New York Law Journal: Realty Law Digest
In his on-going column with the New York Law Journal, Herrick partner Scott Mollen discusses “361 Broadway Assocs. Holdings v. Morales” where a sponsor was granted summary judgment on a breach of contract claim for the buyer's failure to close.
After describing the case law, Scott explains that new construction of significant buildings often involves unexpected delays arising from a plethora of causes. The subject offering plan provided a remedy in this case, i.e. a right of rescission. Some purchasers may negotiate and obtain an outside closing date, apart from the right of rescission embodied in an offering plan.
Partner Philip Tucker, who specializes in condominiums and cooperative law, further explained that “when the real estate market is strong, sponsors rarely agree to an outside closing date. When the market is soft, sponsors are more likely to provide an outside closing date.” The perception of leverage impacts the ability of a buyer to extract outside closing date as a condition to buying the unit.