First published: Feb 2026
Ironclad Clause, Ironclad Win
THE LESSON FOR BOARDS This case demonstrates how a well-crafted alteration agreement can protect a cooperative or condominium from legal liability and defense costs 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. 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 shareholders as additional insureds. Boards should have their alteration agreement forms reviewed by counsel, especially if such a review has not been recently conducted, to ensure that their alteration agreement contains appropriate protection for the building and the board and incorporates current developments in the law.
When shareholders want to do alterations in their apartment, co-ops typically require that they sign an alteration agreement to ensure they take responsibility for any related repairs. As Mandracchia v. Renovate-Create Sourcing and Procurement Corp., illustrates, that doesn’t prevent shareholders from causing problems, which is why boards should have well-crafted agreements to shield themselves from liability.
WHAT HAPPENED
In 2013, Martine Mandracchia entered into an alteration agreement for a gut renovation of her co-op apartment at 405 E. 63rd St. She hired an architect to develop a renovation plan and submitted the plans to the cooperative, management and the cooperative’s architect. It took three years and several rounds of comments and revisions before the plans were finally approved. Ms. Mandracchia hired a general contractor and principal to supervise the project, both of whom were recommended by the co-op’s board president. Renovation began in March 2016 and was estimated to be completed in three months.
More than a year later, however, the project was still ongoing and, it turned out, the contractors did subpar work. Ms. Mandracchia claims the apartment was unlivable and unsellable, forcing her to vacate for two years. In 2019 she sued to recover monetary damages as a result of the allegedly substandard renovation done to the apartment, and the fact that the board president did not tell her the contractors were not licensed to perform contracting work in the city and didn’t have insurance.
The trial court granted summary judgment to the cooperative, the managing agent and the cooperative’s architect, dismissing the plaintiff’s claims under Multiple Dwelling Law §78 for breach of fiduciary duty and negligence by failing to keep the apartment in good repair. Ms. Mandracchia appealed.
IN COURT
The Appellate Division affirmed the dismissal of her claims. The court said an owner’s duty under Multiple Dwelling Law §78 to maintain the premises in good repair can’t be delegated, and that Ms. Mandracchia assumed contractual responsibility for the renovations and damages caused by her contractors.
The plaintiff had also alleged that the managing agent, Douglas Elliman, breached its fiduciary duty to her by signing off on defective construction work and failing to notify the plaintiff that the contractors were unlicensed. The court disagreed, noting that nothing in the record indicated any breach of duty by the managing agent relating to the plaintiff’s retention of the contractors or its limited oversight of the renovation work, which was restricted to code compliance. In addition, the evidence showed that the cooperative did not require general contractors to provide proof of licensing.
The court also found that the cooperative was properly awarded summary judgment on its counterclaim for attorneys’ fees based on the indemnification provision of the alteration agreement. It said such indemnification was appropriate because the record demonstrated that the damage to the apartment was caused solely by Ms. Mandracchia's contractors.
Finally, the court ruled that the claim for negligence against the cooperative’s architect was properly dismissed because the record did not show a relationship between the plaintiff and the architect that was the functional equivalent of privity (i.e. a contractual relation), or that the architect had sufficient control and authority over the project to support a duty of care to the plaintiff.
ATTORNEYS
For Mandracchia: Robert L. Greener
For the defendants: Milber Makris Plousadis & Seiden, Belkin Burden Goldman
