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Co-ops and Condominiums
Board Lacked Authority to Mandate Replacement of In-Unit Windows
Mangold v. Board of Managers of Meadow Court Condominium2025 WL 676733
AppDiv, First Dept.
(memorandum opinion)
In an action by condominium unit owner to declare an amendment to the bylaws void, to enjoin window replacement work, and to declare an agreement between the board and the window contractor void, the condominium board appealed from Supreme Court’s grant of summary judgment to the unit owner. The Appellate Division modified to hold the agreement with the contractor void only with respect to unit owner’s unit, but otherwise affirmed, holding that the board acted beyond its authority.
The condominium board instituted a policy requiring all unit owners to replace their in-unit windows even though the condominium’s declaration deemed the window part of the individual units. The board concluded that the windows were inefficient and had outlived their useful life, while at the same time acknowledging that the windows in unit owner’s unit were in good condition. Unit owner brought an action challenging the board’s decision, and Supreme Court awarded summary judgment to unit owner, declaring the contract between the condominium and the window contractor void and enjoining additional work on the windows. The condominium appealed.
In modifying, the Appellate Division held that the business judgment rule did not shield the board’s policy from judicial review. The court acknowledged that the business judgment rule would be operative if the window replacement were necessary to maintain structural integrity, but here there was no evidence of structural issues. The court also held that a 2023 amendment to the condominium’s bylaws purporting to extend the board’s authority to dictating widow replacement was invalid because it conflicted with the condominium declaration. But the court held that Supreme Court erred in declaring the window replacement agreement invalid even with respect to unit owners who voluntarily sought to replace their windows.
Comment
A condominium board may not amend its bylaws in ways that conflict with the condo declaration, and even absent a direct conflict, a bylaw amendment is invalid if it prohibits conduct implicitly permitted by the declaration. In Strathmore Ridge Homeowners Assn., Inc. v. Mendicino, 63 A.D.3d 1038, the court held invalid the HOA’s amendments to the bylaws restricting owners’ ability to lease their premises citing the declaration’s implicit permission for owners to freely lease their unit. Article VIII of the declaration established the lots could only be used for residential purposes but did not further restrict the leasing of units or lots. Article XV of the bylaws permitted amendments to the bylaws only at a member meeting, with the explicit exception that any matter governed by the declaration could not be amended except as provided in such declaration.
Similarly a condo board’s house rule is invalid if it prohibits activity implicitly permitted by the bylaws. In Bd. of Mgrs. of Vil. View Condominium v. Forman, 78 A.D.3d 627, the court held invalid a condominium board’s amended house rule banning pets from the premises, including within an owner’s individual unit, because although the condo’s bylaws did not expressly permit pets, the language requiring owners to ensure their pets cause no nuisance to other owners acted as implicit authorization to keep pets. In enacting the house rule, the board did not receive approval from eighty percent of unit owners required to amend the bylaws. Moreover, the business judgement rule does not protect condo boards that exceed their authority under the bylaws. In Turan v. Meadowbrook Pointe Homeowners Assn., Inc., 211 A.D.3d 985, the court invalidated a house rule prohibiting owners from keeping dogs above 25 pounds on the premises, rejecting the board’s argument that the business judgement rule protected its decision. The owner successfully demonstrated that the house rule limiting pet sizes was not authorized because neither the bylaws nor the declaration contained any pet size restrictions.
When neither the bylaws nor the declaration limits the power of the board, courts apply the business judgment rule to uphold rules restricting unit owners’ use of their individual unit. In Bd. of Mgrs. of Fishkill Woods Condominium v. Gottlieb, 184 A.D.3d 785, the court invoked the business judgment rule to deny an owner’s counterclaim seeking to enjoin the removal of their pets as ordered by the condo board after the owner’s dogs attacked neighbors on multiple occasions. The condo’s declaration explicitly authorized the board to order removal if “any pet becomes a source of unreasonable annoyance to others.”
