Lance R. Pomerantz
Attorney at Law

Land     Title     Law

“Constructive Notice”  The  Newsletter

Excerpted from the December 10, 2014 mailing of "Constructive Notice":

Damages for Frivolous Notice of Pendency

In J Group Holdings I LLC v. Michem Properties Inc., 2014 NY Slip Op 32792 (Sup. Ct., Kings County, Oct. 22, 2014), the contract was signed by potential buyer J Group, but the seller returned it unsigned, along with the proffered down payment. Upon learning that another buyer had gone into contract, J Group filed a NoP, misrepresenting that a legally binding contract existed for J Groups purchase. Almost $90,000 in attorneys fees later, the seller was able to have the NoP discharged on December 19, 2012. Because of the appeal period, however, the new buyer was unable to obtain title insurance until January, 2013.

Unfortunately for J Group, capital gains taxes increased on January 1, 2013. As a result, the Seller incurred additional tax liability of $268,784.08. This liability would have been avoided had the sale to the new buyer not been delayed by the frivolous NoP filing. When the dust settled, J Group was hit with a judgment of $357,255.35, representing the additional taxes along with the Sellers attorneys fees!


Any colorable claim affecting the title to, or the possession, use or enjoyment of real property can justify the filing of a notice of pendency (NoP). But a filing utterly lacking foundation can result in significant damages.