Co-ops and Condominiums

In the co-op corporation's holdover proceeding, shareholder appealed from Supreme Court's award of possession to the co-op corporation. The Appellate Term reversed and dismissed the petition, holding that shareholder did not breach his survival of closing affidavit or his proprietary lease.

Upon the closing of his purchase of an apartment in the co-op, shareholder was required to tender a bank check in the amount of $122,606.03 to the city's Housing Development Corporation. Shareholder tendered the check, and the co-op forwarded it to HDC by messenger, but HDC never received the check. One year later, the co-op informed shareholder that HDC was requesting a replacement. His ban would not stop payment on the original check unless he executed an affidavit indicating that the check was lost stolen or destroyed. Because shareholder, a lawyer, did not have personal knowledge about the facts regarding loss of the check, he requested that HDC execute a lost check affidavit, but HDC refused. As a result, shareholder did not tender a replacement check. The co-op corporation then brought this holdover proceeding, alleging that shareholder's failure to tender a replacement check constituted a breach of a "survival of closing" affidavit, which constituted a default under the proprietary lease. Civil Court awarded a summary judgment of possession to the co-op corporation, holding that shareholder had breached the survival of closing affidavit when he stopped payment on the original check without tendering a replacement check.