Cooperatives & Condominiums

In reversing Supreme Court's grant of the co-op corporation's summary judgment motion, the Appellate Division noted that no proprietary leases had been executed with respect to the parking spaces. As a result, the court focused on the language of the sample proprietary lease accompanying the offering plan The sample lease permits the holder of unsold shares to cancel the lease if certain conditions are met, upon a payment of “a sum equal to 24 times the sum of the then current maintenance charges for the apartments and parking spaces being surrendered.”

The Appellate Division concluded that this language created an ambiguity about whether parking space leases must be surrendered in conjunction with leases associated with an apartment, or whether parking space leases may be surrendered independently. Moreover, the Appellate Division also concluded that Supreme Court had erred in deciding, as a matter of law, that the co-op corporation did not acquiesce in the sponsor's right to surrender unsold shares to parking spaces when it accepted the sponsor's surrender of parking spaces on four prior occasions.

Board Refuses to Permit Owner to Use Parking Space
Matter of Curlin v. Clove Lane Homeowners Association, Inc.
NYLJ 9/1/17, p. 25, col. 3
AppDiv, Second Dept.
(memorandum opinion)

In condominium unit owner's article 78 proceeding challenging determinations by the association board denying unit owner's right to use a parking space in front of his unit, placing restrictions on location of a basketball hoop, and refusing to treat termite damage, the association appealed from Supreme Court's grant of the petition. The Appellate Division modified to remit to Supreme Court to permit the association to serve an answer.

Unit owner owns a townhouse in the condominium community. On June 11, 2013, the association board made a determination prohibiting unit owner from using the parking space directly in front of his unit, restricting the location of owner's basketball hoop, and refusing to treat termite damage in the unit. When unit owner brought this article 78 proceeding, the association moved to dismiss. Supreme Court denied the motion and directed that the petition be granted, reinstating the parking space, directing that the basketball hoop be relocated to the common area in closest proximity to the unit and requiring reimbursement for termite costs, as determined by a special referee. With respect to the basketball hoops, Supreme Court noted that other basketball hoops have been allowed in the community. The referee appointed to assess termite damage concluded that the termite damage originated from the exterior, and recommended reimbursement of $14,200. Supreme Court confirmed the report and entered judgment in that sum. The association appealed.

In modifying, the Appellate Division first concluded that Supreme Court had correctly denied the association's motion to dismiss. The court acknowledged that the business judgment rule provided the standard of review, and noted that judicial inquiry is limited to determining whether the association's action was authorized, was taken in good faith, and was in furtherance of the interests of the association. The court concluded, however, that the unit owner had made out a cognizable claim that the board was either acting outside the scope of its authority or in bad faith when it decided to eliminate the parking space in front of owner's unit, when it prohibited placement of a basketball hoop in a common area, and when it refused to pay for termite repairs. The Appellate Division concluded, however, that Supreme Court had erred in granting the petition rather than affording the association an opportunity to answer. The Appellate Division noted that the papers did not foreclose the possibility of dispute about questions of fact, and remitted to permit service of an answer.

Right to Surrender Parking Space Shares
North Shore Towers Apartments, Inc. v. Three Towers Associates
NYLJ 8/14/17, p. 19, col. 1
AppDiv, Second Dept.
(memorandum opinion)

In co-op corporation's action against sponsor for a determination that sponsor's purported surrender of shares representing unsold parking spaces is invalid, sponsor appealed from Supreme Court's award of summary judgment to the co-op corporation. The Appellate Division reversed and remanded, concluding that the controlling documents were ambiguous about the sponsor's right to surrender the parking space shares without also surrendering the shares of the associated apartment.

The sponsor's offering plan, effective in 1986, converted into cooperative ownership three buildings with 1844 apartments and 2492 parking spaces. The sponsor remained the holder of unsold shares associated with a number of apartments and parking spaces. In 2010, sponsor purported to surrender the shares representing unsold parking spaces. The co-op corporation then brought this action, seeking to declare the surrender void. Supreme Court awarded summary judgment to the co-op corporation. Supreme Court also denied the co-op's motion for summary judgment on its claim for maintenance payments associated with the parking spaces. The sponsor appealed, and the co-op corporation cross-appealed with respect to the maintenance payments.

In reversing Supreme Court's grant of the co-op corporation's summary judgment motion, the Appellate Division noted that no proprietary leases had been executed with respect to the parking spaces. As a result, the court focused on the language of the sample proprietary lease accompanying the offering plan The sample lease permits the holder of unsold shares to cancel the lease if certain conditions are met, upon a payment of “a sum equal to 24 times the sum of the then current maintenance charges for the apartments and parking spaces being surrendered.”

The Appellate Division concluded that this language created an ambiguity about whether parking space leases must be surrendered in conjunction with leases associated with an apartment, or whether parking space leases may be surrendered independently. Moreover, the Appellate Division also concluded that Supreme Court had erred in deciding, as a matter of law, that the co-op corporation did not acquiesce in the sponsor's right to surrender unsold shares to parking spaces when it accepted the sponsor's surrender of parking spaces on four prior occasions.

Board Refuses to Permit Owner to Use Parking Space
Matter of Curlin v. Clove Lane Homeowners Association, Inc.
NYLJ 9/1/17, p. 25, col. 3
AppDiv, Second Dept.
(memorandum opinion)

In condominium unit owner's article 78 proceeding challenging determinations by the association board denying unit owner's right to use a parking space in front of his unit, placing restrictions on location of a basketball hoop, and refusing to treat termite damage, the association appealed from Supreme Court's grant of the petition. The Appellate Division modified to remit to Supreme Court to permit the association to serve an answer.

Unit owner owns a townhouse in the condominium community. On June 11, 2013, the association board made a determination prohibiting unit owner from using the parking space directly in front of his unit, restricting the location of owner's basketball hoop, and refusing to treat termite damage in the unit. When unit owner brought this article 78 proceeding, the association moved to dismiss. Supreme Court denied the motion and directed that the petition be granted, reinstating the parking space, directing that the basketball hoop be relocated to the common area in closest proximity to the unit and requiring reimbursement for termite costs, as determined by a special referee. With respect to the basketball hoops, Supreme Court noted that other basketball hoops have been allowed in the community. The referee appointed to assess termite damage concluded that the termite damage originated from the exterior, and recommended reimbursement of $14,200. Supreme Court confirmed the report and entered judgment in that sum. The association appealed.

In modifying, the Appellate Division first concluded that Supreme Court had correctly denied the association's motion to dismiss. The court acknowledged that the business judgment rule provided the standard of review, and noted that judicial inquiry is limited to determining whether the association's action was authorized, was taken in good faith, and was in furtherance of the interests of the association. The court concluded, however, that the unit owner had made out a cognizable claim that the board was either acting outside the scope of its authority or in bad faith when it decided to eliminate the parking space in front of owner's unit, when it prohibited placement of a basketball hoop in a common area, and when it refused to pay for termite repairs. The Appellate Division concluded, however, that Supreme Court had erred in granting the petition rather than affording the association an opportunity to answer. The Appellate Division noted that the papers did not foreclose the possibility of dispute about questions of fact, and remitted to permit service of an answer.