Developer Donald Trump, already under heavy pressure from his creditors, must prove he can cover the monthly costs of his Trump Palace condominium before any more units are sold, the New York state attorney general's office said this week.
Trump must produce evidence he can cover the common charges, real estate taxes and other obligations on the 57-story building at 69th Street and Third Avenue, said Richard Barr, a spokesman for Attorney General Robert Abrams.
"We've requested that information, and we're waiting to receive it," Barr said.
Abrams took the action after investors complained that Trump has withheld information about his troubled finances since they contracted to buy condominiums. State law requires condo developers to reveal "material changes" in their finances which could adversely affect people in the building.
If Abrams finds Trump broke the law, the contracts could be invalidated. Sales contracts have been signed on 77 of the building's 283 condominiums.
Trump, in an interview with the New York Times, said the depressed Manhattan real estate market has buyers "looking for any method to break signed contracts."
"This is happening at virtually every new development," Trump said. "And if the attorney general allows it, there will never be another dime invested by developers or banks in New York real estate." Commercial landlords may find it harder to charge tenants for government-mandated alterations since the New York Supreme Court ruled against a landlord in just such a case. Citing the "compliance with law" or "repair" clauses in leases, landlords have often tried to pass on to tenants the cost of asbestos removal and other safety measures required by law.
The tenant in the case had operated a garage in the landlord's building since it was built in 1963. In 1986, the New York City Health Department threatened to close the garage unless hazardous asbestos-containing fireproof insulation was removed. Since the garage owner's lease included a clause holding the tenants responsible for complying with government laws, the owner tried to make him pay for the asbestos abatement.
But the New York Supreme Court decided that the landlord was responsible for the costs because the asbestos was present when the building was first erected. IN THE BUSINESS ... The southeastern states attracted 32 percent of all relocation activity during the first nine months of 1990, RELO/the International Relocation Network reported. Western states received 23 percent and the northeast saw 20 percent of the incoming relocation activity. North-central states, including Iowa, Kansas, Missouri, Minnesota, Nebraska and North and South Dakota received only 3 percent of the country's corporate transfer activity ... Prudential Property Co. began construction of a 12-story, 374,000-square-foot office building on Franklin Square ... Manna Inc. and Community Family Life Services plan to open the 4th Street Co-op, a cooperative that will house 10 lower-income families ... Baltimore-based Rolling Ridge Joint Venture announced the opening of Section II at the Villages of Wisp in Garrett County. Forty town houses, priced from $129,000 to $159,000, are planned for the development ... Prentiss Properties Limited Inc. completed construction of One Franklin Square at 1301 K St. NW., a building with 575,000 square feet of office space and 15,000 square feet of retail space. The building is more than 60 percent leased ... The Fredericksburg Area Builders Association announced the winners of its 1990 Parade of Homes. The "Best in Show" awards went to: Silver Communities' Princeton model at the Park Ridge development in the multifamily category. Wedgewood Homes' Briarwood model at Chancellor Hills won among single-family detached homes. And the Regency model at Pipe Run by Coleman Homes won for detached furnished model ... Trammell Crow Co. completed construction of Market Square, a 1 million-square-foot, $87 million building on Pennsylvania Avenue NW. The building includes commercial, retail and residential space ... Donald E. Dworkin, a former executive at Barnes, Morris & Pardoe Inc. opened a new commercial real estate brokerage company, Doncor Realty Group Inc. in McLean ... Seventeen Baltimore-based companies that provide shared, staffed office space formed a trade association called the Maryland Executive Suite Association ... First Washington Mortgage Corp. created a new mortgage product that will enable a purchaser to buy a home with as little as 10 percent down. Normally buyers must qualify using a ratio of mortgage debt to income of 28 percent and a payment to total debt ratio of 36 percent. First Washington's new loan, called FOR-T, will allow a purchaser to qualify using a single ratio of 40 percent ... Barnes, Morris & Pardoe Inc., commercial real estate services, relocated their offices to the Homer Building at 601 13th St. NW.
CALENDAR ... The Maryland Condominium and Homeowners Association Inc. is planning its annual workshop and trade show today at the Crowne Plaza Holiday Inn ... Commercial Property News is planning a luncheon meeting Nov. 13 at noon at the Willard Hotel. The subject will be "Can Washington's Developers & Tenants Survive on Today's Deals?" For information, call 212-869-1300 ... The Property Management Association is planning to elect new officers and directors at its annual meeting Thursday at the McLean Hilton at 6 p.m. For information, call 301-587-6543 ... The Washington Building Congress is planning a morning seminar on "Recommendations to Improve the Construction Process" Thursday at the Mayflower Hotel ... The National Association of Home Builders and Remodeling magazine are planning "The Remodeler's Show" for November 1991 in Pittsburgh.
PERSONNEL FILE ... JBG Cos. named James R. Hunter senior vice president for marketing and leasing services for the Washington metropolitan area ... The Walton Cos. named Collin Perkins vice president of marketing and leasing ... NVHomes, a subsidiary of NVR L.P., named Alan Shearer vice president in charge of marketing.