Alexico Group is facing a federal lawsuit from two Toronto-based buyers looking to back out of their apartment contract at the Laurel condominium at 400 East 67th Street at First Avenue.
Warren Shepell and Morris Berchard filed suit Oct. 26 in U.S. District Court alleging that the developer failed to file a property report with federal regulators under the Interstate Land Sales Disclosure Act.
Shepell and Berchard signed a November 2007 contract to buy an apartment at the Laurel for about $2.7 million, and deposited $401,250 into an escrow account held by attorney Kramer, Levin, Naftalis & Frankel to reserve Apt. 12B, according to the complaint.
By June 2008, the buyers made a second deposit of $267,500, for a total deposit of $668,750, according to the complaint.
The plaintiffs allege that Alexico was required to issue a property report to the department of Housing and Urban Development for the Laurel, a new ground-up condo building with more than the minimum of 100 units to qualify under the ILSA law. The law has been widely used by buyers trying to get out of new
development condo deals.
“This is another case of purchasers trying to misuse ILSA to back out of their contract,” a spokesperson for Alexico said in an e-mailed statement.
She said the developer would have no further comment on the litigation.
Alexico, a Manhattan-based developer led by Izak Senbahar and Simon Elias, is facing at least four other ILSA suits related to the Laurel, as well as other litigation from contractors looking to enforce mechanic’s liens.
A Denver couple, Vincent Sheperd and Heidi Erdi, filed suit in U.S. District Court to get its deposit back in February under the ILSA law. That couple deposited a total of $800,000 for apartment 12C at the building. The claims in this agreement, however, were dismissed under a stipulation agreement between the parties, with no liability for court costs.
As The Real Deal previously reported, Alexico is facing litigation over $254,000 in unpaid rent at a former off-site sales office at 1161 First Avenue, a commercial space owned by the St. Tropez condo. Alexico officials, in June, claimed that the suit by the St. Tropez resulted from the owners taking back the sales-office space without proper notification.