Huntington Town Board member Gene Cook and his partners purchased an East Northport rental property after a lawsuit against the previous owner over code violations derailed an earlier sale.

The lawsuit, filed Sept. 24, 2013, by Syosset-based real estate holding company Nemesis of L.I. Corp., seeks to recoup the $40,000 down payment made before the April 2013 sale of the property fell apart over issues that included code violations for overcrowding, illegal apartments, debris and junk cars.

That lawsuit, which is pending, was filed more than a year before Cook and his partners paid $400,000 for the nearly 2-acre property at 792 Larkfield Rd. from Carmen Tomeo and Mary Ann Dellinger.

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The property is the subject of an independent investigation ordered by the town board last month to determine whether the house is a legal five-family rental. The investigation also is to determine whether work undertaken on the house required permits.

John Stravato, the Hicksville-based lawyer representing Nemesis, said he learned of the sale to Cook after reading a Newsday story last month about the independent investigation.

"We were shocked to learn that someone else purchased the property . . . with the belief that they could avoid the zoning restrictions," Stravato said.

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Cook and his partners said the house and the work they are doing on it is legal and did not require permits.

Stravato said after Nemesis put down a $40,000 deposit on the property, a code inspector at Town Hall told him it was so unsafe it should be demolished. Stravato said town officials would not allow the building to be used "for any purposes," and cautioned him to "think twice" before pursuing the sale.

When the sale fell through, Stravato sued to recoup the deposit.

Cook and Josh Price, a Commack attorney, along with partner and Huntington real estate agent Tim Cavanaugh, purchased the home in October 2014 through a limited liability company. Cook said the mortgage on the property is privately held and paid directly to the former owners.

Stravato said that before Cook and his partners acquired the house, Price contacted him on March 28, 2014, to work out a deal to return the $40,000. Price did not indicate a personal interest in acquiring the site, Stravato said.

"When I reached out to the attorney, it was because Gene, Tim and I had decided to look into purchasing the property," Price said, adding that he didn't remember whether he identified himself or his partners as interested in buying the property themselves.

Stravato's suit alleges Dellinger and Tomeo agreed to the sale knowing there were "violations and defects" with the property and failed to disclose them even though the contract required the seller to comply with all violations before closing. Dellinger declined to comment through an attorney and Tomeo could not be reached for comment.

Harvey Besunder, a partner with Islandia-based law firm Bracken Margolin Besunder, said he represented Dellinger in the sale to Nemesis and that "everything was open and above board, and the buyers and sellers knew all the information about the property."

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A town building department file about the property includes at least six times in 2012 and 2013 that town inspectors visited the house in response to complaints. The owner was told four times that the home must be restored as a single-family dwelling or go before the town Zoning Board of Appeals for approval as a multifamily house, according to documents.

Stravato said he has been negotiating with Price but plans to amend his lawsuit to include the partners. The next court date is June 29 in Riverhead.