2017 Jack Newton Lerner Landlord Tenant Practice Institute Presentation

Adam Leitman Bailey, P.C.
New York Real Estate Attorneys
COOPERATIVE &
CONDOMINIUM HOT TOPICS
By Adam Leitman Bailey
Jack Newton Lerner Institute CLE
September 15, 2017

When a Board Can Fine Its
Residents
1

Board’s Authority to Impose Fines
2
• For condominiums, this requires a determination that residents are in
violation of a provision of a governing document. If they are in violation, then
the board has statutory authority to impose a fine on them.
• For cooperatives, the court must determine that the residents are in violation
of authority in the governing documents to fine their residents.
• Lastly, even if the board of the
condominium or cooperative is
properly authorized by the
governing documents, courts will
look to whether the severity of the
fine is unconscionable. Courts will
not uphold fines that are found to
be too heavy, even if the board acted
within the discretion of its
authority.

Condominiums
• Failure to comply with any of the [governing
documents] shall be ground for an action to
recover sums due, for damages or injunctive
relief or both maintainable by the board of
managers on behalf of the unit owners or, in a
proper case, by an aggrieved unit owner. N.Y.
Real Prop. Law §339-j.
3

Minkin v.
Board of Cortlandt Ridge Homeowners
Ass’n, Inc.
4

Gabriel v.
Board of Managers of Gallery House
Condominium
5

Cooperatives
• There is no statute that authorizes cooperative board
of directors to assess monetary fines. Instead, a
cooperative board seeking to assess monetary fines
against tenant-shareholders for violating house
rules must do so pursuant to explicit authorization
from within the governing documents.
• Where cooperative boards have authority provided
in the by-laws to implement additional rules and
regulations, boards are also given the implicit
authority to impose fines.
6

Cohan v.
Board of Directors of 700 Shore Road
Waters Edge, Inc.
7

Olszewski v.
Cannon Point Ass’n, Inc.
8

The Departmental Divide on
Shareholder Family Occupancy
1

The Clause
• A representative example of the
kind of clause the Departments
are disagreeing over reads as
follows:
The Lessee shall not, without the
written consent of the Lessor on
such conditions as Lessor may
prescribe, occupy or use the
apartment or permit the same or
any part hereof to be occupied or
used for any purpose other than as a
private dwelling for the Lessee and
Lessee’s spouse, their children,
grandchildren, parents,
grandparents, brother and sisters
and domestic employees…
2

Georgetown Leasing LLC v
Oakley
• Real Property Law §235-f(3) provides that:
▫ Any lease or rental agreement for residential premises entered into by one tenant shall be
construed to permit occupancy by the tenant, immediate family of the tenant, one additional
occupant, and dependent children of the occupant provided that the tenant or the tenant’s
spouse occupies the premises as his primary residence.
▫ The statute does not define the term immediate family. The term immediate family has been
defined by the Rent Stabilization Code to include a husband, wife, son, daughter, stepson,
stepdaughter, father, mother, stepfather, stepmother, brother, sister, grandfather,
grandmother, grandson, granddaughter, father-in-law, mother-in-law, son-in-law or
daughter-in-law. See, e.g., 9 NYCRR 2104.5[a].
▫ Even assuming arguendo the term immediate family did not include the Undertenant, as the
mother of Respondent’s Daughter, certainly Respondent’s minor child would be considered to
be his immediate family. Undertenant is the legal guardian of Respondent’s daughter, and
thus could derive rights to occupancy in her capacity as guardian.
• Generally, courts have held that where the allegation of subletting is
predicated upon a transfer of interest to an immediate family member, a cause
of action for subletting does not lie, and the landlord must bring a nonprimary
residence proceeding to obtain possession, if the essential allegation is based
on the fact that the tenant of record does not maintain his primary residence
at the subject premises. This body of case law is primarily from the First
Department. (See, e.g., MF Holding, LLC v. Apostolopoulos, 30 HCR 222A, NYLJ
April 26, 2002, p. 21, col. 1 (App. Term 1st Dept.) (dismissal of subletting proceeding was
warranted where alleged subtenant’s were the tenant’s own children)
3

First Department, 2016
230-79 Equity, Inc. v Frank
• Appellate Term, First Department
“The undisputed record evidence establishes that respondent
Beatrice Frank, the proprietary lessee, breached Paragraph 14 of the
governing proprietary lease agreement by permitting her daughter to
reside in the subject cooperative apartment, while the respondent
live elsewhere. Paragraph 14 provides that the apartment may not be
used for any purpose “other than as a private dwelling for the Lessee
and Lessee’s spouse, their children, grandchildren, parents,
grandparents, brothers and sisters and domestic employees.” This
language is “correctly construed…as permitting occupancy by the
listed persons other than the lessee only if the lessee maintains a
concurrent occupancy” (445/86 Owners Corp. v Haydon,
300A.D.2d 87 [2002]; but see Wilson v Valley Park Estates Owners
Corp., 301 A.D.2d 589 [2003].)
4

First Department, 2002
5
445/86 Owners Corp v. Haydon
• The Court opined that the:
“meaning is manifested by a grammatical structure that does not
differentiate between the lessee’s family and domestic employees
i.e., to hold that paragraph 14 permits defendant’s mother-in-law
to live in the apartment without defendant also living there at the
same time would permit defendant’s domestic employee to live in
the apartment without defendant also living there at the same
time.” The court added “this is a patently unintended and absurd
result.”

