Condominium and Cooperative Apartment Law / Litigation
Often times, unit owners can be difficult and some even break the rules. We represent Condominiums and Cooperatives regarding enforcement of the terms of the by-laws and proprietary leases, respectfully. Usually, the governing documents provide for a unit owner to reimburse the Condo or Coop if it is successful in enforcing the rules and compelling payment of the various dues and maintenance fees and assessments.
CONDOMINIUM FORECLOSURE: A Condomium Unit, like a single family residence, is “real property.” When unit owners continuously refuse to pay their rightful share of dues, the amounts owed can climb into the tens of thousands of dollars. Obviously, at this point the Condo has to take legal action to recoup that money, which typically means filing a lien and then filing a foreclosure action. An action to foreclose a lien is similar to a bank’s foreclosure of a mortgage on somebody’s home who has not made their mortgage payments but may have more complex issues. Once the
foreclosure action has been successfully completed, the unit is typically sold at a public auction, and the proceeds from the sale are then used to satisfy any first mortgage, and then the Condo’s lien. Ultimately, the unit owner is dispossessed of the unit. Due to the statutory lien priorities that apply to Condominiums, retaining a firm with knowledge and experience in this area is critical. Our firm has experience in the most complex of condominium foreclosure matters.
COOPERATIVE FORECLOSURE: Unlike a condominium, a cooperative unit is not real property. Ownership of a cooperative unit is held by ownership of shares in the cooperative corporation. The shares are considered “attributable” to a particular apartment, and a “proprietary lease” is issued by the cooperative, as landlord, and shareholder, as tenant. A judicially sanctioned sale of the shares of a cooperative to satisfy a lien (the equivalent of a foreclosure of real property) is governed by Article 9 of the Uniform Commercial Code. In essence, the coop sells the shareholder’s shares at a public auction so that the lien can be satisfied. Similarly to condominium foreclosures, the shareholder is ultimately dispossessed of the apartment.
Exceptional references provided upon request.