Case Notes in
Alterations
Category
- Access
- Alterations
- Appeals
- Arbitration
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First published: Jan 2025
Alteration Agreement To The RescueTAKEAWAY This case demonstrates how a well-crafted alteration agreement can protect a cooperative or condominium from legal liability and costs of defense 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. Where was the 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 the shareholders as additional insureds. Unfortunately, property manager Douglas Elliman claimed – suspiciously, according to Mandracchia – that the certificates were lost and could not be located. In any event, boards should have their alteration agreement forms reviewed by counsel, especially if such a review has not been conducted recently, to ensure that the alteration agreement contains appropriate protection for the building and the board and incorporates current developments in the law.
Read full articleFirst published: Sep 2024
Shades of LevanduskyTAKEAWAY What happened here is a repeat of the famous court decision Levandusky v. One Fifth Avenue Apartment Corp, which found actual alteration work did not follow the signed alteration agreement. Boards can take action when a unit owner violates an alteration agreement and makes changes affecting other residents or impacting common areas. These actions are subject to the Business Judgment Rule, which gives boards broad discretion as long as they do not act beyond their authority and decisions are made in good faith. And as established in the Levandusky case, such decisions are not subject to second-guessing by the courts.
Read full articleFirst published: Jun 2024
Old Alterations, New HeadachesThe court ruled in favor of Mr. Clauser, stating that he was not liable for the repair and maintenance of the French doors in his apartment, as he had never signed an agreement with the co-op or the previous owner.
Read full articleFirst published: Jan 2024
Is It A Repair or Improvement?TAKEAWAY: Courts like to defer to the business judgment of boards. As long as a condominium board acts in good faith, within the scope of its authority under the bylaws, and to further a legitimate interest of the condominium, a court is not likely to meddle in board business.
Read full articleFirst published: Dec 2023
You Like Beige, I Hate ItTAKEAWAY Boards and shareholders alike should read this decision (and the lower court decision) as cautionary tales of how a seemingly innocuous issue can snowball into a complete breakdown in communication and trust, and ultimately result in costly litigation. While it may be too late for the parties involved, boards and shareholders who find themselves in similar situations should consider mediation as a first attempt to resolve these “domestic” disputes amicably. In particular, boards should consider encouraging shareholders to submit their disputes with neighbors to mediation so that the parties are afforded an opportunity to communicate their concerns and interests. Ideally, having been given an opportunity to do so, they will be able to develop their own mutually agreeable resolutions without the board’s involvement and legal expense (let alone without resorting to litigation). Boards seeking to require mediation of disputes among residents should work with their attorneys to develop and implement appropriate changes to house rules and other governing documents.
Read full articleFirst published: Nov 2022
My Leaking Doors, Your Cost To FixThis 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.
Read full articleFirst published: Sep 2022
Endless RenovationsIf the duration of an alteration project is of concern to a board of a cooperative or condominium, care should be taken to ensure that all material information, including the specific deadline and consequences for failure to meet it, are clearly spelled out in the agreement. Even a seemingly minor mistake or unintentional oversight can have major consequences and a potentially significant impact on building operations.
Read full articleFirst published: Sep 2022
Brodie v. Board Of Managers Of The Aldyn CondominiumTakeaway If the duration of an alteration project is of concern to a board of a cooperative or condominium, care should be taken to ensure that all material information, including the specific deadline and consequences for failure to meet it, are clearly spelled out in the agreement. Even a seemingly minor mistake or unintentional oversight can have major consequences and a potentially significant impact on building operations.
Read full articleFirst published: Feb 2020
Wachtel v Park Ave & 84th St., Inc.This case raises a number of interesting issues for both boards and purchasers. As a purchaser, it is important that you do your due diligence, although it is not clear typical diligence could have helped these purchasers. There are representations that should be requested in a contract, but there is no indication here that the seller even knew there was an issue with the entrance or with the share allocation. Moreover, it is unlikely that any lawyer would seek to look at minutes going back 40 years, nor is it very likely that a managing agent would provide them. Having said that, the ADA-non-compliant step was obviously in place, and the purchaser could have inquired about it and retained an architect to look into DOB records. Although it is somewhat beside the point of this case, it is important to remember that someone purchasing a even a small home outside of Manhattan will have a home inspection, yet someone buying a far more costly apartment will often do no physical or architectural diligence at all. While it may cost more in the short term, asking an architectural professional to look at an apartment and public records might save money in the long term. As to the share-allocation issue, the court was able to rely on the business judgment of the board in part because the board had records that showed that the determination concerning the share allocation was made in accordance with proper corporate governance. This is important. Boards should make determinations at board meetings; minutes of those meetings should accurately reflect what took place; and those minutes should be maintained.
Read full articleFirst published: Dec 2018
Perrault vs. Village Dunes Apt. Corp.There are some co-op proprietary leases and condo bylaws that require that certain acts of the board be reasonable or that its consent not be unreasonably withheld. These are found most often in provisions concerning alterations and the establishment of house rules, or other rules and regulations. When reasonableness language is present, the burden is on the cooperative or condominium to demonstrate that its acts were “reasonable.”
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