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REAL ESTATE LITIGATION

The Legacy of a Legal Architect: How Adam Leitman Bailey Remodeled NYC Real Estate

By: ​Meghan Hemingway

From the Trump SoHo condo case to the “Ground Zero mosque,” Bailey has taken on some of the toughest real estate battles in the city – and won. Photo by Nick Coleman.

 

In the concrete jungle where fortunes pivot on the stroke of a pen, Adam Leitman Bailey is the lawyer developers clamor for – or dread, depending on their position. Founder and force behind his eponymous firm, Bailey built his legal empire from the ground up, armed with grit, strategy and an appetite for high-stakes, complex battles. Today, he stands among the legal elite: a courtroom tactician with a client roster stacked with New York’s most powerful players and a resume that reads like a greatest hits of real estate litigation. 

 

Bailey has laid the foundation for some of the city’s most jaw-dropping legal victories – from securing the largest condo settlement in New York history to unearthing an obscure statute that flipped a landmark case on its head. His firm won a record-breaking $21M government grant for a co-op and delivered a payout in a casualty case that reset expectations for what’s possible in property law. 

 

A willingness to take on the cases others wouldn’t – matters steeped in controversy, complexity and at times, public backlash – has become a defining characteristic in Bailey’s decades-long career. In Sinensky v. Rokowsky, he fought for the dignity and property rights of an 83-year-old Holocaust survivor, confronting not just legal obstacles but deeply embedded systems of prejudice. In the charged Park51 litigation, Bailey stood virtually alone in defending the rights of Muslim Americans to build a community center near Ground Zero – a position that tested public sentiment and constitutional principle alike. Then came the Trump SoHo condo case, where Bailey alleged that developers used fraudulently inflated sales figures to mislead buyers and fabricate the illusion of strong demand. In each instance, Bailey disrupted the comfortable narrative, challenged entrenched power, and forced a reckoning where silence had long prevailed. 

 

Conviction Over Consensus

 

To be a disruptor is to stand at odds with convention – not out of defiance, but in pursuit of something better. It takes rare courage: the kind that accepts being misunderstood, even disliked, as the price of progress. True disruptors don’t seek comfort in consensus, they advance when others retreat, guided by conviction rather than approval. Their work unsettles, provokes and often divides – but in doing so, it clears the path for change.  

 

A closer look at Bailey’s body of work – behind the spectacle of headlines and hard-won victories – reveals the work of an incredible disrupter, to be sure. But it also unveils something deeper and more nuanced about the storied litigator. Bailey’s strong constitution is fueled by unique motivations, an unassailable moral compass and a deep commitment to the clients who’ve placed their futures in his hands.  

 

Sinensky v. Rokowsky – Fighting Housing Discrimination in the Co-op Market

 

In 2006 Bailey stepped into the fight on behalf of an 83-year-old Holocaust survivor caught in the crosshairs of a discriminatory co-op board in Sinensky v. Rokowsky. Chaim Indig had been denied the opportunity to purchase an apartment in Brooklyn’s Premier House cooperative. Despite having entered into a valid purchase agreement, Indig – who suffered from advanced Parkinson’s disease, rendering him immobile and unable to speak – was rejected by the co-op board. Shortly thereafter, the board president purchased the unit for himself, raising serious concerns of bias and self-dealing. 

 

In a case like this, you’re not just battling legal arguments. You’re battling fear, misinformation and a deep national trauma.

 

Bailey secured a settlement that resulted in the apartment being sold to Indig’s family and established a precedent-setting moment in co-op law. Although the trial court initially dismissed the case, the Appellate Division reinstated the claims, holding that the plaintiffs had alleged sufficient facts to warrant discovery and further proceedings – a pivotal ruling that made new law allowing the right of contract vendees to challenge discriminatory denials by cooperative boards. Before this case was decided, under New York law no contract vendee or non shareholder had the ability to sue a board.

 

Beyond the courtroom, the case stood as a powerful reminder of the legal system’s role in protecting the dignity and rights of society’s most vulnerable – especially in housing, where gatekeeping mechanisms too often go unchecked. 

 

Against the Tide – The Legal Battle to Defend Park51

 

Bailey’s commitment to civil rights didn’t end with housing. His willingness to step into passionately charged, high-profile legal battles – especially those others avoided – would soon be tested on a much larger stage. In 2010, one particular case put constitutional freedoms in direct conflict with raw public sentiment, and Bailey found himself at the center of a legal firestorm. The world was watching. 

 

In the emotionally scorched landscape of post-9/11 New York, grief had hardened into sacred memory and few legal battles tested the boundaries of constitutional rights and public tolerance more than the fight over Park51. The proposed Islamic community center, which included a mosque, was slated to rise just two blocks from Ground Zero – a location many Americans viewed as hallowed ground. To some, its proximity was a gesture of reconciliation and inclusion – to others, it felt like a provocation, an affront to the memory of those killed in the attacks. So when Bailey agreed to represent the developers pro bono, he stepped directly into one of the most polarizing cultural flashpoints in modern American history. At a time when emotions still ran raw, headlines screamed “Ground Zero Mosque,” and politicians fanned the flames of division, Bailey’s task was not just legal – it was existential: to defend the rights of a marginalized religious community to build, and to do so in a city still struggling to define how to remember its dead.

 

The legal attacks came fast. One of the most publicized lawsuits was filed by Timothy Brown, a former firefighter and 9/11 responder who claimed that the building’s proposed location was an affront to the memory of those lost. Brown sought to halt the project by having the existing structure declared a historic landmark, a move that would effectively block demolition and development. For Bailey, this was more than a preservation fight – it was a thinly veiled effort to weaponize zoning and land use laws against religious freedom. 

 

“In a case like this, you’re not just battling legal arguments,” says Bailey. “You’re battling fear, misinformation and a deep national trauma.” 

 

Bailey’s approach was surgical. He challenged Brown’s legal standing, successfully arguing that emotional offense, however heartfelt, did not constitute a legally recognized injury. 

He defended the Landmarks Preservation Commission’s decision not to designate the building, a non-descript former Burlington Coat Factory, as historically significant. And perhaps most critically, he anchored his arguments in the bedrock of the First Amendment and property rights – principles designed to endure even in the face of overwhelming public sentiment. 

 

It was a really important, powerful case for housing and civil rights – and the industry hated me for it.

 

Ultimately, in July of 2011, the New York State Supreme Court sided with Bailey and the developers, dismissing the suit and clearing the way for Park51 to proceed. The legal victory was far from a public one. Death threats, vitriolic media coverage, and persistent political attacks followed. Bailey, who had taken the case for free, bore the brunt of defending a deeply unpopular cause – a role few lawyers were willing to play. 

 

But that is part of what defines Bailey’s legal legacy. He didn’t just win on paper. He stood up in a moment when standing up meant standing alone. In doing so, he reaffirmed the legal system’s ability to protect those most vulnerable to being silenced – even in moments of extreme emotional upheaval.  

 

Park51 would eventually be scaled back, its original vision never fully realized. But the precedent endured. The right to build, the right to pray, the right to exist – all held firm, not because public opinion demanded it, but because the law still did.  

 

Turning Stumbling Blocks Into Stepping Stones

 

Bailey is well aware that his work takes place in the public eye and is no stranger to intense scrutiny. During the 2008 housing collapse, while many were still trying to make sense of the financial wreckage, Bailey quietly began applying a little-known federal statute from 1968 to help NYC homeowners purchase their homes at a steep discount to match the amount that weary banks were willing to loan during the Housing Crisis or the right to terminate their contracts – the Interstate Land Sales Full Disclosure Act. The law, long forgotten by most, required developers of large condo projects to disclose specific information to buyers. Almost none had complied. By invoking the statute, Bailey helped clients renegotiate contracts and secure significant discounts on their homes. In some cases, buyers got every dollar back. It was a legal masterstroke – and not one the industry took lightly. 

 

“It was a really important, powerful case for housing and civil rights,” says Bailey. “And the industry hated me for it.” 

 

He felt the retaliation. One real estate magazine published a piece labeling Bailey “Public Enemy Number One Against Developers.” According to Bailey, the article had been pushed by those developers, and was riddled with inaccuracies. To him, the slight wasn’t just personal – it was emblematic of a deeper rot. Media outlets, he realized, weren’t always free. Some admitted to cutting deals with developers, promising not to cover him in exchange for advertising dollars. 

 

“That was devastating. It was a wake-up call,” Bailey says. “When even the First Amendment is for sale, what hope does truth have?” 

 

With visibility comes both influence and backlash. Over time, Bailey has grown disillusioned with the idealism that once inspired him in law school. He used to believe that justice would prevail and that the legal system was built to protect the vulnerable. But years of practice have revealed how corruption seeps in – not just through individuals, but more often, and more troublingly, through the very institutions tasked with upholding the public trust. The dream of defending people’s rights hasn’t vanished, but it has been tempered by hard-earned experience. It’s no longer a given – it’s something Bailey now understands must be fought for. 

 

“You have to be able to handle a lot of pain doing what I do,” says Bailey. “I didn’t know it at the time, but my painful childhood was preparing me for everything I do today.” 

 

Perspective and The Past

 

Long before he was making headlines in courtrooms, Bailey was being shaped by a far quieter kind of adversity. Born in Bayside, Queens, he was raised in a financially unstable home, his parents both schoolteachers who were often unemployed. Living with that sort of financial and housing insecurity still colors Bailey’s sense of justice today. His family’s cross-country move to California in search of work left an emotional imprint that would gradually influence his understanding of what home means – and who gets to have one.   

