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Real Estate

Home Real Estate (Page 9)
Nonjudicial Foreclosures – Weapon in Cooperative Board’s Arsenal

Nonjudicial Foreclosures – Weapon in Cooperative Board’s Arsenal

Because of the unique form of ownership in cooperative housing corporations, boards have a weapon in its arsenal to enforce shareholder obligations – the nonjudicial foreclosure sale. In cooperatives, owners are shareholders in the cooperative corporation and lessees under a property lease with the cooperative. Because of this ownership structure, proprietary leases contain provisions allowing for termination of the lease for breaches and because shares are security interests, they can be sold by the board at a nonjudicial foreclosure sale. This weapon was confirmed by Appellate Division, Second Department in a decision a few weeks ago in Hargraves v. Tyler Towers Owners Corp.

The facts of that case were a bit complicated but in the end, the cooperative shareholder withheld paying maintenance because he didn’t agree with the coop board’s position on an agreement with the shareholder, and ended up in a lot of hot water. The coop served the shareholder with a notice to cure and after the cure period expired without the shareholder paying, the cooperative terminated the proprietary lease and then notified the shareholder under the lease that it was considering the shares for the apartment forfeited and sold at a nonjudicial foreclosure sale.

When receiving the last notice of sale, the shareholder woke up and brought suit to try to stop the weapon from being used by the cooperative, but the Court held that the shareholder was too late. Like a commercial lease where a Yellowstone Injunction could be sought before the cure period expired, the shareholder couldn’t bring a preliminary injunction demand against the cooperative after the cure period expired. It was too late and the shareholder should have done so before the cure period expired.

You snooze, you lose and in this case, the cooperative board used a powerful weapon of a nonjudicial foreclosure sale, to address its dispute with a nonpaying shareholder.

Read the decision here.

Arbitration – Boards and Owners See it through Different Lenses

Arbitration – Boards and Owners See it through Different Lenses

Many bylaws include an arbitration provision. Something like, any dispute between the Unit Owners and the Condominium shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association and that the decision in any arbitration shall be binding upon all of the parties thereto and may be entered in any court of appropriate jurisdiction. Complaining unit owners often overlook it and boards may stay away from it. Some argue that an arbitration agreement in the condos governing documents only applies to breaches under the governing documents and not disputes outside the four corners of the documents; however, the usual “any dispute” and “shall be submitted” language in an arbitration provision, is awfully broad and arguably goes beyond the four corners.

That said, there are drawbacks of arbitration. For example, discovery is not a right of the parties (that is, unless the arbitration provision covers discovery. Instead, an arbitrator or even a arbitration panel of several decision makers, decides whether the parties need discovery. Another issue is getting discovery from third parties. Although an arbitrator or panel can subpoena third parties to testify at an arbitration hearing, there is no right to subpoena third parties for pre-arbitration discovery. The third party can simply ignore a subpoena and unlike a court, an arbitrator is essentially powerless to compel compliance.

Some people believe that arbitration is a less expensive approach that a litigation, but that is not always the case. Some arbitrations can be as contentious as litigations and sometimes take longer than a court lawsuit.

Unit owners and boards should consider what their governing documents say about arbitration and if appropriate in a given case, consider arbitration instead of litigation. Consulting with counsel who is experienced in both litigation and arbitration like Colbert Law, is always recommended.

Mold – Have to Act Quick and Tee Up Your Condo’s or Coop’s Defense

Mold – Have to Act Quick and Tee Up Your Condo’s or Coop’s Defense

Water damage + mold growth = lawsuit for damages.  Condominiums and cooperatives have to deal with water damage all the time.  When it happens, even when action is taken immediately to mediate, there may be mold growth that will eventually rear its ugly head.  Where there is mold, you’ll probably find a plaintiff and an tort attorney looking for money.

Knowing this, it is important to prepare to have to defend the association. If an insurance adjuster is involved, they’ll probably be lot’s of information gathered and pictures taken.  The association is best advised to document what is happening and have its own record. 

