Frisch v. Bellmarc Management, Inc.

190 A.D.2d 383, 597 N.Y.S.2d 962, 1993 N.Y. App. Div. LEXIS 5096
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMay 20, 1993
StatusPublished
Cited by50 cases

This text of 190 A.D.2d 383 (Frisch v. Bellmarc Management, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frisch v. Bellmarc Management, Inc., 190 A.D.2d 383, 597 N.Y.S.2d 962, 1993 N.Y. App. Div. LEXIS 5096 (N.Y. Ct. App. 1993).

Opinion

OPINION OF THE COURT

Ross, J.

The only issue presented on this appeal is whether Real Property Law § 235-b, the statutory warranty of habitability, is applicable to the relationship between the board of managers of a condominium and an individual unit owner. It is clear that tenant-shareholders in a cooperative can rely on section [385]*385235-b in actions against the cooperative corporation (see generally, Department of Hous. Preservation & Dev. v Sartor, 109 AD2d 665; also see, Caspi v Madison 79 Assocs., 85 AD2d 583; Suarez v Rivercross Tenants’ Corp., 107 Misc 2d 135). However, we are informed that this is the first time the issue of whether the statutory warranty of habitability applies as between a unit owner and a board of managers has been considered by an appellate Court in this State. Since condominium ownership is a form of fee ownership of property, and not a leasehold interest involving a landlord-tenant relationship, we hold that Real Property Law § 235-b does not apply to condominiums and, accordingly, reverse the order of Supreme Court, New York County, insofar as appealed from.

The facts of this case are not disputed. Plaintiff is the owner of Unit 6B at the Cooper Square Condominium located at 63-69 Cooper Square, in Manhattan, having purchased the unit in March of 1986. The condominium contains 36 residential units and one commercial unit. The plaintiff does not reside in the unit and has leased the unit to residential tenants since its purchase.

In the fall of 1988 the plaintiff informed the defendant-appellant Board of Managers that his tenant had complained of water leaks in the unit. Other unit owners also complained of leakage problems. Consequently, the defendant-appellant retained engineers in order to locate the source of the leaks and then had substantial work done to remedy the problems. The main roof of the building was replaced and the sixth-floor terraces of the building were repaired. However, while the leaks were abated somewhat, the water intrusion problems in some of the units were not completely remedied. According to the defendant>appellant, the leaks and other problems with the heating and water pipes in the building were traced to defective work done by the sponsor. Moreover, the defendant-appellant maintains that the water problems that remain are related to leaks on the terraces and balconies of several units.

It is noteworthy that the by-laws of the condominium provide that maintenance of and repairs to any unit and any common elements exclusive to the unit, whether structural or nonstructural, shall be made by the owner of the unit. The bylaws further provide that the terraces and balconies to which a unit has sole access as well as exterior windows, glass doors and doors opening to common elements are for the exclusive use of the unit owner and are to be maintained and repaired by the owner at his sole cost and expense.

[386]*386The plaintiff-respondent began withholding common charges and assessments in or about November of 1988. In May of 1990 plaintiff-respondent commenced this action alleging causes of action against the defendant-appellant Board of Managers, the sponsor and its principals, the architects, the roofing contractors and the managing agents. While the major part of the complaint alleges claims based on construction deficiencies in the building, plaintiff’s eighth cause of action alleges a claim for negligence and breach of fiduciary duty for failure to make the proper repairs to stop the leaks and water damage, against the Board of Managers and Bellmarc Management, Inc., the managing agent for the condominium. The defendant-appellant Board of Managers answered, asserted various affirmative defenses and counterclaimed for, inter alia, payment of the arrears in common charges and assessments with interest, pendente lite, as well as for costs and attorneys’ fees.

On January 6, 1992, the defendant-appellant moved by order to show cause for partial summary judgment on its first counterclaim seeking arrears in common charges and assessments together with other sums accruing until the determination of the motion, payment of assessments and common charges pendente lite, all costs and expenses including attorneys’ fees and, for summary judgment dismissing the complaint, as then amended, as against the individual Board members. On the return date of .the motion, February 24, 1992, the matter was referred to Justice Carol Arber. However, on that date the parties entered into a "So Ordered” stipulation in which the plaintiff-respondent agreed to place all common charges and other assessments and charges due through February 15, 1992, which amounted to $19,810.68, in an escrow account with his attorney. It was also agreed that the plaintiff-respondent would deposit in escrow all charges assessed by the Board during the pendency of the motion with all sums to remain in escrow pending a further order of the court.

The hearing court thereafter denied the defendant-appellant’s motion for partial summary judgment on its counterclaim for, inter alia, common charges and assessments. The IAS Court held that a landlord/tenant relationship exists between the individual condominium unit owner and the condominium board by virtue of the condominium agreement. The court equated condominium ownership with ownership of a cooperative and held that the warranty of habitability of [387]*387Real Property Law § 235-b is applicable to condominiums and directed that there be a hearing to determine whether the warranty of habitability had been breached by the defendant Board of Managers.

The condominium form of ownership is based on a bipartite scheme whereby participants own space purchased by them, as well as an undivided interest in the land, structures, and facilities held in common with all other owners in fee. Each individually owned space is designated as a "unit”. Usually there is an agreement among the unit owners regulating the administration and maintenance of the property (see generally, All Seasons Resorts v Abrams, 68 NY2d 81, 91; Goldsmith, Practice Commentaries, McKinney’s Cons Laws of NY, Book 49, Real Property Law art 9-B [Condominium Act]). "A person having a cooperative interest in real estate (e.g., a tenant-shareholder in a cooperative apartment) typically owns stock in a cooperative corporation and has a 'proprietary’ leasehold granted by the corporation [citations omitted]” (All Seasons Resorts v Abrams, supra, at 90). The cooperative corporation is the sole owner of the land, structures and facilities, while the individual shareholder through the proprietary lease receives the right to occupy the space in the premises to which his or her shares are allocated (All Seasons Resorts v Abrams, supra; Chemical Bank v 635 Park Ave. Corp., 155 Misc 2d 433; 4 Powell, Real Property § 633.11).

While some superficial aspects of condominium and cooperative ownership are similar (e.g., the payment of monthly charges for the maintenance of common areas), the two forms of interest in real property are fundamentally different by design and as a matter of law. This is demonstrated by the case law and commentaries cited supra, and by article 9-B of the Real Property Law which is entitled the Condominium Act (Real Property Law §§ 339-d — 339-ii).

Real Property Law § 339-g provides that "[e]ach unit, together with its common interest, shall for all purposes constitute real property”.

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Bluebook (online)
190 A.D.2d 383, 597 N.Y.S.2d 962, 1993 N.Y. App. Div. LEXIS 5096, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frisch-v-bellmarc-management-inc-nyappdiv-1993.