The key lesson from this new Second Department Appellate Court decision is that condominium boards, supported by their property management, must maintain detailed and objective records demonstrating a good faith effort to investigate, enforce, and balance the interests of all unit owners according to the governing documents. Boards can’t just say that it’s a unit owner-unit owner dispute and leave the owners to deal with their differences. A condominium board investigation and intervention, if deemed appropriate, should be undertaken.

The dispute in the case centers on a condominium unit owner’s complaints that a neighboring unit’s use was violating the building’s bylaws and house rules, specifically alleging a purported breach and resulting in unreasonable traffic and commotion in the common area hallway.

Key Board Obligations Under Scrutiny

The Appellate Division found that the plaintiffs raised issues of fact as to whether the defendant-Board of Managers breached its fiduciary duty by “permitting a purported breach of the bylaws and house rules to persist” over the plaintiffs’ repeated complaints.

• The court noted that the parties provided “sharply contrasting evidence” concerning the extent of the Board’s investigation into the complaints and whether it fulfilled its fiduciary obligation to enforce the condominium bylaws.
• Even though “persons living in organized communities must suffer some damage, annoyance and inconvenience from each other”, this principle does not eliminate a board’s duty to investigate alleged violations and “balance the unit owners’ rights fairly without favoring one over the other”.
• An issue of fact was raised as to whether the Board properly determined that the neighbor’s conduct did not create a nuisance under the bylaws and house rules.

Dismissed Claims and Allegations

The Appellate Court upheld the dismissal of the following allegations and claims:

• Retaliation/Disparate Treatment: The court agreed that the Board’s enforcement of a neutral rule—such as demanding the removal of the plaintiffs’ Ring camera—does not, on its own, establish disparate treatment or support a breach of fiduciary duty claim based on allegations of being singled out or retaliated against.
• Private Nuisance: The court properly dismissed the claim for private nuisance against the Board because the Board “was not responsible for the creation of the purported nuisance”.

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Takeaways for Boards and Management

This case provides critical guidance on a Board’s responsibilities when faced with unit owner complaints about a neighbor’s conduct:

• Due Diligence in Investigation: When a unit owner alleges a violation of bylaws or house rules, the Board has a fiduciary duty to thoroughly investigate the complaint. Simply making a determination without a provable, complete, and fair investigation may be challenged in court.
• Fair and Balanced Enforcement: The Board’s duty includes balancing the rights of all unit owners and acting fairly, “without favoring one over the other”. If the Board determines a neighbor’s conduct is not a violation, the record of the investigation should clearly support that decision.
• Board Liability for Nuisance is Limited: A board is generally not liable for a private nuisance unless it was responsible for creating the nuisance itself.

Here is the Court’s decision.