Don’t Try this at Home

Don’t Try This at Home

Help, my condo is going commercial! The unit-owners are operating businesses out of their units, the doorman is being run ragged handling packages and phone calls, and all kinds of strangers are trooping through the building all day long! Is there anything we can do?

That’s the plea from one condominium board member, who says that her wealthy residential Manhattan condominium seems increasingly like a Times Square office building: one resident is running an import-export business, another a brokerage firm, while a third is a practicing psychiatrist, and a fourth has apparently been operating a bed-and-breakfast out of his apartment for more than a year now. “He says it’s just friends coming to stay,” she notes, but the parade of people coming and going belies this.

Over on Staten Island, a board member at a 148-unit condominium is also facing a serious problem. Two of the unit-owners have decided to open day care centers in their apartments, and the noise is starting to irritate some of the other residents. “It’s turned into a very large legal battle. You can imagine the shock and surprise of an owner. They buy into a condominium – an apartment building converted in the 1950s – where there is no soundproofing,” says the director. “You have seven to eight children running above your head.” He wonders: can an owner do whatever he or she likes?

Who’s right? Who’s wrong?

When it comes to a unit-owner running a business out of his or her apartment, the power of “no” lies in the bylaws of the building, the certificate of occupancy, and the local zoning laws. First and foremost, says Stuart Saft, a partner with the law firm of Wolf Haldenstein Adler Freeman & Herz, if the building’s zoning and certificate of occupancy prohibit any commercial activity, then the unit-owner is not allowed to run a business there. Plain and simple. But even if the zoning regulations and the C of O do permit limited types of commercial businesses or “home occupations,” if the bylaws say that people can’t run businesses out of the condominium, “then they can’t,” says Saft.

“Most condo bylaws or declarations allow commercial uses to the extent permitted by zoning,” observes James Glatthaar, a partner with the White Plains law firm of Bleakley Platt & Schmidt. “Sometimes in residential districts, commercial uses are permitted on the ground floor, but not elsewhere, except for [certain] home occupations.”

And where the bylaws expressly forbid any commercial use of the units, the owners must obey. “You cannot use an apartment in violation of the certificate of occupancy, and if it provides solely for residential use of the apartment, then you must use it for residential use,” says attorney Mark Axinn, a partner at Brill & Meisel. If an individual owner is using an apartment in violation of the [condominium] declaration, the board can absolutely use that for sending them a default notice under the bylaws
But, as always, there’s a gray area, and it lies in the murky waters defining a home occupation. Over the years, the definition has grown. It can include job titles such as teachers, writers, or even consultants. And given the technological changes over the past five to ten years, more and more kinds of work can be done from home, with few people, including board members, any the wiser.

“Before, people worked out of offices with secretarial workers,” recalls Glatthaar. But in an era of high-speed internet access, videoconferencing, and fax machines and photocopiers designed specifically for small spaces, people can run any and all kinds of services out of their homes, without any of such typical objections as pedestrian traffic, package deliveries, ringing doorbells, or other activity.

If the bylaws permit some home occupations, what is acceptable? It all depends on what the bylaws label a home occupation. In a 167-unit White Plains condominium, the board nixed a unit-owner’s request to offer art classes because the local zoning prohibited commercial businesses in the property. The unit-owner wanted to hold classes for up to ten students, something that the board felt clearly went over the line. “The board’s rationale was that this was more intense than a home would allow,” says Glatthaar.

How does a board find out if someone is using his or her apartment in violation of the rules? Sometimes, people trip themselves up, points out Donald Levy, a senior vice president and account executive at Brown Harris Stevens, a management company. “Frequently owners send letters to the managing agent complaining about things, and do it on corporate stationary listing the apartment, and that provides an absolutely terrific piece of documentation to get the business stopped, short of litigation.”

The board can also direct the building staff to keep track of the number of people going to and from the apartment and the amount of ingoing and outgoing deliveries, collect the evidence, and have the managing agent send a notice to the unit-owner to cease and desist.

Practically speaking, Levy notes, “there are a great many businesses in today’s electronic age conducted inside an apartment,” without the board’s knowledge. It’s when the trail of guests and delivery people starts, and packages are brought in and out of the building that boards sit up and take notice.

If the board sends a cease-and-desist letter, and the unit-owner doesn’t comply, then the condo board can send a letter alerting the unit-owner of the board’s legal choices – which are limited. “Co-ops have greater remedies,” says Axinn. “In co-ops, if you are using [a unit] for an improper purpose, the board can terminate the proprietary lease and bring action in landlord-tenant court. A condo cannot. A condominium would have to commence an action in state supreme court seeking an injunction enjoining the unit-owner from the unauthorized use.” And while that remedy is available to condominium associations, it is expensive.

So, what’s a condominium board to do? Choose your battle, Glatthaar recommends. Talk to the unit-owner, show him that he is in violation of the bylaws and, if that doesn’t work, make a decision about whether to push the issue further. While under the bylaws the condo can collect the full amount incurred in a successful lawsuit, “realistically, collecting the full amount is sometimes difficult,” admits Glatthaar. At the end of the day, it’s up to the condo board members to decide. Do they take the owner to court, or do they live with their newest and latest home occupation?