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Perspectives

Business Judgment Rule Applies to Board Decision on How to Perform Local Law 11 Façade Repairs

A New York court has reaffirmed that under the Business Judgment Rule, courts will defer to boards’ decisions on issues relating to how repair work in their building is to be performed. Barbiere v. Board of Managers of 175 West 12th Street Condominium, Index No. 158654/2020, 2020 NYLJ LEXIS 1737 (Sup. Ct. N.Y. Co. Nov. 12, 2020). In this case involving a condominium undergoing Local Law 11 repair work, a unit owner couple alleged that the Board improperly refused to give the façade outside their unit the same remediation as other units on the same side of the building. The Board responded that these owners had installed unique windows in their unit, which explained why a different method of repairs might be needed, and submitted an engineer’s affidavit explaining that the proposed repair method was safe. The Board also stated that a final decision on the repair method had not yet been made.

The court agreed that the court proceeding was premature in the absence of a final decision by the Board. In any event, the Board’s decisions on how to perform repair work were protected by the Business Judgment Rule. There was nothing in the record to suggest that the court should substitute its own judgment for the Board’s. To the contrary, the court declared that it “has no interest in becoming a general contractor and telling [the Board] how to complete Local Law 11 work that remains ongoing. That is not the Court’s role. Part of living in a condo means having to work with the condo and the recognition that not every owner is going to agree with the decisions made by the board.” This was especially true because “there [was] no evidence from an expert suggesting that the type of work petitioners complain about is unsafe or ineffective.” Ganfer Shore Leeds & Zauderer LLP represents the successful Condominium Board of Managers in this case.