Score one for the immense power of co-op boards. Especially the power to change the house rules, provided all shareholders are treated equally.
This came home last week when Manhattan Supreme Court Justice Gerald Lebovits ruled against the pop star Madonna and in favor of the Harperley Hall co-op board in a lawsuit that had dragged on for almost three years, the New York Post reports. The board had changed the house rules to require all shareholders to be “in residence” in their apartments when children and staff are present. Madonna, a mother of four who owns a $7.3 million apartment in the co-op at 64th Street and Central Park West, was not pleased.
She had four months to file a legal proceeding after the board changed the house rule in 2014. When she waited almost two years to contest the change – arguing that she is “a world-renowned recording artist, performer and singer who is constantly on world tours” – Lebovits tossed the lawsuit but allowed her to continue her quest for corporation documents and a demand that the co-op cover her attorneys’ fees. At the time, the co-op’s attorney, Patrick Sweeney, argued that Madonna had not been treated “any differently from every other shareholder.”
The board characterized Madonna’s demand as “merely fishing for materials in an attempt to substantiate an otherwise time-barred challenge to board action.” In last week’s ruling, judge Lebovits found that the board had already provided Madonna with sufficient information – namely a list of shareholders and minutes of the 2013 and 2014 annual meetings. He also denied her demand for attorneys’ fees, a major victory for the co-op.
The drawn-out lawsuit may have provided rich fodder for the city’s tabloids, but it underscores an important fact of co-op life: boards have immense powers, including the power to change house rules – provided they don’t treat similarly situated people differently.
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