 

When even the First Amendment is for sale, what hope does truth have?

Bailey eventually made his way back east and graduated with honors from Rutgers University and Syracuse University College of Law. His parents may have struggled financially, but they supplied him with something that money couldn’t buy – unwavering confidence.  

 

“They treated me like I had special gifts,” Bailey says. “I always had that inner confidence, which I love. Every parent should know how easy it is to take confidence away – and how hard it is to get it back.” 

 

That confidence offered a clarity of purpose that drew him to real estate law on the very first day of law school. A property law professor introduced him to Pierson v. Post, a centuries-old dispute over a fox hunt that captivated him – not because of the drama, but because of what it said about human behavior, rules and ownership. It was the beginning of a lifelong fascination with how cities function, how communities coexist and how the law can – or should – help people find a place to live. 

 

“I didn’t want to defend criminals or fight over divorces,” says Bailey. “I wanted to use the law to build things – not tear them apart.”  

 

His early hands-on legal work came in the form of a real estate clinic in Syracuse, where he helped underserved tenants and property owners facing housing insecurity. Years later, he would carry that same spirit into the courtroom, often representing marginalized individuals fighting against powerful boards, landlords or institutions.  Like the time he went up against Trump. 

 

Trump SoHo Litigation – Redefining Truth in Real Estate Marketing

 

In one of the most notorious real estate fraud cases of the past two decades, Bailey represented a group of buyers who had purchased luxury condominiums at the Trump SoHo New York, a $450M hotel-condominium tower developed by the Trump Organization and its partners. Filed in federal court in February 2011, the lawsuit alleged that the developers had fraudulently inflated sales figures, creating the false impression of robust demand and strong investment potential in what was, they alleged, a struggling project. 

The case centered around the claim that the plaintiffs had been persuaded to enter purchase agreements based on deceptive and materially false representations – a violation of both federal and state consumer protection and securities laws. Bailey’s litigation strategy focused on proving that sales data shared with buyers was knowingly inaccurate and misleading. 

 

Buyers in new construction disputes often face an uphill battle, hindered by contract disclaimers and arbitration clauses. Yet in this case, the plaintiffs secured a rare and resounding victory: each recovered 90 percent of their deposits. The settlement not only protected his clients from financial loss but sent a chilling message across the real estate development industry – this type of smoke-and-mirrors would no longer be tolerated. 

 

“Developers became significantly more cautious about disclosing pre-sale figures,” says Bailey. “They were wary of potential litigation if their representations were found to be even slightly inaccurate.” Never again would a real estate company or brokerage show sales data or square footage of an apartment without a disclaimer at the bottom of the page. 

 

In the years that followed, the case was heralded as a “watershed moment” in condominium law. The case reshaped the standards of transparency in condo marketing and helped recalibrate the balance of power between buyers and developers in one of the most opaque corners of high-end real estate. Adam Leitman Bailey changed the way real estate companies do business.  

 

A Sense of Home

 

Bailey’s advocacy efforts have never been exclusive to the courthouse. Over the years, his sense of justice has found expression in activism, education, philanthropy, film – and even children’s literature. 

 

In 2018 Bailey published “Home,” a children’s book that tells the story of a young boy searching for the perfect place to live, only to learn that home is not about size or style, but about the people you share it with. The book, inspired by Bailey’s own childhood, was named a “Silver Winner” by Literary Classics and donated to schools and libraries across the Tri-State area. 

 

Housing is not just about square footage or property lines. It’s about safety, family and identity.

 

As a writer, Bailey aims to educate and inspire through multiple genres. His 2011 book, “Finding The Uncommon Deal,” became a go-to guide for first-time homebuyers and earned the National Association of Real Estate Editors’ “First Time Author” award.  

 

In 2008, Bailey founded Save Harlem, a nonprofit organization committed to preserving the cultural and architectural legacy of one of New York’s most historic neighborhoods. The group fought against aggressive rezoning and demolition efforts that threatened to displace longtime businesses and erase Harlem’s identity. Under Bailey’s leadership, tenants secured more than $1M in settlements and, more importantly, the right to stay in their businesses – a powerful example of legal expertise turned toward grassroots community preservation. 

 

“Housing is not just about square footage or property lines,” Bailey says. “It’s about safety, family and identity. When people come to me, it’s often because that’s being threatened – and I take that personally.” 

 

A Platform for Change in a City That Never Stops

 

Despite a career filled with headline-grabbing cases and high-profile legal victories, Bailey doesn’t consider himself at his peak. “We’re just getting started,” he says – a mantra rooted in the belief that success isn’t measured by past accolades, but by what you do next. Every case, to Bailey, is both a fresh challenge and an opportunity to push the law forward. 

 

Fearless, unapologetic and often several steps ahead of his adversaries, Bailey has cultivated a reputation that enters the room before he does – part legend, part lightning rod. Over the years, he’s emerged as real estate’s legal disruptor, where innovation meets bare-knuckle advocacy. His career has been built on conviction, calculated risk and an unrelenting pursuit of just results. Time and again, his refusal to chase popularity over principle has placed him at the center of some of the most consequential cases in recent memory. 

 

Today, Bailey leads one of New York’s most respected real estate law firms – a practice that, while narrow in scope, has a wide-reaching impact. With more than 3000 buildings under counsel, Fortune 500 clients on the roster and precedent-setting wins in court, the firm is known for its precision, tenacity and deep command of real estate law. Whether navigating housing disputes, advising on condo governance, or crafting novel legal strategies in the face of economic crises, Bailey’s team is called upon to solve problems others can’t – or simply won’t. 

 

But for Bailey, success has never been about prestige or profit. “Personal success,” he says, “is not about wealth. It’s about being the most impactful in your field.” That impact reverberates not only in courtrooms but throughout the corridors of Manhattan real estate – felt in the lives of clients who might otherwise have been steamrolled by bureaucracy, greed or indifference. His influence lives on in the deals he’s shaped, the standards he’s raised and the precedents that continue to guide the field. Though many of his cases unfold under intense public scrutiny, Bailey’s work remains deeply personal – shaped by a modest upbringing, driven by bold choices and grounded in the belief that the law still has the power to do good. “We’re just getting started,” he says. And in many ways, he is. 

 

Bailey’s legacy is already etched into the legal and physical fabric of New York – in landmark rulings, reformed laws and the very skyline itself. But legacy isn’t the goal. For Bailey, it’s the work that matters: the next case, the next client, the next battle worth fighting. More than just a law firm, he’s built a platform for change – one that refuses to play it safe, settles for nothing short of justice and shows no signs of slowing down.  

 

As New York City, dynamic and brilliant as ever, continues to evolve, one thing remains steadfast: Adam Leitman Bailey. He’ll be right there, in the thick of it, shaping what comes next. 

REAL ESTATE LITIGATION

When Is a Breach of a Real Estate Contract ‘Material’?

Adam Leitman Bailey

John M. Desiderio

Adam Leitman Bailey and John M. Desiderio explain how New York courts decide whether a buyer’s or seller’s failure to meet a real estate contract obligation is a “material” breach that justifies remedies such as forfeiture of a deposit, rescission, or specific performance.

 

Whether a default is deemed “material” often determines whether a purchaser forfeits a deposit, whether a seller may retain it, or whether specific performance is available. When a seller or a buyer, at or before the scheduled closing of a Time Is of the Essence real estate contract, fails to demonstrate it is ready, willing, and able to perform its contractual obligations, the other party is entitled to declare the non-performing party in default and enforce the remedies provided to it in the purchase and sale contract. See e.g., Grace v. Nappa, 46 NY2d 560 (1979). See also Bailey and Desiderio, Enforcing the Contract—Obtaining Down Payment or Specific Performance (New York Law Journal, 3/8/2006), and Bailey and Desiderio, What Constitutes “Tender of Performance” on the “Time Is Of the Essence” Closing Date? (New York Law Journal, 10/7/2025).

 

Where the buyer defaults, it forfeits its down payment deposit; where the seller defaults, the buyer is entitled either to return of its deposit or to commence an action for specific performance. However, in either situation, even where a Time Is of the Essence closing date has not been declared, the “general rule,” in New York, is that “rescission of a contract is permitted for such breach as substantially defeats its purpose. It is not permitted for a slight, casual, or technical breach, but…only for such as are material and willful, or, if not willful, so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract.” Ma v. Biaggi, 150 AD3d 778, 779 (2d Dept. 2017). (Held: plaintiff materially breached contract by stopping payment on several down payment checks and failing to tender the full $2.6 million down payment amount, and seller was thus entitled to terminate the contract prior to closing and retain plaintiff’s partial deposit payment of $840,000.) (Quoting language from Callinan v. Keensville, Ausable Chasm & Lake Champlain R.R. Co., 199 NY 268 (1910).(Emphasis added)

 

In addition, as explained in WILJEFF, LLC v. United Realty Management Corp., 82 AD3d 1616, 1617 (4th Dept. 2011),

 

Generally, the question whether a breach is material is for the finder of fact but “where the evidence concerning the materiality is clear and substantially uncontradicted…[,] the question is a matter of law for the court to decide.”

