Condo Unit Owner Cannot Sue Condo Board Directly for Cell Tower Lease
The Appellate Division, Second Department in Di Fabio v. Omnipoint Communications, Inc., relied upon its 2006 first-impression decision (in Carter v. Nussbaum, 36 A.D.2d 176 [2d Dep’t 2006]) to dismiss a condominium unit’s owners lawsuit against his condominium board based upon the board’s decision to enter into a lease permitting Omnipoint to construct and erect a cellular telephone antenna on the condominium’s roof.
A Condominium unit ownership is a “hybrid from of real property, created by statute” as unit owners hold a real property interest in their units with an exclusive right of possession, as well as, an undivided interest in the condominium’s common element. After establishing that the relevant New York statute (Real Property Law § 339-dd) did not preclude an individual unit owner from suing a condominium sponsor or board for wrongs to unit owner’s interest or unit, the Carter court found that it was an “open question” in New York as to whether a unit owner could sue for damages to the common interest.
Ultimately, the Carter court found that individual unit owners lacked standing to sue individually for injury to common elements or finances. Such a suit, the Court reasoned, would open the door to “duplicative piecemeal litigation” (since each unit owner only has a fractional interest in the common areas) and would “engender potential conflicts” (between suits started by the condominium board and those by condominium unit owners).
Nonetheless, the Court ruled that condominium unit owners did have standing to bring a derivative action on behalf of the condominium. The Court likened the situation to a corporate entity in that a condominium board owes a “fiduciary duty” to the individual unit owners and therefore, condominium units are entitled to the same consideration afforded by Courts to other types of litigants allowed to bring derivative suits.
Applying Carter’s rationale, the Di Fabio Court dismissed the complaint against the board members based upon plaintiff’s lack of standing, but specifically ruled that the plaintiff was not precluded from starting a new litigation in a representative capacity on behalf of the condominium.
SZPITFALL This action highlights a potential pitfall for unit owners in redressing grievances over actions by condominium owners.
