Once you're in the club, you're entitled (and beholden) to a whole new set of rules. And just as there are about a zillion and six ways to run afoul of these rules, there are an equal number of ways the board may overstep these rules when requiring -- or disallowing -- things that are beyond the scope of the written rules. (Let's assume the building rules themselves are lawful -- a whole other ball of wax.) Additionally, the board has a fiduciary duty to be responsible with shareholder's money, and to keep the building and premises safe and in good repair.
Simply, if the board oversteps the bounds of the written rules or if it fails in any part of its fiduciary duty, you may have a legal case against it. First, exhaust all available options for settling the complaint peaceably (keep all documentation), and then contact an attorney who specializes in co-op complaints.
Common sources of legal cases include unfair rejections of attempts to sell, renovations proposed by the occupant, renovations requested by the board and all aspects of living in close proximity to others. (Really, there are so many rules and such Byzantine regulations that you'll need an attorney's expert help to navigate your specific grievance.)
But before you decide to take on your co-op board in a legal battle, ask yourself if it's really worth it. Litigation is expensive, time-consuming and divisive. Are you willing to pay all three prices? Know the answer before you head to court.
For more information on co-ops and lawsuits, check out the links below.
- Arak, Joey. "Dakota Co-op Board Accused of Being a Bunch of Racists." Curbed. Feb. 2, 2011. (Feb. 6, 2011) http://ny.curbed.com/archives/2011/02/02/dakota_coop_board_accused_of_being_a_bunch_of_racists.php
- Bellman, Richard F. and Susan Ritz. "Co-op Rejection." The New York Times. Nov. 30, 1986. (Feb. 7, 2011) http://www.nytimes.com/1986/11/30/realestate/l-co-op-rejection-609586.html
- Frost, Diane. "Fear of Rejection." The Cooperator. March 2002. (Feb. 7, 2011)http://www.cooperator.com/articles/707/1/Fear-of-Rejection/Page1.html
- Hedderman, Domini. "Protection from Lawsuits." The Cooperator. June 2008. (Feb. 7, 2011) http://cooperator.com/articles/1635/1/Protection-from-Lawsuits/Page1.html
- Hinds, Michael deCourcy. "When a Co-op Board Rejects a Buyer." The New York Times. Nov. 2, 1986. (Feb. 6, 2011) http://www.nytimes.com/1986/11/02/realestate/when-a-co-op-board-rejects-a-buyer.html
- Kaye, J. "Matter of Levandusky v One Fifth Ave. Apt. Corp." Court of Appeals of New York. April 5, 1990. (Feb. 6, 2011)http://www.courts.state.ny.us/reporter/archives/levandusky_one.htm
- Taylor, Candace. "Breaking the co-op barrier." The Real Deal. Sept. 1, 2009. (Feb. 7, 2011) http://therealdeal.com/newyork/articles/breaking-the-co-op-barrier