 

Such was the case in Maxton Builders, Inc. v. LoGalbo, 68 NY2d 373, 378 (1986), where the Court of Appeals held “that when a contract requires that written notice be given within a specified time, the notice is ineffective unless the writing is actually received within the time prescribed,” and that “for more than a century it has been well settled in this State that a vendee who defaults on a real estate contract without lawful excuse, cannot recover the down payment.” (citing Lawrence v. Miller, 86 NY 131 (1881),

 

How Courts Determine ‘Materiality’ of a Default

The principle is clear, but determining what is a “material” breach or default is not necessarily clear in all cases. “Material,” defaults, which are “so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract,” and where “the evidence concerning the materiality is clear and substantially uncontradicted,” thus deeming the question “a matter of law for the court to decide,” occur in both pre-closing and post-closing situations.

 

Indisputable ‘Material’ Breaches of Contract

A party’s breach of a specific contractual obligation (whether the default is of the seller or of the buyer) is self-evidently a “material” breach of a real estate purchase/sale contract. The seller or the buyer either did or did not fulfill the specific obligations it assumed under the purchase/sale contract. The default cannot be anything other than “material.”

 

A seller’s material default, at closing, of a typical purchase/sale contract (whether for a condominium, cooperative, or private home) can include breaches of specific contract provisions which expressly (a) require seller to provide marketable title to the property, see Klaiber v. Coon, 48 AD3d 856 (3d Dept. 2008) (Held: “Defendants had ample opportunity [but] failed to provide clear title in a reasonable time, [and] we find that summary judgment should have been granted to the plaintiff.”); see also Arzumamyants v. Fragetti, 19 Misc.3d 1134(A) (Civil Ct., Richmond Co., 2008) (Held: seller breached contract by failing to provide marketable title free from encumbrances), (b) require seller to complete other specified contractual obligations, as conditions for buyer performance, such as providing an amended certificate of occupancy (see Rufeh v. Schwartz, 50 Ad3d 1000 (2d Dept. 2008) or require seller to provide estoppel certificates (see Angelo Gordon Real Estate Inc. v. Benlab Realty, LLC, 216 AD3d 420 (1st Dept. 2023), and/or (c) require seller to provide “all plumbing (including water supply and septic systems […], equipment and machinery in the building in working order as of the date of Closing[, and] roof and basement is free of leaks,” and “in working order.” (see Holder v. Watson, 85 Misc.3d 1276 (A) (Sup. Ct., New York Co., 2025) (Held: plaintiff stated a cause of action for specific performance due to seller’s alleged contract breach).

 

A seller’s willful deception or fraud in negotiating the purchase/sale contract will be treated as a material default, where a seller misrepresents that it could convey marketable title to the property, despite knowing that a third party has not waived its right of first refusal to purchase the property, (see Michael Cipriano v. Glen Cove Lodge #1458, B.P.O.E., 1 NY3d 53 (2023).

 

In addition, post-sale, sellers may be held liable for violations of the Housing Merchant Implied Warranty (General Business Law, §777-A, et seq.), which is automatically included in purchase/sale contracts for new home sales of a single-family house, or for-sale unit in a multi-unit residential condominium or cooperative building of five stories or less,” 

 

and for breach of which “the measure of damages shall be the reasonable cost of repair or replacement and property damage to the home proximately caused by the breach of warranty, not to exceed the replacement cost of the home exclusive of the value of the land, unless the court finds that, under the circumstances, the diminution in value of the home caused by the defect is a more equitable measure of damages.”See Horwitz v. Camelot Associates Corporation, 66 AD3d 1299, (3d Dept. 2009) (Held:. Seller-Developer breached limited warranty when construction failed “to ensure that the home [was] habitable.”); see also Kikorov v. 355 Realty Associates, LLC, 31 Misc.3d 1212(A) (Sup. Ct., Kings Co., 2011) (Demarest, J.) (Held: plaintiff a stated cause of action against developer for breach of offering plan representations that sponsor would “complete the design and construction comparable to the currently prevailing local standards and substantially in accordance with the plans and specifications for the design and construction work filed with the New York City Department of Buildings and other appropriate governmental authorities and general in accordance with the good design and construction standards and practices for firs class, luxury condominiums in Brooklyn.”

 

A buyer’s material default of the purchase/sale contract can include (a) failure to pay the contract deposit with good checks subject to collection, see Ma v. Biaggi, supra, (b) failure to appear at the closing and/or failure to pay the balance of the contract price at closing (see, Duvernay v. Qiao, 240 AD3d 855 (2d Dept. 2025),and (c) failure, at closing, to proffer good checks subject to collection or either required certified checks or official bank checks payable to seller. (see Ma v. Biaggi, supra, and RR Chester, LLC v. Arlington Building Corp, 22 AD3d 652 (2d Dept. 2005) (Held: “even assuming that the failure [of buyer[s attorney] to deposit the down payment was a material breach, there are triable issues of fact as to whether [seller] was aware, or should have been aware, of this breach before commencement of this litigation [and whether] such knowledge on the seller’s part…waived its right to rely upon the failure to deposit the down payment check as a basis for rescission, or should be estopped from arguing that the failure to deposit the down payment was a material breach.”)

 

Uncontradicted proof of any of the above default conduct clearly goes to the heart of the parties’ purchase/sale agreements and will necessarily “defeat the object of the parties in making the contract.”

 

‘Material,’ But ‘Not Substantial’

Nevertheless, depending upon the particular facts and circumstances of a particular case, courts may find that a seller or buyer may indeed have defaulted on an obligation of the parties’ purchase/sale contract, but that, despite the breach, the specified default, if not willful, was not so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract. See The Links at North Hills v. Baker, 226 AD2d 279 (1st Dept. 1996) (Held: Although “defendants were entitled to insist that the defective water seepage condition in the basement be corrected and that the recreational facilities be completed, rescission of the contract was not their remedy, as neither the basement leak nor the unfinished recreational facilities constituted material breaches pursuant to [the terms of the parties’] purchase agreement.”) See also RR Chester, LLC v. Arlington Building Corp, supra (Held: “considering all of the circumstances of the case, including the disproportionately small amount of the down payment and the conduct of the parties, we find an issue of fact exists as to whether the failure to deposit the down payment was a material breach.”)

 

Construction Contract Disclaimers

Purchase/sale contracts for new condominium and co-op units yet to be built often lead to litigation over whether the Sponsor has complied with its obligation to deliver at closing (or post-closing) what it represented to build and deliver to the buyer-vendee.

 

As is the norm for all newly constructed condos and co-ops in New York, developers offer the properties for sale to the public well before construction of the buildings is completed, and, in some cases, even before construction has commenced. However, no building is ever constructed perfectly and entirely without even minor defects, and, although it is the builder-vendor’s obligation to construct the building “in a skillful manner and free from material defects,” Caceci v. DiCanio  Construction Corp., 72 NY2d 52, 56 (1988); but see Fumarelli v. Marsam Development, Inc., 92 NY2d 298 (1998), the developer is not obliged to disclose “‘the normal kinds of problems [encountered] in the course of construction that are described in field reports, project meetings and change orders’ in order to avoid transforming every potential latent construction defect case into a claim for common-law fraud.” Kerusa Co. LLC v. W10Z/515 Real Estate Ltd. Partnership, 12 NY3d 236, 245 (2009).

 

The developer’s actual promises are set forth in its offering plan (and all amendments thereof) and in the purchase/sale contract, and the purchaser’s rights and the contractual obligations of the developer are fully circumscribed by these two documents. Any dispute arising between the parties, regarding the purchaser’s obligation to accept the unit or the developer’s obligation to “make good” on its promises, are determined by the specific terms and representations contained therein. All the terms of the offering plan are incorporated into developer-drafted purchase agreements which normally declare, in the “No Representations” clause, that:

 

Purchaser acknowledges that Purchaser has not relied upon any architect’s plans, sales plans, selling brochures, advertisements, representations, warranties, statements or estimates of any nature whatsoever, whether written or oral, made by Sponsor, Selling Agent or otherwise, (Emphasis added)

 

and that:

This Agreement, together with the terms of the [Offering] Plan, supersedes any and all understandings and agreements between the parties and constitutes the entire agreement between them with respect to the subject matter hereof.

 

 

 

 

 

 

The “No Representation” clause generally precludes the buyer from relying on alleged “precontractual or extracontractual promises.” See, e.g., The Plaza PH2001 LLC v. Plaza Residential Owner LP, 98 AD2d 89, 947 NYS2d 498 (1st Dept. 2012). Nor can purchasers rely upon statements or renderings appearing in ads or in other marketing materials furnished by the developer or its sales agent. Courts readily find such marketing representations to be mere “puffery.” See, e.g., Sirohi v. Lee, 222 AD2d 222 (1st Dept. 1995); Paladino v. Adelphi University, 89 AD2d 85, (2d Dept. 1982); Bader v. Siegel, 238 AD2d 272 (1st Dept. 1997).

