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COURT UPHOLDS COOPERATIVES TERMINATION OF SHAREHOLDERS LEASE FOR SCREAMING, HARRASSMENT A GANFER & SHORE, LLP CLIENT ADVISORY FEBRUARY 2008

Cases being resolved by New York courts reflect the increased authority of cooperative boards to terminate the proprietary leases of shareholder-tenants who engage in a pattern of objectionable conduct.A recent appellate decision, Trump Plaza Owners, Inc., v. Weizner, 2008 WL 192051, 2008 N.Y. Slip Op. 00430 (App. Div. 1st Dept Jan. 24, 2008), continues this trend.

In this case, a shareholder-tenant engaged in conduct such as yelling and screaming in a manner audible in other residents apartments as well as threatening and harassing other residents and building staff.The appellate court found that in voting to terminate the tenants lease, the cooperative board acted for the purposes of the cooperative, within the scope of its authority, and in good faith.Accordingly, the board decision was upheld.The appellate court also found that based on the shareholder-tenants conduct, the board was entitled to a preliminary injunction forbidding her from engaging in further misconduct.However, because the form of injunction granted by a lower court was too vague in describing what actions were prohibited, the matter was remanded for entry of a more specifically worded injunction.

On a procedural issue, the appellate court reversed the trial courts dismissal of the Cooperatives attempt to terminate the proprietary lease and evict the tenant.The trial court had ruled that dismissal was required because the Cooperative had sent some notices to the tenant at a different address from the one provided for in the lease.(This earlier ruling is discussed in the September 2007 issue of this Client Advisory).However, [t]he record demonstrate[d] that notice was sent to the tenant at her post office box, that she actually received the notice, and that the cooperative [also sent] several letters to the tenant at both addresses.In view of these facts, the appellate court held that dismissing the Cooperatives claims was unwarranted.

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