Case Notes

Case Notes provides insight on one particularly relevant co-op or condo case—clearly explaining what happened, why it’s important, and what lessons can be learned within.

285 results
First published: Jun 2022
Trump Village Section 4, Inc. v Vilensky

Although the issues of whether a co-op can sue when a prospective buyer makes misrepresentations on a purchase application have not been finally resolved — and courts will continue to hear motions in such cases — it is interesting that the trial court and then an appellate court allowed a cooperative to bring a fraud action in this case. It is not uncommon for an applicant to claim he will move in and instead install an adult child in the apartment or use it as an investment by subleasing the apartment. In the past, boards have had little recourse. Certainly the cooperative might bring an action that the shareholder has violated the lease, but after curing, the violations could continue. Still, the possibility of winning damages in a fraud claim makes it imperative to follow such disputes to their legal conclusion.

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First published: Jun 2022
Roberts v. WVH Housing Corporation

These disputes happen all too often at cooperative and condominium elections. It would seem that the reason for this is the rush to close the meeting and announce the results the same evening. It is not uncommon for a board to insist that the vote be finalized the night of the meeting, no matter how late it gets. This is asking for trouble, since people often make mistakes. In many cases, if there was a simple comparison of the number of shareholders who signed in (either by proxy or in person) and the number of ballots, discrepancies might be discovered. In the lumberyard, it is common to hear “measure twice, cut once.” Perhaps an adage should be created just for elections at cooperatives and condominiums: Check twice, announce once.

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First published: May 2022
Court Dismisses Treasurer’s Defamation Claim Against Board President

While the statements made during a board meeting may be protected by the common-interest privilege to allow for the free flow of information between attendees, evidence of malice or reliance on knowingly false statements or any statements motivated by ill will or spite will not be protected and may expose the individual making such statements to liability. However, because members of co-op and condominium boards are subject to qualified privilege, it is difficult for them to be found liable for defamation. By the same token, it is difficult for them to obtain favorable results in connection with their own defamation claims. See Pusch v. Pullman, 2003 NY Slip Op 51759(U) (N.Y. Sup. Ct. N.Y. Cnty. Nov. 5, 2003) (an action related to the famous Pullman case re board discretion in determining objectionable conduct, 40 W. 67th St. v. Pullman, 100 N.Y.2d 147 (2003)).

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First published: May 2022
Timing is Everything

If you are dissatisfied with the action of the cooperative or the board, and you believe that the court should review it under Article 78, bring an action immediately, as the statute of limitation is quite short.

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First published: May 2022
Baker V. 16 Sutton Place Apts. Corp.

If you are dissatisfied with the action of the cooperative or the board, and you believe that the court should review it under Article 78, bring an action immediately, as the statute of limitation is quite short.

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First published: May 2022
When Termination Turns Ugly

Discrimination of any type against any group can be a costly claim. Here, the co-op is facing claims from the management company and the individual agent, both of whom alleged discriminatory treatment. The individual director is also facing a separate claim for tortious interference for terminating the management contract, and the cooperative may be subject to almost four years’ worth of contract damages ($201,780) if the contract is found to be wrongfully terminated. Boards must be ever vigilant to ensure that their decisions are not biased against any protected class and made in compliance with the terms of the contracts to which they are parties. The fact that a board changes composition does not give it carte blanche to ignore the terms of agreements signed by an earlier board.

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First published: Apr 2022
Eight Dogs

Boards should ensure that any change in building rules is well documented and circulated among its residents as well as its employees to avoid confusion in the applicability of rules and obligations.There are a myriad of different regulations and cases applicable to the harboring of pets. Consideration must be given to whether the building rule – whether it prohibits pets altogether, requires permission from the board, or imposes specific restrictions – is clear, enforceable, and applies evenly to all of its residents. Boards must be vigilant in pursuing enforcement of its rule, as failing to do so may lead to a waiver of that right. Boards must also thoughtfully consider and carefully balance the need for a reasonable accommodation with the safety and expectations of the other residents, and craft a mutually acceptable solution. Regardless of a building’s position or regulations governing the existence of the pet in the apartment, or the possible claims of waiver or reasonable accommodation, the board retains the ability to address any nuisance caused by the pet in the apartment, such as excessive barking, aggressive behavior, offensive odors, and property damage, which should not be tolerated.

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First published: Apr 2022
Heavy Wind, Then a Tragedy

Where a terrace or balcony is involved, the building, its unit owners and their tenants are responsible for securing its contents or bringing it indoors during inclement weather. Even heavy furniture needs this attention, so that pedestrians below are protected from potentially tragic outcomes. It’s the law, and a common law responsibility. Non-resident renters, as well as the buildings, are bound by it. As for this court decision, it was not a motion on the merits of the claim, and it does not mean that the renters will be liable for the terrible injuries suffered by the plaintiff. A jury may well determine that, if there is fault, it will be apportioned, and the greater fault may be assigned to the Unit Owner, if that is who placed the chair there.

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First published: Apr 2022
Heywood Condominium v. Steven Wozencraft

Governance of a condominium can be difficult, as the board does not have the same remedies as in a cooperative. This being the case, every condo board should review the house rules and bylaws to ensure that it has all of the possible remedies that might be available. Careful review of the provisions in regard to the non-payment of common charges is very important, and it should be clear in the governing documents that if a unit-owner is in arrears, nonessential services, including the use of amenities (such as a gym or pool or rooftop garden), will not be available to that unit-owner. It is best to review all remedies in the governing documents, including those involving other day-to-day violations of the house rules and bylaws, such as smoking, noise and odor complaints.

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First published: Mar 2022
Objectionable Conduct: A ‘Pullman” Slip -Up

The so-called Pullman provision in a proprietary lease is a very useful tool when it comes to shareholders who exhibit objectionable conduct. However, in order to properly use this weapon, the co-op must strictly comply with the terms of the provision, as the courts are very aware that terminating a proprietary lease is an extreme remedy. Prior to utilizing this provision, the co-op must review every step required with management and counsel, as any defect in the procedure will result in a dismissal of the co-op’s action.

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