condo Archives

Jul 19, 2012

Board Member Liability after Fletcher v. The Dakota, Inc.

A recent decision of the Appellate Division, First Department,[1] Fletcher v. The Dakota, Inc.,[2] has significantly changed the circumstances in which tort claims may be asserted against board members of cooperatives and condominiums in their personal, rather than only corporate, capacities. We believe this decision is not the last word on this issue. However, board members should be aware that until or unless the apparent holding of the case is rejected by the New York Court of Appeals or narrowed by the Appellate Division itself, board members who are successfully sued personally and are not protected by sufficient insurance or… Read more

Jun 21, 2012

Mold Revisited

Despite an earlier court decision that has been widely interpreted as holding that landlords in New York (including cooperatives and condominiums) had no liability for alleged bodily injury from mold, the Appellate Division of the New York State Supreme Court for the First Department has issued a decision making clear that the issue remains very much in play. In a memorandum in October of 2006 we advised our cooperative and condominium clients of a Supreme Court decision in the Fraser case[1] which found that then-current scientific evidence did not support a conclusion that mold or damp indoor environments cause illness. … Read more

Feb 2, 2012

Streamlined Sale of Common Space to Shareholders

On January 26, the New York State Attorney General’s Real Estate Finance Bureau announced new standards that will streamline the allocation of stock to, and the sale of, cooperative common areas, such as hallways, servants’ rooms and storage lockers, to existing shareholders. Previously, the Attorney General had taken the position that such sales required the issuance of “no action letters” by its office in order to comply with New York State’s securities laws. This position has now been abandoned. In the future, cooperatives may allocate stock to common areas and sell the stock to existing shareholders without involving the Attorney… Read more

Sep 3, 2010

Recent Legislation on Short-Term Leasing and Powers of Attorney

Two newly enacted laws in New York State affect cooperatives and condominiums: one prohibits the leasing of apartments for less than 30 days; the second involves the effectiveness of powers of attorney which are often used in cooperative and condominium transactions. Short-Term Leasing Chapter 225 of the Laws of 2010 prohibits the leasing of apartments in Class A multiple dwellings, which includes virtually all residential cooperatives and condominiums, for time periods of less than 30-days. This effectively eliminates the use of apartments as hotel rooms, “bed and breakfast” accommodations or other short-term rentals. There are some exceptions. Non-family members… Read more

Apr 15, 2010

Recent Legislation for Green Buildings

The New York City Council has recently enacted, at Mayor Bloomberg’s request, four laws[1] that are designed to increase the energy efficiency of buildings in New York City. The legislation is rather complex, with various “start” dates, but the basic provisions that apply to cooperatives and condominiums are as follows: Effective July 1, 2010, all alterations, including apartment alterations, that require building permits must comply with the new New York City Energy Conservation Code and must be certified accordingly. Commencing January 1, 2013, all owners of “covered buildings” (those over 50,000 gross square feet) must file an energy efficiency report… Read more

Aug 26, 2009

New Powers of Attorney

New Sections 5-1501, 5-1501A and 5-1501B of the New York General Obligations Law[1] will take effect on September 1, 2009 that will affect the validity of powers of attorney. Although currently valid powers of attorney will remain in effect, all new powers of attorney must be drafted on a new statutory form or must incorporate the new language required by the law. The statutory changes will affect many transactions, including those involving cooperatives and condominiums. Under the new law, the agent, as well as the principal, must now sign the form, and the power will survive the incapacity of the… Read more

Jun 12, 2009

New Ruling on Exclusive Cable Contracts

On May 26, 2009, the United States Court of Appeals for the District of Columbia Circuit, in the case of National Cable & Telecommunications Ass’n v. Federal Communications Commission, 2009 WL 1444094 (D.C. Cir. 2009), upheld a rule and order of the Federal Communications Commission, 22 F.C.C.R. 20,235 (2007), that banned exclusivity provisions in contracts between cable companies and owners of apartment buildings. There is the possibility that this decision may be reviewed by the U.S. Supreme Court, but absent a reversal by the Supreme Court, the FCC rule governs. The decision by the Court of Appeals is an important… Read more

Mar 27, 2009

Unit Owner Monetary Defaults

The current state of the national and local economy will likely lead to increased nonpayment of monthly charges by owners of cooperative and condominium apartments. The loss of income can affect the financial stability of a cooperative or condominium and, at least in the short run, the costs of unpaid maintenance or common charges must be borne by other owners. Therefore, it is important that boards have and enforce a clear policy as to payment arrears. The procedures and effectiveness of legal remedies for nonpayment differ substantially as between cooperatives and condominiums. Cooperative apartment owners are tenants for collection purposes,… Read more

Dec 2, 2008

Insurance: Prompt Notice of Claims

We have frequently reminded clients of the importance of promptly notifying their insurers of any actual, threatened or possible claims against them. This has been especially important in New York because the New York Court of Appeals has held that an insurer may deny coverage due to late notification, regardless of whether the delay actually prejudiced the insurer. During its 231st session, the New York State Legislature attempted to overrule this case law through legislation. Under an amendment to Section 3420 of the New York Insurance Law, an insurer may now no longer deny a claim for untimely notice unless… Read more

Apr 7, 2008

Authorization of Board Action

On March 31, 2008, the Supreme Court for New York County rendered a decision illustrating the importance for cooperatives and condominiums of documenting board and owner action properly. As cooperatives and condominiums age, the proper keeping of records has become an issue for many of them. It is an issue that should not be overlooked. In Pello v. 425 E. 50 Owners Corp. et al., 2008 N.Y. Slip Op. 30939(U) (Sup.Ct., N.Y. Co., Walter Tolub, J., March 31, 2008), a cooperative claimed to have enacted and subsequently modified a flip tax by board amendments to its by-laws. However, the coop… Read more