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
- Appeals
- 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
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- Eviction
- Eviction/Termination
- Fiduciary Duty
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- Fraud
- Governance
- Gym
- House Rules
- Indemnification
- Indemnification/Subrogation
- Injunction
- Insurance
- Labor Law
- Liability of Directors
- Licenses
- Liens
- Maintenance
- Malpractice
- Management
- Mechanic's Lien
- Mediation
- Misrepresentations
- Motion Practice
- Motion Practive
- Negligence
- Notice of Pendency
- Nuisance
- Occupancy Agreement
- Ownership
- Parking
- Partnership
- Personal Injury
- Pets
- Property Damage
- Proprietary Lease
- Reasonableness
- Receivership
- Release
- Repairs
- Representations
- Sales
- Service of Process
- 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: Jul 2008
Pello vs. 425 East 50 Owners Corp.This case teaches us that it is important that boards read both the proprietary lease and the bylaws in order to determine how the building is to be governed. If, after looking at these documents, it should turn out that one imposes a higher burden than the other, then the cooperative may well be required to meet that higher burden. What this case also teaches is that, even in a small building, the board cannot act informally. Compliance with the corporate documents is necessary in order for the actions of either the board or the shareholders to be deemed legally binding and enforceable. Here, the board did not follow the lease requirements and the outcome was predictable.
Read full articleFirst published: Jun 2008
Branscombe Investments Ltd. vs. Board of Managers of the Olympic Tower CondominiumThis is a case where the parties should have been able to come to a resolution without resorting to a lawsuit. The court made clear in its decision that it expended significant efforts to try and settle this matter and that, since the parties were neighbors, settlement would have been preferred. From the condominium’s perspective, the court was able to dismiss claims because it complied with the Business Judgment Rule. It retained a competent expert and made decisions based on that expert’s advice. Even though there was a claim that the board acted without holding a board meeting, the evidence submitted to the court showed that its actions were taken at meetings, in accordance with its bylaws. By pursuing claims in the face of evidence that the condominium retained experts, relied on those experts, and followed its own rules, the Bankses were required to pay the condominium’s legal fees. In this case, we join the court in its belief that this was a dispute among neighbors that should have been settled.
Read full articleFirst published: May 2008
Pappas vs. New 19 West LLCOnce again, the courts remind purchasers to read the documents. It is not enough to rely upon oral statements, promises, or omissions by real estate brokers or counsel for the sponsor. If a purchaser wants to have exclusive use of a roof area, the purchaser must make sure that such use is legal and authorized in writing. The courts have repeatedly made it clear that representations made in an offering plan cannot be ignored, particularly by those who purchase from the sponsor of a conversion plan. Here, the purchasers tried to ignore the plain statements made in the offering plan and sought to rely instead on oral statements made concerning the sponsor’s “intent” to legalize the roof setback for use as a terrace. This strategy was unsuccessful. Based on the disclosures in the offering plan, we believe the sponsor would also be successful were it to move to dismiss the action.
Read full articleFirst published: Apr 2008
Residential Comm. of the Bd. of Mgrs. of the Sycamore v. 250 E. 30th St. Owners, LLCThe offering plan disclosed that, even though the condo would be responsible for maintaining the storage bins, all of which were located in an area controlled by the condominium, it was the sponsor that was entitled to reap the financial benefits of selling licenses to the storage bins. The court applied standard rules of contract interpretation when construing all of the documents, found that the documents were unambiguous and that they did not contradict one another and concluded that it had no choice but to hold the parties to their terms. The condominium’s argument that the offering plan, itself, was irrelevant because the conversion had taken place was rejected, at least in part because many of the unit-owners purchased from the sponsor and entered into purchase agreements which adopted and incorporated the terms of the offering plan.
Read full articleFirst published: Mar 2008
Raimondi v. Board of Managers of Olympic Tower CondominiumThe condominium here was willing to use its waiver of a right of first refusal to require a purchaser who had a history of buying, renovating, and flipping apartments in the building to pay an enhanced transfer fee on the resale of the unit. Query whether this type of fee may be demanded by another condominium to institute a de facto transfer fee without relying upon a bylaw provision approved by the unit-owners. The case also reveals yet another condominium that has adopted a flip tax despite the lack of any definitive appellate decision in New York that a flip tax does not create an unreasonable restraint on alienation.
Read full articleFirst published: Jan 2008
Ash v. Board of Managers of The 155 CondominiumIt appears as if the lower court attempted to circumvent the plaintiff’s right to free speech by finding that his actions were detrimental to the discovery process and the administration of the court’s calendar. The appellate court has reminded us, however, that a litigant will not be barred from speaking except under the most egregious circumstances. Interestingly, the issue of whether plaintiff’s communications rose to the level of defamation that may allow the board members to sue was apparently not raised. In any event, freedom of speech prevailed here.
Read full articleFirst published: Dec 2007
Breezy Point Cooperative Inc. vs. YoungThe Pullman progeny keep coming, about one every year since the landmark decision in 2002. While the number is still small, almost all of the progeny have supported the action of the co-op in terminating proprietary leases for objectionable conduct. Does the limited number of cases suggest the difficulty in establishing objectionable conduct or restraint on the part of co-op boards in applying Pullman to only the most egregious instances of objectionable conduct? Stay tuned!
Read full articleFirst published: Dec 2007
Gunning vs. Regina Metropolitan Co. LLCAlthough this case involved a rental building, the issue here, storage of property by a landlord, is equally applicable whether the building is a co-op or a condominium. The entity in whose care the property was left has some responsibility for its return. Even when the standard of care for a gratuitous bailment is relaxed to gross negligence, there may still be liability for lost property. Co-op and condo boards should insure some measure of security and control over goods stored by building occupants outside over their units and should insure that any disposition of stored property is properly documented and recorded to protect the landlord from later claims.
Read full articleFirst published: Nov 2007
Avery vs. CaldwellThis case involved an obviously annoyed judge who did little to conceal her view that the recusal motion was frivolous and without merit. It is hard to see what led to the plaintiff’s decision to seek recusal unless there was some unarticulated belief that the judge was prejudiced against the plaintiff.
Read full articleFirst published: Oct 2007
Joan Messner v. 112 East 83rd Tenants Corp.This situation happens fairly frequently in Manhattan. An apartment is purchased with an existing greenhouse, which was not part of the original building construction. Somehow the purchaser fails to learn for some time, at least until there are leaks, that this structure is one for which the co-op has no responsibility to repair. Then, a dispute with the co-op ensues over the repair responsibility. In most cases, as here, the co-op will prevail, but there are extenuating circumstances in some cases. The best solution would be for the co-op to explain the repair responsibility to the purchaser at closing, making sure to obtain an acknowledgement at that time from the purchaser that the co-op has no such repair responsibility.
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