Hello, Lawsuits
A legal battle between a developer and investors has resulted in a nightmare scenario for some buyers at the Hello Living condo complex on the Crown Heights-Prospect Heights border, the Times reports. The project’s developer, Eli Karp, is being sued by investors who allege he stole money from the project and sold units without their…
A legal battle between a developer and investors has resulted in a nightmare scenario for some buyers at the Hello Living condo complex on the Crown Heights-Prospect Heights border, the Times reports. The project’s developer, Eli Karp, is being sued by investors who allege he stole money from the project and sold units without their permission. For his part, Karp says the investors want the properties to fall into foreclosure so they can turn around and buy them on the cheap. The lawsuits have doomed closings for a couple would-be buyers because banks have pulled out of their mortgage commitments. Other contract-holders, meanwhile, face the prospect of losing their savings: “‘For most of us, this is our first purchase, and it’s most of our life savings,’ said Jennifer DiFiglia, who has a contract with her husband on a $525,000 two-bedroom. Her deposit remains tied up in litigation, and if she cannot close, she could lose thousands of dollars in legal fees and tax penalties for withdrawing retirement money. ‘This isn’t a building filled with people working at hedge funds,’ she added.”
Families See a Utopia Turn Into an Ugly Legal Fight [NY Times] GMAP
Say Hello to More Hello Living [Brownstoner]
Checking In On Hello Living [Brownstoner]
Development Watch: Pacific Blue East [Brownstoner]
I live directly diagonally across the street, next to the Dakota (another Hello Living building) and I’ve been chatting up the foreman (he built some temp walls for my living room). He told me today that he and his team have not received payment for their work for the past 3 months. I hope every thing goes well for everyone…
Bfarwell:
Puh-lease! Clearly, you don’t know diddly about Crown Heights.
Only jews who are tied to very traditionally religiious communities accept the authority of rabbinical courts. But yes, like arbitration. Usually comes up in a dispute where both parties are religious and agreed, either in contract, or when dispute arioses to have matter resolved there. Obviously, any ruling in rabbinical court would have no binding effect on the status of homeowners in the building. Our secular courts are often called upon to interpret contracts to determine whether a particular dispute is within a clause requiring resolution before a rabbinical court. These business disputes get so muddy the loser usually ends up trying to relitigate in court anyway.
Maly – thanks! – makes sense
I thought the buyers were being brought in to Rabinnical court which I didn’t think was fair/relevant
it’s crown heights, so all real estate deals must be approved by rabbis. didn’t you know??
Think of it as arbitration for Jewish people. If both parties agree to arbitration, it can help keep legal costs down. In this case, it appears the investors didn’t like the ruling and went to court. On the merits they should lose, but they are trying to bankrupt the developer first.
Rabinnical Court?
huh?
It’s not like the investors didn’t know the developer was selling properties and making contracts. He was advertising and doing open houses and doing what developers do. The investors just want a do-over. They don’t have an actual case, they just needed a judge to put a hold on the closings so they could put the developer into foreclosure. They have been at this for 9 months and finally got the Brooklyn Judge to bite after trying in Manhattan and with the Beit Din. It’s an abuse of the legal system, but considering that one of the investors, James Schlaff, “allegedly” bribed Ariel Sharon for special treatment of his casino in Jericho, it doesn’t sound like ethics or the law are their concern. Unless, of course, these casino owners are not guilty of bribery and are actually upstanding members of the community. Hah!
Disclosure: I’m an owner in one of the buildings.
For what it is worth my dealings with the developer have been nothing short of impressive in terms of his professionalism, commitment to building a positive community, and ethical fortitude. Sales in these buildings have been strong and even coming in at or above current market comps psf which goes against the investors claims that the sales have been lower than they should be. These units are selling strong because they are well valued. (Again see my disclosure above, of course I’m biased.) In my opinion this is a money grab that is hurting people who don’t deserve to be hurt. The good news (and what the article fails to mention) is that the investors have lost twice already in courts of law as well as the Rabbinical court. I think this will be over shortly and people will close with clean title and move on.