Once you know a lawsuit is coming, retaining an expert is critical at the earliest juncture to sustain and defense and extricate the association from the lawsuit as soon as possible.  If defense counsel is not recommending an expert early on, bring the request to counsel’s attention.

The Board of Managers of Forestal Condominium retained a clinical neuropsychologist expert but failed to retain an expert to address the complainant’s symptoms other than neurological ones.  For example, plaintiff complained that the presence of T-2 Toxin Trichothecene caused plaintiff injury.  The Court explained that if the condo had presented the right expert testimony on the motion, the condo might have been out on summary judgment. Because the condo didn’t have an expert teed up and ready to testify, the condo is now stuck in the lawsuit through trial.  

Click here to read the recent Davydov v. Board of Managers of Forestal Condominium decision.

Quarantine Violation Penalties – Condo and Coops Could be Next

Quarantine Violation Penalties – Condo and Coops Could be Next

New York, Connecticut and New Jersey have self-quarantine requirements.  New York’s Governor just issued an executive order imposing penalties and possible jail time for violators who go to hot spot states and then don’t self-quarantine as required.  Are coops and condos the next targets.  The government went after them when trying to control illegal short term rentals, they may go after condos and coops who don’t make sure their renters comply.  We’ll have to wait and see.

[embedyt] https://www.youtube.com/watch?v=WPzFENhX40Q[/embedyt]

Court grants $3k/mo License Fee, Attorneys’ Fees, Etc. for Neighbor Access

Court grants $3k/mo License Fee, Attorneys’ Fees, Etc. for Neighbor Access

The 40 W. 20th St. Condominium has to sue to gain access to their neighbor’s property for an exterior project and the neighbor got $3,000 per month license fee, attorneys’ fees and other protections from the court. Best course is negotiating access agreements while negotiating the construction contract so there are no delays or unexpected issues. Sometimes, court intervention is the only way and you are stuck with what a court decides.

Read the decision. 

New York Governor Tolls Statute of Limitations Again

New York Governor Tolls Statute of Limitations Again

New York Governor Cuomo has been issuing a lot of Executive Orders this year because of the Coronavirus Pandemic. One of the more important ones for aggrieved parties and their attorneys involves statutes of limitations.  The time that a complainant has to commence a lawsuit before it is barred is called a statute of limitations. During the Coronavirus Pandemic, states like New York have temporarily stopped (or tolled) statutes of limitations from running.  This has been done in a series of Executive Orders by the Governor.  

It has been difficult, however, to follow the Governor’s tolling of statutes of limitations in those hodge podge of Executive Orders.  There has been little news about it and only a few random articles debating if the tolls will stand up in Court.  Creative lawyers will undoubtedly try to argue that the tolls are not constitutional or otherwise legally effective, but they have been essential to lawyers and aggrieved parties.  Because courts have been closed and clients and lawyers haven’t been able to meet and confer easily, tolls to maintain the status quo were the right solution.  There will be an end to the tolls, but when that will happen is not clear.

The first Order was Executive Order 202.8 on March 20, 2020, tolling to April 19, 2020.  Thus, if there was 5 days left on a statute of limitations on March 20th, there would still be 5 days left to sue on April 19th.  The Governor clearly stated that:

In accordance with the directive of the Chief Judge of the State to limit court operations to essential matters during the pendency of the COVID-19 health crisis,  any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding, as prescribed by the procedural laws of the state, including but not limited to the criminal procedure law, the family court act, the civil practice law and rules, the court of claims act, the surrogate’s court procedure act, and the uniform court acts, or by any other statute, local law, ordinance, order, rule, or regulation, or part thereof, is hereby tolled from the date of this executive order until April 19, 2020

About a week and a half before the toll was to expire on April 19th, the Governor issued Executive Order 202.14 on April 7th, giving attorneys a cushion of time to react in case the toll wasn’t extended.   That time the toll was extended to 11:59 pm on April 29, 2020.  The language of the Order, however, was cryptic, and buried amongst paragraphs and paragraphs of other provisions.  Indeed, the Order read:

By virtue of Executive Orders 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, and 202.13 which closed or otherwise restricted public or private businesses or places of public accommodation, and which required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations, games, meetings or other social events), all such Executive Orders shall be continued, provided that the expiration dates of such Executive Orders shall be aligned, such that all in-person business restrictions and workplace restrictions will be effective until 11:59 p.m. on April 29, 2020, unless later extended by a future Executive Order.

