LHaus
Dec 17 2009

LIC’s Crescent Club buyers not over the moon about rescission drama

Crescent Club Condos, LIC

Oh, Crescent Club. What has happened there? The unfortunates in contract seem to be log-jammed in a buyers remorse situation that has everyone seeing stars. And not the good kind.

Quick condo buying recap 101: when one purchases new construction in progress and the closing doesn’t occur by a certain date (usually contract specific), one enters a rescission period during which it’s possible to legally opt out of the contract and received a full refund on the deposit held in escrow by the developer.

Clearly the Crescent Club developers are having serious financial troubles because they’ve failed to complete the building by all deadlines, and have now reached a second round of irate condo buyers in their rescission period trying to get their deposits back (as documented in forum/comment threads here and here).

Here’s the sordid story direct from a Crescent Club buyer via email:

“First, there was a deadline of December 31, 2008. The Crescent Club failed to meet this deadline, so many buyers in contract were entitled to a rescission right. Those of us (including myself) who exercised that rescission right did receive our deposits back, though in my case it took more than 3 months because of what I perceive as foot-dragging by the sponsor.

Then there was a second deadline of December 1, 2009. This has also passed without the building’s being completed. I think many buyers in contract would like their deposits back, including some who had rescission rights the first time but did not exercise them. I’m sure everyone will get their money back eventually but there is concern that it will take even longer this time because the sponsor has been so unresponsive. This is a problem because some people would like to buy other places now while interest rates are low.”

Currently there are no active listings for Crescent Club units for sale, though the last figure had the building at only 30% sold. All signs point to a significant decrease in that figure, natch.

Crescent Club and its more successful brethren in Queens Plaza, LIC

Real Estate

9 Comments

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Wait, ya mean there’s a problem filling a condo that’s practically on top of the Queensborough Plaza station and blocks away from the QB projects?

What a shocker!

#1 adeez / 2 years, 1 month ago

I think it’s horrible what developers can do to buyers. I looked at Crescent Club because it’s a great long term investment. And while QP is still a pit, it was very well priced new construction. I guess though it just didn’t work out. I haven’t heard of any other development in LIC go through this, so I guess we’re lucky.

#2 Anonymous / 2 years, 1 month ago

I expect there will be others in LIC, Williamsburg, Downtown Brooklyn, and possibly Harlem and Hell’s Kitchen. There are lots of mostly empty nearly complete new condo developments in all those neighborhoods, and unless they slash prices drastically I don’t see where they are going to find buyers. Even the Alexander in tawny Turtle Bay seems to be having similar problems.

Since most of condo developments are leveraged, they are probably underwater and CAN’T slash prices, so there will be protracted negotiations with the lenders as closing deadlines pass and buyers walk.

#3 Anonymous / 2 years, 1 month ago

Great long term investment…Oh what BS you must be a broker looking for his commission check.

Lets face it We went through a period of severely stupid “investment” ideas.

Real estate scum brokers who barely or maybe didn’t even finish high school, lied to gullible fools about RE being a great “investment”

Maybe just maybe, Americans will learn how to read and think.

An investment means positive cash flow, negative cash flow is a pure speculation a gamble you would be far better off buying 1000 lottery tickets a month then to “invest” in a condoze project like crescent club or hunters point or just about any of them

#4 ricky / 2 years, 1 month ago

Duh, why don’t they just go rental?

#5 Anonymous / 2 years, 1 month ago

That may work for some developments, but Crescent Club is so far underwater it probably can’t pay its carrying costs as a rental. The sponsor is going to have to work something out with the bank or hand over the keys, regardless.

#6 Anonymous / 2 years, 1 month ago

Crescent Club is being handed over to the bank and all buyers will be able to opt out of contract.

#7 Anonymous / 2 years, 1 month ago

Crescent Club appears to be going the way of the Forte and Be@Schermerhorn.

#8 Anonymous / 2 years, 1 month ago

Forte got out relatively early and snatched up a lot of potential buyers. The Crescent Club and other unsold LIC developments should fare much worse.

#9 Anonymous / 2 years, 1 month ago

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