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Purchaser Allowed to Terminate Contract Because Seller Failed to Pursue Rezoning Applications as Agreed

A contract purchaser of real property was allowed to terminate the purchase contract and recover its down payment, because the contract seller failed to pursue a rezoning application as required.  ZL Elmhurst, LLC v. Sunshine Elmhurst Real Estate LLC, Index No. 650163/2021 (Sup. Ct. N.Y. Co. July 9, 2021).

The purchase contract required that as a condition of the purchaser’s obligation to close, the seller had to successfully apply to have the premises rezoned as “residential with a commercial overlay.”  Under this zoning classification, a structure’s upper floors are reserved for residential use, but commercial use (such as retail stores) is permitted on the ground floor and basement.  The seller submitted a rezoning application, but subsequently withdraw the application for the commercial overlay.  The court concluded that the purchaser was “entitled to summary judgment … as a condition precedent to [its] closing on the Property has not been met.”  The court declared that the purchase contract was terminated and the purchaser had the right to recover its down payment.  Ganfer Shore Leeds & Zauderer LLP represented the successful purchaser in this case.