The buyer of a $12.5 million condo at 111 Murray is suing the developers to get out of the deal — and reclaim his $2.5 million deposit.
Howard Oestreich paid a $1.25 million initial deposit to buy a 60th floor pad at the Tribeca condo tower in 2015, according to a lawsuit filed Wednesday, plus another $1.25 million when the condo’s offering plan was declared effective. Four years later, however, Oestreich is claiming that “construction is not complete” and “the Unit remains uninhabitable and not ready to close.”
The basis of the lawsuit, however, is Oestreich’s claim that developers Witkoff, Fisher Brothers and New Valley have “chilled” buyers like him into closing at the 800-foot condo tower. According to the complaint, the fine print in Oestreich’s purchase agreement says that if he walks away from the deal he will be compelled to lose his deposit and pay a penalty of 20 percent of the unit’s market price, as well as the developer’s legal fees. The complaint states that because the agreement’s so-called Liquidated Damages Provision is “against public policy,” it should be declared null and void.
According to the complaint, the developers “arbitrarily” imposed a 20 percent penalty on buyers who walk away in an “unlawful” attempt to secure payment. Moreover, the complaint says, the purchase agreements set up the developer to be “unjustly enriched” because the 20 percent penalty would applied to increased market prices (if the prices of units were increased).
An attorney for Oestreich did not immediately respond to a request for comment. Witkoff declined to comment
The condo plan was declared effective in December 2017, according to filings with the state’s Attorney General, which has a total projected sellout of $1.09 billion (up from $958 million in 2015.) In August 2018, the sponsor filed an amendment to the offering plan stating that it had obtained a temporary certificate of occupancy.
In 2017, the developers sewed up $650 million in financing from Blackstone Group. At the time, sources said it replaced a prior construction financing and was partially an inventory loan before all in-contract units were set to close in the first quarter of 2018.
In May 2018, the developers listed the penthouse for $40 million.