Court upholds auction price for twp. land sold ‘as is’

Nov, 04-2009 3:16 pm

By STEVE PRISAMENT
Staff Writer

GALLOWAY TOWNSHIP – The municipality won a summary court judgment Friday, Oct. 23 that would save taxpayers around $200,000.

Parsi Investment, LLC purchased about 32 acres on the White Horse Pike near Cologne Avenue at auction from the township in 2005 and subsequently found that it contained more wetlands than it expected.

“I’m pleased that Judge Johnson agreed with our position,” Galloway Township Solicitor Michael Blee said Monday, Nov. 2. “The language was clear. Others purchasing land should learn something from this case and examine the property before buying.”

Judge Nelson C. Johnson of the Chancery Division of the New Jersey Superior Court in Atlantic County, said the facts clearly showed the purchaser failed to do due diligence.

According to Johnson, Parsi failed to engage in “minimally prudent due diligence.”

“This buyer cannot now look to the court for a remedy of which he could have availed himself by simply retaining the proper consultants to examine the wetlands map,” he said in his ruling. “Such consultants would have conducted an in-field/on-site delineation of the boundaries of the wetlands at the property in advance of agreeing to pay nearly $1 million for a piece of land with no land use approvals.”

Parsi’s attorney, Rudy Westmoreland of Westmoreland, Vesper & Quattrone of Egg Harbor Township, did not return a telephone call from The Current requesting comment.

Parsi’s principal member Alimorad Salartash confirmed several facts, according to Johnson.

One was that he had been involved in 10 to 20 previous real estate transactions.

Second, he did not read the entire appraisal – just the summary.

And third, his due diligence was limited to reading the summary; it doesn’t appear that any land use development consultants were retained until long after closing on the property.

Salartash’s company paid $982,000 for property sold as “vacant land” and “as is,” according to Johnson.

Blee said Parsi sought a $198,600 refund based on the percentage of the property that was wetlands, plus a reduction in property taxes.

“He did receive a reduction on the property taxes,” Blee said. “Not all he wanted. But the value of the land was indeed less than what it was thought to be.”

According to Blee, the cost of a wetlands delineation survey on land the township is selling is prohibitive.

“We only had it appraised to estimate a fair purchase price – a starting price,” he said. “It had disclaimers all over the place.”

He said the suit was “vigorously pursued” by Parsi.

“Sometimes there is a mutual mistake of fact and it creates a situation where the value has diminished,” Blee said. “An exception is where the agreement is for a sale ‘as is,’ and the purchaser is required to do his due diligence.”

In tough economic times, he said, developers will do anything to recoup losses or make up for bad decisions.

“We hope he develops the property to create another ratable for the township of Galloway,” Blee said.

To comment on this story

email steve.prisament

@catamaranmedia.com