Published: Spring 1995

SUBLETS, REPAIRS & LIABILITY FOR CONTRACTORS

Marc Luxemburg, president of the Council of New York Cooperatives & Condominiums, is an attorney specializing in cooperative and condominium law. In each issue of the CNYC Newsletter, Mr. Luxemburg reviews recent court cases. In addition, at the annual Cooperative Housing Conference he presents a workshop on significant legal decisions of the year.

CNYC frequently takes advocacy positions on key legal issues in briefs of amicus curiae. If your building is involved in a legal action that you think is significant to other buildings, please be sure to keep CNYC informed of the status of the case.

SUBLET SINKHOLE

In 320 East 35th Owners Corp. v. Shapiro, NYLJ, 12/17/94, p. 28, c 6 (Civ. Ct. N.Y. Co.), the shareholder had been subletting for many years and the board felt that this had to stop. The shareholder's defense was that the board had accepted rent for all of the previous years without objecting to the sublet, so it had waived its right to object now. While cooperative and condominium attorneys may not think highly of such a defense, the court dismissed the case for a novel reason. The board, it seems, had served a default notice and a notice of termination, the latter of which called for the proprietary lease to end on June 22. The managing agent, however, sent out a maintenance bill to the shareholder on July 1. If the cooperative had accepted the maintenance payment after the notice of termination, it would have waived its right to enforce the notice according to previous case law. But, in this instance, the cooperative merely sent out the regular monthly maintenance bill and did not accept payment.

Nonetheless, the court ruled that, because the shareholder had received inconsistent notices, thereby confusing him, the cooperative's right to enforce the termination notice was waived. Because no decision was reached on the merits, no legal fees were awarded.

CONDO REPAIR CONUNDRUM

In Smith v. Parkchester North Condominium, NYLJ, 11/23/94, p. 28, c.1 (Civ. Ct. Bx. Co.), a unit owner had been served with four violations, three inside the unit and one located in the ceiling space between the unit and the one directly above. Smith argued that the ceiling violation should be given to the condominium.

A condominium association does not own anything; all of the real estate belongs to the unit owners. So, how can a condominium be served with a violation on property it does not own?

The court decided that it can, noting that Real Property Law Section 339 ee(1) makes the board of managers responsible for the common areas, and the unit owner had no ability to control what went on in the common area located above his ceiling. Someone has to be responsible. That "someone", the court said, was board of managers, even though the board is not a landlord.

LIABILITY FOR SHAREHOLDERS' CONTRACTORS

In Brown v. Christopher Street Owners Corp., NYLJ, 12/01/94, p. 27, c.1 (App. Div. 1st Dept.), a shareholder on the third floor had hired a window washer. When the worker fell those three stories, he brought an action under strict liability as defined by Labor Law Section 240.

The First Department found that the worker had been hired solely by the shareholder, without the knowledge or consent of the cooperative. Therefore, the cooperative could not be held responsible. The court said that, in order for the cooperative to be liable for the window washer, the washing would have to have been done in connection with building construction or renovation, not simple maintenance. As it turns out, the shareholder was also absolved of liability because the court noted that there is a statutory exemption for owners of single-family residences.

In another labor-related case, DeNota v. 45 East 85th Street Corp., NYLJ 1/20/95, p.5, c.6 (Sup.Ct. NY Co.), a workman had been injured while cutting wood during the renovation of a shareholder's apartment. The shareholder had gone to the board for consent to do the renovation, received approval, and had hired a contractor. The co-op's responsibility for the project, it might be assumed, ended with its approval.

Not so, said the court. It found that, under Labor Law Section 241 (6), which requires that owners and contractors provide safe working conditions, the cooperative was liable because the worker is entitled to recourse even if the owner has no direction or control of the work. The shareholder who hired the contractor was held blameless because the court found a cooperative sufficiently analogous to a single-family house, so that the exemption from liability for a homeowner should be applied.

The lesson of this case is that cooperatives should carefully check all alteration agreements to be sure that contractors and shareholders indemnify the cooperative and that they purchase insurance naming the cooperative as an additional insured.