Case Notes by Kristin Pendergrass, Counsel, Seyfarth Shaw

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First published: Mar 2025

TAKEAWAY In the absence of an express written agreement or specific bylaw provision, a cooperative corporation is not obligated to repurchase common area space or shares from a shareholder-tenant who previously purchased but was unable to use such space in connection with an alteration. Here, although the co-op had agreed in principle to repurchase unused hallway space and shares from the plaintiff, in the absence of a final agreement or applicable bylaw provision, it had no obligation to do so or to waive its standard closing costs. Cooperative corporations and shareholder-tenants should consult the corporation’s bylaws to determine what terms govern the sale and later repurchase of common area space and cooperative shares. To the extent that the bylaws are silent on such issues, parties should consider including repurchase terms in any purchase and sale agreement for common area space and additional shares, to avoid a future dispute regarding the terms of repurchase by the corporation.

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Case Notes by

Kristin Pendergrass, Counsel, Seyfarth Shaw

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First published: Mar 2025