$3.6 Million Settlement To Benefit Condo Owners

Attorney General Spitzer announced today that a $3.6 million settlement, facilitated by his office, has been reached between Chase Manhattan Bank and three condominiums which are part of a development in Piermont Landing.

The three condominiums are known as the DeVries, Leeward Hall, and Reeds and Abbottsford Gate. The settlement compensates the unit owners of these condos for significant construction defects in the buildings which include leaks through the stucco exterior facade and a lack of "firestopping" between apartments.

Firestopping is a term used to describe the walls at the boundaries of each apartment which by law must extend all the way to the floor of the apartment above so that in the event of a fire, heat and smoke do not spread quickly from one unit to another. In many locations throughout the building, the firestopping is missing.

The stucco on the exterior facade of the building is so badly deteriorated that a new surface will be constructed around the entire building.

"We are pleased that Chase has fully cooperated with my office from the beginning of our investigation," said Spitzer. "This settlement will ensure that these buildings will receive the needed repairs and that the condominium owners will not have to pay for them."

Although Chase did not construct the building, it made the construction loan to the original builder who completed the construction and obtained Certificates of Occupancy, but was then financially unable to act as the sponsor and sell the condominium units. Chase obtained the property in foreclosure, and a wholly owned subsidiary then made the sales to the public.

The unit owners’ and Chase’s initial estimates of the cost of repairs differed by almost tenfold, but after mediation by the Attorney General’s office, both sides agreed to jointly retain an engineering firm to further evaluate the problems. Upon completion of that study, which was monitored by Spitzer’s Real Estate Financing Bureau, and after some lengthy negotiating sessions, the agreement was reached.

This matter was handled by Assistant Attorney General Oliver A. Rosengart under the direction of Bureau Chief Geneith Turnbull and Chief of Enforcement Gary Connor of Spitzer’s Real Estate Financing Bureau.

 

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