Back Bay Spas, Inc. v. 441 Stuart Mktg., LLC, No. 11-1057 (1st Cir. 2012)
Annotate this CaseBack Bay has operated a health club in Boston since 1995, renting space under a lease that is renewable through 2025. In 2004, a developer purchased the building and obtained a zoning variance to convert the building into mixed-use condominium units. Back Bay appealed the variance in 2005. It agreed to drop its objections to the project in exchange for the developer’s promise to sell it "Commercial Unit B," the space the health club occupies. Under its construction mortgage and related loan agreement, the developer was required to obtain the Bank's written consent for a sale of any condominium unit; those agreements specified a minimum sales price for retail units higher than the price stated in the Letter Agreement with Back Bay. Back Bay had at least constructive notice of the written consent requirement, as contained in the publicly recorded mortgage. The developer subsequently lost title to the property, by foreclosure, to a subsidiary of the Bank. The district court rejected a specific performance action by Back Bay. The First Circuit affirmed.
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