Legal Legends: True Stories from New York City’s Co-ops & Condos
By: Keith Loria
June, 2012
They say there are eight million stories in the naked city, and when you’re an attorney working for a co-op or condo in New York, you may find that some of the best of them are happening to you.
While some may think that handling the legal issues of the Big Apple’s co-ops, condos and HOA communities means just being bogged down with boring paperwork dealing with bylaws, rules and regulations, truth is the job can often resemble something out of a Judd Apatow movie. Attorneys see and litigate it all—from the dotty neighbor lady, who starts rearing goats in her backyard to the suspected mobster who may or may not be running a house of ill repute out of his condo apartment.
Attorney Jeffrey Reich of the Manhattan-based law firm of Wolf Haldenstein Adler Freeman & Herz, LLP, says that in order to counsel boards of New York City co-ops and condos effectively, one has to be part attorney, part therapist and part law enforcement agent.
He has seen his share of memorable incidents, whether it was the convicted felon trying to move into one of his buildings—carrying a gun to boot—or needing to rent apartments in a building across the street to take photos of unlawful tenants. It’s all part of the job for him.
While Reich has had his fill of typical legal cases like condo conversions, lease negotiations, and routine board-shareholder matters, he adds that “we have had an inordinate number of situations where people are not stable. Whether they roam the hallways naked, smear their feces on the wall, or we are dealing with shut-in cases, there is a lot that is involved.”
The War of the Roses
Attorney Bruce Cholst, a partner with Manhattan’s Rosen Livingston & Cholst LLP, once oversaw a situation where two shareholders in a co-op were fighting over the rights to use a commonly shared six-by-six-foot vestibule.
“They couldn’t reach an agreement between themselves for shared use, so the board intervened and enacted a house rule regulating use [of all the building’s vestibules.] Then the other shareholders sued the co-op—and each other—and the case lasted just under six years,” he says. “There were 18 depositions, a three-week trial and an appeal. Ultimately, the co-op’s house rule was upheld in all but one instance. Literally hundreds of thousands of dollars were spent by the shareholders and the co-op’s insurance.” All over spaces smaller than a broom closet.
Nightmare Neighbors
Attorney Adam Leitman Bailey of Adam Leitman Bailey, PC has seen his share of problems associated with neighbors acting, well, not-so neighborly.
“One owner spent his life trying to ruin my clients—his neighbors,” Bailey says. “He left dead animals outside their door, and would terrorize the neighbors with noises, and a number of other horrible things.” Bad as it was to live with, this unbalanced individual’s antics also hurt when other owners in the building attempted to sell, as buyers would often pull out when they heard about the issue in the minutes of meetings.
On another occasion, Bailey was successful in evicting a longtime resident, who had been creating a nuisance for his neighbors for over 40 years thanks to his unseemly housekeeping practices. The man’s apartment looked like something out of the Hoarders TV series, with piles of clothing and debris everywhere and vermin hiding throughout.
Between the horrible odor and hundreds of roaches escaping into neighboring units and common areas, the other residents wanted him gone. The problem was that the messy man was also a seasoned attorney, and the housing court system does tend to favor long-term tenants. Ultimately the man was evicted, but Bailey says it was an uphill battle all the way.
In a less distasteful—but certainly no less unusual—situation, a landlord represented by Bailey’s firm began an eviction case against a delinquent tenant. When he won, the landlord received a money judgment in the amount of rent owed.
Problem was, the tenant had no discoverable assets—that is, until the firm discovered that the tenant owned the suit worn by Beatle musician John Lennon on the cover of the famous Abbey Road album, and planned to sell it. Bailey took action to recover funds from the sale in order to pay the tenant’s debt to the landlord.
Murder Inc.
Reich tells one tale about a woman tenant in a very nice Upper East Side condo who called her doorman claiming that if he let her husband up to the apartment, she was going to kill him. (The husband, that is—not the doorman.)
