How should a co-op or condo handle a neighbor who is making everyone's life miserable?
When it comes to giving a troublesome neighbor the boot, "the rules are remarkably different depending on whether the building is a co-op or a condo," says Steven Wagner, a co-op and condo attorney with Wagner Berkow LLP and a longtime board member of his own 420-unit Manhattan co-op.
Below, Wagner breaks down your options for handling a problem resident in both kinds of buildings:
WHAT TO DO IF YOU'RE IN A CONDO:
Options for cracking down on a wayward neighbor are comparatively limited in condos versus co-ops, and in this situation, a board's only real tool is to leverage fines against the person in question. (Unlike co-ops, where shareholders are technically tenants, condo owners own their units outright, and therefore can't be evicted.)
"Typically in a condo, the building issues fines based on language in bylaws and the house rules," says Wagner. "Almost all condos have rules concerning the schedule of fines. And on the one hand, they generally do deter objectionable conduct. But on the other hand, you're really selling the right to violate the rules. Someone could decide, 'I love smoking in my apartment, let them fine me.'"
If fines don't solve the problem, the next step is to take the person to court for what's known as an action for declaratory judgment, followed by an injunction. "You ask for the court to declare that the condo bylaws and house rules are binding and authorize you to enforce them in the face of objectionable conduct, and ask the court to enjoin that conduct permanently," says Wagner. "Then, if the person continues to violate the rules, you can take him or her back to the judge who issued the order, and they would face that judge for contempt of court."
If the violation is serious enough, the court even has the power to send the wayward resident to jail. "It's not common, but I've had it done," says Wagner. "Believe me, you don't want to be standing in front of a judge whose judgment you just violated."
Unfortunately, this type of legal action involves a trip to state supreme court, and is more difficult and costly than the options available to co-ops. And barring a prison sentence, your only other option if the person refuses to pay (or end the bad behavior) is to move for foreclosure, which Wagner points out, can take years itself.
However, he says, "There's a lot of money at stake in these things between attorney's fees and the fines themselves, and people generally come to their senses at some point."
WHAT TO DO IF YOU'RE IN A CO-OP:
In a co-op building, the board has more avenues for dealing with bad neighbors, including the declaratory judgment and injunction process detailed above. "The nice thing about this is that you're getting a permanent injunction, but you're not trying to take someone's home away," says Wagner. "For example, if the person is elderly, or somehow mentally or physically infirm," he explains, this is a means of seriously addressing the problem without moving to evict.
Another example: a resident in a building who was illegally running a massage and acupuncture business out of their apartment. "The person had set up their apartment to treat patients, which was in violation of the zoning, and created issues surrounding medical waste," says Wagner. "So we got a permanent injunction. We weren't necessarily saying you have to leave the building, we just didn't want them doing illegal things anymore."
However, co-ops also have the cheaper, more efficient option of taking the issue to housing court, and if necessary, terminating the shareholder's lease. "The rights of a co-op are much stronger than the rights of a condo," says Wagner.
The procedure for this is what's known as a "Pullman" action, named after a precedent-setting case wherein a co-op moved to kick out a shareholder who was systematically harassing the neighbors. (More details on the process here.) Here, a board is generally allowed to terminate the lease of a shareholder who's violating the rules, provided the problem is sufficiently serious, and the shareholder is given appropriate 30 days' notice.
"If the board terminates the lease for objectionable conduct, as it has the right to, typically, you then go to housing court for holdover proceedings," says Wagner. "If the decision to terminate has been made in good faith, in the best interest of the co-op, without any violations of fiduciary responsibilities, and no motivation based on personal animosity, the court will not interfere." Instead, the court's role here is generally to ensure that the person being evicted has been given appropriate due process, including 30 days' notice, and an opportunity to voice their side of the issue.
"Let's say you're always smoking in your apartment in a non-smoking building, the board sends you a letter about it, and you continue to smoke," says Wagner. "Then the board has the right and power to terminate your tenancy, based on the language laid out in the proprietary lease." At that point, you'd be taken to housing court, and likely kicked out of the building.
One scenario in which a court might strike down the board's attempt to terminate: "We had one case where the attorney for the would-be evictee had tried to object, and the board essentially told him to sit down and shut up," says Wagner. "And that was enough of a deprivation of due process rights [that the court could deny the building's motion to evict]." To prevent this kind of technical snag, Wagner recommends that the board (and its attorneys) pay meticulous attention to process. "When I do these, I run them like a mini-trial, with a stenographer, and people presenting evidence," says Wagner. "That way, no one can say that they didn't get their due process rights."
Instead of a full trip to court, though, it's common for buildings and their wayward residents to come to some sort of mutually acceptable arrangement. "Very often these cases get settled, because people don't want to lose their homes through housing court," says Wagner. "So we negotiate time to move out and to fix up the apartment for a sale."
"Frequently, we have the objectionable shareholder literally move out," Wagner adds. "So they're faced with paying some maintenance charges while they're not living there, but at least they'll be able to sell the apartment at an arm's length transaction, instead of having it sold at auction after they're evicted, which will invariably result in a lower sale price."
New York City real estate attorney Steven Wagner is a founding partner of Wagner, Berkow, & Brandt, with more than 30 years of experience representing co-ops, condos, as well as individual owners and shareholders. To submit a question for this column, click here. To arrange a free 15-minute telephone consultation, send Steve an email or call 646-780-7272.
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