 

Accordingly, anything short of construction defects due “to substantially improper workmanship or construction practices or the use of materials that are substantially and materially at variance with the plans and specifications,” or sponsor’s failure to complete post-closing punch list work, will not qualify as a “material” sponsor default. See Kerusa Co. LLC v. W10Z/515 Real Estate Ltd. Partnership, 50 AD3d 503.504 (1st Dept. 2008):

 

[P}laintiff fails, as a matter of law, to demonstrate any injury for which it is entitled to hold defendant sponsors liable. Although the purchase agreement obligated defendant sponsors to provide plaintiff with a building and unit constructed “in a good and workman-like manner,” the purchase agreement, through its incorporation of the terms of the offering plan, limited plaintiff’s remedy for any breach of this obligation to the right to require the sponsors to “repair or replace any defective item of construction.” The latter provision necessarily excludes from recoverable damages any diminution in the value of the unit that may result from defective construction [and] [p]laintiff does not allege that it has incurred any expense to repair or replace any defects in the construction of its unit,* * *. (Emphasis added)

 

Accordingly, unless the purchaser of new condo or co-op construction can show, prior to closing (despite the issuance of a certificate of occupancy for the unit), that the developer has defaulted on specific construction representations made in the offering plan or in the parties’ purchase/sale contract (which could be deemed “so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract”), the purchaser will not demonstrate a “material” breach of the purchase/sale contract. However, except for cases involving purchasers’ failure to close (see, e.g., Uzan v. 845 UN Limited Partnership, 10 AD3d 230 (1st Dept. 2004); 

 

Held: purchaser forfeited 25% down payments as a matter of law for failing to appear at October 19, 2001 closing, following the September 11, 2001 (“911”) World Trade Center tragedy), most cases for rescission of condo or co-op contracts are brought post-closing, in which case issues of sponsor compliance with offering plan construction representations are paramount.

 

In addition, if it is indisputably proven that the purchaser, prior to defaulting at closing, had knowledge of the not “so substantial” matter complained of, see Chateaugay Lake Estates v. Bouyea, 194 Msc. 429 (Sup. Ct, Special Term, New York Co. 1949), and/or, if purchaser’s excuse for not closing is shown to be pretextual (see Donerail Corp. N.V. v. 405 Park LLC, 100 AD3d 131 (1st Dept. 2012), purchaser’s breach will itself qualify as “material” as a matter of law. See WILLJEF, supra.

 

In a reverse situation, where the developer, as a purchaser of real estate, agreed to construct a church and a condominium unit on the premises, but failed to begin construction, defaulted on loans, and marketed the project to unapproved developers, rescission was found warranted because the developer’s breach was found “so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract.” Movimiento Misionero Mundial, Inc. v. SoBro Development, 238 AD3d 607 (1st Dept. 2025).

 

Conclusion

The above discussion illustrates the many ways in which New York courts must determine whether a seller or buyer of real estate has materially breached the parties’ contract of sale, because of actions which are so “material and willful, or, if not willful, so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract.” Ma v. Biaggi, supra.

 

Most cases are determined on motions for summary judgment, when “the evidence concerning the materiality is clear and substantially uncontradicted [and] the question is a matter of law for the court to decide.” WILLJEF, supra.

 

Accordingly, in drafting contracts of sale and in scheduling closing dates (whether “on or about” or “time is of the essence”),attorneys need to be very careful in how they evaluate the facts supporting either a buyer’s or seller’s contract remedies before they proceed to claim a “material breach” by the other party to their client’s contract. Whether one or the other of the parties may be successfully charged with a material breach is often subject to a delicate balancing of the facts and circumstances, with no certain outcome. A successful motion for summary judgment will be dependent upon how well the attorney is able to orchestrate the steps necessary to completing a successful closing and for his or her client to be perceived as always being ready, willing, and able to close (whether or not the closing is actually expected to occur).

 

Adam Leitman Bailey is the founding partner of Adam Leitman Bailey, P.C., and John M. Desiderio is a partner and chair of the firm’s real estate litigation group. Niaz Najafi and Ashley Drewal, externs of the firm, assisted in the preparation of this article.

APPELLATE LITIGATION

Appellate Division Second Department Awards Lender $1.4 Million and Secures Foreclosure and Sale

Jeffrey R. Metz

Danny Ramrattan

A lender retained Adam Leitman Bailey, P.C. to handle an appeal in the Second Department in a foreclosure action. The lender’s action was dismissed at an inquest when the lower Court determined that the limited power of attorney entered into between the lender and its servicer was “void and ineffectual.”


In that action, the Court had granted summary judgment in favor of the lender. Normally, in a foreclosure action, the Court would then send the matter to a referee to compute the amounts due and owing on the loan. However, here, the Court instead order that damages be established at an inquest.


During the inquest, the lender produced a representative from its servicer to testify regarding the damages. In an extraordinary ruling, the lower Court found the limited power of attorney void because (1) it did not include a schedule of loans, and (2) other agreements reference in the limited power of attorney were not produced. The Court then held that since the limited power of attorney was void, the representative did not have the authority to testify. Despite, the hearing only being related to damages as summary judgment had already been granted in favor of the lender, the Court dismissed the entire action.

 

Adam Leitman Bailey, P.C. argued that it was inappropriate for the Court to dismiss the action and by doing so it sua sponte vitiated an agreement freely entered into between the lender and servicer that is customarily used in the mortgage loan business. Here, the limited power of attorney was entered into before the lender acquired the loan. Additionally, the other documents referenced in the limited power of attorney are separate and apart, and the limited power of attorney does not require the servicer to produce those agreements in order to establish its authority to act on behalf of lender.


The Second Department ruled in favor of the lender determining that the lender met its burden in producing the representative from the servicer who established that $1.4 million was due on the loan.


As such, the Second Department overturned the lower Court’s decision dismissing the action, reinstated the complaint, and remanded the matter back to the lower Court to enter the appropriate judgment in favor of lender in the amount of $1.4 million.


Jeffrey R. Metz, Esq., and Danny Ramrattan, Esq. at Adam Leitman Bailey, P.C. secured this result for its client.

FORECLOSURES

Adam Leitman Bailey, P.C., Wins Rare Order Barring Debtor from Interfering with Competition of Foreclosure Action after only Two Bankruptcy Filings

Jackie Halpern Weinstein
Courtney J. Lerias

Adam Leitman Bailey, P.C. was retained by a lender to foreclose a business purpose loan. After successfully prosecuting the foreclosure action and obtaining a judgment of foreclosure and sale, the property was scheduled for auction. On the eve of the foreclosure sale, the borrower filed for bankruptcy, thus invoking an automatic stay on proceedings and preventing the lender from moving forward with the auction.


Adam Leitman Bailey, P.C. is fully familiar with this delay tactic. When a borrower files for bankruptcy for the first time, particularly when a corporate borrower files a bare bones petition, with no schedules or summary of assets and liabilities, the best course of action is generally to wait for the Court to dismiss the petition on its own accord. That is exactly what happened in this case. And, upon dismissal, Adam Leitman Bailey, P.C. re-noticed a foreclosure sale. Like clockwork, the borrower refiled another skeleton petition, without counsel, and Adam Leitman Bailey, P.C.  immediately jumped into action.


Adam Leitman Bailey, P.C. brought a motion for in rem stay relief, seeking an order not only vacating the automatic stay to permit the lender to proceed with its foreclosure sale, but also ordering that any future bankruptcy filings would not affect the lender’s rights to the property. In rem stay relief is notoriously difficult to obtain, and the bankruptcy courts typically requires that a lender prove that the borrower has a lengthy history of abusing the bankruptcy process – in rem stay relief is nearly impossible to obtain on a borrower’s second filing.


However, Adam Leitman Bailey, P.C. was not deterred by this high standard. In its motion, Adam Leitman Bailey, P.C. demonstrated to the Court that the borrower’s history of filing bankruptcy petitions on the eve of foreclosure sales and then completely ignoring even basic requirements of the Bankruptcy Code, lead to only one conclusion: the sole purpose of the borrower’s filings was to prevent the lender from lawfully selling the property at a foreclosure auction, thus establishing the bad faith necessary to obtain in rem stay relief.
In opposition to Adam Leitman Bailey, P.C.’s motion and at argument, the borrower had no explanation for Adam Leitman Bailey, P.C.’s detailed documentation of the borrower’s abuse of the bankruptcy process. As a result, the Court had no choice but to grant Adam Leitman Bailey, P.C.’s motion, thus preventing the borrower from filing a future bankruptcy to prevent the lender from holding a foreclosure sale of the property.


Adam Leitman Bailey, P.C. ’s bankruptcy expertise allowed it to achieve a favorable result for its client. Jackie Halpern Weinstein, Esq. and Courtney J. Lerias, Esq. at Adam Leitman Bailey, P.C. incredibly secured this result for the client.
Read More: https://bit.ly/ObtainsInRemStayRelief

COOPERATIVE CONDOMINIUM LITIGATION

Adam Leitman Bailey, P.C. Secures Full Return of Client’s $270,000 Deposit Despite Buyer’s Attempts to Be Rejected at the Board Meeting by Wearing a MAGA Hat to the Interview and Asking About Entertaining Guests Late at Night

Adam Leitman Bailey
Karen M. Chau

Nurie Metodieva

In Adam Leitman Bailey, P.C.’s latest victory, the sellers agreed to return the client’s full $270,000 deposit after the firm filed a lawsuit demonstrating that the sellers had no contractual basis to retain the funds once the cooperative board denied consent to the purchase.

