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29 Apr 2016
The War on Puffing

The battle between smokers and non-smokers has been raging for the better part of two decades, and it seems that the non-smokers have all but won. Boards are introducing new clauses in proprietary leases, or bylaw amendments, prohibiting smoking completely – and not just in common areas. While the prevailing belief is that we can do whatever we wish inside of our own homes (so long as it’s legal), reality does not match up.  As has been addressed in previous posts on this blog, coop boards have a wide breadth of power when it comes to restricting shareholder’s activities, even within each individual unit.  It is each building’s board, not the unit owner/shareholder that truly is the “king of the castle.”  It’s becoming more and more common for boards to restrict smoking in every part of their buildings. Those initiatives are attracting considerably more support and considerably less opposition than they have in the past, especially as second hand smoke has been labeled a carcinogen.  After all, a building can and should limit residents’ exposure to toxic substances.

The most effective method of effecting a ban on smoking in buildings is to amend the proprietary lease to include an explicit ban.  Depending on your building’s bylaws, a supermajority vote may be required, but with the war on smoking all but over and won, a supermajority on this issue is not relatively difficult to achieve, with the national rate of smokers having fallen below 20 percent, and the dangers of second hand smoke being widely known and accepted.  A proprietary lease amendment may be preferred by your board because as a contractual provision, it provides a more secure ban with less vulnerability to court challenges than a simple “nuisance” clause.  While the courts remain reluctant to restrict what individuals can do within their own homes, they are less likely to challenge a policy approved by a supermajority of owners than one imposed by the community’s elected board.

22 Apr 2016
When a Shareholder Dies

A last will and testament may control the transfer of ownership, but it does not give an automatic right to occupancy of the apartment. If a shareholder or unit owner lived alone, then, under most circumstances, the heir cannot just move into the apartment after the death of the shareholder or owner. Typically, in the course of assignment of shares, the board has the right to approve the occupancy prior to the transfer. Yet, when it comes to an inheritance, the terms of the occupancy agreement will determine how much control the board has to approve the heir or whether or not the family member will have the right not only to own, but ultimately to occupy, the apartment.

Whether or not there is a will, a proprietary lease in a co-op will not terminate upon the death of an owner. Most cooperative boards permit family members to continue to occupy an apartment after the death of a shareholder, provided that they resided with the deceased shareholder prior to his or her death. But if the shareholder lived alone, no one can move into the apartment without permission of the board of directors. This includes the heirs, as well as the executor of the estate, whose sole purpose is to wind up the affairs of the estate, including removal of personal effects and sale of the unit. Maintenance payments continue to accrue, and the estate is liable for those payments. If someone occupies the apartment without the permission of the cooperative, the corporation may commence an action against the estate for a breach of the proprietary lease. Further, the cooperative cannot accept payment of the maintenance from anyone other than the estate of the shareholder, without risking an assertion of waiver, even if the proprietary lease states otherwise.

15 Apr 2016
House Rules: The Co-Op Authority

Think of a Co-Op as the “house rules.” Typically, these regulations are aimed at protecting the safety of residents and generally keeping order. Few would argue with most house rules; ones that restrict residents from holding a “garage sale” in the lobby, for example, or throwing a raging party at three o’clock in the morning generally enjoy widespread support.

Occasionally however, a board will overstep its bounds and try to implement stricter than necessity or legality.  If board members find it necessary to make a rule that goes beyond what their bylaws allow, they’ll first have to amend the bylaws. These situations require the participation of shareholders and require a 2/3 vote. 

 If the board makes rules that contradict it’s authority as laid out in the governing documents, it may be subject to legal challenge.  In which case, if the new overly strict rules apply to you, you may be able to get them reversed. The last thing a board needs is to get dragged into court and see their rule nullified. Adhering to the letter and spirit of the bylaws should ensure a rule’s legality.

Not all rules are cut-and-dried; a rule that’s perfectly reasonable for a common area can turn bad in a hurry when applied to individual units. What can reasonably be restricted in public spaces may not be reasonably restricted in a shareholder’s individual unit.  Restricting what someone does in their own apartment if it’s not demonstrably dangerous to the neighbors, can be an overreach.  Such rules may be challenged in a court of law or by the assistance of counsel. 

While most condo boards have the power to levy fines, their most muscular means of dealing with problem owners, is to seek an injunction in court. Short of eviction, a co-op board can levy extra maintenance charges against shareholders, or revoke privileges like parking spaces and use of common space like roofs.  A co-op is not all powerful, however.  A shareholder can also levy the court’s authority to correct a problem with the co-op’s rules, especially if these rules have caused you to incur money damages.   

Although it’s generally in the best interests of all parties to use litigation only as a last resort, sometimes it is absolutely necessary. Still, there’s one approach to conflict resolution short of involving an attorney that could yield happier results for everyone: professional mediation.  It’s a remedy that often proves to be very effective.

08 Apr 2016
My Co-Op Said NO!

Let’s first assume that you meet all the requirements of city ordinances and zoning restrictions.  Can you run your business from your home?  The answer to this mostly depends mostly on what type of business we’re talking about, and how permissive your co-op board is.  You may have permits for a day-care center, for instance, but the board still might not allow you to run one.  The power of a Co-Op board can be far reaching.

Disruption and security are, by far, the most important factors in gaining board approval.  Are you a writer that sits alone at your desk all day?  Are you teaching a dance class in your living room?  Perhaps you’re a therapist who counsels patients in your guest room?  All of these professions present different, yet very important nuances.

Your co-op will likely discourage or ban anything that will make too much noise or may be too disruptive to your neighbors (tap dancing lessons).  The board may also frown upon the frequent guests, for example, if you are a therapist who has a new patient entering the building once every hour, six days a week.  The board also has the authority to provide restrictions, such as requiring your guests to wait in the lobby rather than your hallway, or demanding that you provide your own “waiting room” within your unit, with limited times that clients can enter, and disallowing walk-ins.

Another big issue that a board will consider involves the possibility of fire or other physical destruction. It’s unlikely that your board will approve of a plumbing business that stores hazardous or flammable chemicals, or a metal working business that requires use of a torch. Co-op residents thinking of starting a home-based business should review the rules and regulations of the condominium association prior to operating a business out of their unit.

01 Apr 2016
Don’t Overstay Your Welcome: Guests in Co-ops

Co-op bylaws are often written to encourage owner occupancy and preserve value for all shareholders. Understanding the nature of a co-op unit as a home, most co-op documents have provisions that allow for guests of shareholders to stay for a certain period of time, commonly up to one month, provided that the shareholder is also occupying the apartment.

It gets a little trickier if a “guest” is staying in a particular unit and the lawful residents of the apartment are not there with them. According to New York law, a “guest,” is not the same as a “roommate.” However, unlike many other tenant protection laws, New York Real Property Law Section 235-f, the “Roommate Law,” applies to co-ops, but the tenant must occupy the unit as well.  Even if your guest has co-op approval, if you are not residing in the unit with them, the situation could actually be construed as an illegal sublet.  No co-op wants that kind of negative attention. Indeed, if you fail to get co-op approval, depending on your co-op’s by-laws, the restrictions and penalties can be much more severe.

Subletting your apartment (legally) may also be difficult.  In most co-ops, you can’t sublet your apartment without the board approval.  Thanks to the business judgment rule, the board has wide latitude in granting or withholding consent.

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