First published: Nov 2022
My Leaking Doors, Your Cost To Fix
This fact pattern is fairly common in cooperatives. A shareholder will undertake an alteration, and the alteration agreement with the cooperative will state that the shareholder is responsible for the repair and maintenance of the new fixtures, walls, etc., and that subsequent owners will also be responsible. But decades later, when repairs are required, there is no agreement with the new shareholder in which he assumes the obligations under the alteration agreement. To make matters worse, management may not even have a file on this matter (since management often changes over the decades). Unless the proprietary lease has precise language binding the shareholder, there is little to do. It should be noted that some cooperatives require a purchasing shareholder to sign an Assumption Agreement of the prior lease, as well as executing a brand new proprietary lease. Some Assumption Agreements include language which states that the new shareholder assumes not only the old lease, but also any other agreements between the (selling) shareholder and the cooperative. This might be enough to hold the new shareholder responsible for problems with a prior alteration, but at this time the courts have not reviewed this issue.
131 PERRY ST. APT. CORP V. CLAUSER
ALTERATIONS WERE MADE In 1998, the owner of an apartment at 131 Perry St., a West Village cooperative, replaced the terrace doors in her apartment with custom-made French doors. The co-op board approved the plans, and both parties signed a consent agreement whereby the owner took full responsibility for the integrity of the work, for whatever maintenance might be required, and, most importantly, that all future purchasers of her apartment would be bound by the agreement. The consent agreement also said that “No transfer ... of your proprietary lease shall be permitted unless you are in full compliance with this consent.”
A CHANGE OF OWNERSHIP AND A RAINSTORM Several years later, the apartment was sold to Mr. Clauser. In 2021, during a heavy rainstorm, water penetrated the terrace doors and caused flooding in the apartment below. The co-op’s architect inspected the doors, and found them to be in a severe state of disrepair and requiring extensive maintenance.
NOT MY PROBLEM Mr. Clauser claimed that when he purchased the apartment, he knew nothing of the arrangement in the consent agreement, nor did he sign anything with the co-op or the seller assuming any obligation for the doors. The co-op, on the other hand, claimed he was responsible for the long-term maintenance and integrity of the doors, and sued him to pay for all repairs.
IN COURT The action against Mr. Clauser was dismissed. Since there was never a signed agreement between the two parties, the court said he was not liable for the damage or the repairs. Additionally, the court noted that the cooperative could have stopped the transfer of shares until he signed an agreement to be responsible for the doors, yet did not do so.
Interestingly, the defendant learned of the agreement between the prior owner and the cooperative approximately a year after he purchased the apartment, and may have even paid for some minor repairs. But the court held this was not enough to hold the defendant liable, again stressing there was no signed agreement, and that a single event (paying for minor repairs) is not enough to modify the proprietary lease or bind him to the prior owner’s agreement with the cooperative.
COUNSEL For the board John O’Hara and Jonathan Minikes CUTLER MINIKES & ADELMAN / For Mr. Clauser Nicole Haff and Andrew Ramstad ROMANO LAW / JUDGE Arlene Bluth
