Becker’s Steven S. Anderson Featured in Co-op & Condo Case Law Tracker: Proprietary Lease Claims Survive Dismissal
WHAT HAPPENED: The shareholder claimed the co-op had engaged in a scheme to deprive her of her rights to the roof garden under the proprietary lease, further alleging that the co-op held a meeting in 2024 to a lease amendment to limit the shareholder’s rights and “exclusive use” of the roof garden.
IN COURT: The shareholder sued to overturn the board’s and co-op’s action, to enforce a settlement agreement entered into with the co-op in 2011 and to otherwise affirm her ongoing roof rights. The court found that the shareholder did not have rights under the parties’ 2011 settlement agreement to compel certain co-op work, but did find that the shareholder did allege claim under the proprietary lease for breach of agreement, and duties owed by the co-op, in, and by, among other things, holding a meeting to amend the proprietary lease and in seeking to eliminate her exclusive roof rights without her consent.
TAKEAWAY: In the world of co-ops and shareholders, legal rights are often decided by the courts against the backdrop and within the framework of the Business Judgment Rule. This case is a reminder—if one is needed—that the legal analysis starts with WHAT the proprietary lease and governing documents of the cooperative say, including the bylaws and certificate of incorporation, and even (a historically dated) offering gplan, before the Business Judgment Rule is even implicated, or deemed applicable. A second takeaway is that some shareholders have the resources to do battle with co-ops particularly those owning a penthouse co-op apartment on Fifth Avenue on the Upper East Side of Manhattan.
Steven S. Anderson’s practice is focused substantially on buildings/real estate in Manhattan and Brooklyn, but historically, has spanned all NYC boroughs, Westchester County, and Long Island. He has represented all types and sizes of properties and buildings: small, medium, large (up to 1,700 units), old, luxury construction, and suburban. Unlike many “Coop/Condo” attorneys, Mr. Anderson has 30+ years’ experience serving as both general and litigation counsel to his clients. Indeed, his litigation, in court, negotiating skills and expertise make him particularly adept at litigation avoidance—but always ready for the vicissitudes and uncertainties inherent in litigation, as necessary in his clients’ best interests.
