Client Lost $985,000 Deposit on Purchase of Manhattan Condo--Attorney Held Liable
On July 31, 2017 Manhattan Supreme Court Justice Billings ruled that an attorney was negligent for "failure to advise plaintiff of the applicable statute and regulation (related to deposits on the sale of condos)". The buyer had made a deposit of $985,000 on the purchase of a condo and as per the real estate contract paid it to the condominium unit sponsor. The deal never closed because the buyer invoked its right to rescind. The buyer couldn't get its deposit back from the seller.
The attorney defended this claim and moved to dismiss arguing that the statute and regulations were inapplicable. Justice Billings disagreed and found that the attorney departed from accepted legal standards in failing to advise the client of the protections afforded under state law. She also held that: 1) the attorney had allowed his client to pay the deposit directly to the seller instead of an escrow agent in violation of state law; and, 2) had the seller made the deposit directly to an escrow agent instead of the seller as required by law, the seller would have recovered the money once it rescinded the sales agreement.
Riviera Property Holdings, Sup. Ct., NY County, 104953/2011
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