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CONDOMINIUM & COOPERATIVE LITIGATION
Who Bears Responsibility for Required Condo/Co-Op Apartment Repairs?
Adam Leitman Bailey
John M. Desiderio
In cases where building management and the unit owner disagree on who bears responsibility for making the repairs and/or who bears the repair costs, the attorney’s role, whether in representing the cooperative or condominium board on the one side or the opposing apartment share-holder or condominium residential or commercial unit owner on the other, is to focus on the several important tasks, discussed here.
New York courts hold that repairs to the interior of residential apartments, or to the commercial space of a building, and to all plumbing therein, whether it be a condominium unit or a cooperative apartment, are the responsibility of the individual apartment unit owner or commercial unit owner, as the case may be. See, e.g., Davis v. Prestige Management Inc., 98 AD3d 909, 951 NYS2d 147 (1st Dept. 2012) (Held: “the condominium’s bylaws provide that repairs and replacements to the units are the responsibility of the unit owners”).
The condominium unit owner’s or cooperative shareholder’s specific repair obligations are respectively set forth in the condominium’s declaration and by-laws or in the cooperative’s offering plan, proprietary lease, and by-laws. See, e.g., Lorne v. 50 Madison Avenue LLC, 65 AD3d 879, 886 NYS2d 1 (1st Dept. 2009) (Held: “It was not unreasonable for the board to require plaintiffs to adhere to the same rules that apply to all other unit owners wishing to make structural repairs.”).
LANDLORD REPRESENTATION
New York Landlord's Obligation in Notifying Residential Tenants of Flood Risk, History, and Insurance
LICENSE AGREEMENTS AND REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (“RPAPL) § 881 ACTIONS
Adam Leitman Bailey, P.C. Files Lawsuit and Settles Emergency Case Providing Fortune 10 Company with Access to Repair Building While Accessing Neighbor’s Property
TITLE INSURANCE CLAIMS GROUP
Adam Leitman Bailey, P.C. Quickly Secures Victory for Lender Facing Adverse Possession Claim
Danny Ramrattan
Adam Leitman Bailey, P.C. was recently retained by a title company to represent a Lender’s interest in an adverse possession action in Queens. The Lender had commenced an action to foreclose a mortgage against the subject property which resulted in an auction taking place. However, before the closing of the sale could take place, a tenant of the subject property commenced an adverse possession action. As a result of the adverse possession action, there was a cloud on title, and the lender and purchaser could not close on the auction sale.
The tenant made meritless and incoherent claims of adverse possession, contending that mere lawful residency and employment on the property for the statutory time period qualified them to adversely possess the subject premises.
Once retained, and against the urgency of needing to close of the foreclosure sale, Adam Leitman Bailey, P.C. immediately moved for joinder under CPLR § 1001(a) and § 1002 on the grounds that any judgment would significantly impact the Lender’s secured interest as the mortgagee. Adam Leitman Bailey, P.C. concurrently moved to dismiss the Complaint on behalf of the Lender under CPLR § 3211(a)(1), § 3211(a)(3), and § 3211(a)(7).
In the joinder motion, Adam Leitman Bailey, P.C. argued that the Lender must be joined as a necessary party because it held a mortgage secured by the Property that was subject to the adverse possession claim. Any judgment would directly impact the Lender’s ability to recover on its mortgage. Adam Leitman Bailey, P.C. further argued that the Lender had commenced a foreclosure action that had proceeded to a foreclosure auction, but Plaintiff’s adverse claim created a stain on title that prevented closing on the Property. Consequently, the Lender’s inclusion in this action was vital to protect its interests.
In the motion to dismiss, Adam Leitman Bailey, P.C.presented several legal arguments on behalf of the Lender. Adam Leitman Bailey, P.C. argued that: (i) the Complaint should be dismissed because a corporation must be represented by counsel and Plaintiff filed pro se; (ii) Plaintiff failed to meet the claim of right requirement for adverse possession under the 2008 amendments by showing a reasonable basis for its belief in ownership; and (iii)
Adam Leitman Bailey, P.C. pointed to the recorded ACRIS documents establishing Plaintiff was on notice of the true owner and the Lender’s first mortgage lien. Adam Leitman Bailey, P.C. researched and analyzed the legislative history regarding the 2008 changes to New York’s adverse possession laws. Adam Leitman Bailey, P.C. showed how the amendments heightened the claim of right standard for adverse possessors to have a reasonable basis for their claim of ownership. Furthermore, Adam Leitman Bailey, P.C. obtained and submitted copies of ACRIS records such as the deed, title report, and mortgage showing the defect in Plaintiff’s claim.
