41 Tenants Corp. v. Karin Werthheim;

In 41 Tenants Corp v Wertheim, the residential coop utilized its rights under the proprietary lease to call a special meeting of the Board; present evidence of the violation; and then vote to terminate the lease of a shareholder, based upon the objectionable conduct of the shareholder, which continued following being informed in writing to cease from the objectionable behavior.

In this matter respondent illegally sublet the apartment without the permission of the Board and continued to do so after being informed in writing to cease and desist. When the objectionable conduct continued, the Board scheduled a special meeting to consider the facts and determine whether to terminate the proprietary lease. Following the meeting, the Board elected to terminate the lease and upon respondent’s failure to surrender possession of the apartment as per the Notice of Termination, Petitioner commenced a holdover proceeding.

Based upon having acted in accordance with the lease provision and that the action of the Board was a proper exercise of Business Judgment, 41 Tenants moved for a judgment pursuant to a motion for summary judgment. 41 Tenants was able to demonstrate that it did act in accordance with the lease and that it did not act in bad faith in exercising its business judgment. Therefore in a January 28, 2019 decision by Judge Chinea, 41 Tenants was awarded summary judgment.

The termination of the lease and the motion were handled by partner Scot Mackoff. Click here for Decision.