For cooperative boards, their management companies, and their legal counsel, navigating the termination of a proprietary lease for “objectionable conduct” is one of the most sensitive and high-stakes responsibilities. The legal framework for these actions is primarily governed by the Pullman doctrine, established by the New York Court of Appeals in 40 W. 67th St. v. Pullman, 100 N.Y.2d 147 (2003). Recent case law continues to refine how courts apply this doctrine, providing boards and their management partners with clearer guidance on protecting the cooperative community while minimizing legal risk.

Understanding the Pullman Doctrine

The Pullman doctrine provides that a cooperative board’s determination to terminate a shareholder’s proprietary lease for objectionable conduct is protected by the Business Judgment Rule. This means that courts will generally defer to a board’s decision as long as the board:

• Acts within the scope of its authority.
• Acts in good faith and in the furtherance of the legitimate interests of the cooperative.
• Does not engage in discrimination or disparate treatment.

Under this standard, a court will not substitute its own judgment for that of the board, provided the board follows the specific procedures outlined in the cooperative’s governing documents, such as the proprietary lease and bylaws. This deference gives boards significant authority-but only when they act properly and document their decisions thoroughly.

Recent Applications of Objectionable Conduct Terminations

Several recent cases highlight the types of behaviors that the boards found to be “objectionable conduct” and demonstrate how boards-working with experienced management companies and legal counsel-are successfully enforcing lease terminations:

1. Chronic Nuisance and Safety Violations

In Rockwood Owners Corp. v. Rainess, the cooperative board, supported by its management company’s detailed documentation, successfully sought to recover possession of an apartment due to several years of unpaid maintenance and a pattern of objectionable conduct. The specific behaviors cited included:

• Propping apartment doors open in violation of local fire laws.
• Leaving personal items and food in common hallways.
• Loitering and attending to personal hygiene in the building lobby.
• Appearing nude or partially nude in hallways and visible through open apartment doors.

The court noted that the defendant’s tenancy had been terminated, and the cooperative successfullyproceeded with an action for ejectment.

2. Maintenance and Physical Neglect of Units

In 61 E. 72nd St. Corp. v. Modell, the board successfully moved for summary judgment on an ejectment action based on a decade of documented objectionable conduct. The primary grounds for termination included:

• Failure to maintain the interior of the apartment.
• Engaging in behavior that negatively impacted the building and other residents.

3. Non-Monetary Defaults and Eviction

In Matter of Peters v. Caton Towers Owners Corp., the court upheld the cooperative’s right to terminate a lease and proceed with an auction of shares based on “objectionable conduct.” This case is significant because it clarifies that:

• Foreclosures and terminations can be based entirely on non-monetary defaults rather than just unpaid maintenance.
• Minor typographical errors in a Notice of Sale (such as the wrong year) do not necessarily void the sale if they are not “seriously misleading” and the petitioner had actual notice.

Best Practices for Boards and Management Companies

To ensure that a termination for objectionable conduct stands up to judicial scrutiny under the Pullman doctrine, boards and their management companies should focus on the following best practices:

• Strict Procedural Compliance: The board must follow every step required by the proprietary lease, including providing proper notices and holding required meetings.
• Documentation: Boards should work closely with their management companies to maintain detailed logs of incidents, complaints from other residents, photographs or video evidence where appropriate, and all communications with the offending shareholder. Professional property management firms are invaluable in creating the comprehensive documentation record that courts expect.
• Uniform Enforcement: Avoid claims of disparate treatment by ensuring that rules are applied consistently across all shareholders. Management companies play a crucial role in tracking enforcement patterns and ensuring consistency.

By grounding their actions in the Pullman doctrine and maintaining a clear record of the conduct in question, cooperative boards-in partnership with experienced management companies and experienced legal counsel-can effectively protect their communities from disruptive and dangerous residents.

Here are the cases.