Posts by Joseph Colbert, Esq.

Condominium boards embroiled in construction defect lawsuits against developers (sponsors) often see a further complication arise: the sponsor bringing in the project architects as third-party defendants. Sometimes the condo can sue the project architect directly but many times the focus is on the developer and its members and they point the finger at the architect. This tactic can introduce additional complexities into the condo board’s case against the sponsor. A recent New York case sheds light on this dynamic.

In the case of Board of Managers of the 15 Union Square West Condominium v. BCRE 15 Union Square West LLC, the condo board sued the building’s sponsor. The sponsor, in turn, filed claims against various third-party defendants, including the project architects, Perkins Eastman Architects P.C. Perkins Eastman argued that the sponsor’s claims against them were time-barred under their contract and that certain claims were duplicative and should be dismissed.

Key Points for Condo Boards

• Shifting Focus: When the sponsor brings the architects into the lawsuit, it can divert attention from their own potential liability for construction defects. Condo boards need to maintain a strong focus on the primary case against the sponsor. If there are additional pockets to pay for damages sought by the condo, great. But, stay focused on moving the condo’s case against the sponsor and its members forward.
• Statutes of Limitations: There is a limited window of opportunity to file claims against architects based on design flaws or oversight errors. Expired statutes of limitations can protect architects and prohibit claims against the if too much time goes by.
• Breach of Contract vs. Professional Negligence: Sponsors may attempt to pursue architects on both breach of contract and professional negligence grounds. However, demonstrating professional negligence requires proving a violation of broader industry standards that goes beyond the contract itself.
• Contractual Indemnification: Contractual indemnification clauses, by which sponsors might seek to shift liability to architects, often have time limits that diminish their usefulness.

In view of this, condo boards should be aware that sponsors may try to deflect blame and responsibility by bringing architects into the lawsuit. This additional layer of complexity can delay the condo’s suit and make it more complicated because of the additional parties and issues involved, but in the end, if there are more parties available to pay for the damages sought. However, it could end up being a good thing provided experienced counsel is leading the charge and stays focused on pushing the condo’s claims full speed ahead.

Here’s the case.

Property managers, take heed! A recent court case highlights the power you have to protect your associations when a neighboring building owner does not cooperate in giving a license for protection on their property so that the association can perform its work . In this case, the court awarded a license fee and mandated typical insurance, but did not reimburse the unneighborly neighbor for any additional professional fees or costs and did not grant any other consideration for the license.

The Case of the Unneighborly Neighbor

The specifics of the case may vary, but the core situation is this: Building A requires repairs to its facade, and in order to do so, Building A has to install protection on Building B’s property to protect Building B. Here’s where the trouble begins.

Building A ideally seeks a license agreement with Building B, allowing the repairs to proceed with clear terms for access and consideration if the access is really intrusive. However, if Building B proves uncooperative and refuses such an agreement, Building A is forced to go to court to obtain a court-ordered license.

The Burden of Proof Lies with the Repairing Building A

It’s crucial to understand that the burden of proof lies with Building A, the entity seeking the license. In order to obtain the court-ordered license, Building A must demonstrate:

• Necessity of the Repairs: The court needs to be convinced that the repairs are essential and cannot be performed without protecting Building B’s property.
• Minimal Encroachment: Building A must show they have minimized the intrusion onto Building B’s property as much as possible.
• Security Measures: A plan outlining how Building B’s property will be protected during the repairs needs to be presented.

The Unforeseen Costs of Uncooperativeness

Building B’s refusal to cooperate may backfire. While they avoid granting explicit permission for the protection, they also forfeit the opportunity to negotiate a potentially favorable consideration package. It’s generally better for the parties to negotiate an out-of-court license than to leave it to a Judge to make a decision on the license terms and consideration. The court, in its decision, may not consider reimbursing Building B for its signifiant attorneys fees incurred regarding the matter. In the case, Building B was looking for up to a $10,000 reimbursement during negotiations which was dwarfed once litigation started. Building B walked away with no reimbursement by the Court.

The Takeaway: Cooperation is Key

This case serves as a cautionary tale for both parties involved. For property managers, it underscores the importance of pursuing clear agreements with neighboring property owners before embarking on facade repairs. For uncooperative neighbors, it demonstrates the potential financial burden of refusing a reasonable license agreement.

By fostering open communication and seeking mutually beneficial solutions, property managers can avoid the hassle and expense of litigation, ensuring a smoother and more cost-effective repair process for everyone involved. It is critical to bring in experienced counsel early on in the license process in order to facilitate negotiations and if necessary, bring the neighbor to Court. The Matter of Board of Managers of Ariel Condominium v. Broadway Metro Association, L.P. case gives, associations that require a license from their uncooperative neighbors, another tool in their arsenal for compelling the neighbor to be neighborly. Read the decision here.

Recent reports about social media trends encouraging individuals to exploit “squatter’s rights” laws are raising concerns for property owners. It’s crucial to understand this complex issue and proactive steps landlords and associations can take.

