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“Storm Clouds Gathering: City Braced for Flood of Lawsuits as Tenants Play Hurricane Sandy Blame Game,” Brokers Weekly

 By: Holly Dutton

December 12th, 2012

First there were the floods from Hurricane Sandy. Now New York can expect a flood of lawsuits as tenants of battered buildings start to point fingers.

From midtown to the Financial District, management companies and owners are being slapped with suits for allegedly inadequately preparing for the hurricane.

“There are going to be hundreds,” said real estate lawyer Adam Leitman Bailey, adding that the parties involved in the suits could spend years tied up in litigation.

“Good lawyers think first and sue later,” he said. “There’s not a rush to sue, we have time. First we have to find out who’s right and who’s wrong.”

In Lower Manhattan, residents of 2 Gold Street, as well as a tenant at 88 Greenwich Street building The Greenwich Club Residences, have both filed suit against property managers.

After 2 Gold Street was declared uninhabitable by city inspectors, forcing residents to seek shelter elsewhere, a group of tenants responded by filing a class action lawsuit against building manager TF Cornerstone.

In a letter published Nov. 13 on the company’s website, senior vice president Sofia Estevez wrote that 2 Gold Street and 201 Pearl Street, which was also damaged in the storm, were both constructed up to NYC building code to withstand “100 year storm” tidal surges.

“Unfortunately, for us all, the tidal surge caused by Hurricane Sandy is the worst ever recorded for New York City, with some reports categorizing it as the 1,000 year storm,” said Estevez.

She added that the buildings took in over 31 feet of water, damaging heat, hot water, electric, ventilation, water filtration and sprinkler systems.

Estevez estimated that around four million gallons of salt water were pumped from the two buildings.

The significant damage and time needed for repair rendered the building uninhabitable until March 1, 2013, she wrote.

The Greenwich Club Residences tenant slapped a lawsuit on Cooper Square Realty, charging the company with negligence regarding how the building responded to the damage incurred from the storm, according to the New York Post.

“There are going to be hundreds [of lawsuits]. First we have to find out who’s right and who’s wrong.” — Adam Leitman Bailey

More than three million gallons of saltwater damaged operational systems in the building’s sub cellars during Sandy, according to the company’s website.

Cooper Square announced in early November that the 452-unit building would be uninhabitable for at least four months. However, on Nov. 30, Cooper Square announced 88 Greenwich Street would re-open the following week after receiving Department of Buildings approval for re-occupancy. All operational systems are back online and the building is structurally sound.

“This is a huge victory for the owners and residents who have been displaced from their homes since the storm,” said David Kuperberg CEO of Cooper Square Realty, in the press release. “Although many of the repairs are temporary, and it will take several months for the building’s systems to be fully restored, this is a critical first step in bringing the building back to life and getting our residents back in their homes.”

In Midtown, two dentists filed a $5 million lawsuit in Federal Court recently against contractor Lend Lease Construction for the partial crane collapse high above 57th Street during Hurricane Sandy Oct. 29 that forced evacuations of the area, according to Yahoo News.

Following that suit, an attorney living in a building nearby who was forced to evacuate said he was preparing to file suit against the crane operator, construction manager, Extell and the Department of Buildings, and asked others to join him.

If a resident is suing the City of New York, they have to file a notice that they will be suing within 90 days of the incident, he said, otherwise, they have three years to file for negligence.

“If and when the lawsuits come before a judge and jury, it will ultimately come down to a battle of the experts,” said Adam Leitman Bailey.

Tal Eyal, president of FS Project Management— the parent company of 2 Gold Street’s managers — said in a statement last week that the company correctly predicted that the hurricane’s magnitude would overwhelm local service providers and hastily made arrangements to secure contractors and equipment from Wisconsin and Michigan to guide the restoration process at Greenwich Club Residences.

A team of experts – including engineers, architects, plumbers, electricians, pump experts, building experts, and project managers – has been on site daily working to restore services.

In order to prove their case, plaintiffs need to prove that a reasonable landlord should have made provisions to prevent the damage, he said, and even if the company has a stellar reputation and is vindicated by the court, it may suffer from the publicity.

“It’s going to be a black eye on their reputation,” said Adam Leitman Bailey.


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