First published: May 2021
Village Mall at Hillcrest Condominium v. Banerjee
This case’s first lesson is simple: if written consent is granted, it’s best to keep it in a very safe place. You cannot trust that the management files are current and accurate. After all, boards often switch management companies, and it’s not safe to assume that all companies pass on complete files to their successors. Secondly, condo and co-op boards should be vigilant in enforcing their rules. If a board knows (or should have known) that there is a violation, it cannot wait to enforce such rules. Courts have been known to rule that waiting to enforce a rule prejudices the owner, and if nothing is done, the court may not allow enforcement years later. The Wong and Pasapula cases emphasize that this is especially true if there is a sale. Finally, there are not many courts that would refuse to allow a condominium or cooperative to do what is required under the law. The overriding fact is that certain laws are meant to protect the public, and FISP is one such law. It seems clear that a court will put the safety of the public over any rights a unit-owner or a shareholder may claim to have.
Many co-op shareholders and condo unit-owners enclose their balconies. After all, who doesn’t want extra living space? However, the case of Village Mall at Hillcrest Condominium v. Banerjee asks a more ticklish question: Was consent to enclose the balcony in a condominium properly obtained – and was it then properly revoked by the board?
The story begins when the board at the 458-unit Hillcrest Condominium in Queens was required to inspect the building’s exterior under the Facade Inspection and Safety Program (FISP). This law, formerly known as Local Law 11, requires that owners of buildings with more than six stories have their exterior walls and appurtenances inspected every five years, then repaired as needed.
In 2015, the Hillcrest Condominium board requested that a unit-owner named Sunil Banerjee remove his balcony enclosure so it could complete a facade- and balcony-restoration project. If Banerjee refused, the board would do the work and charge him for it. The house rules specifically stated that no unit-owner could enclose a balcony without the prior written consent of the board or managing agent. Further, the house rules stated, “Any consent or approval given under these rules and regulation may be added to, amended or repealed at any time by resolution of the board.”
Banerjee refused, claiming that he had obtained written approval from the condominium’s managing agent in November 1979, though he was unable to produce the document. Hillcrest brought an action against Banerjee to remove the enclosure since an inspection and repairs were necessary. Hillcrest also claimed that the enclosure was erected without proper authorization, and therefore the condominium refused to allow him to rebuild the enclosure after the project was completed.
At the same time, the condominium sent similar demands to two other unit-owners, Jimmy Wong and Jaganmohan Pasapula, who also owned units with enclosed balconies.
Wong and Pasapula responded by stating that the enclosures were already in place when they bought their units. They took the position that the board wavied any such right because it failed to make the demand when the units were sold to them.
In May 2015 the condominium amended its house rules to provide “an enclosure of balcony or patio must be removed as per Local Law 11.” The next year, the board adopted resolutions specifically aimed at Banerjee, ratifying its 2015 house rule, taking the position that the 1979 consent letter was “not authentic,” and that the balcony enclosure had to be removed to accommodate the exterior repairs.
Since none of the three unit-owners removed their enclosures, the board brought separate actions against all three.
The court in the Banerjee case spent much time discussing the issue of the consent to the erection of the balcony enclosure, but the fact remained that the condominium’s declaration and bylaws stated that the balconies were common areas and that the board was empowered to “maintain and repair or replace all balconies” and had the right of access to any unit or common element for the purposes of carrying out the bylaws or declaration. Further, the wording of the house rules was clear: enclosures of balconies were not permitted without consent, and consent could be revoked. Therefore the court declared that Banerjee’s enclosure must be removed and could not be reinstalled after the project.
Interestingly, the same judge came to a different conclusion for Wong and Pasapula, finding in both cases that the board had the right to require the removal of the enclosures at its own cost in order to complete the required inspections and repairs; however, once completed, the unit-owners had the right to replace the enclosures, provided they complied with FISP. The court determined that the board could not force these two unit-owners to permanently remove their enclosures since the board had waived its right to object when the apartments were purchased.
Banerjee, clearly upset, appealed the decision in his case. Interestingly, the board instructed its counsel not to submit any papers in opposition to Banerjee’s appeal. The appeals court in 2020 zeroed in on the fact that under the bylaws, consent could be revoked at any time, and in 2016, the consent was revoked for all balcony enclosures. The court refused to make any inquiry as to the board’s decision, stating that under the Business Judgement Rule, judicial review of the decision was not proper as long as the board acted in the best interests of the condominium, within its authority and in good faith. Therefore, even without opposition, Banerjee lost on appeal. He had to remove his balcony enclosure and was not permitted to reconstruct it after the exterior project was concluded.
Attorneys:
For Hillcrest Condominium: Brian D. Graifman, Borah, Goldstein, Altschuler, Nahins & Goidel
For Banerjee: Peter Joseph
