Developer broke $625K deal to buy out UES rent-stabilized tenants: lawsuit

Leo Pustilnikov said market conditions changed and $400K was the new price, tenant suit says

New York /
May.May 25, 2018 09:26 AM

12 East 88th Street

UPDATED, 11:13 a.m., Oct. 2: A pair of rent-stabilized tenants on the Upper East Side are suing a developer for reneging on an agreement to pay them $625,000 for moving out of the building.

Tenants Avi and Fern Abramoff, who are married, have lived at 12 East 88th Street since 1979, according to the lawsuit. BH Karka LLC, an entity managed by Los Angeles developer Leo Pustilnikov, bought 12 of 24 apartments in the building last year from Simon Baron Development for $10 million, and offered the Abramoffs a $625,000 payout to vacate the building by June 1, a deal that both sides agreed to in January, court documents say.

The payment was due on April 18, but Pustlinikov backed out of the deal on May 7, describing the payment as “too generous given the existing market conditions” and declaring the agreement “null and void,” the suit says. His attorney also tried to negotiate by lowering the price Pustlinikov would pay the Abramoffs to $400,000, but they rejected this offer and said they were still ready to move out by June 1 under the original terms of the agreement.

Representatives for Pustlinikov could not immediately be reached for comment.

Slava Hazin of Warshaw Burstein, LLP, attorney for the Abramoffs, described the case as a clear instance of a developer breaching a contract.

“He thinks that he overpaid,” he said, “but that’s not a reason to renege on an agreement.”

Apartments at the 12 East 88th Street are listed for between $1.5 million and $9.5 million, according to StreetEasy.

UPDATE: The parties have reached a settlement in this case, and it was discontinued on Oct. 2, according to lawyers for both sides. The terms of the settlement are confidential.


Related Articles

arrow_forward_ios
Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)
After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies
After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Real Capital Analytics data showed that New York’s multifamily market had a very slow July. (Credit: iStock)
New NYC rent law “beginning to shut down investment”
New NYC rent law “beginning to shut down investment”
Lewis Hamilton and 443 Greenwich Street (Getty, 443 Greenwich)
Formula One champion Lewis Hamilton trades Tribeca penthouse for $50M
Formula One champion Lewis Hamilton trades Tribeca penthouse for $50M
Better.com CEO Vishal Garg (Better.com, iStock)
Better.com CEO apologizes for botching layoffs, anonymously leaking video
Better.com CEO apologizes for botching layoffs, anonymously leaking video
Zillow: iBuyers Account for Record 1.9% of Home Sales in Q3
iBuyers reached record housing market share, sales volume
iBuyers reached record housing market share, sales volume
CoStar CEO Andy Florance
CoStar comes home to play
CoStar comes home to play
Cash-Out Home Refinancing Hits 14-Year High in Third Quarter
Cash-out mortgage refinancing hits 14-year high
Cash-out mortgage refinancing hits 14-year high
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...