Case Notes in

2026

Author
First published: Feb 2026
The Consequences of Rolling Back Rights

TAKEAWAY This case demonstrates that once a board conveys important amenities to a tenant that are maintained for years, an attempt to later claw them back through a change to the house rules risks a lawsuit. The appellate court’s decision shows that if there is evidence that the rule change may have targeted and discriminated against a particular tenant or group of tenants, a court may hold that the business judgement rule does not apply to allow for a quick summary dismissal, leaving the board to face the bad publicity, acrimony, time demands, and costs of ongoing litigation. Still, the appellate court’s decision to let stand the trial court dismissals of counts relating to the freight elevator rule changes, notwithstanding their sweeping nature and seemingly adverse business implications for commercial tenants in a heavily commercial building, demonstrate that the business judgment rule’s protections are still quite substantial. It is also helpful, as occurred here, for a board to pass a more general rule that clarifies and provides notice regarding its powers prior to taking action on particular amenities through a house rule.

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First published: Jan 2026
How Common Are your Elements

TAKEAWAY This decision underscores that disputes over assessment responsibility in condominiums rise or fall on the plain language of its governing documents. Where a condo declaration defines common elements to include building components that both encompass multiple units and benefit the building as a whole, courts will not allow cost-shifting by owners trying to recharacterize façade work based on subjective benefit or physical location. Legally mandated façade inspections and repairs under Local Law 11 are treated as building-wide obligations, and absent express exclusions, all unit owners must pay their proportional share. However, condo boards are not immune from scrutiny: accounting transparency, improperly filed liens, and allocation of non-façade repair work may still give rise to viable claims depending on the facts.

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First published: Jan 2026
A Key Refusal, Among Other Things

TAKEAWAY Before terminating a proprietary lease based on objectionable conduct, boards must carefully document specific incidents of default and clearly explain how the shareholder’s actions harmed other residents or the building. The dates and times of the incidents as well as the specific clauses of the proprietary lease and house rules that are allegedly breached should be sufficiently detailed as well. In appropriate circumstances, especially in view of a well drafted complaint, the court will order an eviction/ejectment of the defaulting shareholder as well as referral to a referee for a calculation of damages. This, in turn, enables a co-op to bypass landlord-tenant court and tenant friendly judges who may sympathize with the shareholder and provide an unjustified opportunity to cure.

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