Co-op Boards May Now Have a Way to Get Rid of Tenants Who Are Nuisances

A significant—and perhaps not uncommon—problem for co-op boards can come in the form of a disruptive unit owner or tenant. Perhaps the resident has not done any “one” thing that appears severe enough on its own to take action against the tenant, but instead has done a series of nuisances over a certain period of time.

Jump to a Topic

How Can Co-op Boards Get Rid of Tenants Who Are Nuisances?

Until recently, the legal answer may have been nothing. However, a recent case in New York state court, Haimovici v. Castle Village Owners Corp., Supreme Court, New York County (August 2022), has perhaps outlined a legal pathway for a co-op board to terminate a proprietary lease due to nuisance-like behavior over a longer period of time.

More specifically, the state court held that the business judgment rule can serve as protection over a co-op board’s decision to terminate a tenant’s proprietary lease after a series of objectionable behavior by the tenant where the board gave sufficient warning to the tenant.

In Haimovici v. Castle Village Owners Corp., the tenant plaintiff was seeking a preliminary injunction after the defendant’s co-op board terminated his proprietary lease. The termination came after a series of reported conduct by the tenant, including, on numerous occasions, using profanities toward residents and near children, taking a photo of a three-year-old child when the child had not been wearing pants, harassing residents and building staff, yelling at pregnant women, and threatening residents that he was restraining himself from “break[ing] their heads.”

The court held that the business judgment rule—the common law rule that states that the court will defer to business leadership, including co-op boards, decisions so long as they are made “for the purpose of the cooperative, within the scope of its authority, and in good faith.”

In this case, the court emphasized (and rebutted the defendant’s contention that the board was acting in a retaliatory manner) that the co-op board offered a sufficient warning to the defendant. The co-op board warned and sent letters to the tenant that his behavior was disruptive and stated that should he fail to change his conduct, action may be taken; the board also held a special meeting in which the board voted to terminate the lease—one where the plaintiff was able to present his case to the board.

The combination of a repeated and documented series of conduct by the tenant and the sufficient warning provided to the tenant by the board led the court to follow the business judgment rule and not second guess the co-op board’s decision to terminate the proprietary lease.

The Takeaway for New York City Co-Op Boards

A long and documented history of objectionable behavior by a tenant leaseholder combined with the board’s sufficient warning and time (such that the tenant may change her behavior but does not) is likely strong grounds to terminate a proprietary lease—and afterward, be protected in state court by the business judgment rule.

Contact Our New York City Condo and Co-Op Lawyer at Woods Lonergan PLLC

If you have additional questions about these types of disputes or the impact of this case, reach out to Woods Lonergan and speak to one of our attorneys who specializes in co-op and condo matters.

Related Co-op Readings:

Find Our Office Here:

About the Author

James F. Woods is Founder and Managing Partner of Woods Lonergan. He has tried more than 60 jury cases to verdict as first-chair trial counsel, beginning his career as a prosecutor, and resolves complex commercial and real estate disputes valued at $1M to $100M+ for business owners, principals, and middle-market enterprises across the New York metro area. He appears regularly in the New York Commercial Division and in the federal district courts for the Southern and Eastern Districts of New York, and has argued appeals in the Appellate Division and the Second Circuit.

His practice covers complex commercial litigation, real estate and asset litigation, partnership and shareholder disputes, fiduciary breach and corporate fraud, and cooperative and condominium governance. He counsels corporate and cooperative boards throughout New York.

The Legal 500 United States ranks James in its New York Elite rankings for Commercial Disputes, and his peers have recognized him with Martindale-Hubbell's AV Preeminent rating. Woods Lonergan is ranked in Chambers USA: Spotlight New York for Litigation: General Commercial and Real Estate. James serves on the Commercial & Business Litigation Committee and the Business Torts & Unfair Competition Committee of the American Bar Association Section of Litigation, and on the Cooperative & Condominium Law Committee of the New York City Bar Association. His commentary on New York commercial and real estate disputes has been quoted in The New York Times, The Washington Post, Bloomberg Law, Law360, and Forbes.