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Board Members Not Liable for Approving Roof Repairs

The owners of a condominium unit sued the board of managers and the individual board members based on the board’s decision to effectuate repairs to the roof. The court granted a motion to dismiss the claims against the individual board members, based on the Business Judgment Rule.  “The record demonstrate[d] that the roof was replaced to further the condominium’s interest, even if [the unit owners] may have been damaged as a result, and there was no evidence of bad faith.”  In addition, the unit owners “failed to provide evidence that the [board members] were motivated by their self-interest, or obtained any individual benefit from the decision to replace the roof.”

The unit owners also argued that the board members breached their fiduciary duties “by failing to inform themselves about the status of [the unit owners’] renovations to their unit before considering the roof replacement.”  However, “[t]he record show[ed] that the board consulted with engineers and building management concerning the necessity to replace the roof and alternative actions to remedy the water infiltration, and that more limited measures were unsuccessful.  The status of [the unit owners’] renovations was not relevant to the board’s interest in maintaining the integrity of the building.”  345 East 50th Street LLC v. Board of Managers of M at Beekman Condominium, 2018 N.Y. App. Div. LEXIS 8044, 2018 N.Y. Slip Op. 8090 (1st Dep’t Nov. 27, 2018).