Condo Board Exceeding Authority
This week we wanted to highlight an interesting New York County Supreme Court decision issued by Justice Alexander M. Tisch, which analyzed, and ultimately dismissed, a Plaintiff’s claim against a Condo Board of Managers alleging that the Board exceeded its authority when it sold, by way of an easement, certain roof rights to the building.
A summary of the facts, as well as a link to, the case are set forth below.
A condominium unit owner claimed that the Board of Managers improperly sold, in the form of an easement, four thousand square feet of rights to the roof of the building. The roof is a common element of the condominium. The Supreme Court, New York County, dismissed the complaint, holding that the Plaintiff had failed to state a claim. First, the Court found that the Plaintiff lacked standing; under New York law, individual unit owners are unable to sue for injury to common elements and the Plaintiff could not maintain a derivative action on the condominium’s behalf because the complaint did not “plead with particularity the reasons why a demand upon the Board would have been futile, and therefore excused due to futility.” Second, the Board’s decision was protected under the business judgment rule. Lastly, the Court found that the Board members could not be personally liable “because they have not acted in bad faith or displayed willful misconduct” [citation omitted]. Kazoku, LLC. v. Board of Managers of the Museum Building and Condominium, 2023 N.Y. Misc. LEXIS 1322, 2023 NY Slip Op 30932, decided March 22, 2023, is posted at https://www.nycourts.gov/reporter/pdfs/2023/2023_30932.pdf
This case is another reminder of the unique protections afforded to a Condo Board when a Court is asked to review its decisions made in the ordinary course of operating the affairs of the Condominium.
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