Litigation

Here are 3 violations issued by NYC to the Farragut Gardens Condominium at 538 East 86th Street in Brooklyn, because of short term rental violations.  In that condo, just 1 unit was short term renting.

The NYC Office of Special Enforcement is issuing violations to condominiums and cooperatives because of short term rentals.  Indeed, NYC is warning property managers, owners and hosts that:

NYC’s position, affirmed by the Courts, is that lack of knowledge by the condo or coop is not a defense.  

If condos and coops are proactive by registering their rental restrictions publicly with Know Your Rental™, they will have some mitigation evidence in response to violations like this.  Registration should be a part of a building’s compliance effort.  Know Your Rental™ (https://knowyourrental.org/why-kyr/) is an inexpensive way towards fulfilling a condos or coops short term rental compliance responsibility; particularly when thousands of dollars in fines could be issued which are not covered by insurance.

This is not an ordinary case of noise in a condominium.  Typically, condo boards have limited recourse with respect to a noisy neighbor.  Unlike cooperative housing corporation counterparts which have a landlord-tenant relationship with owners, condominium’s do not.  Boards typically leave owner-owner disputes to owners to resolve amongst themselves, but sometimes condo boards have to intervene and the Coleman case was one of those.

Attorney Andrea J. Coleman is an owner in the One Grand Army Plaza Condominium.  She is in foreclosure but that is not the issue.  For quite some time she has been a nuisance to her neighbors, blasting classical music and shrieking things such as “Obama is a murderer!” and “Rape!” around the clock.  It was so bad that the condo had to hire an attorney to sue Ms. Coleman for breach of contract for violating the bylaws, nuisance and injunctive relief.  The condo won and when Ms. Coleman failed to stop, they won again obtaining a contempt order from the Court.  If Ms. Coleman doesn’t stop she’ll be fined, over and over again.

The trouble is that she is still in possession of the condominium and she is out of money.  The contempt order would help if she had money or was worried about having to pay the money so as to curb her conduct.   From the looks of it, the condominium must have spent a lot of legal fees for which it may never recover.  Most condominium bylaws don’t allow the recovery of legal fees in these situations.  Creative lawyering in seeking a contempt order and monetary penalties for noncompliance may help recoup the fees, but as stated, Ms. Coleman is broke and in foreclosure.  The good news is that the Courts are willing in extreme cases like this to intervene and help damaged neighbors to the extent that it was in the Court’s power to do so.

Read more.

Throughout most of our country, the states have laws requiring community associations like condominiums, HOA’s and cooperatives to keep certain official records of the entity and make them available to stakeholder owners, members or shareholders upon request.  Some laws provide a list of the types of official records and others don’t.  Some require stakeholders to jump through hoops (like stating a good faith reason for the review) before records will be provided for review and others don’t  Some states like Florida have realized that owners own their condominium associations and have a right to review certain records whenever and wherever they want and just passed a law requiring condominiums with 150 or more units to have specific web access for owners that is compliant with the Florida law.  Florida even made it a potential crime for condominiums of all sizes not to provide access to official records within a short period of time to inquiring owners. If those official records are not provided in just 10 working days of the request, there is a presumption of willfulness and a right of the owner to recover damages including legal fees incurred, along with a possible criminal charge against the offender. Indeed, Florida provides that “[a] unit owner who is denied access to official records is entitled to the actual damages or minimum damages for the association’s willful failure to comply. Minimum damages are $50 per calendar day for up to 10 days, beginning on the 11th working day after receipt of the written request. The failure to permit inspection entitles any person prevailing in an enforcement action to recover reasonable attorney’s fees from the person in control of the records who, directly or indirectly, knowingly denied access to the records.”

New York has just joined the states amending the Not-For-Profit Corporation law, Section 621, adding a list of official records that HOA’s must let their member owners review.  In addition to the existing “annual balance sheet and profit and loss statement or a financial statement performing a similar function for the preceding fiscal year, and, if any interim balance sheet or profit and loss or similar financial statement has been distributed to its members or otherwise made available to the public, the most recent such interim balance sheet or profit and loss or similar financial statement,” there is now a list of official records that must be maintained and available in a “reasonable” time for review.

New York HOA member owners are now entitled to review “invoices, ledgers, bank accounts, reconciliations, contracts, and any documents related to the expenditure of Homeowner Association dues.”  The amendment was passed unanimously by the Senate and signed by the Governor.  That means the entire State of New York is in favor of this new transparency requirement that is sweeping the nation.  When Florida passed its new condo laws, the change was unanimous in the Legislature as well. We will wait to see if New York expands requirements for other community associations like condominiums and cooperatives, defines the “reasonable” time period for responding to the request like Florida and Illinois and others, and imposes a civil or criminal sanction like Florida.  Irrespective, New York HOA’s and community associations in states like Florida, Illinois and others, must take steps now to comply with the new legal requirements.  Office of the Board is an easy and cost-effective way to start complying instantly (www.officeoftheboard.com).