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New Legal Risks for Co-op Boards – NYC

A recent New York State appellate court decision could have ramifications for co-op and condo board members. The decision was handed down making it easier for individual board members to be litigated as individuals by unhappy apartment applicants, renters and owners.

The unanimous verdict was reached on July 3rd by five judges in the Appellate Division in Manhattan. A discrimination case was brought forth by a hedge fund manager against the board of a co-op building near Central Park at West 72nd St.

Alphonse Fletcher Jr. sued the building on the grounds of discrimination after he was turned down for the purchase of a second apartment in the same building. The board claimed Mr. Fletcher’s income was not sufficient for the second residence. The board asked for a dismissal of charges, but the court allowed claims against individual board members to carry forth on the path to trial.

Although most buildings in New York City carry insurance that typically pays for legal fees for board members, this insurance may not cover punitive damages or those related to bias discrimination and “bad faith” acts such as personal retaliation.

The decision, FLETCHER v. DAKOTA., INC NY Slip Op 05338 is available here

This article is  courtesy of CB Title Group, LLC. This article is for informational purposes only and is not intended to provide legal advice, but rather to provide insight into legal developments and issues that may be useful to our clients and friends. In no circumstance is this article intended to be a full treatment of the above subject matter. Reader is advised to obtain additional information as noted.