The Supreme Court in Richmond County through out a condo unit owner’s defenses to a nonpayment case seeking a money judgment for common charge arrears. The Court found that the affirmative defenses by the investor condo owner were boilerplate and couldn’t withstand summary judgment.
The owner stopped paying common charges because of a water leak within his units. The Court held that under the condo’s governing documents, there is no right of set off and the unit owner couldn’t withhold paying his common charges because of a water leak.
The Court distinguished another case called Granda v. Condominium I v. Morris (222 A.D.2d 520 (2nd Dep’t 1996) where the parties agreed to a withholding of common charges and placement in an escrow. in that condo, there was an enforceable agreement to withhold common charges, in this case, there was none.
As typical for condos, the governing documents provided for an award of legal fees and costs for collection of common charges. The Court granted the condo summary judgment and set an award of attorneys’ fees and costs for an inquest where the Court would decide how much to award the condo.
Read the decision here.
The structural stability of parking garages is being analyzed more closely by NYC DOB in response to the most recent collapse in lower Manhattan during April 2023, killing one person and injuring five others. Dozens of garages with potential hazards were identified and some were ordered closed totally or partially until their structural defects could be repaired.
Coops and condos sometimes have parking garages as a part of their buildings. The coop could own the garage which is a part of its building and be responsible for the structural integrity of the garage. A condo could have the garage as a condo unit and should evaluate whether the condo is responsible for the structure or whether the impacted parts of the garage are limited common element or a part of the garage unit and the responsibility of the garage unit owner. The condo board may be obligated to compel the garage unit owner to make the repair irrespective of who is responsible for the cost of the work.
These could be life, health and safety issues which boards should be aware of and take action that is in the best interest of their association.
Here are links to two articles that may be of interest (NY Times Article)(Habitat Magazine Article).
Electronic voting is a simple and efficient way to conduct condo association elections and make important decisions. Here are just a few reasons why your condo in NY should use electronic voting:
- Convenience: Electronic voting allows condo owners to vote from the comfort of their own home, without having to physically attend a meeting. This is especially important for busy individuals who may not have the time to attend a physical meeting.
- Efficiency: Electronic voting eliminates the need for paper ballots, which can be time-consuming to collect, count, and verify. With electronic voting, the results can be tallied quickly and accurately, giving you more time to focus on other important matters.
- Security: Electronic voting is a secure way to conduct elections and make decisions. The voting system can be set up with multiple layers of security, ensuring that only authorized individuals can access the system and vote. This helps to prevent fraud and ensure that the results of the election are accurate.
- Cost-effective: Electronic voting can be a cost-effective way to conduct elections and make decisions. By eliminating the need for paper ballots, you can save money on printing and mailing costs. Additionally, the system can be set up to automatically send reminders to voters, reducing the need for additional administrative costs.
- Increased participation: Electronic voting can increase participation in condo association elections and decision-making. By making it easier for condo owners to vote, you can ensure that a greater number of people have a say in how the association is run. This can lead to better decisions and a more engaged community.
Electronic voting is a convenient, efficient, secure, cost-effective, and participation-boosting way to conduct condo association elections and make decisions. If you want to stay ahead of the curve and improve the way your condo association operates, adopting electronic voting is the way to go.
New condominium, cooperatives and HOA’s must be mindful about time and rights against the sponsor. Statutes of limitations are the time that an association must bring a lawsuit to assert claims, before the claims become time-barred. It is often the easiest defense for a sponsor to end a lawsuit.
The 23-23 Condominium found this out the hard way by having almost all its action against the sponsor for construction defects, dismissed on a summary judgment motion. The Second Department explained that a “claim for damages arising from defective construction accrues on the date of completion of the work”. If the time limit for bringing the claim has expired, then the plaintiff is out of luck. Here is the decision in that case.
Lawsuits against sponsors can be complicated if not handled properly and some of them become newsworthy which can concern some owners. On the other hand, sponsors often do not want the publicity, especially if they are continuing to develop. For example, the media picked up on the “Hyde Midtown condo association alleges construction defects galore”, reporting that “Suit targets Related Group development entity and firms that built 32-story high-rise in 2018”. That’s not a typo. The condo was constructed back in 2018. It took over 5 years for the owners to organize and sue. The suit alleges 163 construction defects including “improper installation of materials on the roof is causing water to seep down several levels” and “balcony railings for some condo units were improperly installed”. Here is an article reporting more.
