This newsletter explores the emerging legal topics and issues affecting the condominium and cooperative services industry. Thought-leading attorneys from Moritt Hock & Hamroff’s Condominium and Cooperative Services Practice Group share their legal insight, experience and best practices on this rapidly evolving area of law.
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Moritt Hock & Hamroff’s Condominium and Cooperative Services Practice Group represents clients in all aspects of condominium and cooperative law.
The New York Court Of Appeals Ends The Glen Oaks Challenge To Local Law 97
We have written previously about the Glen Oaks litigation, which challenged the constitutionality of New York City’s signature climate legislation, Local Law 97. The case was originally filed in 2022, and by late 2023 the trial court had dismissed the case. In May 2024, however, the First Department of the Appellate Division revived the case to the extent of deciding that New York State’s Climate Leadership and Community Protection Act (aka the Climate Act) might possibly “preempt” Local Law 97, meaning that the State’s legislators in enacting the Climate Act may have intended to clear the regulatory field of any related local legislation such as Local Law 97.
That holding was appealed to the New York Court of Appeals, and on May 25, 2025 the Court of Appeals issued a unanimous decision reversing the Appellate Division and finding that, as a matter of law, the Climate Act does not preempt Local Law 97. As the Court explained, “the Climate Act recognizes that local government plays an important role” in combating climate change, and the Climate Act’s legislative findings “evince a sense of urgency concerning the implementation of mitigation measures in general and further express the legislature’s intent to ‘encourage other jurisdictions to implement complementary greenhouse gas reduction strategies.’”
Accordingly, the Court dismissed the Glen Oaks complaint and Local Law 97 remains good law.
Urban Green Council Proposal For A "One Stop Shop" For Greenhouse Gas Emissions Reduction Projects
Speaking of greenhouse gas reduction strategies, Urban Green Council – the preeminent think tank and advocacy group dedicated to decarbonizing buildings in New York City – held its annual conference at NYU on June 2, 2025.
One of the panels at the conference, “Funding the Future of Decarbonization,” featuring policymakers from NYSERDA, the Mayor’s Office of Sustainability, and other subject matter experts, unveiled a potential solution to what has seemed to be an almost intractable problem when discussing how to decarbonize the buildings sector.
That problem – which in fairness was a motivating force for the Glen Oaks plaintiffs as well – is that although we can all recognize the urgency of combating climate change, many building owners cannot reasonably be expected to navigate the high costs, lack of upfront capital, opaque incentives programs, and lack of in-house technical capacity and expertise needed to successfully plan, fund, and execute a comprehensive retrofit program. These challenges are especially difficult for co-op and condo buildings, which are largely run by non-professional real estate owners and do not benefit from economies of scale that portfolio-based commercial property owners may be able to tap into.
The Urban Green panel outlined an ambitious policy response to this dilemma: an “all-in-one” program whereby the State creates a revolving fund (initiated with seed capital and sustained by municipal bond sales) to fund a one-stop turnkey program available to building owners, whereby program administrators and pre-qualified private vendors would handle the planning, financing, and installation of emissions reductions retrofit projects. The cost of the retrofits would be paid back over time by building owners through a fee on the property owners’ property tax bill, hopefully at low interest rates.
The ambition driving this proposal is that the aggregation of many discrete property owners into a centralized retrofit program would create their own economies of scale, reduce costs, and curtail the need for 50,000 different property owners to reinvent the wheel with every retrofit project.
Suffice it to say, the distance between a proposal like this and a real world functioning program is vast, and the odds that something like this ever actually gets off the ground cannot be very good.
Nevertheless, it is heartening to see high-level acknowledgement that if policymakers are really serious about decarbonizing buildings, it is going to require serious policy innovation and – more than anything – significant increases in financial and technical resources available to property owners, particularly as we near 2030, when most large buildings in New York City will start to fall out of compliance with Local Law 97’s carbon emissions limits.
