TAKEAWAY The issues resolved by the court may wander a bit into the legal weeds—third-party complaints, common law indemnification, distinction between contract and professional malpractice claims—yet practitioners in the field, as well as board members, might take away at least two pointers. First, the responsibility for problems that unit owners might experience, especially in newly constructed or newly renovated buildings, may not be so easy to isolate or define. This lawsuit shows the many levels of legal responsibility that might exist for leakage and noise issues, such as professional design, construction, remediation, or maintenance. Second, the lawsuit shows that no matter how glossy the brochure, how exclusive the street address or how expensive the apartment, a residence is only as good as the level of care that went into its design, construction and maintenance. Your building may be a small walk-up in Brooklyn, but don’t hesitate to keep it well maintained by professionals. Also, take some comfort that you’re not swaying in the wind in a noisy and leaky apartment, several hundred feet above the street.
Read full articleNewly 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.
Read full articleA condominium acts through its board of managers. But the board must act as a body. A group of board members cannot make a decision like the one made here. Boards have rules and procedures and must follow them. Although this case involved a condo, the principle is equally applicable in a cooperative. In an unrelated case, co-op board members were sued for making certain decisions, but their actions were taken at properly called board meetings and minutes reflected what took place at the meetings. It was irrelevant that the vote may have been divided along sponsor/non-sponsor lines. The board called meetings, acted, and, even though one “faction” may have been outvoted, the acts were acts of the “board” and were upheld. What we don’t know here is whether the board’s failure to act properly created other problems. It certainly created delay, but one wonders whether the delay was such that any applicable statute of limitations expired. In the end, when the board takes an action, it must be the board – and not just some of its members – that acts.
Read full articleAs discussed above, under the clear and unambiguous terms of the purchase agreement and the offering plan, the court concluded that the sponsor was obligated to renovate the building and plaintiff’s unit, and defendants had failed to establish the existence of a triable issue of material fact as to their liability under these agreements. A trial was necessary, however, to determine the nature and extent of damages, specifically the extent to which the sponsor failed to comply with its obligations to renovate the building and plaintiff’s unit under the terms of the offering plan and the purchase agreement.
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