Default Established. Fees Awarded. Cooperative Protected.
Schneider Buchel LLP represented a cooperative corporation in connection with a holdover preceding arising from the respondent’s failure to comply with the terms of the proprietary lease. The matter involved unauthorized occupancy and the respondent’s failure to properly apply for and obtain approval for the transfer of shares and assignment of the lease to herself following the death of the original shareholder.
Many people think that the direction of a Will which gives a Co-op apartment to a person in the Will must be complied with by the Co-op board. This is simply not the case and gets a lot of people into trouble when they occupy an apartment after the death of a shareholder.
In this case, despite inheriting an interest in the apartment, the respondent never completed the required transfer process or obtained board approval, as required under the Co-op’s governing documents. Not only did the person who was inheriting the apartment fail to obtain the Co-op's consent for that person to acquire the apartment, but she also permitted an unauthorized occupant to reside in the apartment in violation of the proprietary lease. As a result, the Co-op commenced a holdover proceeding in landlord-tenant court to enforce its rights under the proprietary lease.
Following the commencement of the court proceeding, the estate representative decided to sell the apartment. A request was made to our office for a letter indicating the amounts owed to the Co-op. Following receipt of same, the attorney for the estate representative disputed the same and asked the court to schedule a hearing to determine whether the co-op was entitled to recover attorneys’ fees. This turned out to be a big mistake for the attorney and his client.
The Court agreed that a default had occurred due to the unauthorized occupancy and upheld the cooperative’s right to recover attorneys’ fees and disbursements. This resulted in the Co-op receiving an award of more than $50,000 in legal fees; Significantly, testimony was considered where it was highlighted that a significant portion of the legal fees incurred by the Co-op were due to the motion (requested court relief) made by the estate representative and attorney including seeking sanctions. As a result, the cooperative was able to enforce its governing documents, address the unauthorized occupancy, and recover substantial legal fees incurred in the process - ensuring that the financial burden of enforcement did not fall on the cooperative or its shareholders.
By identifying clear violations of the proprietary lease, effectively presenting evidence at the hearing, and enforcing the cooperative’s contractual rights, Schneider Buchel LLP secured a strong result for its client.
