Case Notes
Case Notes provides insight on one particularly relevant co-op or condo case—clearly explaining what happened, why it’s important, and what lessons can be learned within.
Category
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First published: May 2025
It Snowballed with “Snowball”TAKEAWAY The story took a significant turn when an appellate court stepped in and ruled that the co-op couldn't simply kick Zelmanovich out of her apartment without first allowing the court to properly examine the facts. The higher court said that before any eviction could proceed, there needed to be a real determination about two key questions: Was Snowball's barking actually as disruptive as the co-op claimed? And did the co-op illegally discriminate against Zelmanovich? This case highlights an important issue that co-op boards should consider: Is it appropriate to try to evict a longtime resident when, as appears to be the situation here, all the complaints are coming from just one neighbor? There's another troubling aspect to this story. When Zelmanovich told the co-op that Snowball was her emotional support animal — meaning she needed the dog as a reasonable accommodation animal — the co-op and Zelmanovich should have communicated in an attempt to come to some kind of compromise or accommodation. Instead, it seems like both sides dug in their heels without really trying to solve the problem. Now, four years after this whole ordeal began - what started as a simple complaint about a barking dog — the legal battle shows no signs of ending. A case that might have been resolved through communication and goodwill has instead turned into a prolonged court fight that continues to drag on.
Read full articleFirst published: May 2025
You Can’t “Slapp” Them DownTAKEAWAY Most co-op and condo boards, management companies, and board attorneys are familiar with shareholders or unit owners who incessantly complain about everything to do with how the co-op or condo is being operated. Sometimes those complaints have merit; often, however, the complaints lack foundation or any sense of proportionality. In this case, it is clear that the sponsor and condo board believed that the couple (and especially the husband) had crossed the line from legitimate, fair, and productive criticism to toxic, antisocial, and indefensible behavior. However, what the plaintiffs failed to recognize in time is that in New York, when individuals criticize management about matters of public interest (a broad concept that encompasses co-op and condo affairs), litigation should not be used as a tool to silence those voices unless very stringent pleading and evidentiary requirements can be met from the outset.
Read full articleFirst published: May 2025
Whose Water Bills Are You Paying?TAKEAWAY Boards should ensure strict compliance with bylaw provisions relating to sub-metering and billing practices, especially when commercial units are involved. Consider what typically happens: A board may assume that sub-meters are functioning properly, bills are allocated correctly, and that everyone understands their responsibilities. Then reality strikes. The commercial unit on the ground floor had been drawing extraordinary water usage for years without proper accounting, and the board came to the belated realization that the residential owners had been unwittingly subsidizing a business operation. Boards and managing agents should periodically walk the building, clipboard in hand, and verify that every required submeter isn't just installed but actually working. Additionally, any general releases that seem to resolve today's construction disputes could unexpectedly complicate tomorrow's billing disagreement, so it is a best practice to have those carefully reviewed by a professional to ensure clarity regarding future liabilities, and avoid unintended implications for unrelated or future claims.
Read full articleFirst published: May 2025
Doggie DNATHE LESSON FOR BOARDS While rules and regulations can sometimes be used to curb certain behaviors, boards should be made aware that seeking judicial intervention to enforce them regulation may nevertheless be problematic. Here, the board’s adoption of the dog breed restriction created a presumption of viciousness while also creating a potentially irreconcilable conflict with applicable law. By not commencing an action within the statutory three-month period, the board was entirely dependent on its ability to demonstrate through evidence and testimony that the dog “caused damage to the premises, created a nuisance or interfered with the health, safety or welfare of other residents of the building.” In this case, the facts did not support such a determination.
