Fort Greene condo board sues over missing CofO

Four years on, developers lack final approval
By David Jones | August 28, 2013 04:00PM

The board of a boutique condominium building in Fort Greene has accused the developers, led by investor Joshua Landau, of failing to obtain a proper certificate of occupancy, despite completing the project in 2009.

The 96 Rockwell Place board asked a New York State Supreme Court judge for an injunction in a lawsuit filed Saturday, claiming a temporary certificate of occupancy expired in July with no permanent approval in place. The expiration, the board claimed, threatened to wreak financial havoc on the building’s homeowners.

“The lapsed TCO has all but halted the ability of the condominium’s residents to sell, refinance, [or] obtain homeowner’s insurance,” Wolf Haldenstein attorney Jared Paioff, who represents the plaintiffs, said in a court filing, “but even worse, may have caused many unit owners to default on their mortgages.”

Landau, of Manhattan-based Integrated Capital and Eric Derector, of Manhattan-based Quest Builders Group, converted the 103-year-old former piano factory in 2007 into a condo with 37 residential units and one commercial unit. The condo offering had a projected sellout value of $24.5 million, and the developers closed on the first sale in 2009, according to court documents.

“The sponsor’s interest is, and always has been aligned with the condominium board,” Landau said in an email. “The Department of Buildings has granted numerous TCOs in the past for the premises and we are working diligently to resolve any additional requirements they may have. We expect the matter to be resolved as soon as possible.”

Derector did not return calls. A Department of Buildings spokesperson did not return calls.

In July, New York Attorney General Eric Schneiderman ordered the developers to offer to rescind buyers’ contracts after the condo board lodged several construction- and financing-related complaints on behalf of unit owners.

Owners claimed that the developers owed them $61,000 in unpaid common charges and had misrepresented the total owed in a filing with the AG, according to documents filed with the regulator. They also accused the developers of failing to finish construction on storage units, four years after some residents paid for the units and moved in to the building. Lastly, the developers allegedly misspent about $37,000 of common charges on expenses they should have covered independently.

However, Landau denied that claim and said that the developers were using proceeds from condo sales to repay the outstanding common charges.

The condo is selling a penthouse as a “white box” — a raw unit, where the buyer provides appliances and other finishes. A 1,932-square-foot penthouse asking $1.4 million went into contract in March, StreetEasy shows.

In a separate lawsuit, an individual who loaned the developers $500,000 claimed in December 2012 that they had defaulted. However, the developers asserted that they partially paid her back and disputed the amount claimed. The case is currently in discovery, or the exchange of evidence and documents. The lender’s lawyer was overseas and could not immediately provide comment.