Air Rights Obligations
This week we wanted to direct your attention to and interesting decision out of the First Department which reversed a lower Court ruling and directed summary judgment in favor of a Developer-Plaintiff who sued for Specific Performance, Injunctive Relief and Attorneys fees to enforce contract terms requiring a Seller to deliver certain Air Rights as part of its contractual obligations.
The relevant facts of, as well as a link to, the case are set forth below.
A developer contracted to purchase Inclusionary Air Rights for a development in Manhattan. However, after the seller sought to increase the price to be paid for the Rights, the developer sued for specific performance and other relief. Reversing the ruling of the Supreme Court, New York County, the Appellate Division, First Department granted the Plaintiff’s motion for summary judgment on its claims for specific performance, injunctive relief and attorneys’ fees. The Defendant was directed to “obtain a new certificate of eligibility [for a zoning bonus] from [New York City’s Department of Housing Preservation and Development] and convey that certificate to plaintiff.”
The Appellate Division held that while “there is no automatic contractual right to specific performance”, this contract afforded the Plaintiff-purchaser “the right…to seek specific performance of Seller’s obligations under this Agreement.” According to the Appellate Division, “[a] court reviewing an agreement that provides for specific performance should accord deference to the parties’ manifest intent, unless enforcement of the provision would produce an inequitable result.”
301 East 60th Street LLC v. Competitive Solutions LLC, 2023 NY Slip Op 02842, decided May 30, 2023, is posted at https://www.nycourts.gov/reporter/3dseries/2023/2023_02842.htm
This decision is an important reminder of the potential benefit of including Specific Performance language in your Contracts.
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