First published: Mar 2025
Hallway Headaches
TAKEAWAY In the absence of an express written agreement or specific bylaw provision, a cooperative corporation is not obligated to repurchase common area space or shares from a shareholder-tenant who previously purchased but was unable to use such space in connection with an alteration. Here, although the co-op had agreed in principle to repurchase unused hallway space and shares from the plaintiff, in the absence of a final agreement or applicable bylaw provision, it had no obligation to do so or to waive its standard closing costs. Cooperative corporations and shareholder-tenants should consult the corporation’s bylaws to determine what terms govern the sale and later repurchase of common area space and cooperative shares. To the extent that the bylaws are silent on such issues, parties should consider including repurchase terms in any purchase and sale agreement for common area space and additional shares, to avoid a future dispute regarding the terms of repurchase by the corporation.
JUDITH KUSKIN V. 2 HORATIO OWNERS CORP., ET AL.
WHAT HAPPENED Judith Kuskin owns three apartments at 2 Horatio Street, a 17 story co-op in Greenwich Village. She wanted to combine her three apartments and in 2020 (the records are not clear whether this was in August or October) she signed an alteration agreement and paid a $7,500 deposit to the co-op. Almost a year later she entered into a separate purchase agreement to buy 89.5 square feet of common hallway space and 10 additional co-op shares to facilitate the apartment combination work. In April 2022 the alteration work started but a month later the co-op issued a stop work order due to issues with her entryway placement. At that point the co-op and Kuskin reached an agreement in principle for the co-op to repurchase 28.7 square feet of the hallway space and some of the shares, but did not execute a written agreement to that effect. While the co-op gave Kuskin 40 extra working days to finish the work, the co-op claimed that construction ran over the deadline by nine days. The co-op fined Kuskin for finishing late, charging her $250 per day for a total of $2,250.
Kuskin objected to the penalty as well as the co-op’s intent to charge closing costs in connection with its repurchase of hallway space and shares. She sued the co-op on three counts: she claimed that the $2,250 penalty was improperly imposed because the alteration was completed within the time allotted; that the co-op was required to close on the repurchase of the hallway space without closing costs; and breach of contract.
IN COURT The co-op moved for summary judgment, claiming two things: that the penalty was authorized by the alteration agreement and there was no enforceable agreement for the co-op to repurchase the hallway space and shares. It also asked the court to dismiss all claims against the managing agent, which the court did, arguing that none of the claims asserted against it were proper because it was acting as a disclosed agent for the co-op.
The court said two of Kuskin’s claims could proceed to trial. First, that the co-op improperly assessed the late penalty (there was a question about whether Kuskin had 6 or 8 months to complete the work under the alteration agreement) and second, for breach of contract. It dismissed Kuskin’s claim that the co-op was required to close on the repurchase of the hallway space without closing costs. However, the judge concluded that the case “appears overripe for settlement” and offered to help with settlement negotiations.
COUNSEL for the co-op and managing agent EMIL SAMMAN, BRETT GOSSETT Boyd Richards Parker & Colonnelli; for Judith Kuskin DEAN ROBERTS, MONICA CHAWLA Norris McLaughlin; Justice Arthur F. Engoron