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Liquidated Damages Provision for Construction Delay Did Not Constitute Unenforceable Penalty
Barbiere v. 175 West 12th Street Condominium2025 WL 208682
AppDiv, First Dept.
(memorandum opinion)
In an action by condominium unit owner seeking to avoid imposition of liquidated damages, unit owner appealed from Supreme Court’s grant of summary judgment to the condominium. The Appellate Division affirmed, holding that unit owner did not carry its burden of establishing that the damages constituted an unenforceable penalty.
Under the terms of unit owner’s alteration agreement with the condominium, unit owner would pay $200 per day in liquidated damages for delay in completion of the work. When the work was not completed on time, the condominium sought to impose those damages. Unit owner contended that the damages constituted a penalty, and also contended that the condominium wrongly refused a request to install a gas grill on their terrace. Supreme Court awarded summary judgment to the condominium, and unit owner appealed.
In affirming, the Appellate Division held that the condominium established that it damages arising from loss of use of the common elements, extra labor for maintenance of the alteration area affected by the prolonged work, and other fees and expenses incurred by nearly a year of delay could not have been ascertained at the time the parties entered into the agreement. Even though the condominium board characterized the $200 per day fee as a penalty, the court held that the characterization did not prevent the court from enforcing the contract between the sophisticated parties, all of whom were lawyers, in the absence of a countervailing policy consideration. As a result, the condominium was entitled to summary judgment.
Comment
Liquidated damages clauses are unenforceable as penalties if they provide for damages disproportionate to actual loss of if actual damages are readily ascertainable. In construction delay cases liquidated damages provisions are typically enforced unless the party seeking to avoid the fine produces evidence establishing that the stipulated damages were disproportionate to the injury caused by the delay. In Grant v. 30 E. 85th St. Condo., 288 A.D.2d 92, 733 N.Y.S.2d 157 (App. Div. 1st Dept. 2001), the court enforced against a condominium a $350 per day liquidated damages provision provided for in a stipulation that settled prior litigation between the condominium and a unit owner. As a result of the condominium’s failure to satisfy the stipulation’s testing and repair requirements, unit owner’s apartment suffered from chronic leaks. The court emphasized that the condominium failed to show that the fee was disproportionate to plaintiff’s losses as a result of the chronic leaking. By contrast, in Behler v. Ten Eighty Apartment Corp., 2001 N.Y. Misc. LEXIS 1362 (Sup. Ct. Apr. 11, 2001), the court granted owners’ motion for partial summary judgment holding a $500 per day construction delay fee imposed by the cooperative corporation constituted an unenforceable penalty when the agreement with the cooperative imposed an alteration fee of only $100 per day for the authorized construction period. The court held that the delay fee was disproportionate since the alteration fee, which was intended to account for the cooperative’s probable daily loss from the project, was plainly lower than the fee for delay. As a result, the cooperative was only entitled to actual damages, which would be determined at trial.
When damages are readily ascertainable at the time the contract was made, courts will not enforce a liquidated damages provision that provides for a significantly larger amount, In Trs. of Columbia Univ. in the City of N.Y. v. D’Agostino Supermarkets, Inc., 2017 NY Slip Op 32794(U) (Sup. Ct.), the court declined to enforce a liquidated damages provision on both ascertainability and proportionality grounds when the non-breaching party sought to collect $1,029,969.54 in liquidated damages when the breaching party could have fully performed by paying a fraction of that amount. .The parties, who had previously entered into a lease, executed a Surrender Agreement which contained a liquidated damages provision that required the surrendering tenant to pay the aggregate amount of all fixed rent provided for in the lease as liquidated damages if tenant did not pay two fixed surrender payments and a series of additional fixed monthly surrender payments. As a result of tenant’s failure to pay additional monthly surrender payments for one year, landlord sought to collect, as liquidated damages, the fixed rent due for the balance of the lease term. The court, however, held the liquidated damages provision unenforceable because the relevant breach was to the Surrender Agreement, and under the terms of that agreement, tenant would be released from its lease by paying an ascertainable total of $261,751.73 in fixed and monthly surrender payments.
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