NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman filed a lawsuit on Wednesday against a real estate developer for allegedly constructing a building full of defects and failing to disclose the defects to possible purchasers.
Yitzchok Schwartz and his company, Maspeth Plaza LLC, allegedly developed and sold 17 newly constructed condominium units between 2006 and 2008 with major deficiencies and construction defects. Owners of one condominium developed by Schwartz were allegedly subjected to poorly constructed windows and doors, lack of fireproofing in certain areas, a leaking roof and poor workmanship throughout the development.
Schneiderman is seeking $1.3 million in restitution for condominium unit owners, an order permanently barring Schwartz from offering securities for sale in the state and $85,000 in penalties.
"Condominium purchasers were defrauded by a developer who chose to cut corners at the expense of people's safety," Schneiderman said. "Purchasers have a right to full and accurate information about what they are purchasing, and should be able to rely on the representations contained in an offering plan when making a significant investment. We are seeking restitution for the purchasers who were ripped off, in addition to strong penalties for the developer who defrauded them."
After developing the condominium units, Schwartz submitted an offering plan to Schneiderman's Real Estate Finance Bureau. New York state law requires that a prospective purchaser be given all necessary information to make an informed decision about whether to purchase a co-op or condo, including any deficiencies or defects in a unit. Schwartz allegedly concealed and misrepresented the true conditions of the building during each of the 17 sales. The offering plan given to each purchaser promised and represented a condominium built according to all building codes, but the owners were allegedly stuck with units with defective flooring, doors, roofs and windows.
In January 2011, the owners of the units conducted an evaluation of the deficiencies and determined they were owed approximately $1.3 million in repair costs to bring the properties in line with the original promises given in the offering plans.