Nelson V. Board Of Managers Of The 32 East 1st Street Condominium

WHAT YOU NEED TO KNOW Unlike a co-op shareholder, a condo owner is not a lessee under a proprietary lease, and is not protected by the statutory warranty of habitability. Under this protection, a co-op shareholder can withhold rent if his or her apartment becomes unlivable due to damage, but a condo owner does not have that right. The condo owner can't withhold common charges, even if there is a damage claim for alleged water leaks. But note that the Judge, by holding the money judgment in abeyance, essentially gave the unit-owner a reprieve on paying common charges while the lawsuit was pending, undercutting the principle that was supposedly being exalted. It is a curious decision, one that properly states and applies the law but then, in a twist of fate worthy of M. Night Shyamalan, undoes it all in the penultimate sentence.

WHAT HAPPENED After a water leak caused damage to his unit, a condominium unit-owner sued the board of managers for breach of contract and breach of fiduciary duty. The condominium counterclaimed for nonpayment of common charges, which the unit owner had withheld due to the damages he allegedly suffered. The condominium moved for partial summary judgment on the counterclaim for common charges, and the court granted the motion. 

Under the condominium’s Offering Plan, the unit-owner was obligated to pay his share of common charges. There was no clause in the Offering Plan that gave the unit-owner the right to withhold payment. Moreover, the warranty of habitability applies only to leaseholds, and so it is inapplicable to condominium units. As such, the condominium was entitled to summary judgment in the amount of unpaid common charges totaling some $12,000.

 The court nevertheless did not permit entry of the money judgment in favor of the condominium, holding the same in abeyance until all the claims in the case were resolved.