The Court fully adopted Adam Leitman Bailey, P.C.’s legal arguments made on behalf of the Lender and dismissed the Plaintiff’s Complaint in its entirety. By obtaining dismissal, Adam Leitman Bailey, P.C. protected the Lender’s mortgage lien secured by the Property and prevented any stains on the title as the Lender completed sale of the foreclosed Property. Danny Ramrattan, Esq. at Adam Leitman Bailey, P.C. secured this result for its client.
REAL ESTATE LITIGATION
Adam Leitman Bailey, P.C. Preserves Six Million Dollars In Loans Made by Its Client
Jeffrey R. Metz
Jackie Halpern Weinstein
Courtney J. Lerias
When the managing member of three real estate LLCs sought to refinance the existing senior debt, Adam Leitman Bailey, P.C.’s client made loans totaling approximately six million dollars. There was also a mezzanine lender, whose agreement with the holding company for the LLCs, required its written permission for an activity such as a refinance. None was provided. Once the LLCs received and distributed the loan proceeds, the existing debt was retired, but the remainder, approximately 1.6 million dollars, went missing.
Through a series of transactions, the LLCs, which were actually controlled by the mezzanine lender, sued the managing member and others to recover the missing proceeds. While at it, the LLCs also claimed that because the loans were allegedly entered into without the requisite authorization, they were invalid and, consequently, they owed no money and the lender had no security interest in the properties.
Jeffrey R. Metz, Esq. represented the client before the Appellate Division First Department. Courtney J. Lerias, Esq. and Jackie Halpern Weinstein, Esq. represented the client before the Supreme Court.
INTERNET DEFAMATION / CRISIS MANAGEMENT
Adam Leitman Bailey, P.C. Prevails in Defending Former Cooperative Board Members in a Defamation Action Using Amended Anti-SLAPP Statutes
Bonnie Reid Berkow
In response to an action filed by a co-op corporation against a former board member and one of its shareholders alleging that the defendants had defamed Board members by distributing newsletters and emails anonymously accusing the Board members of dishonesty and fraudulent conduct, one of the defendants moved to dismiss the complaint pursuant to New York Civil Rights Law § 70(a) and § 76(a), commonly known as a strategic lawsuit against public participation or SLAPP suit, as amended on November 10, 2020 (the “2020 Amendment”). The defendant argued that the 2020 Amendment should be applied retroactively and that the defamation action was a SLAPP suit intended to inhibit the shareholder’s rights of free speech, petition, and association rights in the cooperative Corporation.
The 2020 Amendment 76(a) significantly expanded the applicability of the statute and extended it to cover almost all modes of public communication, construed broadly. The amended statute broadened the definition of an “action involving public petition and participation” from one brought by a “public applicant or permittee” to “any communication in a place open to the public or a public forum in connection with an issue of public interest.” The amended statute also made an award of legal fees mandatory, rather than discretionary, and provided for other compensatory and punitive damages not available under the existing statute.
Bonnie Reid Berkow, a partner at Adam Leitman Bailey, P.C. in the Coop/ Condo Litigation Group represented the Coop Corporation in this matter.
FORECLOSURES
Adam Leitman Bailey, P.C. Wins a Case of First Impression Under FAPA, Protecting its Client’s Mortgage in a Murky Legal Climate for Lender’s Rights
REAL ESTATE LITIGATION
Mission Impossible: Securing Almost 2 Million Dollars From a Convicted Felon to Payoff Claims Owed to Commercial Lender
SUPREME COURT LITIGATION
Adam Leitman Bailey, P.C. Prevails on Motion for Summary Judgment Against Commercial Tenant in Supreme Court Ejectment Action Under RPAPL Article 6
Carolyn Z. Rualo
William M. Pekarsky
Through creative lawyering, Adam Leitman Bailey, P.C. found yet another way to win for its client. In this matter, Adam Leitman Bailey, P.C. was faced with a difficult situation while in midst of Covid—Adam Leitman Bailey, P.C.’s client, the landlord of a commercial property in Nassau County (the “Premises”), was at the mercy of its tenant (the “Tenant”). The Tenant—the owner and operator of a retail home improvement business that operated out of the Premises— breached its lease with Adam Leitman Bailey, P.C.’s client by performing an illegal alteration in the Premises. To make matters worse, the Tenant also fell back on rent, just a few months before Adam Leitman Bailey, P.C.’s client discovered the illegal alteration.
