The Meter is Running
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41 legal experts on game-changing laws, rules, and cases.
AUTHORDeborah Koplovitz, Shareholder Anderson Kill
PAGE #p. 18
Axelrod v. 400 Owners Corp.
Rejecting Purchase Applications Harold Spitzer, the board president, breached his fiduciary duty regarding the suitability of prospective apartment purchasers. Spitzer was motivated by his own interests, and he also had a business relationship with a real estate broker, which led to his approval of the sale in order to enhance that business relationship.
"It’s very important when a co-op board is considering a purchase application that the individual members of the board never put their own interests ahead of the interests of the person who is trying to sell the apartment. That means that they have to consider only the best interests of the whole community and not whether, for example, they want to buy that apartment themselves. If they deny an application for such a reason, they could open themselves up to litigation. They also need to remember that once a person sells, he or she is going to have money to sue. The board could find itself, like Harold Spitzer, embroiled in a lawsuit."
To read the full lecture, visit: http://bit.ly/DKoplovitz