Co-Op & Condo Case Watch: Endless Renovations
BRODIE V. BOARD OF MANAGERS OF THE ALDYN CONDOMINIUM
Alteration Agreement Signed In February 2019, Stefan Brodie and Irina Denisova, unit owners in the Aldyn Condominium at 60 Riverside Drive, signed an alteration agreement and submitted the required $10,000 security deposit to renovate their apartment. The project timeline submitted to the board indicated that renovations would be completed by September 2020, but by spring 2022 the work had not been completed. The alteration agreement provided for the assessment of a $500-per-day charge for each day that the renovation continued beyond a “Required Completion Date.”
Board Steps In Because the duration of the project exceeded the board’s expectation, the board issued a “stop work notice,” issued fines, and seized the security deposit the unit owners had paid.
Not So Fast Brodie and Denisova commenced an action to prevent the board from enforcing the “stop work order,” and for breach of contract based on the assessment of unauthorized and excessive fines.
Missing Detail While the alteration agreement specified that a $500-per-day charge would be imposed for renovations extending beyond a completion date, the date was omitted from this alteration agreement.
In the Court Brodie and Denisova sought a preliminary injunction requiring the board to permit them to complete the alterations, which were near completion, which the court granted. The court emphasized the fact that the alteration agreement failed to fix a date for the completion of the project – the “Required Completion Date.” As it was solely in the board’s interest to have clarity of that term, the consequence of the ambiguity was solely for the board and condominium to bear. Furthermore, the court said the unit owners should be given time to complete the project and set a deadline of November 30, 2022, for them to do so. COUNSEL For Brodie and Denisova KASOWITZ BENSON TORRES / For Condo Board SEYFARTH SHAW, ABRAMS GARFINKEL MARGOLIS BERGSON and Property Manager Allied Partners ABRAMS GARFINKEL MARGOLIS BERGSON
Takeaway If the duration of an alteration project is of concern to a board of a cooperative or condominium, care should be taken to ensure that all material information, including the specific deadline and consequences for failure to meet it, are clearly spelled out in the agreement. Even a seemingly minor mistake or unintentional oversight can have major consequences and a potentially significant impact on building operations.
Case Summary and Takeaway by Michelle P. Quinn, Partner, Gallet Dreyer & Berkey
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