When the client came to Adam Leitman Bailey, P.C. seeking help, Adam Leitman Bailey, P.C. was faced with a unique issue—given that the Housing Courts throughout New York implemented an eviction moratorium in response to Covid, how could the client preserve its rights against this contumacious Tenant? In answering this question, Adam Leitman Bailey, P.C. employed one of its creative and new Covidera solutions—seeking recourse through a less often utilized provision of the Real Property Actions and Proceedings Law (“RPAPL”). What many lawyers did not realize during this time was that Article 6 of the RPAPL provides landlords with an effective avenue of eviction-related recourse against defaulting tenants. Specifically, Article 6 of the RPAPL allows landlords to commence Supreme Court actions to evict tenants that have defaulted under the terms of a lease. In other words, these types of cases, otherwise known as “ejectment actions”, provide landlords with the ability to seek possession of a premises outside of the purview of more common, preferred, and generally quicker, Housing Court eviction proceedings. Accordingly, through innovative lawyering and careful attention to legal research, Adam Leitman Bailey, P.C. identified this Article of the RPAPL as a certain body of the law that provides the Supreme Court with jurisdiction to hear an ejectment case brought against a defaulting commercial tenant. This was true even during the existence of the eviction moratorium imposed by the New York legislature throughout the height of COVID. Therefore, since the Housing Courts throughout New York paused all eviction proceedings, Adam Leitman Bailey, P.C. creatively developed this new strategy to allow it to protect its client’s rights against its defaulting Tenant.
It was at this point that Adam Leitman Bailey, P.C. sprung into action. Adam Leitman Bailey, P.C. wasted no time in serving the requisite predicate termination notice on the Tenant in accordance with the parties’ lease agreement. After the Tenant failed to vacate the Premises by the date specified in Adam Leitman Bailey, P.C.’s predicate termination notice, Adam Leitman Bailey, P.C. commenced this unique Supreme Court “ejectment action”. While Adam Leitman Bailey, P.C. advised the client that these types of Supreme Court cases tend to move slowly, the client understood and agreed that this was the most efficient and effective way to enforce its rights against the defaulting Tenant while Housing Court eviction cases were on hold. Here, timing was critical, not just because the Tenant undertook an illegal alteration of the Premises which could have subjected Adam Leitman Bailey, P.C.’s client to liability for potential code violations from relevant city agencies, but also because the Tenant was occupying the Premises rent free. It was on this basis that Adam Leitman Bailey, P.C. brought its action which not only sought an Order ejecting the Tenant, but also awarding Adam Leitman Bailey, P.C.’s client with rent for each month that the Tenant failed to pay prior to, and after, the termination of its lease.
Shortly after Adam Leitman Bailey, P.C. commenced this lawsuit, it wasted no time in swiftly moving for summary judgment against the Tenant. In its summary judgment motion papers, Adam Leitman Bailey, P.C. crafted bulletproof arguments with irrefutable evidence to supplement its claims. However, a new development arose just a few months after Adam Leitman Bailey, P.C. filed its motion for summary judgment— the Tenant vacated the Premises. While the client was relieved that the Tenant was no longer in occupancy the Premises, the issue concerning the Tenant’s failure to pay any rent for almost two (2) years was unresolved. Seemingly, when it came time to oppose Adam Leitman Bailey, P.C.’s motion for summary judgment, the Tenant thought it could get away scot-free with its failure to pay rent.