Wilson v.
Valley Park Estates Owners Corp
• The Second Department held that the lease clause was
ambiguous and does not expressly require that Board
approval be obtained for a tenant-shareholder’s family
member to reside in an apartment while the tenant-
shareholder is not in residence.
• The Court reasoned that the lease term did not expressly
require that consent be obtained for the type of
arrangement at issue in the case and thus, triable issues
of fact were raised as to whether the cooperative
apartment owner was in breach of the proprietary lease
when his daughter and her fiancé resided in the
apartment while he resided elsewhere.
6

Conclusion
• Neither Department considered the doctrine that a
lease is normally construed against its landlord-
drafter in the event of ambiguity.
• Neither Department answers whether in such cases
an unauthorized occupancy can be prosecuted as an
illegal sublet, particularly where there is clear proof
that the child is not paying the parent.
• The split decisions between the First and Second
Departments in interpreting the above-mentioned
proprietary lease provision ripens this issue for
review by the Court of Appeals.
7

Updated: Advising Board and
Landowners on Handling
Secondhand Smoke Issues
1

Supreme Court, Appellate Division,
First Department
2

Milena Jovic v.
Lynn Blue, et al.
• In this holdover proceeding to recover possession of a rent-
controlled apartment on the ground that the tenant created a
nuisance, the tenant denied the allegations, asserting that
certain of the complained-of conduct cannot constitute a
nuisance and that other vague and conclusory allegations
were insufficient to satisfy the elements of a nuisance claim.
• After trial, the jury returned a verdict in the landlord’s favor.
• The New York City Rent and Eviction Regulations state that a
tenant commits or permits a nuisance when “his conduct is
such as to interfere substantially with the comfort and safety
of the landlord or of other tenants or occupants of the same …
building” (N.Y. City Rent and Evictions Regulations [9 NYCRR] §
2204.2[a][2])
3

Milena Jovic v.
Lynn Blue, et al.
1. There was no house rule or provision in the
lease which prohibited such conduct. There was
also no evidence establishing that the tenant
smoked in the common areas.
2. Under the circumstances presented, as a matter
of law, the tenant’s smoking did not constitute a
nuisance.
4

Susan Reinhard v.
Connaught Tower Corporation, Arthur
S. Olick, Real Estate Board of New
York
• After a nonjury trial, the court found the
defendant Connaught Tower Corporation liable
and awarded the plaintiff certain maintenance
payments, interest, and reasonable attorneys’
fees, unanimously reversed, on the law and the
facts, without costs, the finding of liability and
award vacated, the complaint dismissed, and the
matter remanded for a hearing and
determination as to Connaught’s attorneys’ fees.
5

Susan Reinhard v.
Connaught Tower Corporation, Arthur
S. Olick, Real Estate Board of New
York
• The finding of liability against Connaught, the owner of a cooperative
building in which the plaintiff purchased shares, was not based on a fair
interpretation of the evidence.
• The evidence failed to show that the odor of cigarettes rendered the
plaintiff’s apartment uninhabitable, breached the proprietary lease, or
caused the plaintiff to be constructively evicted. In particular, the plaintiff’s
evidence failed to show that the odor was present on a consistent basis and
that it was sufficiently pervasive as to affect the health and safety of
occupants.
• The plaintiff’s witnesses testified that they smelled smoke in the apartment
on a handful of occasions over the years, and the source of smoke was never
identified.
• Correctly conceded at oral argument that her claim of constructive eviction
is time-barred.
6

7

Supreme Court, Appellate Division,
Second Department
8

Michael Feinstein, et al. v. Randi
Rickman, et al.
• Condominium residents brought action against neighbors,
real estate agent and her employer, condominium
management company, and condominium board of
managers, seeking to recover damages for negligence,
fraudulent misrepresentation, private nuisance, trespass, and
intentional infliction of emotional distress.
• Plaintiffs are the owners and residents of a condominium
unit located in Oceanside. Alleging that the secondhand
smoke from their adjacent neighbor’s unit was entering their
unit and causing them injury, they commenced this action,
inter alia, to recover damages for private nuisance, trespass,
and intentional infliction of emotional distress.
9

Michael Feinstein, et al. v. Randi
Rickman, et al.
• The Supreme Court properly granted the Rickmans’
motion to dismiss the complaint insofar as asserted
against them.
• The Rickmans succeeded in establishing that the
complaint failed to state a viable cause of action against
them, since their “conduct in smoking in the privacy of
their own apartment was not so unreasonable in the
circumstances presented as to justify the imposition of
tort liability against them” (Ewen v. Maccherone, 32 Misc.3d 12,
14-15, 927 N.Y.S.2d 274 [App.Term, 1st Dept.])
10

27
THE END
ONE BATTERY PARK PLAZA
18TH FLOOR
NEW YORK, NEW YORK 10004
(212) 825-0365
WWW.ALBLAWFIRM.COM

2017 Jack Newton Lerner Landlord Tenant Practice Institute Presentation

Recommandé

Recommandé

Contenu connexe

Similaire à 2017 Jack Newton Lerner Landlord Tenant Practice Institute Presentation

Similaire à 2017 Jack Newton Lerner Landlord Tenant Practice Institute Presentation (20)

Plus de Adam Leitman Bailey, P.C.

Plus de Adam Leitman Bailey, P.C. (20)

Dernier

Dernier (20)

2017 Jack Newton Lerner Landlord Tenant Practice Institute Presentation