John Street condo files $3M suit against developer, alleging construction defects

Board is also asking for injunction against unit owner, a financial analyst, said to be running an illegal boarding house
By David Jones | January 07, 2013 12:30PM

The board of a Financial District condominium has filed a $3 million suit against developer WSA Equities — the parent company of the Gansevoort Hotel Group — over alleged construction defects. It has also filed a separate suit against a financial analyst for allegedly renting out her unit to transient visitors in violation of the city’s multiple dwelling law.

The defects suit, filed Dec. 21 in New York State Supreme Court, alleges WSA and Corcoran Group committed breach of contract, breach of warranty and fraud in connection with the construction, sale and marketing of the South Star condominium at 80 John Street. The board of the 90-unit condominium is contending that the Stephen B. Jacobs Group, a design firm, and Ettinger Engineering Associates committed fraud and negligent misrepresentation in connection with architectural, engineering or consulting services at the property.

Sources familiar with the property said the condo is experiencing water infiltration, among other issues.

In a separate suit, the board is alleging that Sophi Grishanova, a financial analyst in New York, was pocketing payments from a short-term rooming house she is said to be running out of her apartment, which she bought in March 2011.

The board is claiming that Grishanova has refused to pay substantial fines for violating the condo’s rental policy, and has also failed to pay recent common charges at the property. The board, claiming that she has rented out her unit to visitors from out of state and as far away as Australia, is asking the court for an injunction against her.

In September the board sent notices to all residents in the building and began to impose $1,000 fines for each rental violation. Unpaid fines against Grishanova total $4,000, according to court filings. The suit comes at a time when the city has stepped up enforcement of tenants who rent out their apartments for fewer than 30 days.

Streeteasy.com shows five active sales listings for the property at an average of $775 per square foot.

WSA officials said they had not been served with any legal papers and had no comment on the allegations.

Lawyers for the board did not have any immediate comment. Jacobs was not immediately available for comment. Ettinger officials said they were not aware of the suit. A Corcoran spokesman said the company had no comment. Grishanova declined comment.