Here, after vacating the Premises, the Tenant opposed Adam Leitman Bailey, P.C.’s motion based on the theory that the Supreme Court no longer had jurisdiction to hear this case because, among other reasons, the Tenant vacated the Premises and Adam Leitman Bailey, P.C.’s Tenant received the main form of relief that it sought in this case—eviction. Specifically, the Tenant attempted to convince the Court that the client is unable to continue with its “ejectment action” if the Tenant vacated the Premises while the litigation was still active. Adam Leitman Bailey, P.C. was unfazed by this argument. Critically, the Tenant failed to acknowledge that it was still on the hook for the rent that it failed to pay to Adam Leitman Bailey, P.C.’s client for almost two (2) years). In replying to the Tenant’s opposition to the summary judgment motion, Adam Leitman Bailey, P.C., as always, utilized irrefutable case law and innovative reasoning to disprove the Tenant’s position. Adam Leitman Bailey, P.C. made it clear that the Tenant’s decision to vacate the Premises during the pending litigation did not otherwise dispose of the client’s claim seeking to recover unpaid rent from the Tenant. As Adam Leitman Bailey, P.C. argued, the client’s claim for unpaid rent could serve as a standalone cause of action that otherwise survives the already resolved claim seeking ejectment. The Court ultimately agreed.
Specifically, after the motion was moot, and Adam Leitman Bailey, P.C. and the Tenant’s attorney were heard for oral argument on the motion, the Court issued an Order adopting its categorical agreement with Adam Leitman Bailey, P.C.’s position. In sum, Adam Leitman Bailey, P.C. successfully prevailed on the client’s motion for summary judgment, and the Court directed the entry of summary judgment against the Tenant with a future hearing scheduled to evaluate the exact amount of unpaid rent that the Tenant will have to pay to Adam Leitman Bailey, P.C.’s client. After being subjected to the Tenant’s wrongful conduct, Adam Leitman Bailey, P.C.’s client was able to finally not only achieve peace of mind, but also can now look forward to being made whole from the Tenant’s refusal to pay rent for almost two (2) years.
Carolyn Z. Rualo and William M. Pekarsky represent the client in all aspects of this litigation
FORECLOSURES
Adam Leitman Bailey, P.C. Wins Summary Judgment Despite Attacks on the Servicer’s Limited Power of Attorney and on the Affidavits of Service for the Notices
Jackie Halpern Weinstein
Danny Ramrattan
Courtney J. Lerias
Adam Leitman Bailey, P.C. was retained by a lender in connection with the foreclosure of a business purpose loan on a residential premises in Suffolk County. Once the firm moved for summary judgment, the defendants argued that the affidavit of a Vice President from the loan servicer and attorney-in-fact to the plaintiff was insufficient to support summary judgment because the affiant did not have the authority to act under the limited power of attorney. Defendants argued that because the power of attorney gave the servicer only the power to perform specific acts, the servicer did not have the power to provide an affidavit in foreclosure litigation. Defendants also argued that the affidavit from the loan servicer was, regardless, insufficient to establish that the plaintiff complied with the notice requirements of the mortgage in that the affidavit did not constitute evidence of actual mailing of the notices.
In response, Adam Leitman Bailey, P.C. argued that the Second Department has routinely held that an affidavit from a mortgage lender’s servicer is sufficient to demonstrate a lender’s entitlement to summary judgment. All that is required for a servicer to demonstrate its authority to act on behalf of a mortgage lender is the submission of a power of attorney establishing that power. Here, although the Defendants argue otherwise, Adam Leitman Bailey, P.C.. argued that the plain language of the power of attorney specifically granted the servicer to do exactly what the Defendants claimed it could not. Adam Leitman Bailey, P.C. also argued that there is a plethora of New York case law that holds that an affidavit of service from the mailer is sufficient to demonstrate compliance with the notice requirements of the 30-day breach letters and/or the 90-day notices, and the firm was sure to include affidavits of service from the people who actually mailed the notices with the moving papers to guard against this very argument.
The court in this case adopted Adam Leitman Bailey, P.C.’s arguments in their entirety. It found that the plain language of the power of attorney provided that the attorney-in-fact has the authority in a judicial foreclosure action to prepare documents. It further found that the affidavits of service from the individuals that actually mailed the notices were sufficient to establish compliance with the notice requirements. The Court granted the motion, and the firm secured the win for the plaintiff.
Jackie Halpern Weinstein, Esq., Danny Ramrattan, Esq., and Courtney Lerias, Esq. of the Foreclosure Litigation Group at Adam Leitman Bailey, P.C. secured this result for the client.
