CONDO BOARDS CAN ACCEPT MONEY FOR ROFL

While no board member was personally enriched and while the association benefited from the cash, the issue raises concerns over the propriety of what may be perceived as an insider's bribe to influence board members' decision-making — or what the seller called "a hopelessly conflicted relationship between the Board and the individual board members who are also [my] direct neighbors."

Donald Netter, under an entity called Ann Holdings, owned apartment 60-61C at the Time Warner Center Condominium's South Tower, in Manhattan off Columbus Circle. When he put it up for sale in 2011, his 60th-floor neighbor, Jacob Wohlstadter of apartment 60D, wanted to combine his and Netter's apartments and made what's called an escalating bid: $7 million, going up in $25,000 increments to match other bidders, up to $7.7 million. Netter and his advisers were uncomfortable with that and asked Wohlstadter to make a firm offer instead.

There's uncertainly over whether Wohlstadter did or did not make a $7.8 million offer, but in any event Netter found Wohlstadter irritating — and he really, really didn't like Wohlstadter getting a building employee to let him into the apartment behind his back, with neither his knowledge nor consent. Whether money exchanged hands or whether Wohlstadter used his wife's board status to gain entry, Netter's lawsuit does not speculate.

Wohlstadter's real-estate actions had previously come into question in 2004, when he'd bought his extant apartment here: A prodigy who'd graduated from MIT at 19 and went on to Harvard before joining his father Samuel's pioneering biotechnology corporation, BioVeris, Wohlstadter used corporate funds from that company for the $630,000 down payment on the unit. BioVeris later said the money had been reimbursed — though it also filed a lawsuit saying Wohlstadter was draining company assets.

My Wife, the Board Member

On July 19, 2011, one Svetlana Sukhina went into contract to buy the apartment for $7,400,000. About a month later, as per the condominium bylaws, Netter notified the board of the impending sale. Now, Wohlstadter's wife, Deborah, was a member of the board and privy to this information, which otherwise another homeowner would not know. Jacob Wohlstadter learned of the sale contract and the sale price and had a discussion with the condominium's property manager, Bill Brake of the Related Companies. Wohlstadter then put the brake on the sale, by proposing to the board that it exercise of its right of first refusal and assign the contract to Wohlstadter's limited-liability corporation, MS6TC, LLC. Deborah Wohlstadter recused herself from that discussion.

The board informed Netter it was exercising its right of first refusal and buying the apartment through "its designee," MS6TC, upon the same terms and conditions as Netter had with Sukhina. In a Sept. 13, 2011, agreement between the board and Wohlstadter designating his LLC, Wohlstadter agreed to buy part of the common hallway, which he wanted to enclose in order to combine the apartments, for $398,764.80. The figure was based on the price-per-foot charged to other unit owners who similarly had converted parts of hallways.

Netter began negotiating with Wohlstadter, who agreed to pay for some of the cost incurred by the switch. After many months, negotiations ended when Netter, reasonably enough, wanted to be indemnified against third-party claims — in particular, the possibility of a lawsuit by jilted buyer Sukhina. Yet though Wohlstadter had put Netter in that situation, Wohlstadter refused.

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