Council of New York Cooperatives & Condominiums
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Legal Issues

Publication Date: Autumn 2000

CNYC president Marc J. Luxemburg, Esq. is an attorney specializing in cooperative and condominium law. In each issue of the CNYC Newsletter he reviews recent court cases that have the potential to answer questions commonly faced by boards of directors as part of their responsibilities. At CNYC's November 12th Housing Conference, Mr. Luxemburg will present his annual review of the year's Significant Legal Decisions.

A judge of the Supreme Court, New York County, has just invalidated New York City's Lead Paint Law, Local Law 38 of 1999, on the grounds that legislation affecting lead paint is an environmental action which requires the filing of an environmental impact statement. Thus, the Court held that the Lead Paint Law was in violation of the State Environmental Quality Review Act as well as the City Environmental Quality Review requirements. New York City Coalition to End Lead Poisoning v Vallone, NYLJ, 10/16/2000, p. 26, c.1 (Sup Ct, NY County, York, J.).

The Lead Paint law had substantially revised the obligation of building owners (which included the City itself) to make repairs to the paint and decorated surfaces of apartments. It essentially required an annual notice to every tenant, and an annual inspection of units with small children, as well as an inspection and repair obligation every time an apartment was sold or re-rented.

Although the law was intended to strike a balance between the rights and obligations of owners and tenants, the court examined the legislative process by which it had been passed. The court believed that the legislation had been rushed to passage with only a perfunctory analysis of the underlying issues. The court engaged in an extensive analysis of the timing of the various drafts of the bill, the hearings on the bill, the notice to the various petitioners, the extent to which they were afforded an opportunity to testify at hearings, and the amount of time that elapsed between the printing of bills and their consideration by the City Council. The court found the analysis by the City Council of the issues was inadequate.

Although it has previously been held that lead paint did not constitute an environmental issue, the court found that it posed a sufficient environmental hazard that the law required an environmental impact statement The court held the State Environmental Quality Review Act, which regulates actions by "agencies", to apply to the City Council in connection with the passage of legislation.

CNYC was an active participant in the negotiations and discussions with the staff of the City Council which led to the passage of this statute. While the statute was not perfect, it represented a balanced approach. We would expect that the City would promptly appeal this decision to an Appellate Court.

In Paikoff v. Harris, NYLJ,10/20/99, P 32, C 2 (App T 2nd Dept), the court held that a tenant that takes possession of an "unsold" apartment in a cooperative subsequent to the building being converted to cooperative status is a non-purchasing tenant entitled to renewal rights as against a sponsor who continues as the owner of such apartment. The courts in the 1st Department have not followed this decision, and recent decisions continued the dichotomy between the two departments.

In Jonas Equities, Inc v. McLawrence, NYLJ, 8/31/2000, P 28, C 3 (Civil Court Kings Co.) the tenant had occupied the apartment prior to conversion. The sponsor brought an action to remove the tenant, and the parties entered into a stipulation of settlement whereby the tenant agreed to vacate the apartment. The tenant was not represented by counsel. Subsequently, after the time to vacate expired, the tenant brought an order to show cause seeking to set aside the stipulation stating that she had been ignorant of her rights when she entered into the stipulation. The fact that the tenant was ignorant of her rights was held to be good cause to allow her to avoid the stipulation. As determined by this judge, it is the public policy of the State according to the Paikoff case, to prohibit non purchasing tenants from bring evicted.

In contrast, in Parkchester Preservation Co., LLP. v Hanks et. al, 2000 WL 1511310 (Civil Court, Bronx Co., July 13, 2000) the court was faced with a motion to dismiss a number of hold over proceedings brought to evict non purchasing occupants of condominium apartments in Parkchester. It appeared that the petitioner was not the condominium sponsor, since it had purchased a large number of units from the sponsor, and that none of the tenants were in physical occupancy at the time that the building had converted to condominium status. Accordingly the court found dismissal of the petitions would endow the tenants with a perpetual tenancy exempt from the limitations set forth in their leases, and that the tenants did not come within the definition of the statute. Accordingly the court refused to apply the Paikoff decision, and granted judgment of possession of the apartments to the petitioner.

Thus the dichotomy between the first department and the second department as to the interpretation of the Martin Act continues. We await further legislative or judicial clarification of this issue.



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