In recent years there has been a trend in the U.S. Courts that despite common law and/or contractual indemnities, a developer/owner of property cannot seek indemnification and/or contribution from its architect if the building, as designed and built, is not compliant with the ADA or the FHA. This is a troubling development as owners rely on their professionals to design a building that is compliant with law. To suddenly tell an owner, that even despite a contractual indemnity from its architect, the owner will remain liable without recourse against others for such violations, is causing much debate and concern.
Recent Supreme Court case law in certain jurisdictions (most notably Kings County) specifically holds that a Unit Owner may seek damages for breach of the purchase agreement against the individual principals of the Sponsor based upon their certification in the Offering Plan and the incorporation of the terms of the Offering Plan into the purchase agreement, even though those principals were not parties to the purchase agreement. In other words, courts are holding that the required Martin Act certifications in the Offering Plan automatically establish privity of contract between the principals of the Sponsor and the Unit Owners under the purchase agreements notwithstanding that the purchase agreements themselves are only between the Sponsor entity and the Unit Owner.