Read full articleFirst published: Apr 2025
The Never-Ending SponsorTAKEAWAY The co-op found itself in trouble by mistakenly asserting that because the sponsor was “not an individual person which is a condition required to qualify as a Holder of Unsold Shares under the cooperative’s offering plan and . . . proprietary lease,” even though the offering plan did not actually require a holder to be an individual. It is unclear whether the co-op’s position was simply an error, or perhaps a calculated gamble to gain leverage over the sponsor and force it to sell apartments. Regardless, co-ops must be very careful in dealing with holders of unsold shares and understand that their proprietary leases likely provide for very different treatment than average tenant-shareholders. Attempting to charge a holder a flip tax will not only result in a loss in court, but will also require the board to pay the sponsor’s attorneys’ fees as well.
Read full articleFirst published: Mar 2025
Luxury Turns Into LiabilityTAKEAWAY Sometimes less is more and discretion is the better part of valor. When a condo board wants to sue for construction defects, it should be careful about who it names in the lawsuit. This case shows that naming successor sponsor/developers or a sponsor/developer’s individual members unnecessarily can lead to wasted time and dismissed claims. In this situation, since the construction defects were solely created by the original sponsor/developer or on behalf of the sponsor/developer, the claims against the successor sponsor/developers and sponsor/developer executives were thrown out entirely. Significantly, the case also confirms that condo boards can only bring viable fraud claims based on affirmative misrepresentations in the offering plan, not omissions in the offering plan.
Read full articleFirst published: Mar 2025
Luxury Turns Into LiabilityTAKEAWAY Sometimes less is more and discretion is the better part of valor. When a condo board wants to sue for construction defects, it should be careful about who it names in the lawsuit. This case shows that naming successor sponsor/developers or a sponsor/developer’s individual members unnecessarily can lead to wasted time and dismissed claims. In this situation, since the construction defects were solely created by the original sponsor/developer or on behalf of the sponsor/developer, the claims against the successor sponsor/developers and sponsor/developer executives were thrown out entirely. Significantly, the case also confirms that condo boards can only bring viable fraud claims based on affirmative misrepresentations in the offering plan, not omissions in the offering plan.
Read full articleFirst published: Mar 2025
Hallway HeadachesTAKEAWAY In the absence of an express written agreement or specific bylaw provision, a cooperative corporation is not obligated to repurchase common area space or shares from a shareholder-tenant who previously purchased but was unable to use such space in connection with an alteration. Here, although the co-op had agreed in principle to repurchase unused hallway space and shares from the plaintiff, in the absence of a final agreement or applicable bylaw provision, it had no obligation to do so or to waive its standard closing costs. Cooperative corporations and shareholder-tenants should consult the corporation’s bylaws to determine what terms govern the sale and later repurchase of common area space and cooperative shares. To the extent that the bylaws are silent on such issues, parties should consider including repurchase terms in any purchase and sale agreement for common area space and additional shares, to avoid a future dispute regarding the terms of repurchase by the corporation.
Read full articleFirst published: Mar 2025
Condo Board Prevails in Transfer Fee Lawsuit Due to Plaintiff's Procedural ErrorTHE LESSON FOR BOARDS This case is a clear reminder that statute and case law require that a condominium be sued in the name of its president or treasurer, and that those individuals be served on behalf of the entity. Many times, condominiums are not properly named or served but do not move to dismiss on that basis; if there are no statute of limitations issues, boards often assume the plaintiff will just do it correctly at a later date. What is interesting here is that without any indication as to why, the court ordered that costs and disbursements be awarded to the condominium. While that is likely not a large sum, it makes one wonder if the court was disturbed by the failure of the plaintiff to comply with well-settled law.
Read full articleFirst published: Feb 2025
The Price of Control: A Parc Vendome TaleTAKEAWAY Board members do not expect to incur personal liability for their service. This case is an extreme example showing that it can happen where a board has been found to have deliberately failed to follow the governing documents and contractual requirements with improper motives. The court’s ruling would seem to preclude the board members from receiving indemnification from the condominium under the bylaws, and might be excluded from coverage under the applicable directors and officers insurance policy. In the underlying suit, the commercial unit owner is seeking more than $11.5 million of damages. If upheld on appeal, the individual board members will be on the hook for the eventual award of damages and for the fees and costs of that litigation if not covered by insurance.
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