With proper guidance, owners can take control of their situation against a sponsor developer and its members and investors, and make sure that they meet their contractual and other obligations. Sponsors keep control of the association boards during the early years of the development in order to keep owners disorganized without central financial resources to make sure obligations are satisfied before sponsor profits from sales are dissipated. The time to bring claims, statutes of limitations, also must be closely monitored to make sure they don’t expire. Once expired, claims can be lost forever, and the responsible parties insulated from liability. Suing is not necessary in many instances. Amicable negotiation can lead to a resolution without litigation, provided that a sponsor is being reasonable. Sometimes litigation is the only course of action to achieve the condo and its owners’ goals. For the Hyde Midtown condo association, it took over 5 years to come to that realization. Organizing early with experienced representation is the key to success.
Local Law 18, also known as the “Short-Term Rental Registration Law,” requires owners and/or renters (hosts) who want to rent out their residential units for less than 30 days to register with the New York City’s Mayor’s Office of Special Enforcement (OSE) before doing so. This law should be a game changer for condo, coop and HOA boards that have been battling with short term renters in their buildings which prohibit short term renting. The NYC law also permits certain qualified owners, including association boards, to add their building to OSE’s “prohibited building list” to prevent any short-term rental of any dwelling unit therein. Airbnb, VRBO, Booking.com and other short-term renting sites will be prohibited from authorizing bookings for unregistered short-term rentals. Short-term rentals that are properly registered, still are only allowed in Class-A multiple-dwelling buildings if the host remains in the same apartment with his or her guests, and no more than two guests are allowed at a time. The guests must also have unfettered access to all of the rooms located in that apartment.
Beginning Monday, March 6, 2023, boards can start registering their buildings for the “prohibited building list.” Building owners and boards should visit OSE’s website to access the registration or the prohibited buildings list application. OSE’s final rules (Rules), which also go into effect on March 6, 2023, provide that owners, boards, and/or managers of buildings that submit a prohibited building list application.
The application is going to require the following information:
- The name of a natural person making the application;
- A working phone number for the applicant;
- An email address for the applicant;
- The address of the building the applicant seeks to add to the list;
- An explanation of the relationship between the owner and the applicant;
- Any proof or documentation requested by the administering agency to substantiate the request where the administering agency has cause to require further verification; and
- The applicant must also certify that leases and other occupancy agreements for dwelling units within the building prohibit short-term rentals.
To support such application requests, we suggest boards submit their governing documents which provide that short-term rentals are prohibited in their building and if it is not clear, a board resolution providing that such short-term rentals are prohibited.
In representing hundreds of condos, coops and HOA’s across New York City, neighboring construction impact is a regular concern. It can range from access and protection licenses for neighbors to perform construction projects to physical, sound or nuisance impact. The scariest situations can be the physical impact and that just happened at 10th Fifth Avenue and a row house at 12th Fifth Avenue after their neighbor’s building construction at 14-16 Fifth Avenue became dangerous.
It started with falling debris and the impact then manifested itself physically. Department of Building inspectors ordered the evacuation of the residents after finding signs of movement with cracks and separation on the facade of 10th Fifth Avenue.
If there is concern about neighboring construction’s physical impact on a building, bringing in the correct team of professionals quickly can be critical. A structural engineer can evaluate the situation visibly and perform invasive testing regarding structural stability if necessary. Having a baseline established to monitor against is very important. The neighbor should have been monitoring vibration and impact from an engineering perspective on its neighbors and there is likely liability in this situation for the damages that have incurred. Engineers often recommend vibration monitoring devices which measure vibration and can be set to issue alerts above a certain level so that the baseline that is established can be checked to see if the vibration has affected the building being monitored.
Having the right team in place to protect a building being impacted is not something that a board should wait to do. Boards should be concerned about these life, health and safety issues and have a fiduciary duty to look out for the best interest of their owners and residents. There are ways to try to get the neighbor to pay for or reimburse the building for these services but even if they aren’t willing to do so voluntarily, being proactive can avoid damage and in some instances save lives.
Here’s an article on what the DOB found at 10th Fifth Avenue.
The NYC OSE has adopted final rules for Local Law 18 which coop, condo and HOA boards and their managing agents should become familiar. The rules cover the registration and requirements for short term rentals in NYC. But for coops, condo and HOAs that prohibit short term rentals, the rules provide a glimpse at the roadmap to registering their buildings with the OSE. This is a relief to boards of these associations which prohibit short term renting in their governing documents and have struggled with enforcement.
