Co-ops and Condominiums

In an action by the residential condominium against the commercial condominium and the combined condominium alleging violations of the ground lease and the condominium documents, all parties appealed from Supreme Court's order dismissing some, but not all, of the claims. The Appellate division modified to reinstate two claims, but otherwise affirmed.

The subject building includes a luxury hotel on floors 1-14 and residential apartments on floors 15-39. The building is governed by three boards, one for matters concerning the residential units, a second for matters concerning the commercial units, and a third for matters concerning both residential and commercial units. The condominium's offering plan provided that the hotel would be operated by the Ritz Carlton Hotel Company. The condominium sponsor held title to a ground lease, and the ground lease required that any hotel would be one with the "highest rating by a nationally recognized rating service." When the Ritz Carlton stopped operating the hotel, the new owner of the hotel units sought to convert them to residential units, but were thwarted by the terms of the ground lease. The new owners then opened a hotel that, according to the residential owners, did not comply with the standards of the ground lease or the condominium documents. The residential condominium and individual residential owners brought this action raising 15 claims against a variety of legal entities. Supreme Court dismissed many of the claims, but denied motions to dismiss with respect to claims for breach of the condominium declaration and bylaws, for breach of the ground lease, and for violation of Real Property Law section 339-j.