Condo Buyers Can't Rescind Contracts in Downturn

This story, in slightly different form, originally appeared in the New York Law Journal.

NEW YORK CITY-A federal judge in Brooklyn has declined to invalidate the sales contracts of eight plaintiffs who made deposits on apartments in a new Long Island City condominium project, then changed their minds as the construction dragged on and the economy spiraled down. The decision, Romero v. Border East River Realty LLC, by Eastern District Judge Allyne R. Ross is one of the first to address how the relatively obscure Interstate Land Sales Full Disclosure Act of 1968, which was originally promulgated to protect out-of-state home purchasers when buying land sight-unseen, may apply in the present market.

Attorneys have been citing the law with increasing frequency on behalf of clients whose prospective homes plummet in value after the contracts are signed but before the deals are closed. Few decisions, however, have been issued.