Section 21-09 of the rules covers the prohibited buildings list. The application on the OSE’s website seems to be opening for registration on March 6, 2023. The application will require the name of a natural person making the application, a phone number and email for the person, the address of the building, an explanation of the relationship between the owner and applicant and “any proof or documentation requested … to substantiate the request ….” The applicant must certify that the leases and other occupancy agreements prohibit short term rentals. The last requirement of “proof or documentation” is likely the more difficult one because we aren’t sure what the OSE will require. Associations that are professionally managed could have their managers make the application or it may be a board member doing so. The “proof or documentation” will likely be the association’s governing documents that prohibit or limit short term renting. For example, bylaws could say that rentals for less than a year are prohibited. We’ll have to see what the OSE requests and requires before adding an association building to the prohibited list.
The OSE plans to publish the list of prohibited buildings on its website and update it in real time. It is not clear if the OSE has a deal with AirBnb re making sure that it does not allow listings in buildings on the prohibited list. We’ll have to wait and see how this all pans out.
Here are the rules.
Under NYC Local Law 97 (Annual Greenhouse Gas Emissions), most buildings larger than 25,000 square feet must meet caps on their greenhouse gas emissions beginning in 2024 or face hefty fines. By 2030 and 2050 there are increasingly tighter limits. 2024 though is right around the corner and the NYC Department of Buildings has finally issued rules on how condo and coop boards can comply with Local Law 97.
Boards and their management should familiarize themselves with the DOB’s 26 pages of rules which gives guidance on complying with this looming legal requirement. Here is the final rule the DOB released.
What a way to wake up on Christmas morning. Happy holidays to all.
Robert Orr, president of the Las Brisas Condominium Association in Florida was arrested for the third time for installing hidden surveillance cameras in owners homes. I can understand the first time, but three times. Here is the article. Mr. Orr ought to hire himself a criminal defense attorney, but the condo association should put their insurance carrier on notice in case the victims decide to point their fingers back at that board for not taking action to remove President Orr after the first, then second arrest. Three times is a charm and perhaps the owners will take action if the board isn’t willing to do so.
Condo governing documents typically include a provision indemnifying board members for acting within the scope of their authority as board members. This conduct by Orr should fall without that indemnification, but one might ask what was the rest of the board doing after it learned about the first and second arrest for invading owners’ privacy and installing surveillance cameras inside homes without authority. If an association officer is accused for bad conduct like this, boards should consider whether removing the officer from his or her position is a good idea during an official investigation and resolution of the matter. Boards can change officers simply with a board vote. Boards have a fiduciary duty to all of their owners. If an officer is accused of installing cameras inside people’s homes, removing the officer is one of the first things a board should consider. Boards typically can’t remove board members themselves and need an owners’ vote to do so depending on their bylaws. Noticing an owners meeting for the owners to make a decision on board member removal may also be a good idea. In the end, the board is above any one member and if an officer acts improperly, the board should look out for the best interest of the entire community.
The appeals court which governs over Brooklyn, Staten Island and Long Island, just issued a decision holding that the Meadowbrook Pointe Homeowners Association, Inc.’s rule that dogs greater than 25 pounds can’t be on the association premises, was unenforcible and should have been done by an amendment to the HOA’s Declaration. That would have required a vote of 66 2/3% of the owners and then a recording of the amended Declaration against each of the HOA units.
The Second Department explained that:
[T]he plaintiff demonstrated, prima facie, that the board’s adoption of the house rule was not authorized by the condominium bylaws, and thus, the adoption of that rule was not protected by the business judgment rule (see Yusin v Saddle Lakes Home Owners Assn., Inc., 73 AD3d 1168, 1171; Strathmore Ridge Homeowners Assn., Inc. v Mendicino, 63 AD3d 1038). Since neither the condominium bylaws nor the condominium declaration of covenants, restrictions, easements, charges, and liens (hereinafter the declaration) contained any restriction on the size of dogs permitted on the condominium premises, the house rule constituted an amendment of a permitted use of the plaintiff’s unit, which, pursuant to Article X of the condominium bylaws, required approval by 66 2⁄3% of the homeowners at a noticed meeting, and an amendment to the declaration (see Gabriel v Board of Mgrs. of the Gallery House Condominium, 130 AD3d 482; Board of Mgrs. of Vil. View Condominium v Forman, 78 AD3d 628, 630).
Turan v Meadowbrook Pointe Homeowners Assn., Inc., 2022 NY Slip Op 07255
It is critical for boards to have experienced counsel analyze whether a rule change is sufficient or whether an amendment to the governing documents by an owners’ vote is necessary. Read the decision here.
