Since purchasing 37 condo units from bankruptcy nearly a decade ago, a Brooklyn developer has denied that it also acquired responsibility for fixing defects in the building. Now, a court has let the developer off the hook.
A panel of Appellate Division judges found that Fortis Property Group isn’t liable for damages or defects that existed at Bayard Views Condominium in Williamsburg before the previous sponsor declared bankruptcy and sold the units.
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The developer is only responsible for issues at 20 Bayard Street that its representatives “expressly agreed to remedy,” according to an Oct. 7 order.
The case could have broader implications for determining who is responsible for faulty construction, especially in cases where the original sponsor is shielded from litigation.
“This will encourage and allow the freedom of other people to invest in condo and co-ops,” said attorney Adam Leitman Bailey, who represented Fortis. “This is a really good decision for developers all over New York.”
A spokesperson for the condo board said members were disappointed by the court’s ruling.
“Notwithstanding the issues caused by FPG, the Bayard Views Condominium has taken it upon ourselves to rectify all construction issues,” the board said in a statement. “Our building is today in great working order because of the perseverance of its owners. In the years that have passed while this case languished in the Courts, the owners of 20 Bayard Street did the work to make the building what it always should have been if FPG had kept its word.”
Fortis purchased the Williamsburg condominium’s unsold units in 2011, after the project’s original sponsor, developer Isaac Hager, filed for Chapter 11 protection. Bayard’s condo board sued Fortis in 2014 over various alleged defects, including frequent flooding, bad wiring and HVAC, and cracks in the building’s facade.
In 2017 a state Supreme Court judge ruled that Fortis was not liable for these issues, though he left the door open for the condo board to continue to sue Fortis’ principals, Joel Kestenbaum and Jonathan Landau. The board appealed the former part of the order, while Fortis cross-appealed on the latter.
The appellate court also reversed the state Supreme Court’s decision on Kestenbaum and Landau, finding that they shouldn’t individually be held liable for the defects. The board argued that the repairs would cost $2 million.
A description on StreetEasy of the 62-unit building says it is the tallest building on McCarren Park, offering views that “will lure you in” and interiors that “will make you want to stay forever.” A linked discussion from nine years ago flags the workmanship issues.
Still, an upper-floor unit sold for $1,340 per square foot this spring.