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Publication Date: Summer 2000

COURTS DELVE BOARD RIGHTS AND RESPONSIBILITIES
CNYC thanks Marc J. Luxemburg for the following article. A founder and president of CNYC, Mr. Luxemburg is a partner in the New York law firm of Snow Becker Krauss. He presents a workshop every year at CNYC's Housing Conference reviewing court decisions that have particular significance for cooperatives and condominiums. Renovations frequently pose serious problems and misunderstandings which can escalate into court battles. Here Mr. Luxemburg discusses two alteration cases with opposite outcomes. He then explores a claim against a board for negligence in a burglary. At CNYC's 20th annual Conference on Sunday, November 12, 2000, Mr. Luxemburg will again present Current Significant Legal Issues.


SIN IN HASTE... REPENT IN LEISURE
In Demasi v Trousdell Village Owners, Inc, NYLJ, 8/9/2000, p. 28, c. 3 (Sup Ct Nassau Co), the shareholder moved for a preliminary injunction enjoining the cooperative from terminating her proprietary lease. She had renovated the kitchen by adding a washer/dryer and installed a vent by punching a hole in the outside wall of the building. The shareholder claimed that she had been given approval for the installation at a board meeting. The cooperative denied that any consent had been given at such Board meeting, but also stated that it had rescinded its consent because any consent had been procured by false statements made by a former board member. The cooperative then served a Notice of Default based on the allegedly unauthorized installation. The cooperative never submitted minutes of the board meeting in question to the court, nor did the cooperative indicate any change in circumstance which would justify withdrawal of the apparent approval The court pointed out that the pro-prietary lease provided that consent may not be unreasonably withheld to any alteration "in the apartment." Therefore the court found that the Business Judgment Rule is not applicable in the absence of showing why the board refused to give, or withdrew, its consent. Accordingly a preliminary injunction was granted preventing the cooperative from taking any steps to evict the shareholder until the Supreme Court litigation had been determined. There is an ancient adage which states in substance that if you sin in haste you will repent in leisure. In this case it appears that the board too hastily acted to approve the shareholder's installation and now will at great length repent for that mistake throughout the litigation and subsequent events.

HALLWAY WALL UPHELD
In Cohen v Board of Mangers of 22 Perry Street Condominium, NYLJ, 5/3/2000, p.27, c.6, (Sup Ct NY Co), the plaintiff condominium unit owner sought to compel the removal of a wall erected by his neighbor which enclosed a small portion of the common hallway space in order to create a common entrance to two continuous apartments. The board had granted a revocable license permitting the enclosure of 14 sq ft. The issue presented to the court was whether this is prohibited by Real Property Law or the condominiumÍs governing documents. It appeared that unit owner had purchased two continuous apartments at the end of the hallway and had received a revocable license for a period of one year and month to month thereafter in exchange for paying the equivalent of common charges for the amount of hallway space involved. The plaintiff contended that Section 339-i of the law prohibited the board from granting exclusive rights to use any portion of the common elements. The court carefully analyzed this contention, reviewed each of the sub-sections of Section 339-i, and held that a revocable license to use a small portion of a common hallway which only directly serves the two immediately adjacent apartments did not diminish any of the other condominium unit owners' rights in the common areas, and was an appropriate exercise by the board of the powers which were granted by the bylaws and declaration. The court held that if a condominium board were required to obtain the unanimous consent of all unit owners to enter into an agreement whereby a fee is paid for exclusive use of a small portion of the common elements that does not interfere with other unit owners' use of the property, the board would effectively be unable to administer the affairs of the condominium.

CO-OP NOT LIABLE FOR BURGLARY
In Sakhai v 411 East 57th St. Corp., 707 NYS 2nd 630 (App. Div. 1st Dept. 5/25/2000), the plaintiff claimed that in 1991 while the plaintiff was out of her apartment the apartment was burglarized, and jewelry, antique silver and three large oriental rugs were taken. There was no sign of a forced entry to the apartment. She sued the cooperative claiming that the theft occurred as a result of inadequate security, and the building was negligent in permitting a burglar to get into the building and to gain access to the apartment. The cooperative moved for Summary Judgment, which was granted by the Appellate Division, and the complaint was dismissed. The court held that the landlord only has a duty to take minimum precautions to protect the occupants from foreseeable criminal activity, and that a tenant may recover damages only upon showing that negligence was the cause of the injury. The burden of proof was on the plaintiff to show that the theft was perpetrated by an outside intruder who gained access to the building by a negligently maintained entrance. Since there was no proof or evidence as to the nature or identity of the burglar, the manner in which the burglar gained access to the building or to the apartment, the specific conduct which constituted negligence, or any cause or link between the negligence and the loss, the plaintiff could not meet the burden of proof.

 
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