Ask Habitat: How Can We Defuse a Handful of Problems Without Heading to Court?
June 1, 2015 — A READER ASKS: I'm on the board of a midsize co-op in Manhattan. We've had a rough couple of years. Two tenants are in arrears and my fellow board members and I are arguing about the pros and cons of taking them to court. Another tenant has spent the last few months threatening to sue us for everything under the. He has a reputation in the building for being very irate so we want to tread lightly and carefully but at the same time put a stop to the negativity. And if that weren't enough, two neighbors are feuding with each other and threatening each other with court action. Do you have any advice on how to deal with all this? I'm personally at my wit's end!
HABITAT ANSWERS: First off, consider litigation to be your last resort. Lawsuits have a tendency to take on a life of their own, dragging on for protracted periods and inviting all manner of counter-accusations from defendants.
When a shareholder or unit-owner is delinquent on fees and common charges, a lawsuit may seem like the only option. But it's undesirable, unpredictable, and undoubtedly expensive. Avail yourself of the following options before resorting to legal action:
- Notify the delinquent's lender.
- Cut the delinquent's services. You can't turn off their electricity, but unless the residents enter bankruptcy, you can deny them access to amenities such as the gym, the garage, and package deliveries.
- Increase the late fees, interest, and legal-fee reimbursement for nonpayment. If these provisions aren't in your proprietary lease, you won't be able to collect anything, so amend it as soon as possible.
- Refuse to review a sale, sublease, alteration, or financing package until all fees are paid.
As for the irate tenant, when boards are constantly threatened with frivolous lawsuits from irate purchasers and residents, they tend to let their fear of litigation and its attendant costs outweigh their duty to act in the best interests of their shareholders or unit-owners. An effective deterrent is to require the plaintiff to cover your building's legal fees if a judge deems the suit frivolous. With a bylaw amendment, you can bind all of your applicants, owners, and tenants to these terms.
Last but not least, for those disputing neighbors, consider that binding arbitration can be a relatively speedy and inexpensive alternative to litigation. The opposing parties won't always agree to it, but your board can avoid being sucked into a messy feud by convincing them that arbitration is a fair and expeditious solution.
When residents are being overly noisy, destructive, or otherwise disruptive, co-op boards can serve them with an Objectionable Conduct Notice — warning them that if they continue such behavior, their lease will be terminated. Condo boards can do the same if the power is granted in their bylaws.
Have a question for us? Let us know!
For more, see our Site Map or join our Archive >>