New York City’s skyline is dotted with condominiums, each housing a unique community with its own set of rules and challenges. Disputes often arise between condo owners and the boards of managers tasked with overseeing the building’s operations. These disputes can range from breach of contract claims to allegations of fraud and misrepresentation. This blog post examines a series of recent court decisions addressing a variety of legal issues arising in the context of New York City condominiums.

Breach of Contract and Construction Defects:

Several cases involved claims related to construction defects and alleged breaches of contract. In these instances, the courts analyzed the offering plans, purchase agreements, and other governing documents to determine the sponsor’s obligations and the unit owners’ rights.

• In Board of Managers of 45 East 22nd Street Condominium v. 45 East 22nd Street Property LLC, the court considered claims of breach of contract and fraud in connection with the sale of a unit. The court ultimately denied the defendants’ motions to dismiss, allowing the case to proceed to discovery.   
• In Board of Managers of the Aston Condominium v. Building 389 LLC, the Appellate Division, First Department, addressed a case involving alleged construction defects and insufficient water heater warranties. The court partially dismissed the breach of contract claim related to construction defects due to a notice requirement in the offering plan. However, the court allowed the breach of contract claim based on the water heater warranties and the fraudulent conveyance causes of action to proceed.   
• In Board of Managers of the Blackfriars Condominium v. AG Ebenezer LLC, the court addressed a variety of claims, including significant construction defects, failure to preserve tax-exempt status for the church, and failure to honor financial commitments. The court dismissed several claims but allowed others to proceed, highlighting the complexity of legal issues that can arise in condominium development and management.   

Piercing the Corporate Veil:

In Board of Managers of 135 West 52nd Street Condominium v. 135 West 52nd Street Owner LLC, the court addressed the issue of piercing the corporate veil to hold the sponsor’s principals personally liable for alleged construction defects. The court found the allegations insufficient to pierce the corporate veil, emphasizing the need for detailed and specific claims to hold individuals liable for the actions of a corporate entity.   

Common Charges and Liens:

In Board of Managers of 25 Prince Street Condominium v. NYC Prince Holdings LLC, the Appellate Division, First Department, dealt with a dispute over unpaid common charges and a lien on a commercial unit. The court granted summary judgment to the board of managers on its claims for foreclosure on the lien, breach of contract, and attorneys’ fees. The court also declared that the roof was a general common element for which the defendant was responsible.   

These cases provide a glimpse into the diverse legal issues that can arise in condominium disputes. They underscore the importance of carefully drafted offering plans, purchase agreements, and other governing documents. The decisions also highlight the need for boards of managers and unit owners to be aware of their rights and obligations under New York law.