Case Notes in

2023

First published: Aug 2023
What You Buy May Not Be What You Get

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.

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First published: Aug 2023
Dope, Dogs, and Noise

TAKEAWAY We strongly recommend that when seeking injunctive relief (or contempt) against an owner, you must be prepared to present live witnesses at any court hearing, especially if you expect opposition. Written affidavits cannot be cross-examined by a defendant. The court is unlikely to grant relief based solely on affidavit evidence unless the defendant fails to appear at all.

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First published: Jul 2023
Sidewalk Hazard

TAKEAWAY This sidewalk tale, one of the most common types of legal action, serves as a reminder for co-op and condo board directors across the city. Under the New York City administrative code, property owners bear not only the responsibility for their buildings but also for the safety of the adjacent public sidewalks. This crucial duty cannot be delegated or brushed aside. Regular and thorough inspections, coupled with prompt repairs, are paramount in limiting the risk of personal injury claims. The story underscores a crucial point - no matter how obvious a hazardous condition might appear, it doesn't absolve property owners from their duty. The safety and well-being of pedestrians remain a top priority and cannot be compromised.

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First published: Jul 2023
Was It Unbilled or Under Billed

Just because they say it, doesn’t make it true. Although an agency’s interpretation of its own regulations is generally to be accorded deference, an agency is not freed from the obligation to read its regulations reasonably and rationally. When an agency makes an arbitrary and capricious determination which misapplies its own rules and regulations to its own conduct, the court can and will reverse such determinations.

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First published: Jun 2023
Much Ado About A Leak

While it was probably worth the shot at moving to dismiss based on what seem to be fairly damning emails that there is no leak damage in Apt. 4E coming from 5E’s bathroom, ultimately courts are often hesitant to rely on emails in a motion to dismiss as documentary evidence. Here, maybe if a moisture expert, or even a plumber, had undertaken the same testing as the super and issued a report, it is possible such would have been more appropriately relied upon as documentary evidence on a motion to dismiss. Still, the shareholders of Apt. 5E face an uphill battle, as the proprietary lease plainly provides the co-op access to examine the pipes in apartments in order to find and fix leaks.

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First published: Jun 2023
Good Faith

So long as the Board of Managers acts in good faith and within its authority under the by-laws, the court will not second-guess the decisions of the board and its decisions are protected by the Business Judgment Rule. Unpopular decisions can be challenged in the courts, and every decision can be appealed (which is the case here). However, if residents of a condominium or co-op are that unhappy with the current board’s governance, they should seriously consider campaigning to elect a board that shares the same values as they do.

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First published: Jun 2023
Board of Managers of the Broad Exchange Building Condominium v. Nicole Lambert

It is important that boards respond promptly to complaints from unit-owners to prevent nuisance situations from spiraling out of control and to avoid being sued by unit-owners for failure to enforce the rules. In this case, the board quickly mustered a barrage of complaints from unit-owners and neighbors from the adjacent building, including photos and videos documenting the offending conduct. But without seeking a temporary restraining order at the outset, the offending conduct was allowed to carry on from June 2022 until the issuance of the preliminary injunction in March 2023. Moreover, the court did not order that Ms. Lambert remove any dogs from her unit. Because the parties will now proceed to litigate the validity of Ms. Lambert’s discrimination claims, the dogs may remain in place for a long time before their final status is resolved. But if the board ultimately prevails on its claims that Ms. Lambert has violated the bylaws and house rules, it may be entitled to recover its reasonable attorneys’ fees from Ms. Lambert. Unit-owners who own noisy or vicious pets often argue that they are service animals or emotional support animals, and boards will typically need to consult with counsel to ascertain whether the applicable requirements have been met to avoid running afoul of anti-discrimination law.

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First published: May 2023
Ground Lease Tsuris

This litigation dramatically illustrates some of the difficulties faced by ground lease co-ops and their shareholders. Most co-ops in New York City own the land on which their buildings are built, and most of those co-ops took title to the land at a time when property values were much lower than they are today. As a result, the equity in most co-ops resides in the individual apartments and are bought and sold among shareholders who can afford to pay premium prices for apartments. Ground lease co-ops, meanwhile, may include many shareholders who may not be able to pay the prices needed to acquire the land. It is no wonder that shareholders like the plaintiff are willing to go to court in hopes that a judge might relieve them of these difficult choices.

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First published: May 2023
Four-legged Identity Crisis

It is important that boards respond promptly to complaints from unit owners to prevent nuisance situations from spiraling out of control and to avoid being sued by unit owners for failure to enforce the rules. In this case, the board quickly mustered a barrage of complaints from unit owners and neighbors from the adjacent building, including photos and videos documenting the offending conduct. But without seeking a temporary restraining order at the outset, the offending conduct was allowed to carry on from June 2022 until the issuance of the preliminary injunction in March 2023. Moreover, the court did not order that Ms. Lambert remove any dogs from her unit. Because the parties will now proceed to litigate the validity of Ms. Lambert’s discrimination claims, the dogs may remain in place for a long time before their final status is resolved. But if the board ultimately prevails on its claims that Ms. Lambert has violated the by-laws and house rules, it may be entitled to recover its reasonable attorneys’ fees from Ms. Lambert. Unit owners who own noisy or vicious pets often argue that they are service animals or emotional support animals, and boards will typically need to consult with counsel to ascertain whether the applicable requirements have been met to avoid running afoul of anti-discrimination law.

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First published: May 2023
Spirollari v. Breukelen Owners Corp. and SMRC Mgmt LLC

An issue that is very common in co-ops and condos is the use of the handymen and other staff after hours by the shareholders and unit-owners. This litigation illustrates the danger when boards allow that. If there is an injury, might the board be held responsible? If there is damage caused during the job, who might be responsible? Is the super or the board still somehow supervising the work, even though they are not in the room? These are questions that one does not want to have to answer when disaster strikes. If a board allows its employees to work for residents after hours, a policy should be put in place and a waiver of liability signed by the shareholder or unit-owner, freeing the board from any responsibility. The resident should be made aware that the co-op or condo and its management are not responsible if anything goes wrong and that the burden of risk is shifted to the resident. Insurance issues should be reviewed by the board. And consultation with counsel is essential to make sure the board does not ignore or mishandle a very serious and sensitive issue.

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