As we approached April 29th, on April 16th, the Governor issued Executive Order 202.18, extending the toll again to 11:59 pm on May 15, 2020.  The trouble with this Executive Order is that the language again was buried, and the www.governor.ny.gov website, had the wrong link for 202.18 as 202.19, so you couldn’t find it (its still hasn’t been corrected).  Executive Order 202.18, provides that:

Executive Order 202.14, which extended the provisions of Executive Orders 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, and 202.13 which each closed or otherwise restricted public or private businesses or places of public accommodation, and which required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations, games, meetings or other social events), is hereby continued, provided that the expiration date of such provisions of such Executive Orders shall be aligned, such that all in-person business restrictions and workplace restrictions will be effective until 11:59 p.m. on May 15, 2020, unless later extended by a future Executive Order. All enforcement mechanisms by state or local governments shall continue to be in full force an effect until May 15, 2020 unless later extended by a future Executive Order

On May 8th, the Governor acted again on the toll, issuing Executive Order 202.29.  The new toll was to Sunday, June 7, 2020.  Again, buried in the Order, the Governor said:

I, Andrew M. Cuomo, Governor of the State of New York, by virtue of the authority vested in me by Section 29-a of Article 2-B of the Executive Law, do hereby continue the suspensions and modifications of law, and any directives, not superseded by a subsequent directive, made by Executive Order 202.15, 202.16, 202.17, 202.18, 202.19, 202.20, and 202.21, for thirty days until June 7, 2020

On Friday June 5th, decisions had to be made by attorneys for clients impacted by the toll.  No Executive Order granted another toll arrived and it was not clear whether the toll would be extended again.  The Supreme Court in New York opened for electronic filings of new lawsuits, so it was possible that the Governor was not going to extend again. However, court’s like the New York City Small Claims Court do not accept electronic filings yet, so it was not possible to file a new lawsuit there.  

On Sunday June 7, 2020, the day that the toll was set to expire under the last Executive Order 202.29 (albeit, it wasn’t clear what time on June 7th it would expire because the last Order did not specify a time), the Governor on Sunday June 7th, issued Executive Order 202.38, extending the toll to Monday July 6, 2020, providing in a cryptic way that could only be deciphered by people following the chain of Executive Orders for months:

I, Andrew M. Cuomo, Governor of the State of New York, by virtue of the authority vested in me by Section 29-a of Article 2-B of the Executive Law, do hereby continue the suspensions and modifications of law, and any directives, not superseded by a subsequent directive, made by Executive Order 202 and each successor Executive Order up to and including Executive Order 202.14, as continued as contained in Executive Order 202.27 and 202.28 until July 6, 2020.

Until all of the New York State courts allow commencement of new lawsuits, the toll has to be extended so that the status quo is maintained.  Otherwise, statutes of limitations could be missed and claims lost.  Lawyers and their clients need to be aware of this important issue and make sure they are protected.  As July 6th approaches, my hope is that tolls will no longer be necessary as we have arrived at our new normal.

Coronavirus – What can condo, coop and HOA Boards and Management Do?

Coronavirus – What can condo, coop and HOA Boards and Management Do?

On March 11, 2020, the World Health Organization declared the coronavirus outbreak (“COVID-19”) a pandemic. The Centers for Disease Control has detailed recommendations for individual preparation and response to the outbreak of COVID-19. The President just declared a National State of Emergency and many states including New York declared a State of Emergency.  This is a scary time throughout the world and we have to take action now to help our associations.

This is especially true for condominiums, cooperatives and homeowners associations.  Unlike the schools, sporting events or other large gatherings, owners in these communities live amongst each other sharing common area.  When quarantined or told to stay home from the office or to work from home, they are still a part of a mass of people who are stuck living amongst each other.  So what can management and boards do to protect their community associations?