“The woman had found evidence that her husband was having an affair and the managing agent called me in a panic because the doorman didn’t know what to do,” Reich says. “What made it worse is that the apartment was actually owned by the parents of the husband. I said we should certainly do everything we can to warn the gentleman before he walked into what could be an ambush, but we are not the police, and we have no right to keep him from his home.”
To Tell the Truth
Attorney David Byrne of the law firm of Herrick-Feinstein LLP, which has offices in New York City and in New Jersey, has dealt with all kinds of bizarre and unexpected legal situations, some that seem torn straight out of one of Denny Crane’s case logs from Boston Legal.
One recent case concerned a processor who lied about serving someone—the whole case was thrown out because of his dishonesty. “The condo owner spent a lot of money relying on this particular affidavit, and the processor swore under oath that he served the defendant—but the defendant claimed he never was served,” Byrne says. “The condo owner brought witnesses and proved that the processor lied under oath.”
The processor had claimed that he spoke to a person and a neighbor on the premises, but the physical description he gave for both was totally off and bore no resemblance to the actual people. It was eventually discovered that the processor had a criminal record and faced other discrepancies, and that was the end of the case.
Speaking of dishonesty, Reich says he once caught a lying woman dead to rights thanks to a well-placed camera in a nearby elevator.
“We had a unit owner in a condo on the Upper East Side who complained about elevator noise and other things, and was very difficult,” he says. “We needed to get into the apartment [to verify the noise situation], but when the super came around with the contractor, the woman was very agitated.”
Even though the super and contractor had a confirmed appointment, the woman refused to allow them in. She was told she would have to pay any additional costs for having the contractor make a second trip to the building. “She followed him into the hall, into the service elevator, and was berating him” Reich says. “And then she started hitting the super!”
When confronted about her behavior, the woman denied everything and threatened to file a complaint and a police report. Reich’s firm was ready with the security camera footage of what really happened however, and made it clear that they would bring an assault claim against her. “That was enough to get her to behave for the rest of her stay in the building,” Reich says.
Good Advice
According to Cholst, ignoring the advice of one’s legal counsel can lead to problems and expenses that far outstrip whatever fees the attorney is charging. As an example, he cites the experience of a notable client of his who had built his fortune in the Garment District and wanted desperately to have a Fifth Avenue address.
“He had no college degree or the social pedigree that Fifth Avenue boards typically require, but he wanted the status,” Cholst says. “He engaged both me and a broker on an hourly fee basis to find him a building that would consider his application.”
Cholst eventually found one willing to consider his client, and his bid was accepted. As Cholst did his due diligence on the building, he learned that the house rules for the building ran a staggering 300 pages. He knew that his client would never be able to conform—and what’s more, that he would be miserable living there.
“Knowing my client to be the gadfly that he is, I told him not to move in or he would be unhappy,” Cholst says. “I told him, ‘You don’t like following rules and regulations, and they want regulate everything in your life—right down to your attire in the common areas. He ignored my advice and went to contract and closed on the unit.”
Within 60 days, the client was being served with a notice of termination for flouting the building’s rules, and after six months, he was forced to sell at a significant loss.
It doesn’t always go badly, of course. Cholst was also instrumental in helping a Suffolk County co-op that couldn’t attract a quorum for nearly 15 years. The same board remained in power, and there was complete apathy among the shareholders.
“Prior to the first meeting I attended, I suggested holding a maintenance raffle with a maintenance abatement being the prize,” Cholst recalls. “To qualify, you had to at least turn in a proxy at the meeting. It was a spectacular success with 75 percent response rate. We got lease amendments through and a board legitimately elected.”
To Be Continued
Every day, the city’s finest co-op and condo lawyers are faced with unusual and unique challenges that make working with a condo or co-op more than just your average lawyering experience.
“We have definitely seen it all and then-some,” Reich says. “You could probably fill a book with everything that we have experienced—and the job is ripe for more interesting stories to come.”