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Balcony/Terrace Rights
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Yellowstone Injunction
Andrew Brucker, Armstrong Teasdale
Anna Guiliano, Borah Goldstein Altschuler Nahins & Goidel
Dale Degenshein, Armstrong Teasdale
Drew Pakett, Associate, Braverman Greenspun
Kenneth R. Jacobs, Smith Buss & Jacobs
Michelle P. Quinn, Gallet Dreyer & Berkey
Richard Shore, Nixon Peabody
Richard Siegler & Dale Degenshein, Stroock & Stroock & Lavan
Richard Siegler, Stroock & Stroock & Lavan
Sample Writer
Scott Pashman, Cozen O'Connor
Stewart E. Wurtzel, Tane Waterman & Wurtzel
Test Author
Thomas P. Higgins, Higgins & Trippett LLP
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.
Village Mall at Hillcrest Condominium v. Banerjee
This case's first lesson is simple: if written consent is granted, it's best to keep it in a very safe place. You cannot trust that the management files are current and accurate. After all, boards often switch management companies, and it's not safe to assume that all companies pass on complete files to their successors. Secondly, condo and co-op boards should be vigilant in enforcing their rules. If a board knows (or should have known) that there is a violation, it cannot wait to enforce such rules. Courts have been known to rule that waiting to enforce a rule prejudices the owner, and if nothing is done, the court may not allow enforcement years later. The Wong and Pasapula cases emphasize that this is especially true if there is a sale. Finally, there are not many courts that would refuse to allow a condominium or cooperative to do what is required under the law. The overriding fact is that certain laws are meant to protect the public, and FISP is one such law. It seems clear that a court will put the safety of the public over any rights a unit-owner or a shareholder may claim to have.
First published: Oct 2018
Fairmont Tenants Corp. v. Braff
This case is a good reminder that boards can successfully challenge a shareholder's actions, even if the shareholder has engaged in an activity that is in violation of the lease for years – even decades. This court found that, given the proprietary lease's "no waiver" provision, the passage of time did not waive the board's right to object. Nor did the board's apparent knowledge of the Braffs' using the roof waive the right to object. The board knew about it in 2007, when it forbade the couple from using the setback. Also, while the offering plan is probably not an active document anymore, the board and shareholders are still bound by the certificate of incorporation, bylaws, and proprietary lease, all of which can be relevant when trying to determine the rights of the involved parties. In this situation, the offering plan was the document that identified whether use of outdoor space was permitted by the adjacent shareholder. It showed the intent of the original drafter, and Braff failed to demonstrate that anything set forth in the plan was overridden or modified. The court thus properly considered the terms of the plan as a guide to determine whether or not the outdoor area was for the exclusive use of the Braffs.
First published: Jan 2018
Matter of Dicker v Glen Oaks Vil. Owners, Inc.
We cannot stress enough that the Business Judgment Rule does not give boards carte blanche. Boards may not act outside the scope of their authority, may not act in bad faith, and may not violate their own contractual obligations, including those set forth in the proprietary lease. There are a number of cases that raise the type of "disparate treatment" discussed in this case – that is, whether a board can treat some shareholders differently than others. We have seen other appellate level cases where the court upheld the right of a board to treat disimilarly situated shareholders differently. In one case, one group consisted of resident-owners, and another included investor-owners. A final question: would the appellate court have reached the same conclusion if the board had modified its rule under ordinary circumstances – not while the legal issue was pending between Haffey and Dicker? Boards have certain discretion, but we have found that to avoid the appearance of the board treating a shareholder disparately, it sometimes is preferable for a board to exercise its discretion when there is no specific matter before it. Although we cannot be certain as to how the court would have ruled had the modified rule already been in existence when Haffey decided to build her terrace, experience tells us that the rule might have been more likely to pass judicial muster.
Natalie and Geoffrey Richstone v. the Board of Managers of Leighton House Condominium
Outdoor space – terraces – are a very valuable amenity, especially in an urban setting. We all know that New Yorkers lucky enough to have terraces are not happy when their board requires access to perform alterations, particularly if access is required during the summer months. Or when there are delays – so that a request for two months of access becomes three months, then five months, and so on. And let's face it, boards probably aren't happy about having to use an apartment owner's terrace as a staging area. But under the bylaws of many condominiums, the board has the right to use the terrace for building-wide repairs and, assuming that the work is being performed in an appropriate and timely manner, there is little a unit-owner can do about it. This means that, while it has the right to install a rig blocking a terrace, a board shouldn't simply leave it up for a year while nothing is done. In this case, although the court does not go into the background leading to the litigation, it appears that the board and plaintiffs agreed that the equipment would be removed by March 31, but that the board's construction professionals required use of the rig beyond that date. It is not clear why the board would have agreed to an end-date (if in fact it did agree to one), and in that regard this may serve as a reminder. If an apartment owner wants a final date by which equipment must be moved from a terrace, boards and owners must know that there may be construction delays, because of • weather • unforeseen circumstances (contractors find something they didn't expect when they open a wall or floor) • government agency delays • lack of diligence by a contractor The board must look at each of these issues carefully if they arise but there should be an acknowledgement between a board and a unit-owner that delays may occur, no matter how frustrating it may be for board and unit-owner alike. As for the wood terrace, plaintiffs brought this action even though they knew, or should have known, that the wood terrace was not approved by the board or the DOB. We do not know whether the board would have challenged installation of the wood terrace had it not been for the lawsuit. Once the plaintiffs sued, however, the board raised the issue so the court could presumably make a decision on all issues concerning the terrace. Regarding the attorney fees, the court awarded them to the board noting it "is entitled to costs and attorney fees associated in curing plaintiffs' breach of the" bylaws. Presumably, then, the board can recover fees to the extent incurred to abate or remove any violation or default by the plaintiffs – for costs incurred to cause plaintiffs to remove the wood terrace and otherwise comply with the bylaws. This provision is fairly typical in condominium bylaws and – depending on the specific language and circumstances – may not provide for attorney fees when a condominium merely defends an action started by a unit-owner.