Consider whether your House Rules are Sufficient.  You are a quasi government with your own house rules.  For the most part you are allowed to make your own rules provided that they do so within the confines of the law.  The board should review their house rules and determine whether new rules are needed.  Rule changes can be done by a board vote.  With residents home from work and children out of school, there are going to be a lot more people in the common areas during the day for the unforeseeable future. The rules may have to change.  There is usually a rule concerning not creating a nuisance condition.  Is having a fever and using the common areas like the laundry, rooftop recreational area, gym, playrooms, pool, etc., a nuisance?  Perhaps spell it out in a rule change.  You should confer with counsel to make sure the rule is within the confines of the law, doesn’t discriminate and is evenly applied.  Otherwise, your good intentions, could turn into a discrimination claim or a lawsuit.  Be careful and considerate.  But, rule making that protects all owners and residents and that is in the best interest of the whole community will likely help.

Keep Everyone Informed. The media is saturated with national and local information and misinformation but what about information on your particular association.  Let your owners and residents know that the board and management are at the helm, steering the ship with confidence and all of their interests in mind.  If your association has a website, post regular information on the rules, rule changes, places that you’ve installed hand sanitizer, cleaning processes that are being employed in the common areas and anything else that you are doing as a board or management to protect your associations during this unsettled time.

Take Charge of the Common Areas.  The board is charged with governing the community and the common areas.  If the common areas are not particularly cleaned on more of a regularly basis, one could see owners and residents who contract the virus, complaining that the board or managment was negligent in performing their obligations to the community and/or breached their fiduciary or contractual duty to the community.  Review what is being done re the common areas.

For example, the board and management might review the frequency of the cleaning of any shared community areas such as a clubhouse, pool, gym, etc. In addition, the Board should review how well the shared areas are actually being cleaned. Further, the association may want to assess whether additional hand sanitizers, automated soap dispensers or disinfectant wipes need to be added to common areas. A board may even consider shuttering common areas or amenities on a temporary basis.

If an individual suspected or confirmed to have COVID-19 has been in the common area, it is recommended by the CDC to close off those areas and wait up to 24 hours before beginning to clean and disinfect.

Consider Alternative to In-Person Board Meetings.  It may be a good idea to put off in person board meetings for the time being.  Board meetings in New York can be done telephonically as long as everyone can hear each other.  Online board meetings are a possibility as well. Some products like Office of the Board (www.officeoftheboard.com), allow boards to meet online, or even make board decisions without a meeting provided that everyone is unanimous.  Decisions that are unanimous can be done by unanimous written consent and don’t require a board meeting.  Where a meeting is required consider having management or the board members coordinate a telephone call or a video-conference for the board to get together and make decisions.  Staying outside a meeting room or each others apartments for the time being is probably a good idea until we learn more about the virus and how it is transmitted.  

Postpone Annual Meetings.  If your association’s annual meeting is coming up, postpone it for now unless a prompt unit owner decision is absolutely necessary. There are electronic voting applications which allow for owners to vote electronically from wherever they are.  Like in person board meetings, annuals should be postponed or an alternative way of having electronic voting should be explored.  Your counsel should be consulted about whether the new laws in New York on electronic voting applies to your association or whether you need a bylaw change to allow electronic voting.  If your association can electronic vote now, it should be explored as congregation of owners is not necessary.

Avoid Liability.  As mentioned, it is inevitable that a resident will contract the virus.  It is also likely that a resident could infect another resident with the virus or that an association employee may have the virus and infect a resident or be infected by the resident.  The virus situation should be no different than a unit owner to unit owner issue about noise or leaking, or a staff-resident or resident-staff issue.  Illness and safety is always concerning and heightens the stakes. However, in the end, the board is charged with operating the association, maintaining the common elements and doing its best to be reasonable and act for the best interest of the association. In rule making or taking action, be considerate yet protective of the entire community for which you represent.  Exercise your business judgment as a board collectively.  Do not make self interested decisions and when in doubt consult your professionals.  

