Habitat Staff in Co-op/Condo Buyers
March 17, 2011 — One in a series of easy Q&A guides to co-op / condo buying, selling and owning.
Is your apartment habitable? And do you, as a co-op or condo owner, have a right to habitability? We consulted with attorney Dennis H. Greenstein, a partner at Seyfarth Shaw, to tell you in this simple and handy Q&A
Q. Does the New York State law that requires that rental apartments be "habitable" apply to co-ops and condos?
A. Yes, to co-ops. We'll get to condos at the end of this Q&A.
Shareholders in a cooperative apartment building are under a proprietary lease, and a court ruling in Suarez v. Rivercross Tenants Corp., states that "[a] proprietary lessee is entitled to the statutory protection…." Thus, the warranty of habitability in the New York State statute, Real Property Law (RPL) Section 235-b, applies to co-op tenant-shareholders
Q. In terms of habitability, what is a cooperative corporation, via the co-op board, responsible for?
A. The multiple dwelling law (MDL) and the New York City housing maintenance code (HMC) require cooperative corporations to maintain the premises in good repair. For example, the co-op is generally responsible for repairing interior walls and ceilings in apartments. While proprietary leases generally require shareholders to paint, maintain and repair their apartment interiors, the MDL and HMC may require the co-op, as owner, to correct a condition inside the apartment.
Q. What is the co-op board not responsible for?
A. Suarez v. Rivercross Tenants Corp. quoted Park West Mgt. v. Mitchell to state that "[t]he co-op is no absolute insurer of services which do not affect habitability nor is it a guarantor of 'every amenity customarily rendered in the landlord-tenant relationship.'"
Significantly, the court noted, "while it is not indisputable that health and safety are adversely affected by insufficient heat, not every such deprivation will constitute a breach of the warranty [of habitability]." A decision as to whether a breach occurred is based on many factors, including the extent, the effect on health and any corrective measures taken by the co-op.
Q. What can I do if the actions of the co-op board breach the warranty of habitability?
A. A shareholder may claim damages for a breach and/or withhold maintenance payments during the period in which it occurs. In Mastrangelo v. Five Riverside Corp., the amount of damages was calculated as the difference between the shareholder's regular maintenance and the rental value of the premises during the breach of the warranty of habitability.
Q. Can someone subleasing my co-op apartment make a claim against the board?
A. No, but he or she could make a claim against you.
The warranty of habitability cannot be asserted by a shareholder who does not occupy the apartment. The courts have held that a subtenant also has no cause of action in such cases, because the subtenant does not have a contractual or landlord-tenant relationship with the cooperative corporation.
A landlord-tenant relationship, however, exists between the tenant-shareholder and the subtenant, who would have a cause of action against the shareholder. The shareholder may then cross-claim against the cooperative.
Q. Does any of this apply to condominiums?
A. No such relationship exists in condominiums between the unit-owners and the board of managers. Since condo unit-owners do not lease their units, they are not considered tenant-shareholders and cannot assert a breach of the warranty of habitability or withhold their common charges or assessments.
However, the courts have held that condominium boards must still repair common areas, even though the warranty of habitability is not applicable to them. If a unit-owner leases the owner's unit, then a landlord-tenant relationship would exist between the owner and the subtenant, who may assert the warranty of habitability against the unit-owner.
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