(Source: The New York Times)
The Rushmore, a new 41-story glass and stone condominium tower on Riverside Boulevard at the Hudson River, seemed serene on a recent visit. The flowers in the interior courtyard were in full bloom; the ground-level pool had been filled. Sixteen buyers had already moved in.
And yet an error of a single digit in an arcane document — the densely worded 732-page offering plan — could upset that happy picture, and cost the sponsors, the Extell Development Company and the Carlyle Group, tens of millions of dollars in lost revenue, lawyers say.
Buyers at the Rushmore and at other new condominiums began struggling to get out of their contracts and to repocket their deposits — at the Rushmore, 15 percent of the purchase price. Lawyers pored over the offering plan and pondered obscure state and federal laws looking for ways to invalidate the contracts.
At the Rushmore, they may have found a loophole. Both the buyers and the sponsors agree that there was an error in a date in the offering plan, a document painstakingly prepared by a major New York law firm. Now they are debating whether the mistake was a trivial clerical error that should simply be ignored, or a one-time opportunity for Rushmore buyers to back out and recover their deposits or negotiate a better deal.
Read Josh Barbanel’s full article “Attack of the Fine Print” in the New York Times (July 26, 2009).