In sum, when faced with a health crisis like COVID-19, the association’s board and management should be proactive in thinking about upcoming annual meetings, board meetings, community events, etc. We recommend keeping everyone informed about what the board and management is doing to protect the community from the virus. Community associations should also review their rules and may wish to consult with legal counsel regarding the association’s options under the law and governing documents of the association. 

Condo Foreclosure Buyer Snoozes and Loses – Board gets to Keep Deposit

Condo Foreclosure Buyer Snoozes and Loses – Board gets to Keep Deposit

This is a classic story of “you snooze, you lose”.  A Brooklyn condo board at 442 St. Marks Avenue Condominium fought hard to collect over $88,000 in arrears from a unit owner.  In the end, after a long fight, the board gets to keep $49,000 in a good faith deposit by a purchaser at the foreclosure auction who bought without doing its due diligence (recognizing that there was a prior lien of record which would not be extinguished by the foreclosure; in other words, the buyer was buying the property with the bank’s first mortgage on the property – not a good deal), and then waiting over 6 months to challenge the sale because the condo’s representatives didn’t follow the foreclosure rules.  At least the condo walked away with some money for all its efforts.  The lesson from this case for condos is make sure you follow the rules and sometimes if you don’t, if your adversary snoozes, he may lose so that you win a little.

Under most condo bylaws, boards are vested with the obligation of collecting arrears.  The foreclosure of the common charge lien for the arrears that condos in New York have the power to foreclose, is sometimes meaningless depending on the value of the unit.  If there is a huge first, purchase money mortgage which has priority over the common charge lien then there may not be enough equity in the property to benefit the condo once the first mortgage (or any other prior liens of record) are paid out of the foreclosure proceeds.  If there is a surplus then the condo can go after the surplus from the sale.  It takes time but it can be worth the wait.  If foreclosure of the condo’s common charge lien is not worth the effort because there isn’t enough equity in the property, boards sometimes still foreclose the lien (even if the mortgagee lender before the condo’s lien doesn’t act) because the condo wants to get a new owner in who will start paying common charges prospectively.  Another approach is bringing an action for a money judgment against the unit owner who is not paying.  All of these methods, as well as some others, can be employed by the condo board in order to try to collect the arrears; a job which the board is often required under the condo bylaws to do.

Back to the case of “you snooze, you lose” – Board of Managers of 442 St. Marks Avenue Condominium v. Marc C. Milord. The condo was owed tens of thousands of dollars in common charges, but so was the first mortgage bank that was owed over $300,000.  The first bank forecloses and names the condo in the foreclosure action because it has the right to extinguish the condo’s common charge lien in the foreclosure. That bank transfers the first mortgage lien to another bank and then the foreclosure action is discontinued so the chain of title for the lien can be established by the lawyers.  In the meantime, the condo is still not getting paid its common charges, which are mounting.  The condo decides to start its own foreclosure action knowing that the value at the end to the purchaser at the foreclosure auction would be less because the condo’s foreclosure would not extinguish the first mortgage lien, so the purchaser would be buying the property subject to the first lien of over $300,000.  However, the value of the property was over $700,000, so there would be enough value for the condo to get something out of the foreclosure proceeds, or at least, a new owner who would start paying common charges prospectively.  So the condo continued with the collection effort.

The buyer however made a critical mistake and didn’t do his due diligence to discover the first lien by the bank on the property before he bought at the foreclosure sale, depositing $49,000 as a good faith deposit.  The posting at the auction by the referee (prepared usually by the foreclosing lawyers) didn’t mention the first lien by the bank and when the buyer asked the referee about prior liens of record, with the condo lawyer in earshot, both skirted or ignored the question.  The buyer bought anyway.  

The buyer sat on his rights for over 6 months (another critical mistake) and then fought to vacate the sale and get his deposit back.  The condo fought back and in the end, the Court split the proverbial baby.  The court vacated the sale but also held that even though the rules were violated by the condo and its professional, the buyer should not have waited over 6 months to get its deposit back.  So, in the end, the condo got to keep the $49,000 deposit and hopefully a new owner who will pay its common charges.  Stay tuned for an appeal by the buyer. 

