By: Leigh Remizowski
November 18th, 2010
A group of potential home buyers at a 14-acre complex of luxury condos and stores in downtown Flushing has filed a lawsuit against developers in an attempt to get out of their contracts and have their hefty deposits refunded.
The complaint names 67 plaintiffs who signed 41 contracts to buy condos at Sky View Parc in 2008. In the wake of the housing market crash, the group of buyers found themselves in a precarious situation – out thousands of dollars and unable to secure mortgages, lawyers said.
“The market has changed since when they signed contracts,” said Adam Leitman Bailey, a lawyer representing the buyers.
Buyers put down deposits ranging from $43,000 to $121,000 – “often their entire life savings,” reads the lawsuit, which was filed in Brooklyn Federal Court on Monday.
“These are people who have to put together their working wages to make a living,” Bailey said.
Lawyers are using a 1968 law meant to protect home buyers from fraud as leverage to help the Sky View Parc buyers who are in over their heads. He calls the Interstate Land Sales Full Disclosure Act a “pearl straight out of the ocean” for home buyers who can no longer obtain financing in the wake of the mortgage crisis.
The law requires developers of residential buildings with 100 apartments or more to register with the U.S. Department of Housing and Urban Development and provide buyers with a disclosure statement.
The lawsuit alleges that developers at Sky View did neither.
If developers don’t comply with the law, a home buyer is allowed to back out of a contract within two years of signing it, Bailey said.
“This is simply an opportunity for these consumers who would be really out of luck because they can no longer get mortgages,” he said.
Sky View Parc owners, Onex Real Estate Partners and Muss Development, declined to comment on the lawsuit, but did say: “We have met and will continue to meet our contractual obligations to our purchasers.”
“In addition, we have brought on resources to facilitate a seamless closing process and have secured several financial institutions that are familiar with the development and the Flushing market and are eager to provide financing to our buyers,” owners said in a statement.