Category Archives: Condominiums

The Right of First Refusal: A Condominium Minefield

Real Property Law Section 339-v(2)(a) permits condominiums, in their by-laws, to include “provisions governing the alienation, conveyance, sale, leasing, purchase, ownership and occupancy of units[.]”.

Based thereon, most residential and commercial condominiums include, in their by-laws, a so-called “right of first refusal” – pursuant to which an owner, before selling a unit, must offer the apartment to the condominium or to a contiguous owner on the same terms and conditions as the contemplated third party transaction.

It is quite rare and unusual for a condominium to, in fact, exercise the right.  However, two recent decisions by the Appellate Division, First Department, are instructive as to the issues that may arise when a condominium elects to do so.

Bittens v. Board of Mgrs. of the Octavia Condominium, 2013 NY Slip Op 33218(U) (December 17, 2013) and 2015 NY Slip Op 07540 (October 15, 2015) Continue reading

Marbury Corners: A Legal “Cond-Opera” in Three Acts

Prologue
The Board of Managers of the Marbury Club Condominium (the “Board of Managers” or the “Board”) [the “Condominium”], filed suit against Marbury Corners LLC (the “Sponsor” or “MC LLC”), Ginsberg Holdings LLC, Martin Ginsburg (“Ginsburg”), William Riehl, Susan Newman, Dan Mulvey and Rob Lodes (collectively, “Defendants”).

The action arose out of the conduct of Sponsor (the developer under a residential condominium conversion plan, its manager and principal), together with the sponsor-appointed and controlled initial board of managers of the Condominium, in signing a $2.2 million note to Sponsor (the “Promissory Note” or the “Note”)  secured by an assignment of, and a security interest in, common charges collected by the Board from unit owners.

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Second Department Affirms Invalidation of Promissory Note From Sponsor-Controlled Board of Managers to the Sponsor of a Residential Condominium Conversion Plan

(Victor M. Metsch is a Senior Litigation/ADR partner at Hartman & Craven LLP.  He can be reached at vmetsch@hartmancraven.com.  He maintains a website at www.LegalVictor.net and can be found on Twitter at @LegalVictor1).

This article was originally published on Law.com

On August 22, 2012, the Second Department issued a clear and concise Decision and Order in Board of Managers of Marbury Club Condominium v. Marbury Corners, LLC, 2012 NY Slip Op. 06008.

The first paragraph described the appeal:

In an action, inter alia, for a judgment declaring that a certain promissory note and related documents are illegal, invalid, and/or otherwise unenforceable, the defendants appeal, as limited by their brief, from so much of an order and judgment (one paper) of the Supreme Court, Westchester County (Scheinkman, J.), dated September 22, 2010, as granted those branches of the plaintiff’s motion which were for summary judgment declaring that the subject promissory note and related documents are illegal, invalid, and/or otherwise unenforceable and on the cause of action for injunctive relief, declared that the subject promissory note and related documents are illegal, invalid, and/or otherwise unenforceable, and awarded the plaintiff certain injunctive relief.

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