A.G. Files Lawsuit Against Hudson Valley Developer
Attorney General Spitzer announced today that his office has filed a lawsuit against a Hudson Valley residential developer who failed to deliver on the terms of a multi-phase residential real estate project.
In 1993, the project's developer, Mid-Hudson I Associates, of White Plains, filed with the Attorney General's Real Estate Financing Bureau a two-phase offering plan, known as Devon Farms. The project involved developing 61 residential lots and 62 acres of common property in East Fishkill. Under the offering plan, the owners of each of the residential lots was also granted membership in the Devon Farm Homeowner's Association. Under Phase I of the project, 17 residential lots would be sold, and the Association would receive 35 acres of property held in common. During Phase II, an additional 44 lots would be sold and an additional 27 acres of property added to the Association. Typically, homes constructed in the Devon Farms development carried market prices exceeding $200,000.
During Phase I sales, the Association received only 19 of the 35 promised acres. In addition, mortgage payments to Logan Reed, the project's Phase II financier, were suspended. Amendments to the offering plan misrepresented the impact of these actions on the initial and future phases of the project. Further, due to the developer's failure to make payment, Reed commenced a foreclosure action against Mid-Hudson. As a result, it reacquired the undeveloped acreage, and elected to pursue other development opportunities for the property.
"My office will do whatever it takes to compensate defrauded purchasers," said Spitzer. "We will not let the public be victimized by developers who refuse to follow the terms of their own offering plans and who fail to let potential purchasers know critical information before they commit a life-time of savings for the purchase of a home."
The suit, which was filed in Dutchess County Supreme Court, also individually names the company's principals: Andrew Simon, and Donald Giannattasio, both of Yorktown Heights; Stephen Weinstein of Manhattan; Sandra Spielfogel of Bedford Hills; as well as East Coast Land Partners, Inc. of White Plains. It seeks to prohibit the defendants from engaging in future sales of condominiums and cooperatives in New York State, and requests compensation for purchasers as a result of the value lost by the individual property owners because the common area surrounding their residential lots was reduced.
The case is being handled by Assistant Attorney General Nancy J. Haber under the direction of Bureau Chief Geneith Turnbull and Chief of Enforcement Gary Connor of Spitzer's Real Estate Financing Bureau.