Case Notes in


First published: Mar 2003
Barbour v. Knecht

A lower court decision that board consent was not required for this transfer was reversed. The co-op documents and the history of prior transfers, all of which mandated board approval, were the controlling factors, despite a shareholders' agreement and the fact that the purchaser was already a shareholder. This decision reinforces the standard co-op requirement of the need for board approval of apartment transfers.

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First published: Jul 2002
Schultz v. 400 Cooperative Corporation

This reversal of the lower court decision reported earlier last year in Habitat leaves little support for shareholders seeking a reallocation of the shares for a co-op apartment. A different result is difficult because of the frequent passage of considerable time since the alleged improper share allocation was made, the deference given to board decisions under the business judgment rule and the adverse impact on all other shareholders of a co-op if a reduction in a share allocation is granted many years later.

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First published: Mar 2002
Lambs, Inc. v. Diven

This is another in a long line of cases seeking to construe the nature of co-op ownership. In considering the dual nature of co-op ownership, a mixture of personal and real property, the court here concluded, for purposes of determining how a co-op was treated in a statutory homestead exemption from a legal attachment situation, that it was to be treated as real property. The reason: co-op shares represented the right to occupy and reside in real property. Despite this conclusion, the court refused to afford any relief to the petitioners on the ground that they had selected the wrong forum, an error that could be corrected by another lawsuit in a court of appropriate jurisdiction.

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First published: Feb 2002
Merioz v. Addison Hall Owners Corp.

This case is significant for two reasons. First, it clarifies the definition of a holder of unsold shares and expands it beyond that normally found in the typical proprietary lease to include the requirements imposed upon a holder of unsold shares by the New York State Department of Law. This may serve to reduce the number of persons claiming to be holders of unsold shares. It also reaffirms that bed and breakfast transient occupancies are not acceptable in a residential co-op since they constitute a commercial business.

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