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Orienting New Owners Getting Smart About Condo & Co-op Life BY A J SIDRANSKY Removals, Ejections, & Evictions in Condos & Co-ops When an Owner Has to Go BY A. J. SIDRANSKY June 2022 NEWENGLANDCONDO.COM 205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED THE CONDO, HOA & CO-OP RESOURCE CONDOMINIUM NEW ENGLAND In a rental building, the landlord has certain rights under certain circumstances to remove a tenant from his property before the expiration of their lease. In a private home setting, the only real path to removing an owner is through foreclosure—usually due to a mortgage default. But what about in a multifamily setting like a condominium or a co-op? In short, it’s complicated. To start off, in the legal world, the word eviction has a very specific meaning, differ- ent from how most non-lawyers understand the term. Attorneys often prefer to use the term ‘remove’ or ‘eject’ when speaking about forcibly getting a condo owner or co-op shareholder out of an association or building. For the purposes of this article, however, we will use the colloquial ‘evict’ and ‘eviction’ to keep things simple. Can an Owner be Evicted? According to Scott Piekarsky, an attorney with Phillips Nizer, a law firm located in Hackensack, New Jersey, “You can eject a shareholder from a co-op—but you can’t evict a condo owner from his or her unit.” That said, removal can occur for monetary or non- monetary reasons. In the case of monetary default, which is the more common reason, “an association can put a lien on the unit for outstanding common charges, and then foreclose on that lien,” Piekarsky says. “The lien has a priority over the first mortgage and tax liens. The association can pursue a foreclosure, and then a sheriff’s sale subject to the lien. In the end, if the foreclosure and sale are successful, the association gets the unit and the owner is out.” So, the process is not an eviction per se—but a means of removing a non-paying association member and recouping the monies owed. William McCracken, a partner with the law firm of Ganfer Shore Leeds & Zauderer in New York City, explains that in New York, understanding the difference in ownership Loss, Insurance, & Claims A Primer BY COOPER SMITH For many, the topic of insurance can be a bit overwhelming. Even the terms we use as insurance purchasers differ sub- stantially from the terms industry profes- sionals use when discussing and settling claims—which can leave laymen feeling like we need a translator to make sense of what exactly we’re paying for, what’s cov- ered, and (even more importantly) what’s not. For example, take the expression ‘to- tal loss.’ The average policyholder likely takes it to mean that there’s no hope of repairing the asset in question, whatever that may be. To an insurance profession- al, however, ‘total loss’ means something else. Replacement isn’t really the issue. It’s more a matter of numbers; are the pro- ceeds from the claim enough to repair the asset to its prior state? And in the world of insurance, that’s only the beginning— so it’s incumbent on boards, managers, and even individual owners and share- holders to better understand what’s cov- ered, what’s not, and how a claim is made. Types of Loss Loss—of property, possessions, even of life—is the basis of the entire insurance business, and therefore the industry has as many words for loss as the Inuit have for snow. That said, the basic terms most of us need to be familiar with are direct loss, indirect loss, partial loss, and cata- strophic loss. According to Insuranceopedia.com, these different losses can be defined as follows: Direct loss refers to physical or finan- cial loss or injury resulting directly from an unbroken chain of events, or a proxi- mate cause that led to a risk covered by an insurance policy. The latter refers to First-time buyers in condo associa- tions, co-ops, and other multifamily resi- dential communities are often surprised— and a bit confused—by the way their new building or HOA operates. Whether they are coming from a rental background or a single-family home experience, condo/ co-op living, and its administrative and governance structure, differs dramatically from both. Understanding how and why —before a problem arises—is an impor- tant part of being an engaged community member. Renter Mentality “People who move from single-family homes into multifamily dwellings often have some trouble adapting to their new environment,” says Daniel Wollman, CEO of Gumley Haft, a management firm based in New York City. “They often don’t im- mediately grasp that there are reasons it’s called ‘cooperative living.’” Scott Wolf, CEO of BRIGS, LLC, a Bos- ton-based management company, agrees. “As renters,’’ he says, “everything was done for them, and this is how they often con- tinue to think. They don’t realize they are now responsible for the interiors and inte- rior equipment in their units. When a dis- posal is clogged, they think the association will pay to repair it.” And by extension, Wolf continues, “New owners often think the management company is the decision maker \\\[in the building or HOA\\\], when really, we’re the enforcer of decisions made by the board of directors or trustees. A lot of owners don’t realize that the board makes policy and we then administer their decisions.” Co-op and condo communities have rules and regulations that govern every- thing from behavior in common areas to construction or alterations in individual units. These rules can sometimes be an issue for newcomers, notes Wolf. “When coming from a private home, owners don’t know what they can’t do,” he says. “They can’t change their front door without per- mission. They don’t realize that changes to the exterior of their unit needs prior board approval—and might not be approved. They often also have issues with where continued on page 8 continued on page 6 rights is key to understanding evictions in co-ops and condos. “Condo unit owners own their units,” he says. “The condo board has no standing. Because a co-op shareholder has a tenant-land- lord relationship with the board under a proprietary lease, for purposes of eviction, they’re in the same boat as a renter. The co-op owns the unit, so if they follow the appropriate rules, \\\[the board\\\] can remove the shareholder, evict him or her, recover continued on page 6