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August 21, 2008 04:46 PM
Living room partition's a deal-breaker
Can buyer back out of purchase after learning bedroom's true identity?August 21, 2008 04:46 PM
By Ilyce Glink
Co-written by Samuel J. Tamkin
Inman News
Q: I signed a contract to buy a condo in New York City in "as is" condition. Although the old floor plan provided to me indicates that it is a one-bedroom, when I looked at the unit, there is a partition dividing the living room, which essentially adds a room to the unit.
This additional room is the main reason I signed the contract to buy this unit. However, the closing is now being delayed because the condo board will not approve the sale unless the seller tears down the partition.
I no longer want to purchase this condo if it does not have this extra room. In your experience, do you feel that the seller has misrepresented the condition of the unit and that I may terminate this contract and recover my deposit? What remedies would you suggest?
A: While you are buying the condominium in New York in its "as is" condition that does not mean that you have to accept the condo in the condition as changed by the seller.
Your contract might provide that you agreed to take the condo in the condition it was in as of the contract date. If the condo burned down or is materially changed, that risk is or should be assumed by the seller.
In your case, you probably have a good argument that the change in the condo is material enough that you are not required to close on the condo purchase.
When it comes to the misrepresentation claim, you might have a harder time. Did the seller lie to you? Presumably, you viewed the condo prior to making your offer to purchase. You might have even had a professional inspection of the condo. If you saw the condo and you knew what you were getting, the seller probably did not misrepresent any information to you.
That partition in the living room created an additional space. Most municipalities have ordinances relating to making improvements within a dwelling unit. If your seller constructed the partition without the required permits, your seller might have violated various ordinances in making those improvements. If the partition created an additional bedroom in a building that is not zoned for that particular type of unit, the seller might have also violated zoning laws.
And if the seller was required to obtain permission from the condominium association to make any improvements in the unit and failed to get those improvements approved, the seller got caught.
The real question is whether the seller knew that he needed permits from the municipality and permission from the condominium association to make this change. If the seller knew that, the seller may have had a duty to disclose the lack of permits under your local seller disclosure laws.
Most states have enacted seller disclosure laws. These laws provide that the seller of residential property must disclose to a buyer material defects or other hidden problems with the property being sold. If a seller fails to make these required disclosures accurately, in some states the buyer can terminate the contract and sue the seller for the damages that the buyer has sustained including attorneys' fees.
You should talk to your real estate attorney to determine whether you have the right to claim that the seller is in default under the contract for failing to deliver the condominium in the condition required under the contract and that the seller should have disclosed these problems relating to the partition under your state's seller disclosure law.
At that point, you and your attorney can discuss what your options are to recover damages from the seller or come to some settlement that would satisfy you.
To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.
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Copyright 2008 Ilyce R. Glink and Samuel J. Tamkin
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