Case Notes
Case Notes provides insight on one particularly relevant co-op or condo case—clearly explaining what happened, why it’s important, and what lessons can be learned within.
Category
- Access
- Alterations
- Appeals
- Arbitration
- Assessment
- Attorney Fees
- Attorney-Client
- Authority to Sue
- Balcony/Terrace Rights
- Bike Lane
- Board of Directors
- Books and Records
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- Business Judgment Rule
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- Negligence
- Notice of Pendency
- Nuisance
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- Ownership
- Parking
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- Personal Injury
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- Property Damage
- Proprietary Lease
- Reasonableness
- Receivership
- Release
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- Sales
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- Yellowstone Injunction
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First published: Feb 2025
The Price of Control: A Parc Vendome TaleTAKEAWAY Board members do not expect to incur personal liability for their service. This case is an extreme example showing that it can happen where a board has been found to have deliberately failed to follow the governing documents and contractual requirements with improper motives. The court’s ruling would seem to preclude the board members from receiving indemnification from the condominium under the bylaws, and might be excluded from coverage under the applicable directors and officers insurance policy. In the underlying suit, the commercial unit owner is seeking more than $11.5 million of damages. If upheld on appeal, the individual board members will be on the hook for the eventual award of damages and for the fees and costs of that litigation if not covered by insurance.
Read full articleFirst published: Feb 2025
Condo Board's Negligence Leads to Liability in Sidewalk Tripping Hazard CaseTHE LESSON FOR BOARDS This sidewalk tale, one of the most common types of legal action, serves as a reminder for co-op and condo board directors that under the New York City administrative code, property owners bear not only the responsibility for their buildings but also for the safety of the adjacent public sidewalks. This crucial duty cannot be delegated or brushed aside. Regular and thorough inspections, coupled with prompt repairs, are paramount in limiting the risk of personal injury claims. The story underscores another crucial point: No matter how obvious a hazardous condition might appear, it doesn't absolve property owners from their duty. The safety and well-being of pedestrians remain a top priority and cannot be compromised. COUNSEL For Maria Villeda: Siegel & Coonerty For the Board and Jamaica East Condominium: Gannon, Rosenfarb & Drossman
Read full articleFirst published: Jan 2025
Battling GoliathTAKEAWAY The government is different from you and me. So it is not always easy to hold the government to legal standards that apply to individuals and corporations—but it can happen. Here, the appellate court found that the City’s efforts to move the Brooklyn property from one program to another could not stand. The tenants had participated for years in the TIL program, and presumably were working towards creating an HDFC cooperative for themselves. The City’s unilateral efforts to pull the property from that pathway were, for the time being, stopped. It remains to be seen if discovery or other evidence comes to light that renders the City’s actions warranted by law.
Read full articleFirst published: Jan 2025
Alteration Agreement To The RescueTAKEAWAY This case demonstrates how a well-crafted alteration agreement can protect a cooperative or condominium from legal liability and costs of defense when, as happens frequently enough, an apartment renovation is unsuccessful. Here, the shareholder’s duty to indemnify and hold the cooperative harmless for work performed by her contractor shielded the board in the absence of insurance. Where was the insurance? The alteration agreement explicitly required the shareholder to produce the contractor’s certificates for $1 million in liability insurance and $500,000 workmen’s compensation insurance naming the cooperative, management, and the shareholders as additional insureds. Unfortunately, property manager Douglas Elliman claimed – suspiciously, according to Mandracchia – that the certificates were lost and could not be located. In any event, boards should have their alteration agreement forms reviewed by counsel, especially if such a review has not been conducted recently, to ensure that the alteration agreement contains appropriate protection for the building and the board and incorporates current developments in the law.
Read full articleFirst published: Dec 2024
Having Plans Isn’t EnoughTAKEAWAY The court’s decision shows just how crucial meticulous documentation can be when accidents happen. While it’s common for buildings to have maintenance schedules and inspection protocols, the Downtown Condominium case reveals that simply having these plans isn’t enough—you need to prove they’re being followed. The building’s resident manager testified that the deck was supposed to be checked twice daily, but he couldn't provide records showing these inspections actually happened. This gap in documentation proved costly when the lawsuit came, providing a stark reminder that in today’s legal environment, if you didn’t write it down, it might as well not have happened. For board members and building staff, this means creating clear paper trails for everything from routine inspections to weather-related responses. When snow is coming, document your preparations. When ice forms, record your removal efforts. Keep detailed logs of who checked what and when. Take photos. Save security footage. These records might seem tedious to maintain, but they can make the difference between winning and losing a lawsuit.