The reason is a legal loophole that gives would-be trespassers the right to stay in possession if they only stay in a property long enough to claim legal residency — otherwise known as “squatter’s rights.” In New York City, it’s only 30 days of living at a property.

So a homeless migrant just has to stay below the radar for 30 days and then the property owner has to take them to Court to have them legally removed. The process can be complicated and takes a long time. Unlike a known tenant, the squatters are anonymous in most cases and have to be served and then usually they won’t show up in Court. After multiple adjournments which the Courts routinely afford tenants who don’t appear, a property owner will get a default judgment of possession and eviction. Then, a lockout by a marshal has to be scheduled and occur. If the squatter shows up in Court and argues against the eviction, they might be able to steer the proceeding to a trial which adds time to the process. It is extremely frustrating to property owners and now influencers are trying to rally migrants to find abandoned property and squat to take advantage of our system which protects people who trespass and take possession of the property of others.

Proactive Steps for Property Owners

• Regular Monitoring: Frequent inspections of vacant properties help identify potential squatters early, before they establish strong legal claims. With all the news around this issue, if you have a property, get to it quickly now and make sure you aren’t already a victim of squatting.
• Secure the Property: Board up windows, keep utilities disconnected, install alarms, and maintain overall good condition to deter squatting.
• Documentation: Meticulous records of ownership, property upkeep, and lack of permission for occupancy strengthen your legal case.
• Time is of the Essence: The moment you suspect a squatter, consult with an attorney specializing in landlord-tenant law. Delays work in the squatter’s favor.

Challenges for Condos & HOAs

In the condominiums and homeowners associations that we represent, squatting happens to owners and because the association doesn’t own the property, it is difficult to address the squatting. Coops are a different form of ownership where the coop owns the building, so it can take action as the owner against squatters. There are tactics that experienced counsel can take for the boards.

What Condo & HOA Management and Owners Can Do:

1. Check Governing Documents:

• Bylaws/Rules: Look for provisions on unit owner responsibilities for vacant units, security measures, or authority granted to the board in exceptional circumstances.
• Lien Authority: Investigate if the association has a lien for unpaid assessments that could form the basis for a foreclosure action, which might indirectly resolve a squatting issue.
• Consider amending the governing documents to give the association more rights in these squatting situations.

2. Support the Owner:

• Notify & Advise: Alert the unit owner immediately and advise them to seek urgent legal counsel specializing in eviction proceedings.
• Enforce HOA Rules: If the squatter is causing disturbances violating HOA rules, fines or other sanctions against the unit owner may add pressure to act.
• Security: Consider enhancing association-wide security to deter squatting.
• Bring a Nuisance Injunction Action: The association usually has authority to bring lawsuits to abate nuisance conditions or rule violations. If so, the association may be able to commence suit to stop nuisances or violations by the squatters which may pressure them to leave.

A brand new Appellate Court decision underscores condo boards’ duty to act in good faith when residents report violations of building rules and regulations. In the case of Bacharach v. Board of Managers of the Brooks-Van Horn Condominium, the board faced legal action after years of alleged inaction regarding excessive noise complaints. The New York Court which oversees the trial courts in Manhattan and the Bronx, refused to dismiss the case against the board and clarified that property managers and condo boards cannot merely leave it to owners to address their own owner-to-owner complaints and the board has to act in good faith when receiving a complaint that an owner if violating the rules.

Case Summary

• Residents complained about unreasonable noise from a neighboring unit due to unapproved flooring installation.
• Despite repeated requests over several years, the board didn’t adequately investigate or enforce the Condo’s noise rules.
• Frustrated residents sued the board for breach of duty and sought an injunction to address the noise issue.

Court Ruling

• The court denied the board’s motion to dismiss, determining:
  • The Condo’s bylaws are ambiguous as to whether the board has discretion to refrain from acting upon complaints of rule violations.
  • The board’s inaction may not be covered by the well-established business judgment rule, which requires actions in good faith for the benefit of the community.
  • “The alleged multiyear gap between plaintiffs’ first complaint and the board’s first action in response to the complaints suggests that the board may not have acted in good faith.”

Takeaways for Condo Boards & Property Managers

1. “Discretion” Doesn’t Mean Inaction: While boards have flexibility in enforcement, ignoring legitimate complaints can be seen as a breach of duty.
2. Document Clarity Matters: Review your bylaws and rules to ensure they clearly define the board’s authority and enforcement responsibilities.
3. Good Faith Response Is KEY: Taking complaints seriously, even if your ultimate ruling favors the accused party, shows you’re fulfilling your role.
4. Timely Action Builds Trust: Promptly addressing potential violations can prevent issues from escalating and damaging resident relations.

Proactive Steps

• Establish and Follow Complaint Procedures: Have a clear process for documenting, investigating, and responding to complaints.
• Regular Bylaw Review: Ensure your rules remain enforceable and fair.
• Seek Legal Guidance Early: Advice from an attorney specializing in condo law can help you navigate complex disputes.

Here is the decision.