Appellate Court Strikes Down Attorneys' Fees Provision At The Dakota Building
A recently-issued Appellate Division decision is a reminder and warning to co-op boards that proprietary lease attorneys’ fees provisions may not be enforceable if those provisions permit a board to recover attorneys’ fees from tenant-shareholders even where the tenant-shareholders may potentially prevail in litigation against the board.
The dispute in Kasowitz, Benson, Torres & Friedman, LLP v. JPMorgan Chase Bank, N.A., 2025 N.Y. Slip Op. 00396 (1st Dep’t 2025), had originated when a former tenant-shareholder at the famed Dakota building on Central Park West sued the co-op for alleged racial discrimination, defamation, and tortious interference after the board denied his application to buy an additional apartment in the building.
That case was eventually dismissed and the tenant-shareholder’s attorneys (Kasowitz, Benson) sued him for unpaid fees incurred in his failed lawsuit. That dispute eventually transmogrified into a dispute among the law firm, the co-op, and the tenant-shareholder’s lender (JPMorgan Chase) as to who had the first lien on the apartment.
Because the co-op’s lien was based on the attorneys’ fees the board had incurred in contesting the discrimination lawsuit, the bank argued that the proprietary lease provision permitting the recovery of attorneys’ fees was unconscionable and unenforceable as a matter of public policy. The key precedent here is the decision in Matter of Krodel v. Amalgamated Dwellings Inc., 166 A.D.3d 412, 413-414 (1st Dep’t 2018), which had found that an attorneys’ fees provision which “permits the landlord to recover attorneys’ fees when the tenant brings an action against the landlord even when the landlord is in default” is unenforceable as a matter of public policy, because it would “dissuade aggrieved parties from pursuing litigation and preclude tenant-shareholders from making meaningful decisions about how to vindicate their rights in legitimate instances of landlord default.”
One difference in the Dakota litigation is that the board had actually prevailed in the litigation by defeating the discrimination lawsuit. The Appellate Division ruled, however, that this factual contingency did not matter. “Because the lease provides for attorneys’ fees regardless of default or merit, in a dispute between a residential co-op and a shareholder tenant,” the attorneys’ provision was unenforceable regardless of the outcome in this particular dispute.
Boards will be rightfully concerned that their own building’s attorneys’ fees provision may now be deemed to be unenforceable based on this decision. They may take some comfort that although the Dakota’s original attorneys’ fees provision is a typical one found in many proprietary leases throughout the City, it was amended in 2000 to significantly expand the circumstances in which that board could seek to recover attorneys’ fees. This amendment arguably limits the scope of the Kasowitz, Benson holding, but board members should consult counsel to determine whether their building’s ability to charge back attorneys’ fees may be at risk.
Court Throws Out Election Challenge Against Board That Had Not Held Elections For Three Years
In Jazwinski v Justice Ct. Mut. Hous. Coop., Index No. 702707/2024 (Sup. Ct. Queens Co.), a co-op had failed to hold an election for three years, supposedly due to COVID difficulties. By the time the co-op did finally hold an annual meeting in October 2023, the terms of all of the seven then-serving board members had expired.
In order to reinstitute the “staggered” terms contemplated by the co-op’s by-laws, the board decided that for the October 2023 meeting, four director positions would be put up for election, with two seats for a three-year term, one for a two-year term, and one for a one-year term, thereby “allow[ing] the current directors to serve similar terms relative to each other while also phasing in the staggered election of directors.”
The petitioners had argued that given the passage of time, the co-op should have put all seven (not just four) positions up for election with staggered terms. When the board rejected that argument, the petitioners (who, not coincidentally, would have been elected if all seven seats had been up for grabs) filed a lawsuit.
The court, however, dismissed the petition, finding that because the petitioners did not allege any fraud or other improper conduct by the board members, the business judgment rule should be applied and the board’s decision to put only four seats up for staggered terms was entitled to deference.
