Case Notes by

William D. McCracken, Partner, Ganfer Shore Leeds & Zauderer

First published: May 2023
Ground Lease Tsuris

This litigation dramatically illustrates some of the difficulties faced by ground lease co-ops and their shareholders. Most co-ops in New York City own the land on which their buildings are built, and most of those co-ops took title to the land at a time when property values were much lower than they are today. As a result, the equity in most co-ops resides in the individual apartments and are bought and sold among shareholders who can afford to pay premium prices for apartments. Ground lease co-ops, meanwhile, may include many shareholders who may not be able to pay the prices needed to acquire the land. It is no wonder that shareholders like the plaintiff are willing to go to court in hopes that a judge might relieve them of these difficult choices.

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First published: Feb 2023
The Unbearable Sound of Noise

There are at least two important points to make about this unusual decision. First, the courts recognize the inherent noisiness of living in New York City and are not inclined to find a public nuisance just because the children in the apartment upstairs run around a lot. Second, condominium boards have broad powers and discretion when it comes to enforcing its own rules, but a board that effectively abdicates its enforcement responsibilities may not be protected from legal consequences. Taking the two lessons together, while it is reasonable for condominium boards to treat noise complaints skeptically as a general rule, they still need to take them seriously enough to show that the complaints were investigated.

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First published: Nov 2022
Fix My Condo!

Newly constructed condominiums often have construction defects, and it is not uncommon for newly constituted condominium boards to sue their sponsor for contract and non-contract claims (such as fraud and fiduciary duty claims). It is equally common for the sponsor to move to dismiss those claims. In particular, sponsors and their representatives are often successful in dismissing fraud claims on the theory that those claims are really just duplicative of contract claims, but phrased in more “intimidating” language. The plaintiffs in this case were able to survive the motion to dismiss because they described specific building defects that the sponsor and its representatives were actually aware of and actively concealed or failed to address.

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