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New York Foreclosure Listings to Include Battery Park Condos

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By : John Cutts    99 or more times read
Foreclosure listings in New York are expected to include condo units at the Rector Square in Battery Park City after Anglo-Irish Bank decided to file another lawsuit to complete its foreclosure case in New York State Supreme Court against Yair Levy, the developer, in August. It said that it wants to sell the project to another investor so that the condo conversion can be completed.

The original lawsuit was filed by the bank in February, claiming that the developer was not able to pay his $165 million loan which he obtained to convert all the 304 rental units of the Rector Square building into condo units. The suit also alleged that Levy failed to pay common charges, contractors' fees and pilot rental fees to the Battery Park City Authority, which owns the ground lease of the rental building.

In response to the first lawsuit, the developer filed his own lawsuit in Nassau County, his place of residence, claiming that the bank forced him into default because it failed to provide the needed construction money on time.

State and local investigators of the reserve fund of the Rector Square complex issued subpoenas to the said bank to respond to Levy's accusation. They also stated that the fund was already depleted and that the accounting for the expenses was not clear. According to some reports, state and local officials asked Manhattan District Attorney Robert Morgenthau to get involved in the investigations.

Trust lawyer Michael Miller was later appointed receiver of the Rector Square and he appointed Related Companies to be the new managing firm of the building. Within 3 months, Miller has completed building some of the common areas and managing agent Related Companies has rent out around 40 of the apartments which were not yet renovated and converted into condo units.

On July 31, the New York Attorney General approved a revision to the building's condo offering plan. Under the new amendment, buyers who bought their apartments before the approval of the new amendment have the option to cancel their purchases and get a refund of all their initial payments.

In New York history, Rector Square was the first and biggest operating condo building that was foreclosed. There were other condo buildings that were foreclosed, such as the 80-unit Jasper, but they were not yet occupied.

In early August, Levy's other condo conversion project Sheffield57 also went into foreclosure after his partner Kent Swig failed to pay over $100 million in construction and mezzanine loans.

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