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THE CONDITION ATTACHED TO THE SUBDIVISION OF A LOT AND THE SALE OF ONE PARCEL BENEFITTED BOTH THE BUYER AND THE SELLER; THEREFORE THE BUYER ALONE COULD NOT WAIVE THE CONDITION WHEN IT COULD NOT BE MET; THE BUYER’S ACTION FOR SPECIFIC PERFORMANCE SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the condition attached to the sale of a lot by decedent to plaintiff, i.e., that a single-family home be built on the lot, benefited both parties and therefore could not be waived by the plaintiff alone. Plaintiff was unable to procure a building permit but elected to proceed with the sale. The decedent cancelled the sale Plaintiff then brought an action for specific performance which Supreme Court granted:

The contract of sale between the plaintiff and the decedent for the subject property provided in a rider that it was subject to the plaintiff obtaining an as-of-right building permit to build a single-family residence. The plaintiff was subsequently unable to obtain a building permit because a covenant of conditions had never been filed to complete the process of subdividing Norman’s single parcel into the two parcels referred to as 112 Jessup Lane and 114 Jessup Lane. The plaintiff’s and the decedent’s efforts to have the covenant filed so as to complete the subdivision process failed. * * *

Generally, “the party for whose benefit a condition is inserted in an agreement may waive the condition and accept performance as is” … . “However, where the relevant circumstances reveal that the condition has been inserted for the benefit of both parties to the agreement, either party may validly cancel the contract upon failure of the condition, and the condition may be waived only by the mutual assent of both parties” … . …

Inasmuch as the building permit could only be obtained if the subdivision of the property were completed, that condition cannot be interpreted as existing solely for the benefit of the plaintiff where the decedent retained an interest in the other lot to be included in the subdivision … . D&J Realty Partners, LLC v Booth, 2024 NY Slip Op 01169, Second Dept 3-6-24

Practice Point: With respect to the sale of real property, if a condition of the sale, here the construction of a single-family residence on the lot to be sold, benefits only one party, the condition can be waived by that party. Here, however, the condition benefitted both parties and could only be waived by the consent of both.

 

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