The Real Deal New York

East Harlem’s Sedona condo sues the AG

October 31, 2011 05:28PM
By David Jones

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Clockwise from top left: Attorney General Eric Schneiderman, 346 East 119th Street and Ruthann Richert, senior vice president of Perry Associates Realty
New York state Attorney General Eric Schneiderman is facing a lawsuit from East Harlem’s Sedona condominium, alleging he improperly fined the developers after the offering plan for the newly constructed property expired.

According to the lawsuit, the offering plan for the 11-unit property at 346 East 119th Street, was filed with the AG in November 2009. The developers sold five units at the property between March and October 2010, and the first amendment to the offering plan was filed in May 20, 2010, declaring the plan effective.

When a plan is declared effective, the developers, 346 E119 Associates, can begin closing sales for apartments that are under contract with a buyer. The development group is led by Ruthann Richert, senior vice president at Perry Associates Realty.

According to the complaint, the second amendment to the offering plan was filed nearly a year later, on May 10, 2011, but Assistant AG Nancy Haber’s office wrote the developers a letter stating that the plan had expired in November 2010.

After the developers resubmitted the second amendment, Haber wrote them back stating that the developers had to sign an “assurance of discontinuance” with the AG’s office, which is essentially a legal settlement, and also fined them $18,000, or $3,000 per unit allegedly sold after the plan expired.

Lawyers for the Sedona questioned whether the AG had the right to assess those fines.

“Where does it state that you’re going to fine someone $3,000 a unit,” said Martin Kera, attorney for the Sedona.

Kera, in the complaint, notes that the AG had not made any complaints about rules violations by the developers and that they are current on all of their obligations. He also notes that no complaints were filed by any buyers at the Sedona regarding either the operations or quality of construction.

Streeteasy.com records show that four of the building’s 11 units remain on the market, at prices ranging from $385,000 to $420,000, all one-bedroom units measuring 720 square feet. The previous seven apartments have all closed their sales.

Richert was in a meeting and could not immediately comment for the story. And a spokesperson for the AG was not immediately available for comment.

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