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Harlem condo board sues developer over construction flaws

A condominium dispute is unfolding in Upper Manhattan. According to a lawsuit that was filed with the New York State Supreme Court, the Lenox condominium building in Harlem has a defective roof, widespread leakage problems and basic structural flaws. The building's board of managers has sued the former sponsor, whom the lawsuit has accused of breach of contract and fraud.

The board claims that after unit purchasers were shown an offering plan in 2006, the sponsor failed to provide units that met the decided-upon guidelines. The complaint says that the owners have already paid $260,000 for repairs, and the necessary additional repairs will cost $4 million.

For his part, the sponsor says the dispute is between the company that built the building and the residents. Apparently, the sponsor is a resident of the building and has also been heard complaining about the construction flaws.

The sponsor filed for bankruptcy in 2009, and after a deal was struck with the lender, the units were again up for sale. Residents reportedly complained about the construction issues in 2010, but the board's complaint states that the sponsor did nothing to fix the problems.

Rather, the board says the sponsor tried to shirk responsibility by turning over ownership of the remaining unsold units to another business entity. Theoretically, such a move would protect the sponsor from legal action by the board.

However, an attorney for the board asserted that the former sponsor and the other business entity are "one and the same."

Unfortunately, real estate disputes such as this one are relatively common. To achieve a favorable outcome, condo owners and condo boards need to have strong legal support on their side. This area of the law is complex, especially when proprietary leases, bylaws and other contracts are ambiguous.

If New Yorkers would like to learn more about resolving construction and repair disputes, our real estate website is a good place to start.

Source: The Real Deal, "Harlem condo board takes developer to task over alleged construction gaffes," Katherine Clarke, Jan. 3, 2014

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