NY’s First Department Walks Back Pomerance Condo Document Inspection Rights a Little Bit

NY’s First Department Walks Back Pomerance Condo Document Inspection Rights a Little Bit

New York’s Appellate Division, First Department (which covers the Manhattan and Bronx) just decided a case by a unit owner seeking to inspect certain condominium records.  In Frankel v. Board of Managers of the Central Park West Condominium, the Court decided on November 14, 2019, that dismissal of the plaintiff unit owner’s claim seeking inspection of condominium books and records should not be dismissed.  The Court held that “[f]actual disputes regarding whether plaintiff is acting in good faith and has a proper purpose for reviewing the books and records, as well as the scope of documents already provided, whether in electronic form or otherwise, cannot be resolved on a motion to dismiss.” 

In sum, condo boards and managers need to be aware of condominium unit owner inspection rights and the differences in Manhattan and the Bronx where one standard applies now, and most of the rest of New York State like Brooklyn, Westchester, Long Island, Staten Island, etc., where a different standard applies.

An interesting part of the Frankel case is that the condominium provided the plaintiff unit owner with complete access to its financial records including a copy of its general ledger.  The unit owner additionally wanted to inspect how unit owners voted in the last two elections and learn the names of unit owners who have parking spaces and which spaces they are assigned, but the condo said no. 

One might argue that the First Department didn’t walk back its 2016 Pomerance v. McGrath decision (143 AD3d 443 (1st Dep’t 2016, lv denied, 32 NY3d 913 (2019)) which came out of nowhere and was criticized by the condominium community as being baseless and beyond the books and records that the law provides that condominium unit owners are allowed to inspect.  Notably, the other Appellate Divisions including the Second Department which covers Queens, Brooklyn, Staten Island, Long Island and Dutchess, Orange, Putnam, Rockland and Westchester counties, have not yet spoken on this issue.  Irrespective of the limitations in the NY Condominium Act regarding what documents condominium unit owners can review, the First Department in Pomerance, created, out of thin air, a right for unit owners to inspect (and copy) condominium books and records, well beyond the requirement of the Condominium Act.  Perhaps, a factual distinction in Pomerance, was that the condominium’s by-laws at issue there allowed unit owners access to books and records for which typical condominium by-laws do not provide access.   At least in the Pomerance case, the Court recognized that inspections and copying (which is not provided for in the Condominium Act or in the condominium there’s by-laws) should be subject to a confidentiality agreement.  The Court never really explained why it held that unit owners were entitled to a list of names and addresses of unit owners when there is no such requirement in the Condominium Act or in the by-laws of the condominium there.  The First Department created new law in the Pomerance decision which the other Appellate Divisions have not adopted (probably because the First Department was wrong).  

In this new Frankel decision, the First Department did not just add on to its bad Pomerance decision.  Instead, the Court sent the case back to the Supreme Court for discovery and decision making into the facts as to whether plaintiff was acting in good faith with a proper purpose.  This however once again was a bad decision by the First Department in that unlike cooperative corporations which are governed by the Business Corporation Law in New York under which a different standard for record inspection rights is applicable (like whether the cooperative shareholder is seeking to inspect records in good faith for proper purposes), most condominiums are not covered by that law and that standard.  The Condominium Act and likely the by-laws in the Frankel condominium, do not allow unit owners to obtain names and addresses of unit owners with parking spaces or to review records on how unit owners voted in elections.  The First Department blew it again and should have dismissed the plaintiff’s claim in the Frankel case for inspection of the condominium’s books and records.  

In sum, the First Department in Frankel walked back the Pomerance decision a bit by not just giving litigious unit owners access to whatever condominium books and records they want to inspect and copy.  The Court got it wrong again, but at least they sent it back to the Supreme Court for further inquiry into whether the unit owner was acting in good faith with a proper purpose. Hopefully the other Appellate Divisions and maybe the New York Court of Appeals will set this straight and correctly hold that the Condominium Act and the by-laws of the condominium at issue must be examined and that condominium unit owner inspection rights are limited to the provisions of the law and the by-laws.

