How Common Are your Elements

TAKEAWAY This decision underscores that disputes over assessment responsibility in condominiums rise or fall on the plain language of its governing documents. Where a condo declaration defines common elements to include building components that both encompass multiple units and benefit the building as a whole, courts will not allow cost-shifting by owners trying to recharacterize façade work based on subjective benefit or physical location. Legally mandated façade inspections and repairs under Local Law 11 are treated as building-wide obligations, and absent express exclusions, all unit owners must pay their proportional share. However, condo boards are not immune from scrutiny: accounting transparency, improperly filed liens, and allocation of non-façade repair work may still give rise to viable claims depending on the facts.

SOYBEAN PARKING LLC V. BD. OF MANAGERS OF THE AMHERST CONDO

 

WHAT HAPPENED The Amherst Condominium at 401 East 74th St. consists of three units - an underground garage, a 251-unit co-op and a ground floor commercial unit. Between 2017 and 2020 the condo performed facade inspection and repair work and Soybean, the owner of the garage, paid its proportionate share. In August 2020, however, Soybean began asking for backup documentation for facade work, claiming that it was being improperly charged because only the residential units above the ground floor benefited. It contended that only façade work performed at or near the garage level could properly be assessed to it.

IN COURT  Soybean asserted claims for breach of contract, unjust enrichment, accounting, and declaratory relief, arguing that the facade was not a common element. The Amherst board moved to dismiss these claims, relying on two things: the condominium’s governing documents and the voluntary payment doctrine. The court agreed with Amherst, in substantial part, because of the clear and unambiguous language of the condo’s Declaration which established the building’s façade as a common element. Because of this, the board was authorized to assess LL11 costs against all unit owners in proportion to their interests. Additionally, the court said Soybean could not recover assessments it paid before August 2020 because of the voluntary payment doctrine, which bars recovery when a sophisticated commercial entity pays charges for years without inquiry or protest. The court did allow limited claims on accounting issues and legal fees tied to an improperly filed lien to proceed, but the central challenge to the façade assessments was dismissed.

COUNSEL for Soybean Parking AARONSON, MATTHEW J., DAURIA, SOPHIA N., Troutman Pepper Locke; for the Amherst ASKANASE, ERIC S., BROWN, CALEB J., Adam Leitman Bailey; Justice Lyle E. Frank