Last year a group of buyers at new West 47th Street condo building The 505 sued the project's developers in an effort to get their deposits back. They cited ILSA, the arcane law being used in many similar lawsuits around town, which was passed decades ago to protect buyers from being hoodwinked by Florida swamp salesman. Several recent ILSA suits have been won by buyers, but The 505's developers always thought they had a winning case. In fact, they dared the buyers to sue. Was that confidence misguided? Nope. Parkview Developers just announced that the United States District Court has dismissed the lawsuit. And the company is taking a victory lap.
According to Parkview, 53 buyers made ILSA claims, but during the course of litigation, 18 buyers settled or closed on their condos. With 35 buyers potentially due refunds, this could have been a crushing blow for the building. But now those tenants will lose their deposits and owe legal fees to the developer. And if they decide to go through with buying their apartments, good luck. According to Parkview, a victory would not have been decimating. The buyers went into default by not closing on their units, and 75% of the disputed apartments were resold at prices 1% higher on average. The ILSA peeps had wanted 20% to 30% price reductions.
Says the developer's attorney, "This ruling sends a clear message to those purchasers hoping to use ILSA as a way of escaping their contractual obligations that ILSA is not the panacea proclaimed by plaintiffs' lawyers," adding, "read it and weep, suckas!" According to The Real Deal, the buyers plan to appeal the decision.
UPDATE: The 505's reps would like us to point out that the attorney did not, in fact, say "read it and weep, suckas," which was an embellishment created by the Curbed staff for the purposes of comedy, which is a form of entertainment consisting of jokes and satirical material with the intent of making an audience laugh.
· Hell's Kitchen Developer to Buyers: Sue and You'll Lose! [Curbed]
· The 505 coverage [Curbed]
· The 505 [the505hk.com]