The French government had reportedly agreed to pay $7.2 million dollars for the Art Deco flat in one of New York City's most sought-after buildings, the River House overlooking the East River.
But the offer fell through when the residents' board insisted on slapping restrictions on the number of parties and receptions that new Ambassador Francois Delattre would be able to throw.
"The condo board attempted to be as accommodating as they could and ultimately, it just was not an arrangement that the French government and the ambassador felt was appropriate and they chose to move on," said Pat Wheatley, a broker with Sotheby's International Realty that handled the offer.
The five-bedroom, five-bath duplex apartment went back up for sale last week at a price tag of $8.2 million.
The Wall Street Journal reported that the ambassador's bid to make the building his home ran into a fierce campaign by one of the residents, socialite Elizabeth Kabler, who considered Delattre pretty much persona non grata.
Kabler wrote in a letter to fellow residents that it was not in their "interest to cohabit with foreign emissaries who are, to a large extent, beyond the reach of the law."
The French mission to the United Nations declined to comment, but sources with knowledge of the matter said the building was "highly restrictive" in terms of the ambassador's social calendar.
It is not uncommon for high-end buildings in Manhattan to impose a series of rules and regulations on their residents, and the condominium boards do wield some form of veto authority.
Another high-profile UN ambassador has resorted to hosting parties at his deputy's apartment, due to restrictions at his own building.
Wheatley, however, said there was "no backlash" against diplomats who consider it part of their mandate to often invite dozens of guests for drinks and casual discussion about the state of the world.
"This is not an increasing trend," she said.
The French ambassador "is a wonderful potential resident and I am sure he will find an appropriate residence that he will be happy living in," she said.
Delattre is looking for a Manhattan home after his predecessor Gerard Araud decided to sell the sumptuous Park Avenue apartment that had been his abode for the impressive sum of $70 million, well over the asking price of $48 million.
The sale of the 18-room duplex caused a buzz in the New York real estate world, which has been boasting record high prices in recent years.