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Platinum Properties, SNR Denton Sued Over $13M Apt. Buy

By: Kaitlin Ugolik

March 28th, 2013

Platinum Properties Inc. and SNR Denton were hit with a $2 million suit in New York state court on Wednesday by an online retail entrepreneur who claims Platinum fraudulently induced him to spend $13 million for a 200 Chambers St. apartment and failed to disclose its dual agency status.
David Wilkenfeld, president of online retailer, accused Platinum and agent Daniel Hedaya of failing to disclose that if Wilkenfeld did not retain his own broker, they would act as so-called dual agents on behalf of both him and the seller.

It’s the first case to be brought under the state’s real property law statute requiring disclosure and signed consent for dual agency, according to the plaintiff’s attorney, Adam Leitman Bailey, and the penalty is four times the brokers’ commission. The suit also seeks injunctive relief to keep SNR Denton from releasing escrow to Platinum and Hedaya at closing.

“We intend on collecting our four times the commission as per the statute, and we are looking forward to being the first case on the subject,” Adam Leitman Bailey told Law360 on Thursday.

Wilkenfeld argues that not only did Platinum and Hedaya fail to provide the required disclosure form or make him aware that he was entitled to it, they never disclosed that under the statute, despite their status as dual agents, they were still legally obligated to work solely in the best interests of the seller, for whom they had originally listed the property.

The law requires that at “first substantive contact,” Platinum and Hedaya were required to provide Wilkenfeld with the New York state disclosure form for buyer and seller, which not only notifies the signee of dual agency, but of the fact that “only a broker engaged by a buyer can represent the buyer’s interest with undivided loyalty.”

“At no time, either at their first substantive contact with Wilkenfeld, or at any subsequent time during precontract negotiations, did Hedaya or Platinum provide the disclosure form to Wilkenfeld,” the complaint said, adding that a disclosure form the parties have recently purported to have sent him “is a recent fabrication and completely fraudulent in nature.”

In addition, the sale contract was allegedly presented to Wilkenfeld during Superstorm Sandy, so he felt pressured to buy the apartment without taking additional time to review all of the terms, according to the complaint.

Wilkenfeld also claims that Platinum and Hedaya lied about the size and cost of the apartment in the Tribeca building, advertising it as about 4,700 square feet with common charges of $3,870 per month and real estate taxes of $1,142 per month. In fact, the unit is 4,548 square feet, the common charges are $5,199.25 per month and the real estate taxes are $2,196.66 per month, according to the complaint.

While Platinum’s website contained a disclaimer as to the accuracy of information about the apartment, Wilkenfeld said he trusted the information because Platinum and Hedaya represented themselves as providing “competence and professionalism” and he assumed they would not knowingly make inaccurate representations.

The suit seeks $2,080 from Platinum and Hedaya, plus the difference between the actual purchase price Wilkenfeld agreed to in the contract of sale and the price that would otherwise have been negotiated if all representations were made accurately. It also seeks to enjoin SNR Denton as escrow agent from releasing any funds to Platinum and Hedaya until the matter is settled.

Representatives for Platinum and SNR Denton could not immediately be reached for comment Thursday.

Wilkenfeld is represented by Adam Leitman Bailey PC.

Counsel information for the defendants was not immediately available.

The case is David Wilkenfeld v. Platinum Properties Empire LLC et al., case number 651114/2013, in the Supreme Court of the State of New York, County of New York.


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