Cooperative and Condominium chair Steve Troup and counsel Chris Tumulty recently won a significant victory for a cooperative apartment board client in New York Supreme Court involving both co-op governance and construction law issues. We were retained by the co-op to address a dangerous condition on its roof, which was created by the penthouse owners’ illegal alterations over many years to their apartment and the rooftop above.
During the course of a hard-fought litigation, we achieved several interim orders permitting the co-op to correct and remove the dangerous conditions. Last week, we received a decision granting the co-op summary judgment, awarding it recovery of its construction costs, associated professional fees and attorneys’ fees in the case. In doing so, the court determined that the penthouse owners’ conduct violated the proprietary lease and rejected a myriad of asserted defenses, including based on statute of limitations.
The court applied the “continuous wrong” doctrine to find that the alterations, which violated the Building Code and other applicable laws, constituted a breach of the defendants’ “ongoing contractual duty … to comply with all applicable laws regarding their use and occupancy.” The court also rejected the argument that the defendants were permitted to modify and alter the size and layout of the units in their discretion when they made the initial alterations as the co-op’s sponsor and holder of unsold shares. The court correctly stated that the requirement to comply with applicable laws always governed defendants’ acts, as sponsor or a shareholder, and found that the proprietary lease was binding on defendants once it was signed, even if it was signed in the capacity as a holder of unsold shares.