Monday, April 27, 2015

Billionaire Banker Recovers $2.75M Deposit On 5th Avenue Apartment After Being "Shocked" Into Backing Out Of Purchase Contract By Rogue Co-op Board; HOA's 11th Hour Declaration That Buyer Would Not Be Entitled To Exclusive Use Of Penthouse Terrace Despite Provision In Governing Docs To The Contrary Dictated Return Of Money: State Appeals Court

In New York City, the New York Post reports:
  • A billionaire banker is about to get a few million dollars richer.

    A Manhattan appeals panel ruled that Peruvian banking magnate Carlos Rodriguez-Pastor should get back the $2.75 million deposit he lost in a bid for a $27.5 million Fifth Avenue penthouse. Last March, a lower-court judge said Pastor had to forfeit the funds.

    The South American financier backed out of the purchase in 2012, when the board suddenly ruled that his penthouse roof was a common area. That meant neighbors could traipse through his terrace to access the shared space.

    The board at 1107 Fifth Ave. made the claim even though the proprietary lease awarded the penthouse owner exclusive use of the nearly 5,000-square-foot terrace, according to the decision.

    The lingering specter of a co-op board’s refusal to comply with the governing document’s provision regarding the owner’s right to exclusive access . . . would make any reasonable purchaser uneasy,” appeals Judge Rolando Acosta wrote in the unanimous, five-jurist ruling.(1)

    When Pastor learned about the roof issue, he walked away from the deal and the seller pocketed the 10 percent deposit. Pastor sued. He later bought a 24.5 million pad in a different building.

    Attorneys for both sides declined to comment.
Source: Judge gives billionaire $2.75M deposit back on penthouse bid.

See also, New York Law Journal: Terrace No Longer Exclusive, So Seller Cannot Keep Deposit.

For the ruling, see Pastor v DeGaetano, 2015 NY Slip Op 03307 (App. Div. 1st Dept. April 21, 2015).

(1) From the court's ruling:
  • The Board's position "came as a complete shock" to plaintiff. Although the Board notified the parties in June 2012 that it approved the sale (without imposing any conditions), it again sought to interfere with plaintiff's right of exclusivity when, in an August 2012 email, the Board proposed a "conditional consent agreement" to be signed by plaintiff and the Estate.

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