1855 7 Ave. Housing Dev. Fund v. Wigfall, New York County Landlord-Tenant Court, Index No. 81069/2010

In this residential landlord-tenant case, a co-op board was successfully able to terminate a tenant-shareholder’s proprietary lease based upon objectionable conduct in violation of the House Rules and  the Proprietary Lease that created a nuisance and an unhealthy and unsafe environment for residents and guests.  The trial testimony established that the co-op had documented 744 separate incidents of objectionable conduct, complete with respective dates and times, including urinating and defecating in the hallways and elevators, loitering and smoking, illegal drug sales in and around the building, and sexual activity in the stairway.  The co-op, apparently, had security camera footage of many of these events.  The co-op board scheduled a meeting notified the tenant-shareholder that it would consider whether to terminate the shareholder’s tenancy and served the tenant with notice of the meeting.  The tenant appeared and spoke at the meeting, after which the co-op board decided to terminate her tenancy.

The Board’s failure to act in the face of these allegations would amount to an abdication of its responsibilities and duties to all the shareholders.

The court ultimately determined that the co-op had the authority, within the scope of the business judgment rule to terminate the tenancy.  The Court emphasized that the board provided notice to the tenant-shareholder, acted for the purposes of the cooperative, within the scope of its authority, and in good faith.  The co-op in 18557 7Ave Housing Dev. Fund had obviously taken the time to develop an extensive record upon which to base its decision. The tenant-shareholder was unable to provide assurances that her objectionable conduct would not continue in the future.  Under these circumstances, the court found the board’s action to be “deliberate, thoughtful, and accommodating.”  The court further wrote that the “Board’s failure to act in the face of these allegations would amount to an abdication of its responsibilities and duties to all the shareholders.”

The lesson of 18577 7Ave Housing Dev. Fund is that a co-op board can terminate a shareholder’s tenancy, but it should take great care to insure the the tenant has notice and  an opportunity to be heard, to follow the procedures set forth in the governing documents, to act solely for the purposes of the cooperative, to proceed in good faith, and to document its allegations of objectionable conduct.