Cooperative Boards of Directors Do Not Have Unlimited Power to Reject Proposed Purchasers
Written By:
By David L. Berkey
Partner at Gallet Dreyer & Berkey, LLP
Cooperative boards of directors may be limited in their power to reject a proposed apartment purchaser. These limitations are set forth in the cooperative's proprietary lease. When a board acts contrary to those restraints, it risks suit by the aggrieved seller to force the board to approve the sale to the proposed purchaser and, in addition, to recover the seller's attorneys' fees and damages for the seller's costs incurred to carry the apartment until the court-ordered transfer occurs.
This is what happened in Kotler v. 979 Corporation., Index No. 653398/2019, Supreme Court, New York County. The executor of a deceased shareholder that resided in a duplex apartment at 9 East 79th Street, in Manhattan, requested the cooperative board to approve the estate sale of the 510 shares allocated to the duplex and the assignment of the proprietary lease to the decedent's daughter...
David L. Berkey
For more than thirty years, Mr. Berkey has been a trusted advisor to numerous cooperative and condominium boards, banks, insurance companies and individuals. Mr. Berkey counsels his loyal clients regarding all issues pertaining to co-op and condo law, prepares their various contracts, handles their transactions and litigates their claims.