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
- Access
- Alterations
- Arbitration
- Assessment
- Attorney Fees
- Attorney-Client
- Authority to Sue
- Balcony/Terrace Rights
- Bike Lane
- Board of Directors
- Books and Records
- Breach of Lease
- Business Judgment Rule
- Bylaws
- Bylaws/House Rules
- Certificate of Occupancy
- Charges/Fees
- Commercial Unit
- Common Element
- Common Elements
- Companion Animal
- Constitutionality
- Construction Defects
- Contracts
- Conversion
- Defamation
- Discovery
- Discrimination
- Due Diligence
- Easement
- Elections
- Estate
- Eviction
- Eviction/Termination
- Fiduciary Duty
- Fines
- Foreclosure
- Fraud
- Governance
- Gym
- House Rules
- Indemnification
- Indemnification/Subrogation
- Injunction
- Insurance
- Labor Law
- Liability of Directors
- Licenses
- Liens
- Maintenance
- Malpractice
- Management
- Mechanic's Lien
- Misrepresentations
- Motion Practice
- Motion Practive
- Notice of Pendency
- Nuisance
- Occupancy Agreement
- Ownership
- Parking
- Partnership
- Personal Injury
- Pets
- Property Damage
- Proprietary Lease
- Reasonableness
- Receivership
- Release
- Repairs
- Representations
- Sales
- Sponsor
- Statute of Limitations
- Stock/Shares
- Stocks/Shares
- Sublets
- Succession Rights
- Tax
- Third-Party Liability
- Transfers
- Trespassing
- Trial Practice
- Violations
- Warranty of Habitability
- Yellowstone Injunction
- Zoning
First published: Feb 2024
In Guaranties We TrustTAKEAWAY Based on a change in federal law back in 1986, many cooperative shareholders have sought to transfer their shares to a trust, for tax or estate purposes. When a board is faced with such a request, there is much to be said for simply refusing it, as well as all similar requests. Cooperative living has always contemplated ownership by, and a community of, individuals, not trusts and their beneficiaries. Trusts are actually not legal entities per se, like LLCs or corporations, and a trust might better be described as a legal arrangement by which a trustee holds title to property and administers it for the benefit of beneficiaries. The complications that can arise from dealing with an apartment that is held by a trust are not insignificant, and since there is no upside to the cooperative itself if the shares are held by a trust, denial of the request outright may be the cleanest and best option for a board. Still, if a board were inclined to allow ownership of apartments by trusts, they would be wise to follow the path chosen by the plaintiff in this case. Here, the cooperative demanded and got a solid, well-crafted, and unconditional guaranty of payment by a solvent individual. As this case demonstrates, the courts will hold a guarantor liable for unpaid maintenance plus attorneys’ fees, and the cooperative does not have to wait around to get paid until trust and estate issues are resolved in Surrogate’s Court.
Read full articleFirst published: Feb 2024
You Don’t Have The Votes!TAKEAWAY This case is a reminder that co-ops and condominiums are ultimately political organizations controlled by the majority interest of their owners. Particularly in small buildings, where just a few owners can constitute a majority, the majority owners have a substantial ability to control the building’s leadership and operations. Unless there are protections for minority interests in the bylaws or other governing documents, minority owners may be frozen out by a coalition holding a majority. Additionally, lawyers can be focused on bringing claims based on procedural issues in providing notice of and conducting meetings. However, this case points out that if the procedural issues can be shown not to make a difference in the ultimate result, courts can properly ignore them.
Read full articleFirst published: Feb 2024
Handling a HoarderBeekman East was successful in court not only because the facts were so extreme but because the language in the governing documents was comprehensive and clear. It’s advisable for every board to review with its attorney the bylaws and house rules (and the proprietary lease in a co-op) to be sure that the language regarding accessing apartments is very strong and broad. This vigilance will lead to a successful outcome if the owner decides not to give access when the board requires it to conduct an inspection, make repairs or exterminate pests.
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: Jan 2024
Storm in ProgressTakeaway This case illustrates the “storm-in-progress” doctrine where a property owner is “not required to provide a constant, ongoing remedy for an alleged slippery condition caused by moisture tracked indoors during a storm,” but it must take “reasonable measures to remedy a hazardous condition.” As we head into winter and possible snow accumulation (even in the face of climate change) boards must make sure that building staff takes all reasonable affirmative steps to maintain the building, including assigning staff to cover the public areas with mats, continually mop up any moisture on the floor, put wet-floor notices in affected areas, assign someone to continually monitor the affected areas, and keep written assignment and progress notes in the logbooks. I would add: Assign staff to offer to assist disabled and elderly persons to traverse areas of possible danger.
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 2023
The Fallout From a Ladder FallTAKEAWAY There is little to be done about a law that finds you liable though you did nothing wrong. New York’s Labor Law can seem cruel at times. There is a very important lesson here, however, and that is before a board allows a renovation, the shareholder must sign an alteration agreement. This is critically important. Not only will it set forth the rules for a renovation (which if broken, the board can ask a court to suspend the work), but it will also require a shareholder to indemnify the cooperative (or condominium) in the event the renovation causes a problem, whether it occurs during the renovation (such as drilling into a gas pipe) or after (a leak results years later from defective plumbing). Alteration agreements must be reviewed, updated, signed and kept in a safe place for future reference. A board might consider an extra copy to be placed either in a safe place (i.e. a board room), with their lawyer or some other alternate location. That’s how important an alteration agreement can be.
Read full articleFirst published: Nov 2023
The Vote Must Be WrongTAKEAWAY If a board member feels that an election is questionable, he or she would be wise to make sure there are enough facts to back up the claim. It appears that in this case the former board president may have been so aggrieved that she didn’t obtain the board position she wanted that she was willing to spend her time and money, and that of the co-op’s also, to challenge the election outcome without the necessary proof. Unfortunately, lawsuits such as this tend to affect the collegiality of any board, and while it’s unclear why, the decision in this case points out that the president of this board has already resigned.
Read full articleFirst published: Oct 2023
How Many Times Do I Have to Ask?TAKEAWAY Section 881 of New York’s Real Property Actions and Proceedings Law was enacted in 1968. It was designed to address the needs of building owners who needed access to a neighboring property so they could perform improvements or repairs to their own property. Building owners turn to RPL 881 when access can’t be agreed upon amicably, or in the case of the Columbus House, when an access request isn’t even acknowledged. RPL 881 provides a legal framework for obtaining court orders to gain access to a property. Co-op & condo boards should pay attention to FISP timetables, particularly if an access agreement is necessary. Note that Columbus House began requesting access in May 2022, and finally received a court decision granting it nearly 15 months later.
Read full articleFirst published: Oct 2023
A Board Decision That HoldsTAKEAWAY Boards retain broad discretion to enforce the rules and regulations of the building in different ways, as long as they do not single out a shareholder for “harmful or selective enforcement” and otherwise act in what they believe to be the best interests of the cooperative. Special arrangements with shareholders should be memorialized in writing in the interests of both parties in order to avoid questions from future boards who may not have been parties to the initial agreement. The purchasers might also have investigated with the prior owner or the co-op before purchasing to see whether the board had approved the installation of the jacuzzi.
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