Co-op Board Improperly Waived Shareholder Tenant's Consent to Terrace Request

The shareholder tenant of eight co-op apartments on the first floor of a building, who didn't live in any of the units, sued landlord cooperative corporation board as well as the shareholder tenant who lived above one of his units. The upstairs shareholder had asked the board and the multi-unit owner for their consent to the construction of a terrace. The multi-unit owner refused. The co-op board then agreed to waive the consent requirement because the multi-unit owner didn't live in the apartments, his family members didn't live there, and he didn't intend to live there in the next year. The board also found that presence of the terrace would have no impact on the value of the multi-unit owner's apartments. The court dismissed the case.

The multi-unit owner appealed and won. The board's decision to dispense with the consent requirement and allow second-floor tenant to put up a terrace without the other unit owner's consent wasn't protected by the business judgment rule. The board acted in bad faith by singling out the nonresident shareholder to waive his required consent, and the board's decision didn't legitimately further any corporate purpose.

Dicker v. Glen Oaks Village Owners, Inc.: 2017 NY Slip Op 06645, 2017 WL 4275837 (App. Div. 2 Dept.; 9/27/17; Hall, JP, Roman, Cohen, Barros, JJ)