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Court Rejects Claims for Breach of Warranty of Habitability and Breach of Proprietary Lease Resulting From Superstorm Sandy

Two corporations that owned unsold shares in a cooperative sued the cooperative, asserting a wide variety of claims, but were unsuccessful on almost every claim.  Transus LLC v. Beach View Apartment Corp., 2021 N.Y. Misc. LEXIS 3742, 2021 N.Y. Slip Op. 50615(U) (App. Term 1st Dep’t July 1, 2021).

One plaintiff asserted it should not have been charged late fees because it had a credit balance on one of its units.  However, the arrears on that plaintiff’s other units far exceeded the amount of the credit.

Plaintiffs’ claim for breach of the warranty of habitability, based on temporary building conditions following Hurricane Sandy, was rejected because the plaintiffs never resided in the units.  Plaintiffs’ claim that the same conditions entitled them to a rent abatement under the proprietary lease also failed.  Paragraph 8 of the proprietary lease provided for an abatement of rent where the unit was so damaged as to be untenantable; however, another paragraph provided that the cooperative would not be liable for lack of services unless it resulted from the cooperative’s negligence.  Reading the proprietary lease as a whole, the court concluded that paragraph 8 “was not intended to apply to a building-wide shutdown on account of a natural disaster.”

The court agreed that one plaintiff had improperly been charged a $50 sublet fee and directed that it be refunded.  The court refused, however, to award plaintiffs the attorneys’ fees they had incurred in the litigation.  Given that plaintiffs had sued on five causes of action totaling more than $25,000 and had been awarded only $50, they could not be considered the “prevailing parties” and therefore entitled to attorneys’ fees.