Co-op Board Had Unlimited Right to Either Consent or Withhold Permission to Sublet
LVT Number: #33658
A co-op shareholder tenant sued landlord cooperative corporation for refusing to grant permission to sublet his apartment and denying his request for a shareholder meeting on the issue. The tenant also claimed that landlord entered his apartment without permission after completing a gas line repair. The landlord co-op also terminated tenant's ability to sublet his apartment. Each side sought dismissal of claims made by the other, and both sides appealed the result.
The appeals court ruled for landlord in part by granting its motion to dismiss the claim for breach of the proprietary lease, breach of the implied covenant of good faith and fair dealing, and constructive eviction/breach of the covenant of quiet enjoyment. The proprietary lease clearly gave the co-op board unlimited right to consent to all sublets and to withhold consent for any reason or for no reason. The lease also didn't impose upon the co-op any obligation to repair claimed trespass-related damages.
However, tenant could pursue a claim for breach of fiduciary duty since it was timely filed and alleged that he was singled out for disparate treatment when the board refused his sublet request. Discovery was needed to determine if the board's actions were made in good faith. The tenant also could raise a claim based on trespass and should be permitted to obtain discovery to determine what, if anything, landlord gained from the trespass. Tenant's complaint did sufficiently lay out a claim for breach of fiduciary duty by the board for singling out tenant for disparate treatment concerning subletting. Tenant's additional claims of breach of the warranty of habitability and tortious interference failed because tenant didn't live in the apartment and there was no claim that subtenant breached the sublease.
Orlitsky v. 33 Greenwich Owners Corp.: Index No. 152667/22, App. No. 3816, Case No. 2024-01555 (App. Div. 1 Dept.; 3/4/25; Kern, JP, Singh, Friedman, Scarpulla, Shulman, JJ)