Private homeowners can do pretty much whatever they want in their own homes, as long as it’s not illegal and doesn’t put other people or private property at risk. These same rights are not always afforded to co-op owners, however, and in some cases, not to condo unit owners, either. Building boards and management often attempt to regulate the behavior of residents, from mandating what percentage of their floors must be carpeted to attempting to prevent people from smoking in their apartments.
This may seem crazy to those who don't understand how anybody can have control over what happens in the privacy of another person's home—after all, isn’t this the Land of the Free? Well, yes – but.
Far-reaching rules and regulations in co-ops and condos have had varying levels of success over the years in court, with shareholder/owners generally winning out over overzealous boards when rules result in controversy.
To understand the difference between the authority of a co-op board versus a condo board, it's important to understand the difference between co-op and condo ownership itself. Patricia Kantor, a partner in the law firm of Edwards Wildman Palmer, says that since shareholders in a co-op do not own their apartments outright, but rather own shares in a cooperative corporation, the relationship between residents and board resembles somewhat that of a landlord and a tenant—though with some major differences, of course.
“Like any landlord, the co-op board is empowered to oversee the operation of the entire building, which includes the individual apartments,” says Kantor. “Assuming a co-op board is not arbitrary, self-dealing or breaking any laws, and believes it is acting in the best interest of the co-op as a whole, the proprietary lease, bylaws and applicable law gives a co-op board pretty broad authority to dictate what shareholders may do in their apartments.”
Meanwhile, the bylaws of most condominiums empower the board to govern the “affairs of the condominium,” which, in broad strokes, includes financial matters, repair and maintenance of common elements and certain quality of life-related issues intended to ensure the smooth operation of the building and usually embodied in the house rules. “Accordingly, most boards are not authorized to dictate what goes on inside an owner’s unit unless it affects the affairs of the condominium,” Kantor says.
Kenneth Jacobs, a partner with the law firm of Smith Buss & Jacobs, LLP in Yonkers, says there’s a myth about what condo owners can do. “When you live in a multifamily building in New York, you have to respect your neighbors, but plenty of condo unit owners come in and say ‘I can have pets, I can make noise, it’s my home.’ They’re wrong,” he says. “The condo board has the right to establish regulations how your conduct affects your neighbors. These are in the condo’s [house rules and bylaws].”
Bernd Allen, a senior partner with the Manhattan-based law firm Allen, Morris, Troisi & Simon LLP, adds that most co-ops operate under the Business Judgment Rule, which in its simplest definition provides that a board action is protected from legal challenge if there is a good business justification for the decision, and it isn’t fraudulent or an abuse of discretion. When the business judgment rule is applied, the burden of proof to establish the impropriety of the decision is on those challenging it.
“If a co-op board stays within [the Business Judgment Rule], they can basically do anything they want,” Allen says. “The courts have determined that as long as it doesn’t interfere with the personal rights of a shareholder, it’s allowed but that has been stretched to the ‘nth degree.”
An example of this is a client Allen had in a co-op on Sutton Place who had a large terrace outside his unit. The co-op board decided that they wanted to do facade work and they stored all the materials on his terrace; he was without a terrace for three years, and there was nothing he could do about it. “You couldn’t do that with a condo because you own your terrace and they can’t take it away from you—even temporarily—without your consent,” Allen says. “The thing is, one person’s fairness is another person’s unreasonableness.”
You Can’t Control Everything
Bryan Mazzola, a partner with the Manhattan law firm of Cantor Epstein & Mazzola, LLP, says that boards are limited in what they can make a resident do or not do, and it must be in good faith and in the best interest of the building.
“They cannot turn around and single any shareholder out,” he says. “For example, the board president might have issues with someone so they make that person stop doing something or another. But you can’t target one person for something and not apply the same rules for the rest of the building.”
Mazzola knows of a case where a professional piano player in a co-op was singled out for noise because a neighbor didn’t want to hear his playing throughout the day. Even though there was a rule in place about noise after 11, nothing in the rules prevented this player from practicing during daylight hours. “The board asked him to stop or come up with a plan to reduce the noise,” he says. “This was affecting this resident’s livelihood and he fought because it wasn’t reasonable and was singling him out.”
