New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

ARCHIVE ARTICLE

How to Increase Your Income

A luxury condo’s board exercised its right of first refusal to match the offer of a purchaser to buy an apartment, and assigned the purchase right to a neighbor of the seller. The condo also agreed to license a portion of the adjacent hallway area to the neighbor, in exchange for a significant license fee to the condo. The seller refused to proceed with the sale and, instead, sued everyone involved. The lower court upheld the condo’s right to exercise its right of first refusal and to assign the purchase rights to the neighbor, thus making new law. The appellate division affirmed. The closing should occur shortly.

 

Takeaway

Board powers are very broad if exercised in accordance with procedures set forth in the plain language of governing documents. Boards should not shy away from revenue opportunities that comport with governing parameters.

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