 

Adam Leitman Bailey, P.C. was retained after the sellers refused to authorize the release of the deposit, despite the contract’s clear provisions requiring the Escrowee to refund the deposit if the Board did not grant approval. The client had fulfilled all contractual obligations and made extraordinary efforts to comply with the Board’s interview process, even traveling from Florida to New York City multiple times at significant personal expense. His interview date and time were changed several times at the last minute. When he finally received a last minute call to be interviewed, we were lucky we had encouraged him to stay in New York versus his primary residence in Florida.  He was called into the interview with less than 8 hours’ notice and only two board members attended.

 

Nevertheless, the Board denied the application following a series of unreasonable scheduling changes and incomplete attendance at the interview.

 

Thus, the board made it clear it did not want this buyer in their building. And of course, the board’s actions regarding his necessary alterations caused our contract-vendee client to no longer want to purchase without such approval.

 

In addition, even before the interview the Board denied our client’s alteration requests which were essential to his living in the apartment. At the same time, our client did not want to lose his deposit, so he was willing to close if approved by the board. And he stood a strong chance of approval, as his financials more than qualified him - not just for this cooperative, but for many far more high-end cooperatives. We coached our client that he had to attend the interview, no matter how difficult the board made it for him. We kept him prepared at all hours for several days to ensure he did not default under the contract. However, our client’s primary goal was to be rejected by the board lawfully, and we provided suggestions regarding lawful questions and conduct that might discourage the board of directors from providing him with an acceptance. We emphasized that he could not act in bad faith, and had to answer every question honestly, but, for example, he was free to bring up social uses of the apartment. At the interview, he wore a MAGA hat, remained unshaven, and did asked about entertaining guests in his unit. As advised, during his interview he remained careful not to push the boundaries so far that he could be deemed to have acted in bad faith. He accurately gambled that the board would not be Donald Trump supporters and would not like questions about how late he could entertain guests.

 

Ultimately, our coaching and his gamble worked. The board rejected him within two hours after the interview and provided no reasons for the decision. Although his questions and attire may not be well-received by some board members, they would be welcomed by others, and we ensured that everything remained within the limits of the law and in full compliance with the contract.

 

Following the Board’s denial, the client properly exercised his right to cancel the contract and sought the return of his deposit. The sellers, however, refused to return the deposit stating that they learned of our client’s alleged bad faith and antics and directed the Escrowee to withhold the funds, in direct violation of the contract.

 

Adam Leitman Bailey, P.C. swiftly filed a complaint against the sellers, outlining the Board’s denial, the client’s timely cancellation, and the sellers’ breach of their contractual duties. The complaint made clear that the sellers had no legal or equitable claim to the deposit.

 

Shortly after the action was filed, the sellers’ attorney contacted Adam Leitman Bailey, P.C. to resolve the dispute. The firm secured a settlement providing the client with the full return of his $270,000 deposit, avoiding prolonged litigation.

 

Through strategic advocacy centered on protecting its client’s interests, Adam Leitman Bailey, P.C. secured a complete recovery. This swift resolution saved the client significant time and resources, delivering a prompt and efficient victory.

 

Adam Leitman Bailey, Karen Chau, and Nurie Metodieva of Adam Leitman Bailey, P.C., represented the client in this litigation.

LANDLORD REPRESENTATION

Adam Leitman Bailey, P.C. Has Nearly All of Respondent’s Affirmative Defenses and her Counterclaim Thrown Out

Dov A Treiman

Carolyn Z. Rualo
Charles W. McMellon

In Adam Leitman Bailey, P.C.’s latest victory, the Court granted its cross-motion dismiss dismissing all but one of Respondent’s affirmative defense and dismissed the counterclaim outright.

 

Adam Leitman Bailey, P.C. was retained by their client under significant pressure. The current tenant had succeeded on a rent overcharge claim against Petitioner in the past. When Petitioner came to Adam Leitman Bailey, P.C., Petitioner was instructed that it was time to end the battle, but not the war. Despite losing the overcharge case under prior counsel, Petitioner was still owed nearly $100k in back rent from Respondent. Thus, a new chapter of war began.

 

Adam Leitman Bailey, P.C. swiftly took action, carefully crafting a non-payment petition that sought only six years’ worth of back rent in compliance with New York law. Respondent filed an Answer with six affirmative defenses and a counterclaim. Shortly thereafter, Respondent filed a motion to dismiss, contending, among other things, that Petitioner sought more than six years of rent and engaged in unlawful failure to register Respondent’s unit with DHCR. Adam Leitman Bailey, P.C. cross-moved seeking to dismiss Respondent’s affirmative defenses and shut down her counterclaim for discovery on a warranty of habitability claim.

At oral argument, Adam Leitman Bailey, P.C. picked apart Respondent’s argument by proving to the court that the petition sued for the proper amount under New York law, Respondent had not shown any prejudice to pay the back rent, and discovery is not warranted by Respondent as there was no evidence of a claim for warranty of habitability.

 

Interestingly, a few months after reserving decision at oral argument, Respondent filed a motion claiming that there was new evidence on the “pending motions.” Strikingly, this position could not be further from the truth because the motions were not pending. The motions were reserved for decision and marked fully submitted. The “new evidence” proffered by Respondent was in fact an attempt to bolster arguments that were not effectively raised during the hearing on the first motion.

 

Nonetheless, Adam Leitman Bailey, P.C. drafted opposition and argued at the second hearing that Respondent’s new motion was actually disallowed and “nothing more than another bite at the apple.” The court agreed stating, “Respondent’s motion is granted to the extent that the new evidence submitted was considered by the court in connection with Respondent’s initial, unsuccessful motion”. The court recognized that Respondent was attempting to relitigate an issue that was not effectively plead or argued. The court dismissed all but one of Respondent’s affirmative defenses and struck the counterclaim outright.

 

Carolyn Z. Rualo, Dov A Treiman and Caleb J. Brown of Adam Leitman Bailey, P.C., represented the client in this litigation. 

LANDLORD REPRESENTATION

Adam Leitman Bailey, P.C. Wins Residential Non-Payment Trial, Defeats Tenant’s Overcharge Defense and Counterclaim, and Obtains a Large Money Judgment

Vladimir Mironenko

Representing a New York City landlord concerning a rent stabilized apartment, Adam Leitman Bailey, P.C., overcame the tenant’s overcharge claim, achieved a complete victory in a residential non-payment trial, and obtained a possessory and monetary judgment against the tenant for over $50,000 in rent arrears and a warrant of eviction. The warrant issued in less than 24 hours after our post-trial request. 

 

The tenant was the first rent stabilized tenant of the apartment following the vacatur of a rent controlled tenant many decades ago. She stopped paying rent and accrued tens of thousands of dollars of arrears. The landlord turned to Adam Leitman Bailey, P.C., for help.

 

We served the required five-day notice and 14-day rent demand and commenced a non-payment summary eviction proceeding in the housing court. The tenant hired a private attorney who interposed an answer asserting various defenses and counterclaims, including, breach of warranty of habitability and overcharge, and questioning whether the landlord’s limited liability company was a valid New York entity based on allegations of lack of required publishing at the time of creation.

 

First, we subpoenaed the Department of State and obtained certified records proving that the landlord entity was duly organized and published. Next, we obtained and closely analyzed the DHCR registration and case list history for the subject apartment. We also obtained archived case records for several prior housing court cases concerning this tenant spanning several decades.

 

At trial we established our client’s prima facie case by introducing the certified deed, multiple dwelling registration, and DHCR filings, and introducing the tenant’s signed lease renewals and ledger of arrears.

 

The tenant argued that she was being overcharged despite the landlord charging her a preferential rent. On cross examination we demonstrated that the tenant was the first rent stabilized tenant of the apartment following a rent controlled tenancy, that the tenant (while represented by counsel) settled a prior proceeding confirming the legal rent and waiving overcharge, and that a contemporaneous lease renewal was executed confirming the exact preferential rent agreed upon.

 

The court analyzed the issues and correctly concluded that the pre-2019 law applied barring consideration of increases more than four years before the claim, that the tenant’s remedy would have been to file a fair market rent appeal and the deadline to do so long expired, and that the DHCR exercises exclusive jurisdiction over a fair market rent appeal. The court also ruled that the tenant’s prior settlement of a housing court proceeding (confirming the rent and waiving overcharge) is a lawful exception to the rule against the waiver of benefits of rent stabilization and should not be disturbed.

 

The tenant also abandoned her breach of warranty of habitability claims at trial after the landlord worked diligently to obtain access to the apartment and performed repairs, once on notice of them.

 

After trial, the court awarded our client a possessory and money judgment for over $50,000 together with a warrant and stayed execution of the warrant for only five days. We immediately contacted our marshal, who submitted a warrant application. The court issued a warrant in less than 24 hours.

 

Vladimir Mironenko, co-managing partner of Adam Leitman Bailey, P.C.’s landlord-tenant group, represented the landlord in the housing court proceeding and conducted the trial.

CONDOMINIUM COOPERATIVE SHAREHOLDER

Adam Leitman Bailey, P.C. Attorneys Obtain Favorable Settlement for Real Property Seller Who Sought to Retain Down Payment After Purchaser Defaulted at Closings

Brandon M. Zlotnick
John M. Desiderio
Laurence Sklaw

Adam Leitman Bailey, P.C. settled a case on favorable terms for a seller of real property, recovering the majority of the down payment paid by a would-be purchaser, after the would-be purchaser defaulted on paying at the first time-of-the-essence closing scheduled by the seller and did not appear at the second time-of-the-essence closing scheduled. The case settled shortly prior to trial.

