Hello, Lawsuits
A legal battle between a developer and investors has resulted in a nightmare scenario for some buyers at the Hello Living condo complex on the Crown Heights-Prospect Heights border, the Times reports. The project’s developer, Eli Karp, is being sued by investors who allege he stole money from the project and sold units without their…
A legal battle between a developer and investors has resulted in a nightmare scenario for some buyers at the Hello Living condo complex on the Crown Heights-Prospect Heights border, the Times reports. The project’s developer, Eli Karp, is being sued by investors who allege he stole money from the project and sold units without their permission. For his part, Karp says the investors want the properties to fall into foreclosure so they can turn around and buy them on the cheap. The lawsuits have doomed closings for a couple would-be buyers because banks have pulled out of their mortgage commitments. Other contract-holders, meanwhile, face the prospect of losing their savings: “‘For most of us, this is our first purchase, and it’s most of our life savings,’ said Jennifer DiFiglia, who has a contract with her husband on a $525,000 two-bedroom. Her deposit remains tied up in litigation, and if she cannot close, she could lose thousands of dollars in legal fees and tax penalties for withdrawing retirement money. ‘This isn’t a building filled with people working at hedge funds,’ she added.”
Families See a Utopia Turn Into an Ugly Legal Fight [NY Times] GMAP
Say Hello to More Hello Living [Brownstoner]
Checking In On Hello Living [Brownstoner]
Development Watch: Pacific Blue East [Brownstoner]
After reading the full article, it looks like the investors are going out of their way to involve the buyers in the mess. Note to the buyers: it’s election season! Time to reach out to your dearly beloved elected representatives and make them work for their money. Politically, it’s pretty clearcut: on one side, sulfurous Austrian rich investors, on the other, hard-working middle class families (only one step down fluffy kittens on the cuteness scale.) It should be a slam dunk.
I agree Dibs
am wondering especially in the case of new condo developments, perhaps the buyers can give their deposits to their respective attorneys to hold until the buillding can close, and when/if it all falls apart, they can get their deposit back from their own attorney with ease. sure they might be out of a house and time, but at least they have their money back
I agree with you, bkre. We got off on a tangent. Not sure how something like this could have been prevented. Were there any signs that their attorney should have picked up on???
This sort of thing is the epitome of greed at a fairly low level given the descriptions of the wealth of those involved.
Especially for a new development there has to be some change in how excrow money is held. That seems to be 95% of the problem in cases like this.
I don’t really think she was throwing hate at hedge funders. SHe wasn’t implying that a hedge funder deserves this to happen. She was just saying that a losing a $500K investment would be bad for a hedge funder, but in all likelihood would not represent the loss of his/her entire life savings. However for the people buying here, $500K is their entire nest egg.
Also reading the article – what a terrible story! A young developer reaches out to a much richer man whom he considers his “mentor” to invest in his project, then that mentor decides that the young guy doesn’t know what he’s doing and tries to force him out! And all these innocent buyers are caught in the middle!
From the head of the Free Democrats Party in germany over the weekend……
“Everyone just talks about benefit recipients but
the people who pay for everything hardly get
noticed
[We need] a completely new start for [our]
welfare state to ensure that people who work
get more than people who don’t work…
Anything else is socialism.”
not able to close might be the best thing that could’ve happened to these buyers – assuming they get their deposits back
taking money out of retirement accounts to buy a 500k+ new construction 2 bdrm on border of crown heights-prospect heights – NOW that should be in a Harvard case study of HOW/WHY NOT To DO
Yes, I agree, DIBS, but the opportunity to tar with a broad brush was irresistible; you know us ultra-liberals can be snarky!
cmu, it’s actually not “the industry as a whole,” just a few high visibility rotten apples.