Court Decision Addresses What Proof Cooperative Must Provide To Establish Claim For Unpaid Maintenance
To establish a claim for unpaid maintenance, a cooperative must provide evidence of how the amount owed by the tenant-shareholder was calculated. A cooperative’s failure to provide evidence that the court considered sufficient led to dismissal of such a claim in 300 East 85th Housing Corp. v. Dropkin, NYLJ 1202664851759 (Civ. Ct., N.Y. Co. July 24, 2014).
In this case, the Cooperative brought a summary proceeding seeking to evict a tenant-shareholder couple based upon unpaid maintenance and electric bills. At the trial, the Cooperative put into evidence the proprietary lease, which required that the tenant-shareholders pay maintenance in the amount of their unit’s share of the Cooperative’s cash requirements. The Cooperative also offered a rent ledger, the minutes of a meeting in which the Board of Directors approved a maintenance increase, and a letter advising tenant-shareholders of this maintenance increase.
The court found this proof insufficient and dismissed the summary proceeding. The court concluded that the evidence before it established only that there existed a contract between the Cooperative and the tenant-shareholders under which some amount of maintenance payments were required. However, the Cooperative had offered no evidence of its “aggregate cash requirements” as determined in a board resolution, which would represent the total amount of maintenance to be collected. Nor was evidence presented as to how these tenant-shareholders’ pro rata share of the maintenance was determined, such as documentation of their percentage of the total shares.
The Cooperative argued that the tenant-shareholders had paid their maintenance in the past and that this evidenced their agreement that maintenance must be paid. The court agreed that where a tenant pays the same amount to a landlord or cooperative month after month, this provides strong evidence that the amount paid is the correct amount owed. Here, however, the tenant-shareholders’ payments varied from month to month, precluding application of this doctrine.
In light of this decision, cooperatives and their managing agents may wish to review their recordkeeping and billing practices to ensure that in the event it is necessary to bring a nonpayment proceeding, appropriate documentation to establish the amount due and unpaid, including the principal amount and any applicable interest and penalties, will be available.