Case Notes by
Andrew Brucker, Armstrong Teasdale
Category
- Access
- Alterations
- Arbitration
- Assessment
- Attorney Fees
- Attorney-Client
- Authority to Sue
- Balcony/Terrace Rights
- Bike Lane
- 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
- Easement
- Elections
- Estate
- Eviction
- Eviction/Termination
- Fiduciary Duty
- Fines
- Foreclosure
- Fraud
- Governance
- Gym
- Indemnification
- Indemnification/Subrogation
- Injunction
- Insurance
- Labor Law
- Liability of Directors
- Licenses
- Liens
- 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
- Tax
- Third-Party Liability
- Transfers
- Trespassing
- Trial Practice
- Violations
- Warranty of Habitability
- Yellowstone Injunction
- Zoning
First published: Jun 2022
Trump Village Section 4, Inc. v VilenskyAlthough the issues of whether a co-op can sue when a prospective buyer makes misrepresentations on a purchase application have not been finally resolved — and courts will continue to hear motions in such cases — it is interesting that the trial court and then an appellate court allowed a cooperative to bring a fraud action in this case. It is not uncommon for an applicant to claim he will move in and instead install an adult child in the apartment or use it as an investment by subleasing the apartment. In the past, boards have had little recourse. Certainly the cooperative might bring an action that the shareholder has violated the lease, but after curing, the violations could continue. Still, the possibility of winning damages in a fraud claim makes it imperative to follow such disputes to their legal conclusion.
Read full articleFirst published: Jun 2022
Roberts v. WVH Housing CorporationThese disputes happen all too often at cooperative and condominium elections. It would seem that the reason for this is the rush to close the meeting and announce the results the same evening. It is not uncommon for a board to insist that the vote be finalized the night of the meeting, no matter how late it gets. This is asking for trouble, since people often make mistakes. In many cases, if there was a simple comparison of the number of shareholders who signed in (either by proxy or in person) and the number of ballots, discrepancies might be discovered. In the lumberyard, it is common to hear “measure twice, cut once.” Perhaps an adage should be created just for elections at cooperatives and condominiums: Check twice, announce once.
Read full articleFirst published: May 2022
Baker V. 16 Sutton Place Apts. Corp.If you are dissatisfied with the action of the cooperative or the board, and you believe that the court should review it under Article 78, bring an action immediately, as the statute of limitation is quite short.
Read full articleFirst published: Apr 2022
Heywood Condominium v. Steven WozencraftGovernance of a condominium can be difficult, as the board does not have the same remedies as in a cooperative. This being the case, every condo board should review the house rules and bylaws to ensure that it has all of the possible remedies that might be available. Careful review of the provisions in regard to the non-payment of common charges is very important, and it should be clear in the governing documents that if a unit-owner is in arrears, nonessential services, including the use of amenities (such as a gym or pool or rooftop garden), will not be available to that unit-owner. It is best to review all remedies in the governing documents, including those involving other day-to-day violations of the house rules and bylaws, such as smoking, noise and odor complaints.
Read full articleFirst published: Jan 2022
Elango Medical PLLC v. Trump Palace Condominium and Trump Corp.Though the decision of the appeals court did not address whether there was discrimination by Trump — the case is still pending — the decision here points out three very important points every co-op and condo board should be aware of. First, courts will often look at past acts of a board, and inconsistency is frowned upon. The board’s decision to allow other units to be used as medical offices could only lead a court to conclude that there must be another reason for a rejection of the current applicant. A mantra of all boards should be: “Be reasonable, and be consistent.” This golden rule will alleviate much pain — and avoid many lawsuits. The second point is a simple piece of advice for avoiding charges of discrimination: Do not ask questions (or require things of an applicant) if it would elicit information that would lead you to know that they belong to a protected class. For example, do not ask an applicant’s age, since that may result in a claim that there was a rejection because the applicant was too old or too young. Do not ask if they will need any accommodations, because this is akin to asking: “Do you have a disability?” Do not ask the applicant’s religion or where they were born. None of these questions are relevant to whether they will be a good neighbor and pay their maintenance on time, and none of these questions can be asked on an application or at an interview. Likewise, requiring a photograph is wrong because it can elicit information that is inappropriate (and illegal) when making the admittance decision. The final important point involves the Trump Corp.’s role. In asking the court to dismiss the claim, Trump took the position that it was only the agent of the condo board, and the board made the decision. The court seemed to be warning managers that if there is discrimination, they may be held culpable if they took an active role. We do not know how the court will rule in this matter. However, given the two most important factors (the photo of the applicant and the prior use of the unit), it would be safe to say that the position of the condo board and Trump seems weak. The decisions of the court so far have taught a valuable lesson to boards that are wise enough to learn from the mistakes of others.