There are also discrimination laws that come into effect and may contradict a rule or prohibition that a board attempts to enforce. “If you have a rule that says no dogs are allowed, but someone needs a support animal, you have to allow the pet even if the rule says otherwise,” Mazzola says.
Jacobs was involved in a case where some older residents at a co-op were complaining that kids were using the pool at night and there wasn’t room for them to do their laps. The dispute resulted in the co-op board passing a rule that said no children were allowed in the pool after 8 p.m. However, “This was discriminating against residents on the basis of family status—you can’t distinguish between families with children and those without,” Jacobs says. “Instead, what they needed to do was pass a rule saying the pool was reserved for laps only after 8 p.m. That solved the problem.”
The one rule Jacobs has for all his co-op board and condo board clients: If you’re going to be restricting people’s behavior in any way, run it by him first, or you may get blindsided.
Wall to Wall
Perhaps the biggest difference between what a co-op board can control and a condo board can’t concerns making changes to the actual dwelling.
“In a co-op, you need to submit an alteration agreement for any changes you want to make,” Mazzola says. “In a condo, boards don’t have the right to stop alterations as long as they aren’t structural.”
Jacobs says that in a co-op, you own everything inside the walls—but not the walls themselves, which is why you need permission if you want to paint. In a condo, you own the walls, so you can do what you want—but you better make sure that you don’t alter the pipes or electricity and affect anything behind the walls of other units.
Some co-op residents may get upset if they aren’t allowed to put washers and dryers in their units, but often there is sound reasoning behind the decision. The pipes in the building may be old, and it could compromise the integrity of the building’s infrastructure.
Fight For Your Rights
Steve Goldman, a partner in the real estate department at the law firm of Kurzman Eisenberg Corbin & Lever, LLP in Manhattan says smoke, noise and dog issues are increasing the friction between resident owners and condo associations and co-op boards, and he has been involved in many such disputes of late. “While noise issues can be usually worked out, smoking is another matter; It is not easy,” he says, but points out that there are ways to help co-op and condo associations prevail.
Action for a co-op starts with sending a notice of default or termination of the lease and then a summary proceeding can happen really quickly and the court will decide if the unit owner breached its lease.
“In contrast, there are no summary proceedings or landlord/tenant court for condo boards,” Jacobs says. “A condo board has two choices for a breach of non-monetary covenant; they can seek injunctive relief (unless something in the bylaws calls for some other resolution and most bylaws don’t have that) or they can go into the state Supreme Court and ask for an injunction.”
It’s a process that’s very cumbersome, very expensive and very frustrating. While other states have alternative dispute resolution arbitration for condos, New York does not, which makes enforcement that much harder.
When you live in a co-op, you do give up certain rights that you wouldn’t have to sacrifice if you were an owner of a condo. “Take noise for instance. If someone below you in a co-op complains that you are making too much noise, a co-op board has the power to make you install carpeting throughout,” Allen says. “It’s very difficult for a condo to do that—in fact, it’s almost impossible.”
According to Mazzola, some condo boards have in recent years attempted to exercise authority over individual unit owners similar to that exercised by co-op boards. Their success has been mixed—and still, there is a difference between the two models.
“Noise is the most common example,” he says. “In a co-op, the board has the responsibility to address that problem but in a condo, there is not the landlord/tenant relationship so the board may be more willing to let the owners work out the problem themselves. They can regulate behavior if it’s something that will really affect neighbors.”
Not to say that living in a condo affords you the right to do anything you want, there’s still rules you must follow and the board can intervene and moderate one’s behavior if they are doing something detrimental to the condo as a whole.
“If the governing documents say there’s no smoking allowed and someone in the condo is smoking, the board can take action and sue that person,” Allen says. “In a co-op, you would notify the offending shareholder and if it continues, you would fine them and it could go as far as canceling a lease. In a condo, you would have to take legal action.”
Whether you're a shareholder or a unit owner, it pays to know what your board can compel you to do (or not do) and what's out of bounds, every bit as much as it pays to know your rights during a traffic stop. Knowing what's okay and what's not, as well as what you signed on for when you purchased your unit, can help dispel confusion and reduce conflict.
Keith Loria is a freelance writer and a frequent contributor to The Cooperator.