First published: Jul 2015
Pastor v. DeGaetano
We cannot stress enough how important it is to know what you are buying. And to make sure the board agrees! In a condo, one can – and should – always look to the tax lot drawings, which are filed with the Department of Finance (many are available on the Automated City Register Information System). In modern condominiums, the tax lot drawings will show the boundaries of what you are about to purchase, although we have found that there is often less information on older drawings. In a co-op, however, this information is not recorded and not always readily available. The proprietary lease (which will be available) may refer to the offering plan, or one of the amendments to the plan. If the co-op was created before 1962, there may never have been an offering plan as there was no filing requirement. And if the co-op is more than ten years old, the plan and amendments may no longer be available. The attorney general's office has an official retention policy of only 12 years. Even worse than referring back to the plan, the lease may refer to a drawing, or even a separate agreement, of which no one has a copy (or perhaps no one has an executed copy). While it may be easy to blame the managing agent – it is, after all, the agent's responsibility to maintain documents – the reality is that when a building changes from one agent to the next, all the records often do not necessarily get transferred, and no one realizes it until years later. The takeaway, of course, is to make sure the seller, buyer, and board all agree on what exactly is being purchased.
Goldhirsch v. St. George Tower & Grill Owners Corp.
There have been a number of cases where courts have refused to award damages or abate maintenance charges to an apartment owner because the owner has been unable to use the terrace in connection with repairs, even for an extended period of time. Without performing an exhaustive analysis, the courts have generally held that a co-op has the right to perform building repairs and has the concomitant right to use a terrace to do so. This is provided, of course, that the work is warranted and diligently performed. The court here engaged in an interesting interpretation of the interplay between the BJR and the apartment owner's breach-of-lease claim. Although the court quoted certain provisions of the proprietary lease concerning damages from general use of a terrace, it did not state whether there are provisions that specifically allow a co-op the right to use a terrace for building repairs, a provision found in many leases. Regardless, the result – that the co-op is not required to abate maintenance charges for its use of the terrace for building repairs –appears to be consistent with other decisions. We note that in a condominium, access rules and use of a terrace would be guided by the particular condominium's bylaws. The warranty of habitability, codified in the Real Property Law, does not apply.
First published: Jun 2008
Branscombe Investments Ltd. vs. Board of Managers of the Olympic Tower Condominium
This is a case where the parties should have been able to come to a resolution without resorting to a lawsuit. The court made clear in its decision that it expended significant efforts to try and settle this matter and that, since the parties were neighbors, settlement would have been preferred. From the condominium's perspective, the court was able to dismiss claims because it complied with the Business Judgment Rule. It retained a competent expert and made decisions based on that expert's advice. Even though there was a claim that the board acted without holding a board meeting, the evidence submitted to the court showed that its actions were taken at meetings, in accordance with its bylaws. By pursuing claims in the face of evidence that the condominium retained experts, relied on those experts, and followed its own rules, the Bankses were required to pay the condominium's legal fees. In this case, we join the court in its belief that this was a dispute among neighbors that should have been settled.
Pappas vs. New 19 West LLC
Once again, the courts remind purchasers to read the documents. It is not enough to rely upon oral statements, promises, or omissions by real estate brokers or counsel for the sponsor. If a purchaser wants to have exclusive use of a roof area, the purchaser must make sure that such use is legal and authorized in writing. The courts have repeatedly made it clear that representations made in an offering plan cannot be ignored, particularly by those who purchase from the sponsor of a conversion plan. Here, the purchasers tried to ignore the plain statements made in the offering plan and sought to rely instead on oral statements made concerning the sponsor's "intent" to legalize the roof setback for use as a terrace. This strategy was unsuccessful. Based on the disclosures in the offering plan, we believe the sponsor would also be successful were it to move to dismiss the action.
First published: Sep 2004
360 East 72nd Street Owners Incorporated v. Rutter
Although this case was decided in favor of the co-op, the board may have merely won the first battle in a protracted war over the use of the terrace. From the list of counterclaims asserted by the shareholders, there are other issues to be resolved by the courts. While the court stopped the ball-playing for the moment, it is likely that this decision will be challenged in the future.
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