Read full articleFirst published: Oct 2021
Siwana Green v. Al CristanchoOften we hear that a court’s decision is based on a technicality and that form is as important as substance. In this decision, the court has made it clear that the will of the people will prevail, even if there may have been a technical mistake or two. Substance, in this case, was more important than form.
Read full articleFirst published: Jul 2021
Weinstein v. Board of Directors of 12282 Owners' Corp.As stated decades ago, without a showing of a breach of fiduciary duty, judicial inquiry into the action of directors is prohibited – even if the board’s decision was unwise or inexpedient. Broad statements accusing a board wrongdoing will not suffice; the plaintiff must state with particularity that the actions of the board were taken in bad faith, showed self-dealing, discrimination or misconduct, or otherwise fell outside the scope of the business judgment rule. Weinstein failed to show any of the above, and thus the court dismissed his case. Management contended that its actions were also shielded by the business judgment rule. The court disagreed. However, bringing an action against management was a decision for the board to make, and the board’s decision not to bring such an action was also protected by the business judgment rule. Therefore, the derivative claims against management were also dismissed. This case is a useful reminder that the decisions of co-op and condo boards will be respected by the courts – provided there is no bad faith or self-dealing and provided the decisions are made within the scope of the board’s authority. The business judgment rule is alive and well. But the lesson to be learned is that no matter how often the courts uphold this rule, shareholders will continue to attack their boards’ decisions. Therefore, every board should be forewarned to always make educated and well-documented decisions and to always act within the scope of its authority.
Read full articleFirst published: Jun 2021
Dubin v. GlasserThe standard New York cooperative proprietary lease does not expressly state that a tenant-shareholder is a third-party beneficiary of another tenant-shareholder’s lease with the cooperative corporation. Therefore, if a board fails to take action against a shareholder for violation of the proprietary lease or house rules, another shareholder cannot independently bring his or her own action against a shareholder. In addition, the standard lease has a provision that states the co-op is not responsible to the lessee for the non-observance of the lease or house rules. Thus, to remedy a bad situation, the shareholder in a cooperative is dependent on the board to enforce the lease provisions and house rules. If the board refuses, based on the Ran v. Weiner decision, there is nothing for the injured shareholder to do. (Interestingly, the Condominium Act would allow an aggrieved condo unit-owner to bring an action if the condo board does not, but there is no such parallel provision in any laws applicable to cooperatives.) But perhaps the door has opened slightly by the decision in Dubin v. Glasser. Perhaps common practice in cooperatives will change. Stay tuned, as we may not have heard the last of this from the courts. A shareholder may indeed have the right to enforce the lease or house rules when the board refuses.
Read full articleFirst published: Jun 2021
Dubin v. GlasserThe standard New York cooperative proprietary lease does not expressly state that a tenant-shareholder is a third-party beneficiary of another tenant-shareholder’s lease with the cooperative corporation. Therefore, if a board fails to take action against a shareholder for violation of the proprietary lease or house rules, another shareholder cannot independently bring his or her own action against a shareholder. In addition, the standard lease has a provision that states the co-op is not responsible to the lessee for the non-observance of the lease or house rules. Thus, to remedy a bad situation, the shareholder in a cooperative is dependent on the board to enforce the lease provisions and house rules. If the board refuses, based on the Ran v. Weiner decision, there is nothing for the injured shareholder to do. (Interestingly, the Condominium Act would allow an aggrieved condo unit-owner to bring an action if the condo board does not, but there is no such parallel provision in any laws applicable to cooperatives.) But perhaps the door has opened slightly by the decision in Dubin v. Glasser. Perhaps common practice in cooperatives will change. Stay tuned, as we may not have heard the last of this from the courts. A shareholder may indeed have the right to enforce the lease or house rules when the board refuses.
Read full articleFirst published: May 2021
Village Mall at Hillcrest Condominium v. BanerjeeThis case’s first lesson is simple: if written consent is granted, it’s best to keep it in a very safe place. You cannot trust that the management files are current and accurate. After all, boards often switch management companies, and it’s not safe to assume that all companies pass on complete files to their successors. Secondly, condo and co-op boards should be vigilant in enforcing their rules. If a board knows (or should have known) that there is a violation, it cannot wait to enforce such rules. Courts have been known to rule that waiting to enforce a rule prejudices the owner, and if nothing is done, the court may not allow enforcement years later. The Wong and Pasapula cases emphasize that this is especially true if there is a sale. Finally, there are not many courts that would refuse to allow a condominium or cooperative to do what is required under the law. The overriding fact is that certain laws are meant to protect the public, and FISP is one such law. It seems clear that a court will put the safety of the public over any rights a unit-owner or a shareholder may claim to have.
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