When a co-op is trying to determine whether family members can live in an apartment without the shareholder also being present, a necessary first step is to analyze the terms of the lease itself. Although not discussed in either of the cases, we also believe that the cooperative’s course of conduct is an important factor to be considered. Course of conduct will rarely, if ever, trump a contract; yet, if the clause is ambiguous, the way in which it has been enforced may properly be used to consider how the parties interpreted the provision. Moreover, co-op boards must treat their shareholders equally, so that allowing one shareholder to have family members as the sole residents, while disallowing the same arrangement in another apartment, may give rise to a charge that the two shareholders are being treated differently, which is a breach of the board’s fiduciary duty. In a perfect world, use clauses would be unambiguous. To the extent possible, boards should propose and encourage shareholders to vote in favor of an amendment to the proprietary lease so that the use clause actually requires the kind of occupancy the shareholders intend and expect to have the board enforce.
Read full articleAdverse possession is often tough to prove. The law is careful to prevent changes in ownership of real estate to be based only on the concept of abandonment. Obtaining title to a co-op apartment by adverse possession is rare and difficult. It does not seem likely that the plaintiff in this case will prevail. However, the case will turn on all of the facts presented to a court for decision.
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