“Another Reminder: Condo Defect Claims Against Sponsors Rarely Survive” – Habitat Case Watch
WHAT HAPPENED: The plaintiff, Thomian Holdings, LLC, owns an Upper West Side condominium apartment unit. The defendant, Cydonia W71, LLC, is the condominium sponsor. The plaintiff purchased the unit from the defendant in November 2020. The plaintiff alleges that the defendant did not fully repair or remediate material construction defects within the unit. These defects were not discovered until after closing. The plaintiff claims that the defendant has therefore breached the terms of the offering plan (incorporated by reference in the purchase agreement). The offering plan advertised that the condominium units were renovated in accordance with the filed plans, specifications, and applicable laws.
The plaintiff alleges the following deficiencies: (i) defective sound insulation of the walls, ceiling, and flooring between the unit and other units and between the unit and common areas; (ii) leaky showers causing floor damage; (iii) defective HVAC system; and (iv) improperly installed sub-floors causing flooring to vibrate and squeak. The defendant took a substantial part in the construction and renovations of the condominium and unit. The plaintiff also claims that the defendant has breached locally acceptable building practices and the purchase agreement.
The plaintiff brought this action in November 2023. The complaint asserts nine causes of action and seeks $1 million in damages, plus attorney fees
IN COURT: The court dismissed all causes of action in the complaint except for the one for breach of contract. These include for breach of warranty, multiple species of negligence and fraud, violations of the General Business Law provisions on sales practice, breach of the covenant of good faith, and attorneys’ fees. Thus, the lawsuit did not even survive the pleading stage. Even worse for the plaintiff, leave to amend the complaint was denied
TAKEAWAY: It is really hard to sue a sponsor for condominium defects—claiming misrepresentations in the offering plan/sales process etc. There is a great deal of well-defined case law and while it is possible to get around the many legal hurdles by alleging fraud in one iteration or another, there must be something more than conclusory statements and allegations and generalities. It’s simply a very uphill battle for a buyer as this case, essentially of a piece, shows. That said, the plaintiff’s claim for breach of contract did survive
