Cooperatives & Condominiums

Sponsor Not Obligated to Sell All Condominium Units

Bauer v. Beekman International Center, LLC

NYLJ 2/26/15, p. 24, col. 2

AppDiv., First Dept.

(memorandum opinion)

In an action by condominium unit owner against the sponsor, unit owner appealed from Supreme Court's dismissal of the complaint. The Appellate Division affirmed, holding that the sponsor was not under an implied obligation to sell all of the condominium units.

Sponsor developed a newly constructed 65-unit residential condominium building, and filed an offering plan. Sponsor sold 35 units, including the unit purchased by plaintiff unit owner, and then stopped selling units and began renting them. Unit owner brought this action, contending that the failure to sell the remaining units constituted breach of the sponsor's obligation, and have made units more difficult to sell or refinance. Unit owner also contends that sponsor's retention of apartments caused an increase in common charges. Supreme Court dismissed the complaint.

In affirming the Appellate Division held that sponsor was not under an implied obligation to sell all of the units. The court emphasized that in this case, sponsor sold a majority of the shares, distinguishing the case from an earlier case in which sponsor had sold a minority of shares in a rent-stabilized building.

Waiver of Jury Trial Binding on Shareholder's Family Members

Hines v. 1025 Fifth Avenue, Inc.

NYLJ 3/2/15, p. 17, col. 3

U.S.Dist. Ct.

(Scheindlin, J.)

In a co-op shareholder's action for violation of the Fair Housing Act, the New York State Human Rights Law, and the New York City Administrative Code, the co-op board moved to strike shareholder's demand for a jury trial. The court granted the motion, holding that shareholder's waiver of a jury trial was binding not only on the shareholder but on members of her family.

In 2001, Helene and George Hines purchased a one-bedroom co-op in the subject building. Although they identified themselves as co-applicants, only Helene signed the proprietary lease and only Helene was identified as the lessee. Nevertheless, the co-op board had interviewed both Helene and George, and had required them to list the names and ages of their children. Both Helene and George signed an acknowledgment that they had read the Co-op's house rules, and that they understood the Co-op's pet policy. The proprietary lease itself specified that the covenants in the lease would bind the lessee and legatees and assignors of the lessee. The lease also provided expressly that lessor and lessee waived trial by jury in any action brought by either party against the other on any matter “in any way connected with ' the Lessee's use or occupancy of the apartment ' ” In 2010, Helene and George's daughter moved into the apartment. Both Helene and Jennifer keep service dogs in the apartment, and Jennifer also keeps an emotional support dog. By 2013, the dogs became a source of conflict between the Hineses and the co-op board. The Hineses then brought this action alleging discrimination on the basis of disability, and sought a jury trial. The Co-op moved to strike that demand, relying on the jury trial waiver in the proprietary lease.

In granting the Co-op's motion, the court rejected the argument that the jury trial waiver could not bind George or Jennifer because they had not signed the proprietary lease. The court noted that the proprietary lease expressly contemplated that its terms would bind legatees and assigns ' persons who would not have signed the lease. The court also noted that George and Helene were intended third-party beneficiaries of the proprietary lease even though they were not specifically mentioned in the lease. Because the lease contemplated that members of Lessee's family would live in the apartment, those family members were intended beneficiaries, and therefore bound by the lease's no-waiver clause.

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Sponsor Not Obligated to Sell All Condominium Units

Bauer v. Beekman International Center, LLC

NYLJ 2/26/15, p. 24, col. 2

AppDiv., First Dept.

(memorandum opinion)

In an action by condominium unit owner against the sponsor, unit owner appealed from Supreme Court's dismissal of the complaint. The Appellate Division affirmed, holding that the sponsor was not under an implied obligation to sell all of the condominium units.

Sponsor developed a newly constructed 65-unit residential condominium building, and filed an offering plan. Sponsor sold 35 units, including the unit purchased by plaintiff unit owner, and then stopped selling units and began renting them. Unit owner brought this action, contending that the failure to sell the remaining units constituted breach of the sponsor's obligation, and have made units more difficult to sell or refinance. Unit owner also contends that sponsor's retention of apartments caused an increase in common charges. Supreme Court dismissed the complaint.

In affirming the Appellate Division held that sponsor was not under an implied obligation to sell all of the units. The court emphasized that in this case, sponsor sold a majority of the shares, distinguishing the case from an earlier case in which sponsor had sold a minority of shares in a rent-stabilized building.

Waiver of Jury Trial Binding on Shareholder's Family Members

Hines v. 1025 Fifth Avenue, Inc.

NYLJ 3/2/15, p. 17, col. 3

U.S.Dist. Ct.

(Scheindlin, J.)

In a co-op shareholder's action for violation of the Fair Housing Act, the New York State Human Rights Law, and the New York City Administrative Code, the co-op board moved to strike shareholder's demand for a jury trial. The court granted the motion, holding that shareholder's waiver of a jury trial was binding not only on the shareholder but on members of her family.

In 2001, Helene and George Hines purchased a one-bedroom co-op in the subject building. Although they identified themselves as co-applicants, only Helene signed the proprietary lease and only Helene was identified as the lessee. Nevertheless, the co-op board had interviewed both Helene and George, and had required them to list the names and ages of their children. Both Helene and George signed an acknowledgment that they had read the Co-op's house rules, and that they understood the Co-op's pet policy. The proprietary lease itself specified that the covenants in the lease would bind the lessee and legatees and assignors of the lessee. The lease also provided expressly that lessor and lessee waived trial by jury in any action brought by either party against the other on any matter “in any way connected with ' the Lessee's use or occupancy of the apartment ' ” In 2010, Helene and George's daughter moved into the apartment. Both Helene and Jennifer keep service dogs in the apartment, and Jennifer also keeps an emotional support dog. By 2013, the dogs became a source of conflict between the Hineses and the co-op board. The Hineses then brought this action alleging discrimination on the basis of disability, and sought a jury trial. The Co-op moved to strike that demand, relying on the jury trial waiver in the proprietary lease.

In granting the Co-op's motion, the court rejected the argument that the jury trial waiver could not bind George or Jennifer because they had not signed the proprietary lease. The court noted that the proprietary lease expressly contemplated that its terms would bind legatees and assigns ' persons who would not have signed the lease. The court also noted that George and Helene were intended third-party beneficiaries of the proprietary lease even though they were not specifically mentioned in the lease. Because the lease contemplated that members of Lessee's family would live in the apartment, those family members were intended beneficiaries, and therefore bound by the lease's no-waiver clause.

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