Take a moment and imagine your family or circle of friends: each person with his or her unique personality, attitude, experience and background. In a co-op building or condo association, hundreds of people live together, sharing common areas and trying to abide by the same rules and regulations. That’s hundreds of different backgrounds, experiences and personalities coming together and like your own family, it's inevitable that there will occasionally be friction—or outright conflict—between members of the group, no matter how harmonious things usually are.
Boards suing unit owners is more common than you’d think. “Typically boards will sue residents when they violate the house rules,” says Daniel T. Altman, a partner at the law firm of Belkin, Burden, Wenig & Goldman, LLP in Manhattan. “For example if the house rules stipulate that before a resident will do an interior alteration to your apartment, you must file an alteration application with the board and that alteration application will have several different requirements. One, you need to know who the contractor is. The contractor has to provide proper insurance naming the board as an additional insured so that they are covered in case anything happens. That’s a very common lawsuit. Another common lawsuit is if a shareholder is illegally subletting its apartment and not complying with the proprietary lease or if they don’t pay their maintenance obligations.”
Stephen W. O’Connell, co-managing partner of Manhattan-based law firm Hartman & Craven LLP says disagreements between board members and unit owners can range from harboring an illegal pet to running an illegal B&B to creating a nuisance.
“In most cases what a board would do before taking legal action is that you would serve the unit owner with a requisite notice, a notice to cure or a notice of termination before you would start an actual legal action,” says O’Connell. “What you do is you serve them with these notices and also copy their banks that lent them the money because there is something called a recognition agreement which requires that the bank gets notice of notices sent to its borrower alleging any default. Once you do that then the banks’ interest is peaked, they might take independent action to get the offending shareholder to stop doing what it’s doing and to stop causing problems.”
Nip it in the Bud
When it comes to the various types of disputes that arise between boards and residents, or between residents themselves, O'Connell says that if legal action has been brought against an individual or board, it’s important to take the proper steps, and take them promptly.