Query on Litigation

Hi – new to this site and wonder if you can help advise me on my current situation: – I’m in contract on a brownstone in BedStuy, where the application for a 2-family CO is taking far longer than the seller (a professional developer) and I expected (5 months +) – House prices have risen significantly in the area, and now the seller is trying to flake on the contract by claiming he is unable to perform, because the CO process is taking too long – My lawyer advises me that he’s unable to do this per our contract (I agree, and she has communicated this to his lawyers), but she has also advised me to seek out a litigator to ratchet up the pressure (principally by showing that I am not just going to roll over) – I have no experience in doing this, so am unsure if (a) it’s actually needed (b) it’s likely to be successful (c) how to begin finding the right firm to do this Any advice on a, b or c would be greatly welcome. Thanks

kpetrycki

in Lawyers and legal service 9 years and 11 months ago

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c_w | 9 years and 11 months ago

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As no-permits has observed, a developer is very unlikely to invest in providing a C/O unless it’s required. This leads to another question you should be concerned about: why is the C/O taking so long? 5 months in itself is not necessarily long but the C/O is tied to passing all inspections and signing-off all renovation work. Is it taking long just because of DOB moving slowly or is it because there are issues preventing sign-offs? Failed inspections, work that may fail inspections, lack of permits, bad paperwork, unpaid contractors and/or architects may all be holding things up. On the other hand, what if it’s just a simple signature that’s withheld on purpose? Some research will let you know.

nancyk | 9 years and 11 months ago

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you can only file a lis pendens once a lawsuit has been commenced.

no-permits | 9 years and 11 months ago

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you need to slap a lis pendens on there and just wait it out. if a CO wasn’t necessary, they wouldn’t be wasting their time on it. it was most likely an SRO or reconfigured triggering the need for a CO.

slopefarm | 9 years and 11 months ago

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Oy. Been there (sort of). All the conflicting advice above is correct. Here’s why. 1\. Get your arms around whether and why you need a new C/O. Do you need it to close on the loan (and often it is a lender’s condition that can be satisfied without a new C/O for reasons some have stated above. A good RE lawyer will know how to present the issue to the bank)? Either (a) it is a must for closing, (b) completely superfluous, or (c) something of value to you but not essential. Kick the tires on this and get sound legal advice. 2\. If (b), walk away from the C/O requirement and just close. Not worth losing the house over. Yes, in this market seller has an incentive to test market again after 6 months. 3\. If (c), propose that, in lieu of seller getting the C/O, figure out the cost, insist on escrow that amount plus a cushion from the sales proceeds, get the C/O yourself after closing and draw against the escrow to pay for it. 4\. In the unlikely, but possible event that (a) applies, then sue for specific performance and have a lis pendens filed (lis pendens is for any legal proceeding affecting title). You gain leverage once seller knows he can’t move the property without resolving with you. But don’t do this until you have tried the remedy for (c), first. BTW, if you are planning on renovating, you will have to file anyway, and that file will resolve C/O status because DOB either will require Alt-1 which results in new C/O, or it will allow the job to be filed with an Alt-2, in which case it is effectively signing off on the existing occupancy as if there were a C/O. I would think that, unless you absolutely need a new C/O to close, you are better off dealing with any filings after closing because you have more control over what is said and done in the name of your property. I am never an advocate of putting the money and labor burden on seller to do something before closing. Better to chip a few grand off the price and do everything yourself after. better control and better incentives.

daveinbedstuy | 9 years and 11 months ago

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Yor lawyer doesnt sound knowledgable on real estate matters. Like the others said, most houses dont have a C of O and nor do you need one for a mortgage. That house, without its C of O can be a two family unless there are permit violations having to do with that conversion. If there are no violations, go ahead and close. Get a new lawyer. Its not a litigation issue.

resident2 | 9 years and 11 months ago

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Yes in a fast appreciating market, greedy sellers often try to get out of contracts. If you have a strong contract then you need to file an action for specific performance and record it, so that he cannot sell it to anyone else. On the other hand when markets suddenly go wobbly, buyers ditch contracts and often loose their contract deposits or file a lis pendence….! The seller does not sound like a “proffessional developer” if he thought he could get a new C of O in 5 months! Your attorney does not have someone to refere you to for Litigation? strange, most Real Estate attorneys have someone that they work with for when their deals or clients go sideways….. Sorry, I cannot refere any, they are all nuts…it just goes with the nature of the beast!

gpoint | 9 years and 11 months ago

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I think the seller has a higher offer.

carmenf | 9 years and 11 months ago

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why do you need a CoO?

mortgagepro | 9 years and 11 months ago

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willevans83, while I am not qualified to advise you legally I do have one question, and that is “Why is the seller applying for a CO?”. The majority of BedStuy brownstones were built in 1899 (+/-) and predate CO’s. I must guess then that a significant renovation occurred where the layout was altered to modify the classification? Each scenario is truly unique, so please let the Brownstoner community know more details as to the need for a CO and maybe more can chime in. Adam Roberts South Shore Mortgage NMLS# 1310