 

The Tenant Protection Act Significantly Affects New York Cooperatives

The Tenant Protection Act Significantly Affects New York Cooperatives

The Housing Stability and Tenant Protection Act was enacted recently in New York State to protect millions of tenants in rental properties but it also affects coops because of the landlord-tenant relationship with owners. The Act imposes the following on all landlords, including coops:

  1. Landlords can’t get fees and other charges including late fees and attorney’s fees in Housing Court (only maintenance) and have to start separate civil actions to recover those.
  2. Security deposits are limited to one month’s rent/maintenance. Escrows of substantial maintenance as a condition to a coop board’s approval of a purchaser are not possible.
  3. Late Fees cannot exceed $50 or 5 percent of monthly rent/maintenance, whichever is less. If coop’s governing documents provide for higher late fees, they will be uncollectible.
  4. Purchase Application fees could be limited to $20. The New York Department of State issued a memorandum in September 2019 excluding coops regarding this provision but until the law is changed, it is risky to charge the typical application fee which is usually much more than $20.
  5. An Extra 5-Days Certified-Mail Notice is Required after Nonpayment. So, if a tenant/shareholder does not pay rent/maintenance within five days of when it is due, the landlord/coop must send a notice by certified mail. 
  6. Tenant/Shareholder could argue “Extreme” hardship to get out of a non-payment judgment of possession for up to one year.  So, if the tenant/shareholder stops paying and the landlord/coop sues and gets a judgment of possession, the tenant/shareholder can argue for up to a year more of possession. 

Until the law is changed, coop boards must be aware of these new limitations and restrictions.

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  • When Repetitive Filings Cross the Line: Lessons from Fulton v. Yameogo July 21, 2026
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When Contractors Lack Licenses: Key Lessons for Condos, Co-ops, and HOAs

July 25, 2026

A recent NYC Civil Court decision (Fortes v. Decorating and...

When Bankruptcy Won’t Stop Your Foreclosure Sale: What Condo Boards and Management Need to Know About Repeat Filers

July 22, 2026

For condominium boards foreclosing on unpaid common charges,...

When Repetitive Filings Cross the Line: Lessons from Fulton v. Yameogo

July 21, 2026

Community association boards—whether governing condos,...

Condominium Boards: Why Being Aware of First Mortgage “Standing” Can Protect Your Community’s Bottom Line

July 13, 2026

When a condominium unit owner defaults on their monthly...

Winning the Common Charge Battle: How Condo Boards Prevail Against Defiant Unit Owners

July 2, 2026

Condominium boards and property managers face a unique,...

When the Neighbor Builds: What Condo and Co-Op Boards Need to Know

June 29, 2026

Construction in New York City is a fact of life, but when a...

Succession Rights in Limited-Equity Co-ops: Practical Lessons from Mutual Redevelopment Houses v. Manyevitch

June 12, 2026

Succession disputes are among the most sensitive and...

The Post-Settlement Trap: What Fiondella Teaches Co-op Boards About Stipulations and Continuing Habitability Claims

June 9, 2026

For New York cooperative boards and managing agents,...

The Derivative Action Threat: Why “Limited Common Elements” Present Litigation Risks for Condominium Boards and Managers

May 16, 2026

A recent decision by the Appellate Division, First...

Governance and Rule-Making in the Modern Condominium

April 27, 2026

Reflections on 10MSW17D LLC v. Bd. of Managers of 10...

Don’t Delay: Why Timely Enforcement of Common Charges is Critical for Condo Boards

April 15, 2026

A recent decision from the Supreme Court of New York,...

RPAPL § 881 Licenses, and Why Fee Reimbursement Is a Core Deal Term

April 13, 2026

Boards and managers of condominiums, cooperatives, and...

The 432 Park Decision: A Masterclass in Risk Management for New York Condo Boards

April 2, 2026

New York condominium boards and management companies operate...

Protecting Your Building’s Integrity: Lessons from Board of Mgrs. of the 80th at Madison Condominium v. 1055 Madison Ave. Owners LLC

March 31, 2026

As a condominium board member or property manager, your...

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