 

The client owned real property located in the Bronx. The client had contracted to sell the property to a buyer that had paid, to the escrow agent on the transaction, a down payment equal to ten percent (10%) of the property’s purchase price. However, the buyer later decided against the deal. The client scheduled a time-of-the-essence closing for January 2023. The buyer’s counsel appeared at the closing, and refused to close, arguing there that the seller had defaulted on the transaction, because the property allegedly was not vacant at the time of the closing, but instead was being leased out for use as a commercial parking lot, and there were car lifts on the property that the parking lot operator had used to store cars during business hours.

 

The buyer then sued the seller for, among other things, breach of contract and specific performance of the contract of sale. The seller scheduled a second time-of-the-essence closing. When the buyer did not appear for the second closing, the seller declared the buyer in default under the contract of sale, and counterclaimed against the buyer for, among other things, breach of contract, seeking to retain the down payment as the damages to which it was entitled under the contract.

Both the buyer and seller moved for summary judgment. Both sides’ motions were denied. However, a seller who has scheduled a time-of-the-essence sale of property may require the buyer to perform under the contract, even the seller was not, as of the closing date, ready, willing, and able to sell, if the seller could become ready, willing, and able to sell within a reasonable period of time. The court, in deciding the summary judgment motions, thus indicated that the seller would prevail if it could show that it could have removed the car lifts within a reasonable period of time if the buyer had demanded such removal.

 

An Adam Leitman Bailey, P.C. attorney arranged for a person with a company that prepared properties for sale, including the removal of car lifts from property, to testify, if the case went to trial, that it would have taken only a short period of time to remove the car lifts. An Adam Leitman Bailey, P.C. attorney attended a settlement conference and negotiated settlement on behalf of the client, both at that conference and between then and the scheduled beginning date of the trial. A week before the trial was to begin, the parties agreed to split the down payment in a manner favorable to the seller. Thanks to the efforts of Adam Leitman Bailey, P.C., the client obtained a favorable settlement without having to incur the costs of trial.

 

Brandon M. Zlotnick and John M. Desiderio worked on the client’s motions for summary judgment and the opposition to the opposing party’s summary judgment motion, and on obtaining testimony of an expert on car lift removal. Laurence M. Sklaw negotiated the settlement agreement on behalf of the client.

LANDLORD REPRESENTATION

Adam Leitman Bailey, P.C., Prevails on Summary Judgment in a Holdover Case in a Mitchell Lama

Dov A Treiman

Carolyn Z. Rualo
Charles W. McMellon

“Float like a butterfly, sting like a bee.” In Adam Leitman Bailey, P.C.’s latest victory, the court granted summary judgment in favor of Adam Leitman Bailey, P.C.’s client. The Respondent was improperly residing in a unit, contending that he had succession rights to the unit. The problem is that in a Mitchell-Lama, only HPD can determine whether a resident has succession rights. HPD determined that the Respondent had no right to succeed to the unit he resided in and issued a certificate of eviction. Since HPD is an administrative body, the only way to challenge its decision is by an Article 78 proceeding, which holds a slim four-month statute of limitations. The Respondent failed to appeal the decision by HPD in the requisite time period. Absent a challenge to the Certificate of Eviction, summary judgment is essentially automatic. Accordingly, Adam Leitman Bailey, P.C. moved for summary judgment at this very point. During argument on the motion, the Respondent requested that his attorneys be relieved in their role as counsel and that the case be stayed. Adam Leitman Bailey, P.C. argued against any stay on the proceedings, given the prejudicial effect it would have on their client. The court agreed and warned the Respondent that it was not wise to fight a heavyweight champion in your first match, signaling Adam Leitman Bailey, P.C.’s prowess in the landlord-tenant world. The Respondent nonetheless requested to argue the motion. Adam Leitman Bailey, P.C. swiftly dispatched all the Respondent’s arguments and proved to the court that the rules of the Mitchell-Lama govern. The court agreed with Adam Leitman Bailey, P.C.’s argument, rendering a decision in favor of their client and a judgment of possession against the Respondent.

 

Dov A Treiman, Carolyn Z Rualo and Caleb J. Brown of the Landlord-Tenant Department of Adam Leitman Bailey, P.C., represented the client. 

LANDLORD REPRESENTATION

Adam Leitman Bailey, P.C. Prevails at Trial on Holdover Proceeding against Cooperative Shareholder’s Breach of a Conditional Limitation to Pay Maintenance Charges Pursuant to the Proprietary Lease

Charles W. McMellon
Carolyn Z. Rualo
Charles W. McMellon

Adam Leitman Bailey, P.C., was retained to represent a long-standing Queens cooperative to resolve a shareholder’s failure to pay substantial maintenance charges. In cooperative housing, there is a reasonable expectation that every shareholder is held responsible for the payment of maintenance charges essential to the maintenance of the building and services provided.  After a notice to cure failed to compel the shareholder to pay their maintenance charge arrears, their lease was terminated and a holdover commenced in NYC Civil Court, Housing Part for breach of their proprietary lease for failure to cure the default. After several months of court delays caused by the shareholder, Adam Leitman Bailey P.C. attorneys secured a trial date and prevailed on the merits, affording their cooperative client and remaining shareholders a right to possession and a monetary judgment for the full amount of maintenance charges owed by the defaulting shareholder.

 

Carolyn Rualo was the managing attorney on the proceeding, and Charles W. McMellon was the litigator for the trial. Caleb J. Brown did the resolution work, and stopped the shareholder’s delay tactics. 

COOPERATIVE AND CONDOMINIUM BOARD REPRESENTATION

Adam Leitman Bailey, P.C. Wins Unprecedented Motion to Dismiss Affirming that Condominium Garage and Commercial Unit Owners Must Pay Their Fair of Share Local Law 11 Work on any Portion of a Condominium’s Façade

Eric S. Askanase
Courtney J. Lerias
Charles W. McMellon

As an unruly commercial condominium unit owner recently learned the hard way, an excellent real estate attorney is a Condominium Board’s best friend, especially when a unit owner refuses to pay its fair share of common charges and assessments for work on the Building’s common elements.  Adam Leitman Bailey, P.C. is counsel many of New York’s most prominent residential and commercial buildings, including a a 20-story condominium on Manhattan’s Upper East Side that contains residential units, a commercial unit, and a garage, all of which share a common façade.  Under New York’s infamous Local Law 11 (“LL11”), all buildings must undergo period inspections and repairs to their facades to, among other reasons, prevent injuries from insecure façade elements that may fall to the ground (which is responsible for much of the scaffolding constantly surround older New York buildings). 

 

It is a fundamental aspect of condo life in New York that LL11 work is authorized by the condo’s Board of Directors and then typically billed out as a common charge or special assessment to individual unit owners in accordance with their ownership percentages in the condominium.  For years, the garage unit owner in our client’s condominium paid its proportionate share of approximately of 2.7% of every LL11 charge.  However, without any change in circumstance, it suddenly decided even that was too much; and it refused to pay for common charges related to any further LL11 façade work – which every other shareholder continued to pay without dispute – asserting that the largely underground garage was not responsible for the façade that primarily surrounded the other, above-ground, unit owners. 

 

The Board engaged Adam Leitman Bailey, P.C, which immediately recognized that, although the amount in controversy were not enormous, the costs over time would quickly mount, it would set an incredibly dangerous precedent for the building – and other similarly situated buildings – if the garage owner was able to avoid rightfully assessed common charges for city-mandated repairs.   When Adam Leitman Bailey, P.C. and the Board refused to acquiesce, the garage sued the Board in New York state Supreme Court, seeking, among other things, a declaration that they should never have to pay for LL11 charges and their past payments should all be refunded.  However, Adam Leitman Bailey, P.C. had not one, but two aces in its pocket: (1) a damning precedential decision in which the Appellate Division, First Department had already determined that the commercial unit owner in the very same Condominium – was required to pay its fair share of LL11-related common charges; and (2) intricate insider knowledge from our team of real estate experts of the ways that LL11 and the very definition of a building’s ”façade” intentionally dovetail with the most common Cooperative declaration terms, including those in this Condominium’s governing documents. 

 

In order to try to minimize costs to the Board from a motion to dismiss – and in the hopes that the garage would see the folly of pursuing its implausible claims, and settle the matter without further costs – Adam Leitman Bailey, P.C. filed a detailed answer including in-depth analysis of the prior First Department opinion and the Condominium’s governing documents.  However, when the garage doubled down and amended its complaint to claim that the Board – and all other Unit Owners -- should now pay for repairs wholly within the garage while the garage still refused to pay for repairs to the common façade, enough was enough; and Adam Leitman Bailey, P.C. moved to dismiss the entire complaint and force the garage to pay all of the Board’s legal fees related to the garage’s frivolous litigation. 

 

In typical fashion, Adam Leitman Bailey, P.C.’s team presented a multi-prong attack, including a meticulously detailed analysis including (i) why the Condominium’s governing documents’ requirement that every unit owner pay its fair share of common charges specifically applied to repairs to a common item, like a facade that surrounded or benefitted more than one unit and was necessary for, among other things, the safety of the entire building; (ii) how clauses in those same documents granting certain easements for the use by the garage of portions of the façade implicitly recognized it as a common element; (iii) the interplay between LL11 and the New York City Department of Building’s definition of a façade as encompassing the entire exterior walls of a building; (iv) the binding precedent already set by the First Department’s decision concerning the commercial unit owner’s responsibility to pay its share of LL11 work at this Condominium; and (v) that, under New York’s Voluntary Payment Doctrine, the garage’s prior payments without protest for LL11 work waived any claims to such payments. 

