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.