LANDLORD REPRESENTATION
Despite Throwing the Kitchen Sink, Knives and Tables at the Landlord, Dinner is No Longer Being Served at This Restaurant —Eviction Ordered and Effectuated
Carolyn Z. Rualo
Michael Nesheiwat
In the realm of commercial real estate, disputes between landlords and tenants regarding nonpayment of rent can be intricate and demanding. The attorneys here at Adam Leitman Bailey, P.C. take pride in assessing these intricacies and obtaining favorable results for their clients. Representing the landlord in a commercial nonpayment proceeding against a restaurant tenant, and despite the tenant’s assertion of multiple affirmative defenses and a counterclaim, the diligent efforts and strategic legal maneuvering of the team at Adam Leitman Bailey, P.C. resulted in a decisive win through a successful summary judgment motion.
Our client, the landlord, faced a challenging situation when a commercial restaurant tenant failed to meet its rental obligations. As the dispute unfolded, the tenant raised several affirmative defenses and a counterclaim in an attempt to circumvent its financial responsibilities. These defenses included claims of property defects, alleged breaches of lease by the landlord, and other assertions aimed at justifying the tenant’s nonpayment.
Navigating through the tenant’s defenses and counterclaim presented a formidable challenge. The case demanded meticulous analysis, through understanding of lease agreements, and a comprehensive grasp of legal precedents. Our client’s financial stakes and the imperative to uphold the integrity of the lease agreement added to the gravity of the situation.
Adam Leitman Bailey, P.C. approached the case with a comprehensive strategy aimed at dismantling the tenant’s defenses and counterclaim while showcasing the validity of the landlord’s claims. Through extensive legal research, detailed examination of the lease agreements, and diligent fact-gathering, our team formulated a compelling argument that refuted each of the tenant’s defenses and counterclaim. Leveraging our expertise in commercial real estate law, we meticulously crafted a motion for summary judgment that systematically addressed and discredited the tenant’s assertions
Our strategic legal efforts materialized in a resounding victory for our client. The Court ruled in favor of the landlord, granting our comprehensive summary judgment motion that not only upheld the landlord’s claims for nonpayment of rent, but also dismissed all of the tenant’s defenses and counterclaim. The Court issued our client a six-figure monetary judgment and a judgment of possession, as well as attorneys’ fees, recognizing the merits of our case and determining that “Petitioner has established its prima facie entitlement to summary judgment as a matter of law.”
The landlord is represented by partner Carolyn Z. Rualo and associate Michael Nesheiwat. Mr. Nesheiwat drafted the motion for summary judgment.
THE REAL DEAL
Agency finds probable cause in discrimination suit against Bespoke
The New York State Division of Human Rights has found probable cause regarding a discrimination complaint filed by former Bespoke executive Jarret Willis against the brokerage and its founders, Cody and Zachary Vichinsky.
The investigation stems from a complaint Willis, who is Black, filed in February, in which he alleged that another employee addressed him by the N-word and that various employees referred to him as Jafar, the villain from “Aladdin,” in a derogatory manner.
Willis also alleges the word “kike,” an anti-Jewish slur, was frequently used at the firm’s Hamptons office and that the brokerage withheld from him hundreds of thousands of dollars in commissions.
LICENSE AGREEMENTS AND REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (“RPAPL) § 881 ACTIONS
Adam Leitman Bailey P.C. Client Receives “Probable Cause” Ruling Determined after Failing to Pay Commissions Owed and Committing Unlawful Racial Discrimination
LANDLORD REPRESENTATION
The Battle of Manhattan Apartments: Legal Showdown Between Landlord and Terminated Superintendent
CONDOMINIUM AND COOPERATIVE REPRESENTATION
Limited Liability Company Transparency Act
Rosemary Liuzzo Mohamed
On June 20, 2023, The New York legislature passed a bill called the LLC Transparency Act which would require the beneficial owners of limited liability companies (“LLC”) to disclose their identities. This disclosure of information could then be found in a newly created, public searchable database maintained by New York’s secretary of state.
Governor Hochul signed this bill into law on December 23, 2023, and it will be effective one year after. However, the bill was amended to remove the requirement of the public searchable database to preserve the privacy and security protections LLCs provide in real estate transactions. Instead, the collected information will be entered into a database only accessible internally to agencies of law enforcement.