Read full articleFirst published: Dec 2024
The Do-Over That Didn’t WorkTAKEAWAY A court will not give a defaulting unit owner a free pass and will not allow the revocation of a settlement agreement presumably made in good faith. A “do over” will also not be permitted by a court when, in the “glaring light” of hindsight, a delinquent shareholder changes his mind about a settlement agreement. A promise made by a shareholder to pay an agreed upon monetary amount for the violation of the cooperative’s bylaws and occupancy agreement can be reasonably relied upon by a board of directors. That promise, if broken, can also be the basis for liability and a monetary judgment.
Read full articleFirst published: Nov 2024
Nightmare On Astor PlaceTAKEAWAY Courts tend to take discrimination claims very seriously. Boards and managing agents should diligently and repeatedly instruct all staff members to not conduct themselves in a manner that may reasonably be deemed to constitute harassment (sexual or otherwise), and the awareness of any inappropriate conduct by any staff member must be immediately reported to a supervisor, the managing agent, or the board. Further, all persons in a supervisory position, after being on notice of inappropriate conduct by a staff member, must immediately notify their supervisors and must take necessary and appropriate actions to cause the discountenance of such inappropriate conduct.
Read full articleFirst published: Nov 2024
The Battle Over the Super’s ApartmentTAKEAWAY Many condominiums and cooperatives have apartments that are dedicated as residences for the resident manager during the term of his or her employment. Boards should be careful to have agreements in place with their superintendents that specifically provide for the permitted occupancy to be incident to the continued employment of such person in that position. The ultimate eviction of a former superintendent may take several months, and sometimes an eager board will opt to enter into a stipulation of settlement with a terminated superintendent with respect to the ultimate delivery of possession of the apartment. However, it is important for boards to reserve all rights to recover damages for any unpermitted use and occupancy. In this case, the condominium board entered into a stipulation of settlement with the defendant as part of the eviction proceeding, but then later brought the unjust enrichment claim seeking recovery of its expenses after the superintendent vacated the unit.
Read full articleFirst published: Nov 2024
Court Grants Access to Adjoining Properties for Necessary RepairsTHE LESSON FOR BOARDS Enacted in 1968, RPL 881 was designed to address the needs of building owners who need access to a neighboring property in order to perform improvements or repairs to their property. When that can’t be agreed upon amicably or a request isn’t even acknowledged, as was the case here, RPL 881 provides a legal framework for obtaining court orders to gain access to a property. Note that Columbus House began requesting access in May 2022, and finally received a court decision granting it nearly 15 months later, underscoring the need for boards to pay attention to FISP timetables, particularly if an access agreement is necessary.
Read full articleFirst published: Oct 2024
‘Death Of Lessee’ Provision PitfallsTAKEAWAY The central legal issue here is over the meaning of a lease provision known as the “Death of Lessee” provision. The Death of Lessee provision in this proprietary lease is a typical variant that provides that if a shareholder dies, “consent shall not be unreasonably withheld to an assignment of the lease and shares to a financially responsible member of the Lessee’s family.” There are several potential interpretative pitfalls in this provision, two of which are at issue in this case. First, what is the meaning of the phrase “member of the Lessee’s family”? Does a niece qualify? Complicating matters is that, while “family member” is not defined here, a different provision of this co-op’s proprietary lease limited use of the apartment to shareholders and their “children, grandchildren, parents, grandparents, brothers and sisters.” Does the fact that this other provision does not include nieces mean that “member of Lessee’s family” should also be read to not include nieces? Or does the fact that the Death of Lessee provision not specifically list immediate family members imply an intent to read “family member” more broadly? Second, the parties disagreed over what it means for the co-op to “not unreasonably withhold” consent. According to the co-op, this means nothing more than it could not act unreasonably in denying consent. In this case, the co-op contended that Stauber had engaged in a “pattern of disruptive behavior” and showed “an utter lack of judgment and inability to get along with others,” which provided a basis for rejecting her application. According to Stauber, however, the reasonableness standard must be confined to the elements specifically identified in the text of the provision – whether she is “financially responsible” and whether she is a “member of the Lessee’s family.” Thus, in Stauber’s view, the alleged behavior identified by the co-op is legally irrelevant because it has nothing to do with whether she is a financially responsible member of Cohen’s family. By denying summary judgment in favor of additional discovery, the court deferred resolving these ambiguities. For co-op boards looking to avoid these problems in the first place, the lesson here may be to consider amending your “Death of Lessee” provision to resolve these two potential sources of conflict.
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