A Manhattan judge has issued a preliminary injunction enjoining a Cooperative from interfering with a tenant-shareholder couple’s installation of an exterior air conditioning system on their 22nd-floor terrace as well as certain related interior repairs. Kaplan v. Park South Tenants Corp., NYLJ 1202648096983 (Sup. Ct. N.Y. Co. Mar. 18, 2014).
The plaintiff tenant-shareholders reside in one of the two apartments in the building that include an outdoor roof terrace. Under the proprietary lease, the plaintiffs had “the exclusive use of the terrace,” albeit subject to regulations imposed by the Cooperative’s Board of Directors. The plaintiffs sought permission to install an exterior air-conditioning system on their terrace, which required drilling a two-inch hole in an exterior wall, because the existing system did not adequately cool their apartment. The need for the additional air-conditioning was due in part to unique features of how the apartment was configured, which would not apply to other apartments in the building.
Plaintiffs described the proposed new air conditioning system as consisting of small, lightweight, energy-efficient “state of the art” condenser units, which would be equipped with internal vibration isolation pads so as to eliminate any vibration or sound, and which would be installed so as not to be visible to or have any impact on other residents. They presented evidence that the level of cooling from their existing system was insufficient, as well as a physician’s letter attesting that one of the plaintiffs was 73 years old and suffers from cardiovascular conditions requiring him to live in an adequately cooled residence. Plaintiffs also sought to relocate a telecommunications conduit from the center of their bathroom to the wall.
The Board denied plaintiffs permission to make these alterations on the ground that they would be contrary to House Rules and “longstanding board policy” and out of “reluctance to set a precedent for similar applications.” Plaintiffs sued asking the court to overturn the Board’s decision. The court sided with the plaintiffs, observing that under the proprietary lease, alterations were subject to the Board’s prior consent, but such consent may not be “unreasonably withheld.” Under all the circumstances of this case, the court found, the Board’s withholding of permission was unreasonable. Among other factors, the court relied on the physician’s letter, the fact that the air conditioning system would not adversely affect any other residents, and the fact that the Board had previously permitted a different resident to place an air conditioning unit on the same terrace.
The Board urged that its decision whether to allow or disallow the air conditioning work was protected by the Business Judgment Rule. However, the court held that the proprietary lease’s requirement that approval not be unreasonably withheld “trumps” the Business Judgment Rule. With respect to the Board’s contention that allowing plaintiffs’ application would set a precedent for other tenant-shareholders, the court responded that the Board must evaluate each application on its own merits. Here, allowing plaintiffs to install an exterior air conditioning system on their terrace would have minimal implications for future applications by other tenant-shareholders because there is only one other apartment in the entire building that has a terrace. The court found the Board’s refusal to permit plaintiffs to relocate the telecommunications line to also be unreasonable.
A factor in the court’s determination appears to have been that plaintiffs submitted specific evidence that the proposed alterations would provide substantial benefits to plaintiffs without prejudicing other tenant-shareholders, while the Board’s expert simply opined that the proposal did not comply with building requirements. Ganfer & Shore, LLP has successfully represented boards in cases in which tenant-shareholders or unit owners sought to override the Board’s right to approve or disapprove proposed alterations, including with respect to air-conditioning systems. As appropriate, our attorneys work with the building’s architects, engineers, or other experts to explain with specificity why the proposed alterations are contrary to the best interests of the Cooperative or Condominium and its other residents and, where relevant, acceptable alternatives that are available.