Sasha (left) and Malia ObamaPresident Obama’s daughters, Sasha and Malia, aren’t exactly big New York City real estate players. At ages 9 and 12, respectively, it’s safe to say that they’re more concerned with living in the White House and doing their homework than a routine building sale in Brooklyn.
So why are they alluded to in an otherwise dry real estate contract between an affiliate of Midtown Equities and a bankrupt developer for a stalled Williamsburg site?
The document mentions the president’s “last surviving child” in connection with the maximum amount of time one of the contract provisions will be valid. And it not only mentions his kids; it uses one of their deaths as a benchmark of time.
“The rights herein shall survive for 21 years following the death of the last surviving child of President Barack Obama,” the papers, which were filed in October, say.
Real estate attorneys say that while invoking the president’s daughters in a contract like this might be unusual, these types of clauses are not. The 21-year clause is a standard part of New York State regulations, known as the “rule against perpetuities.” The rule is rooted in the rationale that the transfer of a property cannot be restricted indefinitely.
“It dates back to English jurisprudence in the 16th century,” said Dennis Sughrue, real estate partner at law firm Herrick, Feinstein. “The idea is, you don’t want to restrict the transfer of property for too long a period of time, because that is just bad for society.”
In this case, Joseph Cayre, who heads Midtown Equities, and investor Alex Adjmi partnered to form CAB Bedford LLC, which signed a $20 million purchase agreement in July for 240-246 Bedford Avenue, city property records and bankruptcy filings show. As of late last month, no sale had been recorded in public records. The seller is an affiliate of the Brooklyn-based Backer Group.
“While it is not common practice to designate the president of the United States or his family members as the ‘then living persons’ required by the statute, the drafters obviously wished to select a renowned individual whose identity, and thus date of death, would be relatively easy to determine,” said attorney Terrence Oved, a partner at Oved & Oved.
“You could pick Madonna, or any person whose whereabouts and date of death can be easily discoverable,” added Brian Sapir, an associate at Oved & Oved.