 

From any perspective, these arguments should have prompted the garage to explore settlement, but it refused to cede any ground.  In mid-November, the Court held oral argument; and, in a turnaround without precedent, the very next day, and in language largely mirroring Adam Leitman Bailey, P.C’s arguments, the Court dismissed each and every one of Plaintiff’s LL11 claims, held that the façade is a common element of the condominium, and ordered that the garage must pay its fair share of all LL11 charges now and in the future.   This decision is particularly significant for Condominium Boards throughout the City because it affirms, once and for all, that costs to maintain Condominium building facades – and, by extrapolation, other similar common elements -- must be shared by each and every unit owner, regardless of size or location; and, with able Board counsel like Adam Leitman Bailey, P.C. in place, any Unit owner that protests such charges faces the likely risk of paying the Board’s legal fees when they inevitably lose. 

 

Eric S. Askanase, Courtney J. Lerias, and Caleb J. Brown of Adam Leitman Bailey, P.C.’s New York Supreme Court Litigation Group secured this unprecedented result for this Board.

LANDLORD REPRESENTATION
Jackie Halpern Weinstein
Danny Ramrattan
Courtney J. Lerias

Legislature Quietly Puts Out a New Law Limiting Bounced Check Fees

Dov A Treiman

In a new law that the Legislature passed and the Governor signed without any fanfare, New York now limits landlords to charging only so much for a bounced rent check as the bank charged the landlord. More than that, the landlord cannot, under the new law, charge anything for the bounced check unless the landlord has (1) kept the documentation showing the dishonor fee from the bank and (2) has a provision in the lease authorizing bounced rent check fees. The law became effective immediately when the Governor signed it on October 16, 2025, but nearly none of the media covered the new enactment and what they did report was inaccurate.

 

The new provisions can be found in Real Property Law §238-a and General Obligations Law §5-328. Because of the title of those sections, the new law is probably limited to residential leases, but there is room in the law for a judge to apply it to commercial tenancies as well. We will be tracking the court decisions on that question.

 

The new law does not apply to what cooperatives can charge their shareholders, but it does apply to what shareholders can charge their subtenants.

 

While many commercially available leases omit the supporting language the law requires, Adam Leitman Bailey and Dov A Treiman authored leases have had that language for nearly twenty years. During those same years, we have come across many leases that are not based on pre-printed forms and don’t have the landlord-protecting provisions we have been putting in them over the past two decades.

 

Our next round of revisions to those leases will strengthen the already existing language so that it more closely tracks the new enactment. This might very well be the perfect moment for our landlord-clients to take a look at their leases and check the copyright date. While anything older than a year probably could use a bit of polish, anything from prior to 2019 is almost guaranteed to have provisions that are now bad for landlords. This is with respect to a wide range of topics, not just bounced check fees.

 

The full text of the law is at the base of this report.

 

2025 Session Law News of NY, Chapter 431

 

Approved and effective October 16, 2025

 

AN ACT to amend the real property law and the general obligations law, in relation to prohibiting residential landlords from charging tenants a fee for a dishonored rent check in excess of the actual costs or fees incurred by such landlord as a result thereof.

 

The People of the State of New York, represented in Senate and Assembly, do enact as follows:

 

Section 1. Section 238–a of the real property law is amended by adding a new subdivision 2–a to read as follows:

2–a. (a) No landlord, lessor, sub-lessor or grantor shall demand any payment, fee, or charge from a tenant for the delivery of a check, draft or like instrument that was given in payment for rent and subsequently dishonored by the tenant’s financial institution for insufficient funds except as provided in paragraph (b) of this subdivision.

(b) Notwithstanding any contrary provision herein, a landlord, lessor, sub-lessor or grantor may demand any payment, fee, or charge from a tenant for the delivery of a dishonored check only if such payment, fee, or charge was provided for in the lease or contract between landlord, lessor, sub-lessor or grantor and the tenant; provided, however, that:

(i) such payment, fee, or charge shall not exceed the actual costs, charges or fees incurred by landlord, lessor, sub-lessor or grantor for the return of such dishonored check or the amount set forth in subdivision three of section 5–328 of the general obligations law, whichever is greater; and

(ii) if the payment, fee or charge exceeds the amount set forth in subdivision three of section 5–328 of the general obligations law, the landlord, lessor, sub-lessor or grantor shall provide to the tenant upon request evidence substantiating the equivalence between the payment, fee or charge and the amount of actual costs, charges or fees incurred for the return of the dishonored check.

(c) As used in this subdivision, “dishonored check” shall have the same meaning as such term is defined in section 5–328 of the general obligations law.

(d) The provisions of this subdivision shall not apply to a shareholder of a cooperative housing corporation, provided, however, that the provisions of this subdivision shall apply with respect to any tenant or subtenant of such a shareholder.

§ 2. Subdivision 3 of section 5–328 of the general obligations law, as added by chapter 529 of the laws of 1995, is amended to read as follows:

3. (a) Notwithstanding any other provision of law, any person to whom a check, draft or like instrument, other than a money order, bank cashier’s check or certified check, is tendered for any transaction, other than a consumer transaction, may, if such instrument is dishonored charge or collect from the maker or drawer the amount of twenty dollars for the return of such unpaid or dishonored instrument.

(b) Notwithstanding any other provision of this subdivision, a landlord, lessor, sub-lessor or grantor to whom a check, draft or like instrument, other than a money order, bank cashier’s check or certified check, is tendered for payment of rent, may if such instrument is dishonored charge or collect from the maker or drawer the amount of actual costs, charges or fees incurred by such landlord, lessor, sub-lessor or grantor for the return of such dishonored check or the amount set forth in paragraph (a) of this subdivision, whichever is greater, provided that:

(i) if the payment, fee or charge exceeds the amount set forth in paragraph (a) of this subdivision the landlord, lessor, sub-lessor or grantor shall provide to the tenant upon request evidence substantiating the equivalence between the payment, fee or charge and the amount of actual costs, charges or fees incurred for the return of the dishonored check; and

(ii) such dishonored check charge was contracted for in the lease agreement between the tenant and landlord, lessor, sub-lessor or grantor in accordance with the requirements of subdivision two-a of section two hundred thirty-eight-a of the real property law. The provisions of this paragraph shall not apply to a shareholder of a cooperative housing corporation, provided, however, that the provisions of this paragraph shall apply with respect to any tenant or subtenant of such a shareholder.

§ 3. This act shall take effect immediately and shall apply to actions and proceedings commenced on and after such effective date.

COOPERATIVE AND CONDOMINIUM

New Procedural Hurdle For Condo & HOA Collections - Amendment to Real Property Law Section 339-aa Requires 90 Day Notice of Commencement of Foreclosure Actions

Rachel Sigmund McGinley

On October 17, 2025, Governor Hochul signed a new law requiring condominiums and homeowner associations (HOAs) to give a 90-day “Notice of Intent to Foreclose” to owners in arrears before the board can begin foreclosure proceedings. This is the first time a requirement of this nature has been put into law, which amends Section 339-aa of the Real Property Law (RPL) for condominiums and adds a new Section 20A to the Real Property Actions and Proceedings Law (RPAPL) for HOAs.


Under this new law, before proceeding with a foreclosure action, a condominium or HOA board must send written notice at least 90 days in advance to the owner at the property address and any other address of record.


Additionally:
The notice font must be in at least 14-point type
The notice’s contents must:
(1) state that the condo board/HOA intends to file an action to foreclose the lien;
(2) identify the property address; and
(3) state the specific amount due.


A significant drawback of this new requirement is it fails to distinguish when the 90 days is triggered. It is currently unclear whether the 90 days is measured from the date that the condominium’s lien arises under RPL Section 339-z or the date that the lien is effective (that is, recorded) pursuant to RPL Section 339-aa.  


That said, as noted above, the amended statute’s requirement that each 90 day notice must expressly inform the owner that the board “intends to file an action to foreclose the lien” leads this firm to believe that the notice must be sent after the lien has been recorded under RPL Section 339-aa. This is also recommended to avoid potential dismissal of the foreclosure action for sending the notice too early insofar as it is not definitively clear under the current drafting of the amended statute when the 90 days is triggered.


Unfortunately for condos and HOAs, this means that the earliest a board may commence a lien foreclosure action is 90 days after the date a lien is recorded. This extra three month wait period can be problematic for buildings that need funds from owners in arrears and now must wait even longer before commencing the actual lien foreclosure action.


Accordingly, under this new law, boards must be extra vigilant in filing liens as soon as possible according to the timeframes in their by-laws. Many by-laws require boards to wait at least 30 days (and sometimes even 60 days) after the payment is past due before filing a lien. This means that, with the amended law in place, some boards may not be able to commence foreclosure proceedings until five or six months after the missed payment.  Once the lien has been recorded, the 90 day notice should be sent immediately.


Additionally, we recommend that boards check their by-laws to ensure they provide that the defaulting unit owner must pay “a reasonable rental for the unit” during the pendency of the foreclosure action as provided in RPL Section 339-aa.

