Ruling paves way for co-op, condo tenants looking to sue developers

Co-op and condominium buyers have more leeway to pursue legal action against developers, according to Crain’s, following a New York Appellate Division ruling last week. The ruling, which related to a suit against JPMorgan Chase in which the plaintiff claimed the defendant committed gross negligence, superseded a law that typically allows only the attorney general to file class action suits in regard to securities. The law, known as the Martin Act, has forced tenants in the past to go through the attorney general’s office to instigate legal action against their developer, according to real estate attorney Steven Sladkus of Wolf Haldenstein Adler Freeman & Herz. Now, they may be able to file legal action directly. “If they complained to the attorney general’s office that their building was falling apart or the developer breached contract and the attorney general’s office doesn’t do anything, condo owners and boards were in a pickle,” Sladkus said. [Crain’s]