Case Notes in
Foreclosure
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
- Due Diligence
- Easement
- Elections
- Estate
- Eviction
- Eviction/Termination
- Fiduciary Duty
- Fines
- Foreclosure
- Fraud
- Governance
- Gym
- House Rules
- Indemnification
- Indemnification/Subrogation
- Injunction
- Insurance
- Labor Law
- Liability of Directors
- Licenses
- Liens
- Maintenance
- 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
- Succession Rights
- Tax
- Third-Party Liability
- Transfers
- Trespassing
- Trial Practice
- Violations
- Warranty of Habitability
- Yellowstone Injunction
- Zoning
First published: Feb 2019
Zazzarino v 13-21 E. 22nd St. Residence Corp.When faced with a foreclosure, it’s important for boards to review their documents to determine the corporation’s responsibilities to both the shareholder and the potential purchaser. As there is likely a recognition agreement (a contract entered into by the shareholder, co-op, and lender), the board should also review its responsibilities to the lender. Boards should be proactive in dealing with the lender to make sure, among other things, that the terms of sale in the foreclosure include a provision that any purchaser at auction is subject to board approval. As an aside, we note that courts have held that where a provision of a lease requires action by the managing agent, as opposed to the board, the managing agent may take the board’s position into consideration.
Read full articleFirst published: Sep 2016
Citimortgage Inc. v. Abdou Salam Gueye and Plotch v. CitibankThe first of these cases is very important for condominiums. Most of the cases we have seen that preclude a lender from collecting interest (or a portion of interest) are because the court found the lender was acting in bad faith. In this case, however, the court was very clear that the lender’s failure to diligently pursue the case warranted a reduction of interest. As to the second case, the Court of Appeals has now clarified that consolidated mortgages, at least so long as they are consolidated prior to the filing of a common-charge lien, become a first mortgage so that the condominium’s lien is behind the total loan. Until the Condominium Act is changed, we suspect that condominiums will continue to have problems collecting their common charges during foreclosures.
Read full articleFirst published: Apr 2014
AMT CADC Venture v. 455 CPW, LLCSo why is this case important? The Condominium Act is clear that a valid first mortgage has priority over a common charge lien. It is highly significant if condominiums can limit the amount the bank is allowed to collect in a first position. Although this has always been an issue, we are seeing more and more cases where boards are looking for ways to challenge a lender’s apparent right to receive – before any other creditor is paid – all money claimed under the mortgage. Individual condominium units may be heavily mortgaged. When you add interest at the “default rate” under the mortgage, there may be little if anything left for the condominium. Therefore, if they can get some – if not all – of the money before the bank does, then that’s a big deal.
Read full articleFirst published: Apr 2011
LI Equity Network LLC v. Village in the Woods Owners Corp.The case is consistent with other cases that have held that, provided the terms of sale contain a provision making the sale subject to the rules of a co-op, a successful bidder should not expect to be able to immediately move in to the apartment. To the contrary, the bidder must be prepared to comply with the rules, regulations, and policies established by the co-op. This may result in the co-op refusing to issue the shares and lease to the successful bidder. Based on the court’s analysis of who is bound by the terms of sale, we do not know how the court would have decided the case if the terms of sale had not included language making the auction subject to the terms and conditions of the co-op’s governing documents. As there may be more nonjudicial foreclosure sales given the recent economic climate, we caution boards to be proactive and make certain that the terms of any sale include provisions making it clear that the sale is subject to the co-op’s governing documents.
Read full articleFirst published: Apr 2011
LI Equity Network LLC v. Village in the Woods Owners Corp.The case is consistent with other cases that have held that, provided the terms of sale contain a provision making the sale subject to the rules of a co-op, a successful bidder should not expect to be able to immediately move in to the apartment. To the contrary, the bidder must be prepared to comply with the rules, regulations, and policies established by the co-op. This may result in the co-op refusing to issue the shares and lease to the successful bidder. Based on the court’s analysis of who is bound by the terms of sale, we do not know how the court would have decided the case if the terms of sale had not included language making the auction subject to the terms and conditions of the co-op’s governing documents. As there may be more nonjudicial foreclosure sales given the recent economic climate, we caution boards to be proactive and make certain that the terms of any sale include provisions making it clear that the sale is subject to the co-op’s governing documents.
Read full articleFirst published: May 2009
New York Mercantile Exchange Condominium, By its Board of Managers v. Pambassab Ltd.It is important to note the time periods involved in this foreclosure action. Assessments were to be paid beginning in 2001. The action began in 2005 and the condominium was first able to obtain summary judgment in January 2009, eight years after the first payments were due and roughly three years after the action was started. Further, even though the condominium was awarded summary judgment, the action is not over. One of the things this case teaches us is that, if a unit-owner does not pay assessments or common charges in a timely manner, it is imperative that the condominium act as quickly as possible to start and diligently pursue legal proceedings. Indeed, boards should review their bylaws on this point as many require the board to act as soon as a unit-owner is more than 60 days in arrears. In addition, this case reminds us that it is important that boards maintain minutes of board meetings. It is clear that the court relied, in several instances, on the minutes in order to determine whether Pambassab objected to (or waived objections to) the amount or imposition of the assessments or the vote taken to impose the assessments. This proof was important in order to allow the condominium to meet its burden and challenge Pambassab’s arguments.
Read full article