Recently the Appellate Division issued several decisions concerning real estate transactions which failed to close and in which buyers, sellers and brokers were negatively affected by provisions in each of the relevant contracts. The cases below all point out the importance of strictly abiding by provisions of a contract that governs the relationships between buyer and seller, as well as the broker.
1. Gorgoglione v. Gillenson
The Appellate Division, First Department, decided this case on January 15, 2008. In its decision the Appellate Division reversed the decision issued by the Supreme Court in New York County.
A. The Facts of Gorgoglione
The plaintiff, Gorgoglione, and the defendant, Gillenson, entered into a contract of sale for defendant’s cooperative apartment for $850,000.00. As is customary, the buyer paid a downpayment in the amount of $85,000.00 in connection with the transaction. The downpayment was held in escrow by the Seller’s attorney pending the Closing. In all transactions involving the sale of a cooperative apartment, as in this one, a buyer must be approved by the Cooperative Corporation’s Board of Directors (the “Co-op”) and a seller must obtain the consent of the Co-op before any closing may take place.
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