An LLC is a business structure in the United States that protects its owners from personal responsibility for its debts or liabilities. A beneficial owner of an LLC is any person who exercises substantial control over the entity or owns or controls at least 25 percent of its ownership interests, directly or indirectly.
The LLC Transparency Act aims to provide the necessary information needed by law enforcement to tackle unlawful activities involving possible corruption, fraud, theft, money laundering, tax evasion, etc.
The database would include the full legal name of the beneficial owner(s) of New York organized LLCs as well as foreign LLCs qualified to do business in New York. This will include the entity’s full name, business address, date of birth, unique identification number from a passport or other government issued identification document and other detailed information.
The penalty imposed under the ACT for failure to comply with beneficial ownership within the required timeframe would be a fine of $250.00 as well as a non-compliance public listing.
Top 10 Most Influential Real Estate Litigation Lawyers in New York, 2023
In the world of commercial real estate, litigation is a common and inevitable facet. The diverse range of complexities, from tenant disputes to land use matters, necessitate the expertise of highly skilled litigators. In New York, home to some of the world’s most iconic real estate, we find attorneys who are at the top of their field in real estate litigation. This article focuses on some of these leading lawyers, their professional experience, and what peers and clients say about their competence and dedication.
With hundreds of legal minds navigating the waters of real estate litigation, what sets the following individuals apart is their impressive body of work, extensive experience, and the reputation they have built within the industry. Their expertise spans the gamut of real estate matters – be it luxury residential cases, landlord and tenant class action cases, or New York City land use matters.
Providing an in-depth understanding of the intricacies of New York’s complex real estate law framework and hands-on experience, these lawyers offer a broad range of services, often making the difference between success and failure in high-stake real estate litigation. Let’s dive deeper into their legacies and their contributions to the Real Estate Litigation industry in New York: Adam Leitman Bailey is a real estate litigator of high repute. His expertise particularly shines in complex landlord-tenant disputes. Clients value his thorough understanding of legal intricacies and his ability to effectively navigate them to achieve successful results.
Adam Leitman Bailey, P.C. Featured in Chambers Associate’s 2023 Guide and is Ranked in 5 Categories Nationwide in the 2023 Associate Satisfaction Survey
You’ll get a new lease of life at ALB, “the real estate boutique that everyone in New York knows.”
If the world of New York real estate was a game of Monopoly, Adam Leitman Bailey, P.C. would have its pieces spread across the board. “We have the biggest clients in the world, and we have some of the smallest,” eponymous founder Adam Leitman Bailey tells us. “We do the biggest and most exciting cases with the most interesting results.” Contrary to the size of its massive clientele – made up of some of the top Fortune 100 companies – the firm houses fewer than 30 attorneys. The firm also has a much smaller focus than its Big Apple peers, something which drew our interviewees to the firm: “If you want to be a real property attorney, Adam Leitman Bailey focuses and specializes in just that. You don’t have to do other things, so it’s a great firm for those who want to focus.”
TESTIMONIALS
TESTIMONIAL OF THE YEAR
We asked our attorneys and staff to choose the number one testimonial of the year which enlightened them more than the others. This was the winner.
“Adam is brilliant. Adam thinks outside the box. Adam doesn’t give up; he goes to war for you.” - M.F.
“Rosemary and her team are amazing. They made me feel confident in them, which made me extremely comfortable for the entire process. They were professional, extremely knowledgeable and always responsive.”
“It is an honor to know you. I appreciate the wonderful work your firm does. Wishing you and the members of your law firm all the best, always!”
Supreme Court Judge in New York
“One of my favorite guys from my days as a reporter for the Real Deal. Wanna win your RE case? He’s the man!”
J.N.B.
“I cannot be happier for my shareholders– they have received superb legal counsel.”
J.A.L.
“Adam Leitman Bailey – I am always thinking of you and very appreciative of all you have done for me and my family. Thank you for your kind words. I hold you in high regards, always.”
P.R.
“Happy Thanksgiving Adam. Because of you I have hope that everyday will be brighter than the one before. Thank you for protecting my family and fighting for us. I love you pal and I will NEVER be able to express how much what you are doing means to me.”
J.W.