Once again, the court reviewed and upheld the clear terms of the contract between the parties. Of particular interest was the landlord’s attempt to declare the lease provision invalid by asking the court to apply the provisions of the Condominium Act to a request to convert premises to cooperative ownership. As the appellate court properly noted, the two are distinct and separate forms of ownership. While the Condominium Act applies to condominiums (which requires residential real property to be owned in fee simple), the court correctly explained that it does not apply to cooperatives, in which shareholders own stock in a corporation owning real estate, which permits them to live in a specific apartment pursuant to a proprietary lease. Moreover, the court made it clear that the landlord’s attempt to delay a review of the tenant’s alteration plans until the tenant agreed that it would not seek to convert the building to luxury hotel cooperative units would not be permitted. The lease gave the landlord a final five-day opportunity to submit its objections to the renovations and specifically provided that, absent such objections, approval is deemed given. Thus, the court found that when the landlord failed to object, it could not preserve a right to object at a later date, i.e., when the tenant agreed that it would not convert the building to cooperative units. Finally, the term “owner” as used by the Department of Buildings, must be reviewed by all cooperatives and condominiums. Although this case relied on an interpretation of the administrative code, we note that new DOB rules, in effect as of August 4, 2008, may require buildings to change their practices concerning who may sign certain permit applications as “owner.”
Read full articleThe co-op had granted Arnold permission to alter his apartment and install a central air conditioning system. When the co-op board members had second thoughts about this installation, they acted as if the permission was conditional and revocable despite any evidence that this was the case. Levandusky was no defense for the board’s breach of contract liability. This was not a case where the business judgment rule could protect the board’s efforts to alter the consent. Perhaps most significantly, the decision here holds that the shareholder may recover his legal fees from the co-op because of a statutory provision in the Real Property Law for the benefit of tenants. This should give other co-op boards pause before trying to alter binding contracts with shareholders.
Read full articleOnce a shareholder in a co-op embarks upon an apartment alteration with co-op approval, it is very difficult to stop such alteration without a clear and compelling reason as long as the work is proceeding as authorized. In other words, once an apartment alteration is approved, a co-op does not have the option of changing its mind and stopping the work.
Read full articleThe result here was predictable. There was no proof that the wall had been moved. Also, the plaintiff waited a long time to pursue this claim. As a result, the sympathy of the court was not invoked. Indeed, other defenses such as laches, waiver, and estoppel probably could have been raised by the defendant to support dismissal of the claim.
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