Cooperatives & Condominiums

Condo Borrowing Without Approval Of Unit Owners May Violate Bylaws

Kwiecinski v. Sea Breeze II Condominium Assn.

NYLJ 10/3/05, p 32, col. 6

AppDiv, Second Dept

(memorandum opinion)

In an action by unit owner alleging that the condominium board violated its bylaws by borrowing without the requisite approval by the unit owners, unit owner appealed from Supreme Court's grant of summary judgment dismissing the complaint. The Appellate Division reversed and reinstated the complaint, concluding that the board had failed to offer evidence demonstrating the absence of a material issue of fact.

In 1997, the condominium board hired a contractor to perform exterior repair work at a cost of $52,296. The contractor agreed to finance the work over a 2-year period, and the board executed a note in the amount of the agreed-upon price. The board then imposed a special assessment on unit owners to cover the cost of the repairs. The unit owners did not vote on either the decision to execute the note or the decision to impose the special assessment. The condominium bylaws, however, require consent of two-thirds of unit owners for the borrowing of a sum in excess of $50,000 in any one year. Unit owner brought this action, contending that the board had violated the bylaws. Supreme Court granted summary judgment to the board, finding no violation of the bylaws.

In reversing, the Appellate Division concluded that the board had failed to demonstrate the absence of an issue of fact with respect to the claim that the board had violated the bylaws by borrowing more than $50,000 in 1997. As a result, the court reinstated unit owner's claim.

Condo Borrowing Without Approval Of Unit Owners May Violate Bylaws

Kwiecinski v. Sea Breeze II Condominium Assn.

NYLJ 10/3/05, p 32, col. 6

AppDiv, Second Dept

(memorandum opinion)

In an action by unit owner alleging that the condominium board violated its bylaws by borrowing without the requisite approval by the unit owners, unit owner appealed from Supreme Court's grant of summary judgment dismissing the complaint. The Appellate Division reversed and reinstated the complaint, concluding that the board had failed to offer evidence demonstrating the absence of a material issue of fact.

In 1997, the condominium board hired a contractor to perform exterior repair work at a cost of $52,296. The contractor agreed to finance the work over a 2-year period, and the board executed a note in the amount of the agreed-upon price. The board then imposed a special assessment on unit owners to cover the cost of the repairs. The unit owners did not vote on either the decision to execute the note or the decision to impose the special assessment. The condominium bylaws, however, require consent of two-thirds of unit owners for the borrowing of a sum in excess of $50,000 in any one year. Unit owner brought this action, contending that the board had violated the bylaws. Supreme Court granted summary judgment to the board, finding no violation of the bylaws.

In reversing, the Appellate Division concluded that the board had failed to demonstrate the absence of an issue of fact with respect to the claim that the board had violated the bylaws by borrowing more than $50,000 in 1997. As a result, the court reinstated unit owner's claim.