At the end of 2021, the Appellate Division, First Department again was called upon to examine the legal standards for pleading a fraud in the inducement claim against a sponsor. Board of Managers of Latitude Riverdale Condominium v. 3585 Owner, LLC, 199 A.D.3d 441, 442 (1st Dep't 2021). In dismissing that claim as being duplicative of the breach of contract claim, the court reiterated that a fraud in the inducement claim is not preempted by the Martin Act where such a claim is "based upon allegations of affirmative misrepresentations, not omissions." Id.

However, because Latitude Riverdale's unit owners had the means to ascertain the truth of the condition when they inspected the apartments and buildings prior to their closings, the Board could not "establish as a matter of law that it reasonably relied upon the Offering Plan's statements about the brand of toilet, type of roofing material, and existence of a lobby vestibule." Id. Accordingly, the fraud claim was properly dismissed. Id. (citing Von Ancken v. 7 E. 14 L.L.C., 171 A.D.3d 440, 441 (1st Dep't 2019) ("Since, pursuant to the terms of the purchase agreement, plaintiffs had the opportunity to inspect and measure the apartment, their fraud and negligent misrepresentation claims were properly dismissed.")).