Dennis H. Greenstein, Seyfarth Shaw

Seyfarth Shaw, Partner

Dennis H. Greenstein

The client’s tale. A co-op board contacted us for advice regarding a major alteration of an apartment that was well into the second year of construction with no apparent end in sight. The neighboring shareholders were complaining of the noise, disruption of services, and odors arising from the unit and insisted the work be stopped. We asked for a copy of the alteration agreement and found it to cover everything, but noticed that the completion date for the construction was left blank. We also asked if the work being performed was consistent with the plans that were approved. The building’s architect reviewed the matter and reported that the work went beyond the agreed-upon scope. We stopped the work and prepared an amendment to the alteration agreement, allowing the shareholder to resume the work with a specific completion date and also requiring the shareholder to pay the professional fees the co-op incurred in its investigation.

The lawyer’s take. Most proprietary leases of co-ops and bylaws of condos require the shareholders and unit-owners to obtain the prior written consent of the board before beginning any alterations and state that the board may not “unreasonably withhold” its consent. However, rules can be broken, so boards should also have a procedure to confirm that the alteration is following the approved plans and alteration agreement. The robust market and low interest rates on loans will probably contribute to an increase in requests for alterations to be performed in apartments.

Case closed. It is critical that requirements, including completion deadlines, are clearly stated in the alteration agreement and complied with by the shareholder/unit-owner.