A self-described novice real estate investor, Haim Kahan, alleges in a lawsuit filed yesterday that he signed a contract in approximately May 2022, to buy the 11,657-square-foot commercial building at 525 Park Avenue in Bedford Stuyvesant for $11 million from developer CW Realty Group, but the transaction never closed and the property is now in contract to another seller. LINK
The complaint says that a provision of the agreement was that Kahan would pay a $1 million deposit directly to Weisz, not in escrow, and that Weisz would make efforts to get the current lender to provide an acquisition loan to Kahan.
Weisz, in an email to PincusCo, said Kahan did not close and the contract has ended.
“Haim Kahan was in contract in 2022 and failed to close timely after his time of the essence date. His contract had been terminated,” the email said.
Court filings represent the position of one party and are not necessarily accurate or complete.
The filing also says that Kahan was 26 years old in the spring of 2022, and he relied on the wider experience of the seller to guide him. Kahan, the complaint says, “had no prior experience in commercial realty transactions and was influenced by the much more mature Weisz.”
The complaint alleges that no effort has been made to help Kahan obtain the financing, and that Weisz has now entered into a contract with a different buyer at an undisclosed price.
The purchase contract, attached as an exhibit to the complaint, specifically states the closing is not conditioned by such efforts.
“Seller or CW Realty Group LLC shall provide reasonable cooperation and assistance to Buyer in connection with the arrangement of buyer financing for this transaction provided that such requested cooperation and assistance does not unreasonably interfere with the ongoing business of such seller. Purchaser’s obligation to close the transaction hereunder on the Scheduled Closing Date shall not, in any way, be subject or conditioned up Seller or CW’s arranging of buyer financing on behalf of Purchaser
Kahan seeks “specific performance” meaning he is asking the court to order the parties to adhere to the contract. According to the complaint, the contract vendee, Haim Kahan, made a $1 million deposit directly to CW Realty Group instead of escrow, with the understanding that, “CW Realty Group would make reasonable efforts to cooperate with and assist the Purchaser to obtain buyer financing on advantageous terms… he would make reasonable efforts to work with the lender currently holding the mortgage on the property for that loan to be assigned directly to the Purchaser as a portion of the consideration to purchase the building.” The plaintiff alleges Weisz has not yet made those efforts. Further, “Instead of complying with its obligations under the subject contract of sale, the Seller has now entered into a sales contract with a different entity or persons which constitutes an anticipatory breach of contract.”