Case Notes in


First published: Apr 2021
Olcott v. 308 Owners Corp

There are two lessons in the story of the Olcotts. The first is that one must consider the precise language of the proprietary lease, and if a provision contains the word “reasonable,” the protection afforded by the business judgment rule is lost, and the courts will review the board’s decision and make its own decision based upon what it believes to be reasonable. The other lesson is more abstract. In this case, a man and his family had lived in a co-op apartment in his father’s name for many years, without incident and without a history of arrears. Suddenly, there is an issue about whether he would be worthy of being a shareholder. Is a judge really going to evict the family? Boards must consider all of the facts. What is legally correct and what is fair given all of the facts are often two different things. And if the matter lands in court, a judge, who is only human, may make a determination based on what’s reasonable rather than on what’s purely legal.

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First published: Jun 2016
Board of Managers, Soundings Condominium v. Foerster

It’s unusual for a co-op or condo board to initiate a legal action based on misrepresentations in the purchase application. The case merely denied Foerster’s motion for summary judgment. Accordingly, there remain many issues and unanswered questions. In this case, the misrepresentations were plain and undeniable. But what happens when the misrepresentation is less obvious? And how long can a person be held to a representation made in a purchase application? Clearly, no one believes that a representation made 20 years earlier should be binding. Another question is whether the Social Services Law requires a condo or co-op to allow a group home to be in place even if the governing documents require that apartments be used only for residential purposes. And what rights – or obligations – will the initial sellers have? We don’t have the answers to all of these questions, but the board’s decision to sue here – and the court’s refusal to dismiss the claim for rescinding the sale – should be taken into account by any purchaser seeking to “put one over” on a board.

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