Suarez v. Rivercross Tenants' Corp.
1981 N.Y. Misc. LEXIS 2049, 438 N.Y.S.2d 164, 107 Misc. 2d 135 (1981)
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Rule of Law:
The statutory implied warranty of habitability, as codified in New York Real Property Law § 235-b, applies to the proprietary lease between a cooperative corporation and its tenant-shareholder.
Facts:
- Since July 1978, the plaintiff, Suarez, has occupied a cooperative apartment in a building owned by the defendant cooperative corporation, Rivercross Tenants' Corp.
- Beginning in August 1978, Suarez complained to management about several issues, particularly a malfunctioning heating and air-conditioning unit.
- During the winter of 1978, the lack of heat became acute, with apartment temperatures allegedly dropping as low as 40 degrees Fahrenheit.
- A daughter was born to Suarez in October 1978, and on a physician's advice, the family had to find alternative shelter for a period due to the cold.
- Suarez attempted to use supplemental electrical heaters, but the building's wiring could not support the additional load.
- Suarez ultimately hired his own contractor to repair the three heating units at a personal cost of $375.
Procedural Posture:
- In March 1979, plaintiff Suarez filed an action against defendant Rivercross Tenants' Corp. in a New York trial court, alleging breach of lease and statutory duty to supply heat.
- On January 31, 1980, Suarez moved for summary judgment on the issue of liability.
- On March 19, 1980, Rivercross Tenants' Corp. cross-moved for summary judgment.
- On April 16, 1980, the trial court denied both motions, finding that issues of fact required a trial.
- Suarez appealed the trial court's order to the Appellate Term of the Supreme Court.
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Issue:
Does the implied warranty of habitability under New York Real Property Law § 235-b apply to the proprietary lease between a cooperative corporation and a tenant-shareholder?
Opinions:
Majority - Per Curiam
Yes, the implied warranty of habitability applies to proprietary leases for cooperative apartments. While the court recognizes the unique, or sui generis, nature of the cooperative relationship, it holds that a proprietary lease establishes a landlord-tenant relationship. As a matter of sound policy, a proprietary tenant, who can be evicted for non-payment much like a traditional tenant, is entitled to the same statutory protections. The legislative intent behind Real Property Law § 235-b was to modernize landlord-tenant law, and its protections should extend to this modern form of tenancy to ensure cooperative boards remain attentive to the well-being of their members. However, summary judgment was properly denied because a trial is needed to determine the factual question of whether the specific conditions constituted a breach of this warranty.
Concurring - Asch, J.
While concurring in the result that summary judgment was properly denied, the opinion disagrees that the statutory warranty of habitability applies to cooperatives. The relationship between a cooperative corporation and its shareholder-tenant is sui generis and fundamentally different from a conventional landlord-tenant relationship, as it is non-profit and based on a fiduciary duty. Shareholders have other remedies available to them, and there is no legislative history to suggest § 235-b was intended to apply to this unique arrangement. Applying the statute could also improperly void agreements between shareholders regarding building maintenance and improvements. The denial of summary judgment is correct simply because fact issues exist, not because the statute applies.
Analysis:
This decision established a significant precedent in New York real estate law by formally extending the statutory warranty of habitability to cooperative apartments. It resolved conflicting lower court opinions and clarified that despite their equity ownership, proprietary lessees are entitled to the same baseline protections for livable conditions as traditional renters. This holding strengthened the rights of co-op shareholders against their corporations and imposed a clear duty on cooperative boards to maintain facilities essential to health and safety, treating them as landlords for the purpose of this statute.
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