Council of New York Cooperatives & Condominiums
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Legal Issues

Published: Summer 2001

Mediating Co-op and Condo Disputes

CNYC thanks Abigail Pessen for the following guest article. A former commercial litigator, Ms. Pessen now mediates business and employment disputes in New York City.

Some Illustrative Cases:
  • A shareholder's bathroom is damaged by a leak from the unit above; shower tiles must be replaced to make the repairs; the shareholder decides to replace all the bathroom tiles. When the work is completed, the co-op bills the shareholder several thousand dollars representing, part of the repair costs. The shareholder refuses to pay. The co-op adds the amount to the shareholder's monthly maintenance bill, and begins to charge late fees. Angry letters are exchanged between shareholders and Board. Finally, the shareholders brings the Proprietary Lease, the correspondence, the contractor's bill, and the tile receipts to a lawyer, who shakes her head sadly and points out that her hourly rate will quickly outpace the amount at stake in the dispute.
  • A shareholder gets divorced and is awarded the co-op apartment, worth $1 million, as part of equitable distribution. The shareholder has been a stay-at-home wife and mother and now has a job that pays only a modest salary. The Board refuses to transfer the shares and Lease to the wife unless the husband guarantees the maintenance and one year of maintenance payment is kept in escrow. The wife consults a lawyer to find out whether the Board is engaging in unlawful discrimination against her.
  • A condo unit owner and his family are being harassed by their neighbor who is a rent-stabilized tenant. The neighbor has severe mental problems and screams obscenities and insults at the family. The unit owner complains repeatedly to the owner of the tenant's unit and the condo's Board of Managers, and is repeatedly told that the Board is powerless to act. Finally the unit owner retains counsel and sues the tenant and the Board for breach of the condo's by-laws, intentional infliction of emotional distress, and other claims. The case is eventually settled by a Consent Order enjoining the harassment and a $7500 payment from the board and the owner of the tenant's unit. Total legal fees incurred by the unit owner: $25,000.

These examples are all too commonplace in the densely-populated and intensely litigious city of New York; indeed, all are loosely based on actual cases. Each almost certainly would have been disposed of in a single, inexpensive session with a skilled mediator. Yet no co-op or condo board ever suggested, let alone mandated mediation.

Mediation can be a very powerful tool for settling disputes. By engaging a mediator for a single day, boards can quickly dispose of unpleasant and time-consuming problems at a fraction of the cost of litigation. And if the mediation does not succeed (a very small percent of the time), all that has been lost is a minor investment of time and money. Communications made during the mediation are confidential and either side is free to proceed with a lawsuit if not satisfied with the proposed resolution.

In mediation, the parties themselves attempt to resolve their dispute with the mediator's assistance. The mediator has no authority to impose a solution; rather, he/she explores the interests underlying the dispute and helps to develop options that satisfy the parties' respective needs.

Specifically, in the three examples cited above, within a day or half a day the mediator might:

In the first case, help the Board and shareholder fairly apportion the repair and tile replacement costs, by discussing the necessity for the work, the time spent by the contractor to replace the additional tiles, the benefit (if any) to the shareholder in using the Board's contractor, etc.

In the second case, help the shareholder and Board find a reasonable way to protect the co-op in the event of default, while giving effect to the divorce decree.

In the third case, facilitate a resolution between the unit owner and tenant by discussing both sides' grievances and crafting a stipulation/ protective order providing for penalties in the event of violation.

CNYC has long advocated mediation for resolving disputes of this nature. Ms Pessen and other mediators knowledgeable about cooperatives and condominiums have helped bring adversaries to the table, to hear one another's point of view and to put together a reasonable compromise. For the names and numbers of mediators to help your cooperative or condominium bring disputes to resolution, call CNYC at (212) 496-7400.


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