Seller of real estate has a building with a 50 year lease ending. Chase Bank has the lease, and long ago subleased the property for a profit. Buyer says that he never saw the leases, and that $3750 per month is just not enough to run the building.
Attorney admits that he was sellers’ attorney, buyer’s attorney and the broker in the deal. Palmieri v Mattimore 2014 NY Slip Op 30300(U) January 16, 2014 Sup Ct, Suffolk County Docket Number: 20155/2008 Judge: William B. Rebolini is a description of behavior which cannot but lead to problems.
"The plaintiff Mario Palmieri alleges that he was approached by the defendant with regard to a potential purchase oft e subject property. The defendant had represented Mr. Palmieri and other family members in real state, zoning, and other legal matters for a period of about 15 years. The original asking price for the property was $900,000.00 but after negotiation the price agreed upon was $700,000,00. Acco ding to the documentary evidence, the property was subject to a 50-year lease held by JP Morgan Chase Bank ("Chase"), which was set to expire in 2011. Under the lease,
Chase paid a total of $3,750 a year in rent. At the time of the sale, Chase no longer occupied the
subject property and ha subleased each of the buildings thereon. One was leased to the State of New York for a monthly rent of $5,665.00. The other building was subleased to the Consulate of El Salvador for a monthly. rent of $4,025.00. Mr. Palmieri testified that the defendant did not inform him that he would only be receiving the rent under the main lease until that lease expired in 2011,
and he testified that the defendant told him several times that he would be receiving $9,500.00 in rent each month. He further claimed that he never saw the lease documents until after the closing and that the leases were not attached to the contract that he signed. Upon discovering that he could receive only $312.00 per month ($3,750.00 for the year) in rent from the property, he was outraged.
He testified that he called the defendant, who apologized and said he made a mistake. He states in his affidavit that if he ha known the lack of rental income from the property, he would have opted
not to buy it.
The defendant denied at his examination before trial that he failed to disclose the rental income that Palmieri Realty LLC would receive under the Chase lease until it expired in 2011. He admitted, however, that he had acted as the seller’s attorney and the broker on the transaction and
that he had received fees from both activities. It is also clear from his testimony that he also represented the plaintiffs and was also paid a legal fee by them for his work. The defendant also
submitted a real estate a appraisal of the subject property from John Grossman, a qualified ppraiser."
Motion for summary judgment denied as to the LLC.