Case Notes in

2004

First published: May 2004
Edith K. Spiegel v. 1065 Park Avenue Corporation

This case reinforces established law about treating some shareholders differently from others. Because of the Business Corporation Law dictates, this is not permissible. Special privileges, even if provided for in the proprietary lease, are unenforceable. However, rights of holders of unsold shares may still be protected.

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First published: May 2004
Fraken Builders Inc. v. Joanne M. Ciccone

This case involved a sublease in a co-op apartment building. The co-op here was a proprietary lessee seeking to enforce its house rule about required floor coverings against a shareholder occupant of the apartment who was obviously the subject of complaints from adjacent occupants. Undoubtedly, the co-op encouraged this action by its shareholder. Because the sublease incorporated by reference the house rules from the proprietary lease, the shareholder was bound to observe those rules. The significance of this case is that the court sanctioned enforcement of required floor coverings and thus validated this common and widely used co-op house rule.

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First published: Apr 2004
Babeli v. East 13th Street Tenant Corp.

Once a shareholder in a co-op embarks upon an apartment alteration with co-op approval, it is very difficult to stop such alteration without a clear and compelling reason as long as the work is proceeding as authorized. In other words, once an apartment alteration is approved, a co-op does not have the option of changing its mind and stopping the work.

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First published: Apr 2004
Robert Fleisig v. 75 East End Owners Inc.

This is one of a long line of co-op cases establishing the principle that where there are building repairs to be done by the co-op, the co-op determines the scope of such repairs, including the nature and extent, even if an affected shareholder prefers a different methodology or aesthetic.

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First published: Mar 2004
178 E. 80th St. Owners, Inc. v. Jenkins

The result here was most unusual. In American jurisprudence, each party normally bears its own legal expenses. Occasionally, by contract, this rule can be varied so that either one party or another bears the expenses of both parties. Often, the proprietary lease so provides. In this case, the lease was not the basis. Rather, it was the combination of the federal court venue and the shareholder's contempt of court, a unique situation.

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First published: Mar 2004
Peck v. Lily Lodge

The facts of this case led the court to conclude that the defendant was operating a bed-and-breakfast establishment in a co-op, which is inimical to the underlying purpose of a co-op enterprise. Transient occupancy involves a commercial enterprise, which has no place in a building designed to provide housing for its shareholders. The courts invariably frown upon such operations and not even the so-called roommate law could be invoked to help the tenant's position.

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First published: Jan 2004
Trepel v. Diop

By Richard Siegler, Stroock & Stroock & Lavan This case reveals that a court will enforce a shareholder’s agreement given to induce a co-op to permit the transfer of shares and a proprietary lease to that person which in some manner restricts the use or occupancy of the apartment. Here, the court permitted only such access as was needed to sell the apartment, but without providing a key that would have afforded unlimited access to the apartment by the shareholder.

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