Case Notes in


First published: Dec 2019
Kling v. The 129 Lafayette Street Condominium

It can be difficult for condo boards to know who is going to be a problematic subletter, even if the board – as some do – requires an application package with references. A board has a right of first refusal, and most boards are not in the business of being a landlord, nor should they be. The onus is properly on the owner of the unit to determine whether the subtenant is likely to comply with the rules of the building. If the subtenant fails to comply, it is the unit-owner who is responsible for the tenant’s behavior. Nonetheless, condo boards should review their rules and bylaws to see if there is a way to amend them to effectively discourage bad behavior.

Read full article
First published: Sep 2019
Leon v Harlan

The reason this case is important is not because it breaks exciting new legal ground but because it is a common complaint in vertical living: other people make noise. Aside from preposterously obvious nuisances – no, you cannot practice your tap routine at 1A.M. – most courts will tell litigants that if you’re going to live in an apartment building, you have to expect noise from other people living there. Carpets and padding should be required, but will not ensure the silence of living in a one-story house. There is another lesson for shareholders here, though: let he who is without sin cast the first lawsuit. Despite the fact that the initial complaint was filed by Leon, Harlan’s counterclaims took over the proceedings. Be wary – sometimes, if you sue a neighbor, she may turn around and sue you right back.

Read full article
First published: Jul 2019
Segev v 262 N 9 LLC

The theory behind a condo board’s right of first refusal is that the seller, a unit-owner to whom the board owes a fiduciary duty, is in no different a position if the apartment is sold to the buyer or to the building. It is thus the buyer – with whom the building has no contractual relation-ship – who takes the risk that the building will purchase the apartment. However, the theory Segev advanced here – tortious interference with the contract by the board – has previously been rejected by the courts in the context of a co-op board’s rejection of a purchaser. The conclusion is that any contract to purchase a co-op or condo apartment is subject to the board’s rights under its respective governing documents. Accordingly, the prospective purchaser signs on to the rules of the building and is required to abide by them.

Read full article
First published: Mar 2019
345 East 50th Street LLC vs. The Board of Managers of M at Beekman Condominium

Board members are permitted to – and should be permitted to – operate their buildings as they see fit. They do, however, have obligations to all unit-owners (or shareholders in a co-op), including one to make repairs to the envelope of the building when required. While the board members did not act improperly, the court noted that, when Brown’s application for the roof deck work was submitted, the board could have let her know that a roof replacement was being considered. While failing to notify her may have been irresponsible, it was not actionable. The lesson for unit-owners is that when they are about to perform renovations of the type discussed here, they may want to ask the board if it is considering repairs that would affect the renovation. Unit-owners may even want to read the board minutes. That may seem like an unnecessary burden, but it also is a simple enough way to avoid situations like this one.

Read full article
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 article