 

FINANCE GROUP/BANKING

New York Banking Law §35 – Information Pamphlet for Residential Mortgage Applicants

Zoe Tsicalos

On June 11, 2025, Section 35 of the New York Banking Law took effect. The new law now requires licensed lenders, mortgage bankers, and banking organizations to provide a disclosure pamphlet titled “What Mortgage Applicants Need to Know” to individuals applying for a loan secured by a mortgage upon residential real estate. The pamphlet must be provided to such individuals no later than the third business day after the date their loan application is received.

 

The pamphlet is available on the New York Department of Financial Services website. Applicants may be provided the pamphlet through electronic communications, including electronic mail or a hyperlink to the pamphlet posted on the Department of Financial Services website.

 

The term, “banking organization,” includes all banks, trust companies, private bankers, savings banks, safe deposit companies, savings and loan associations, credit unions and investment companies.” NY BNK §2. Further, the term, “mortgage banker,” refers to any person or entity who or which is licensed under Section 591 of the New York Banking Law to engage in the business of making mortgage loans in New York State. The law only applies to entities that are chartered or licensed under New York law. The law does not apply to federally chartered institutions.

 

While mortgage brokers are not included in the definition of a banking organization, it is highly recommended that they still comply with this new law, as it is good practice to do so.

 

The pamphlet discloses to applicants that they have the right to:

1. Compare and negotiate the charges of different mortgage brokers and lenders to obtain the best loan possible.

2. Ask your mortgage broker to explain such person's responsibilities within the mortgage lending process.

3. Know how much the mortgage broker is compensated by you and the lender for your loan.

4. A clear and truthful explanation of the terms and conditions of the loan.

5. Know if the loan being offered is a fixed or adjustable rate mortgage loan, whether the loan can be transferred or refinanced, know the exact amount of your monthly loan payments, including any projected escrow payments, know the final annual percentage rate (APR) and the amount of regular payments at the loan's closing.

6. Ask for an estimate detailing all loan and settlement charges before you agree to the loan and pay any fees, including without limitation loan application fees, title search and insurance fees, lender's attorney fees, property appraisal charges, inspections, recording fees, late payment fees, transfer taxes, point and origination fees, escrow account balances, which services a loan applicant can shop for and which they cannot, and you are entitled to receive such estimate within three business days of applying for a loan.

7. Obtain credit counseling before closing a loan.

8. Decide whether or not to finance any portion of the points or fees.

9. Refuse to purchase credit insurance for any mortgage loan.

10. Have your property appraised by an independent licensed professional and to receive a copy of the appraisal.

11. Not be subject to deceptive marketing practices.

12. Ask for the consumer financial protection bureau's booklet “Your home loan toolkit”.

13. Receive the following documents, and every document otherwise required to be given to you at closing under federal and New York state law:

a. Loan estimate or good faith estimate depending on the loan you are applying for.

b. Closing disclosure.

14. Know what deposits and fees are not refundable if you decide to cancel the loan agreement.

15. Receive in writing the reason for the denial or conditional approval of your loan application.

16. If refinancing, you may cancel a loan within three days of the closing by providing written notification of cancellation to the licensed lender or banking institution.

17. Receive the closing disclosure three days before the closing takes place.

18. Have any lending disputes resolved in a fair and equitable manner.

19. A credit decision that is not based upon your race, color, national origin, religion, sex, family status, sexual orientation, disability or whether any income is from public assistance.

20. File a complaint with the department or the Consumer Financial Protection Bureau if you believe that a mortgage broker or any other entity licensed by the department or the Consumer Financial Protection Bureau has violated any rules, regulations or laws which govern such person's conduct in working with you to get or process a mortgage loan.

21. File a complaint with the New York state department of state or the Consumer Financial Protection Bureau if you believe that a real estate broker has violated any rules, regulations or laws which govern such person's conduct in working with you to purchase a home.”

 

If licensed lenders, mortgage bankers, and banking organizations fail to provide loan applicants with the required disclosure pamphlet, they risk penalties from the New York Department of Financial Services and possible lawsuits by loan applicants seeking damages or loan invalidation. As indicated in the disclosure pamphlet, loan applicants have the right to file complaints with the New York Department of Financial Services or the Consumer Protection Bureau against lenders, mortgage bankers, and banking organizations that violate any rules, regulations, or laws governing their operations.

 

Overall, the new requirement of providing loan applicants with the disclosure pamphlet under Section 35 of the New York Banking Law will help ensure that loan applicants are aware of important details and procedures when applying for a mortgage in New York.

CONDOMINIUM AND COOPERATIVE

New York Banking Law §35 – Information Pamphlet for Residential Mortgage Applicants

Bonnie Reid Berkow

On March 1, 2024, New York’s Governor Hochul signed Senate Bill 8059, amending the New York LLC Transparency Act (NYTA), which requires all LLCs formed under New York law (domestic LLCs) or formed elsewhere and registered to do business in New York (foreign LLCs) to file either a beneficial ownership disclosure (BOI) or an attestation of exemption with the New York Department of State. 

 

In June 2025, the New York State Senate, in recognition of changes in the federal law and regulations, introduced and passed S. 8432, which seeks to remove the NYTA’s references to the CTA in favor of “statutory definitions from federal law in order to inoculate the [Act] from shifting federal guidelines or attempts to repeal the CTA.” The New York State Assembly passed S. 8432 shortly thereafter.  This bill would remove NYTA’s key definitions—“reporting company,” “beneficial owner” and “exempt company”—from federal law in order to maintain disclosure requirements for domestic LLCs.  Specifically, the 2025 Bill would redefine “reporting company” to mean (1) LLCs formed by filing with the New York Department of State or (2) authorized to do business in New York as a foreign LLC.  It would also codify the CTA’s 23 exemptions directly into New York law, rather than incorporating them by reference to FinCEN’s regulations.

 

On December 8, the bill was delivered to the governor, which means she then has 10 days (excluding Sundays) to take action on the bill.  The governor may sign the bill, veto the bill or sign the bill conditional on “chapter amendments,” which effectively permit the governor to amend the bill. A chapter amendment can be technical or more substantial in scope. If the governor does not take any action on the bill by December 19, it would become law.

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Chambers Spotlight Guide Has Selected Adam Leitman Bailey, P.C. As One of the Top 15 Leading Small to Mid size Law Firms in New York City for 2026

Chambers Spotlight Guide has selected Adam Leitman Bailey, P.C. as one of the top 15 leading small to mid size law firms in New York City for 2026 for the third year in a row since the guide's inception. Chambers Spotlight remarked that "Adam Leitman Bailey, P.C. is primarily known for its real estate litigation work. Based in New York, the firm has an impressive client roster mainly made up of landlords and tenants in the city. The team also has capability in transactional matters, with complementary expertise in construction and mortgage finance."

 

From Chambers Spotlight Guide:

2026 highlights 262 ranked firms across seven regions. It is a comprehensive resource for identifying exceptional small and mid-size law firms across America's key markets.

 

A new type of guide to the legal profession
While the traditional Chambers USA Guide focuses on large national and international practices, Chambers Spotlight specifically champions outstanding boutique and mid-size firms that deliver partner-level attention, deep regional knowledge, and cost-effective solutions for sophisticated legal work.

 

Their dedicated Spotlight research team identifies firms that punch above their weight across key legal markets. These firms combine the personal service and competitive rates of smaller practices with the sophisticated expertise typically associated with larger firms.

 

What sets Chambers Spotlight apart is our city-based approach to legal excellence. They dive deep into local markets to uncover firms that have built sterling reputations in their communities, excel in region-specific and nationally recognised practice areas, and demonstrate intimate knowledge of local courts, regulations, and business environments.

Adam Leitman Bailey, P.C. Is One of Only Two New York City Law Firms, and One of Just Ten Across New York State, With Fewer Than 30 Attorneys to Be Recognized in Best Law Firms 2026

Adam Leitman Bailey, P.C. is one of only two New York City law firms, and one of just ten across New York State, with fewer than 30 attorneys to be recognized in Best Law Firms 2026. Best Law Firms rankings provide comprehensive information about thousands of top law firms nationwide including data on areas of expertise, lawyers, awards, office locations and more. A ranking from Best Law Firms signifies both a high-quality practice and a breadth of legal expertise.

Firms included in the 2026 “Best Law Firms” list are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal expertise.

Ranked firms, presented in tiers, are listed on a national and/ or regional scale. Receiving a tier designation reflects the high level of respect a firm has earned among other leading lawyers and clients in the same communities and the same practice areas for their abilities, their professionalism and their integrity.

Adam Leitman Bailey, P.C.’s Attorneys Named as 2025 Super Lawyers and Rising Stars

In 2025, 9 of Adam Leitman Bailey, P.C. attorneys were listed in Thomson Reuters’ Super Lawyers and Rising Stars lists. Since the firm’s first induction, over 75% of our attorneys have been selected to be featured among the top real estate attorneys in the New York Metro Area. Adam Leitman Bailey, P.C. attorneys have been selected every year since 2007.

 

Super Lawyers is a rating service of outstanding lawyers who have attained a high-degree of peer recognition and professional achievement. The notability of this award derives from the patented selection process that Super Lawyers Magazine utilizes to make its selections. Through independent research across over 70 practice areas as well as peer nominations and evaluations, each chosen attorney is critically selected to be awarded the title of Super Lawyer or Rising Star. Only the top five percent of attorneys are recognized as Super Lawyers and no more than 2.5 percent are recognized as Rising Stars.

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