Issues In Apartment Buildings When There is No Mending WallAugust 31, 2022 – New York Law Journal
Herrick partners Deborah Koplovitz and Andrew B. Freedland wrote an article for the New York Law Journal discussing case law around a myriad of noise complaints in apartment buildings and how and how boards and cooperative owners can make sense of a 2022 Ruling in O’Hara v. Board of Directors of the Park Avenue and Seventy-Seventh Street Corp., 206 A.D.3d 476 (1st Dep’t 2022).
The article states, "In O’Hara, downstairs neighbors complained that their lives were made "intolerable and uninhabitable" from the children in the upstairs apartment at 850 Park Avenue, New York, New York. The upstairs children allegedly created "noises, shrieks and pounding" and other "raucous events" which caused noise and vibration in the downstairs apartment.
After alleged attempts to resolve the issues with management and the board failed, plaintiffs filed suit, interposing several claims against the board of directors of the corporation for breach of fiduciary duty, breach of the proprietary lease, breach of warranty of habitability, breach of the covenant of quiet enjoyment, actual and/or constructive eviction, negligence, and attorneys’ fees. The plaintiffs also sued their upstairs neighbors for injunctive relief and damages alleging nuisance and breach of the Coop’s House rules. Defendants made motions to dismiss the Complaint, and on March 18, 2021, Supreme Court dismissed the plaintiffs’ claims against the board for constructive eviction, negligence, and for attorneys’ fees, and denied the neighbors’ motion to dismiss the Complaint.
Defendants appealed, and on June 14, 2022, the Appellate Division, First Department unanimously modified. O’Hara v. Board of Directors of the Park Avenue and Seventy-Seventh Street Corp., 206 A.D.3d 476 (1st Dep’t 2022)."
Deborah and Andrew limit their discussion to the claim against the neighbors as alleged third-party beneficiary of the proprietary lease, and the claim against the board for breach of the warranty of habitability due to alleged noise issues.
They note that, "It is hornbook law that "a third party may sue as a beneficiary on a contract made for his benefit…" but "an intent to benefit the third party must be shown". Port Chester Elec. Const. Co. v. Atlas, 40 N.Y.2d 652, 655–56 (1976). Accordingly, "an incidental beneficiary has no right to enforce a contract." Id.
An "intended beneficiary" as opposed to an "incidental beneficiary" is found where, for example, "no one other than the third party can recover if the promisor breaches the contract" or "the language of the contract otherwise clearly evidences an intent to permit enforcement by the third party." Fourth Ocean Putnam Corp. v. Interstate Wrecking Co., 66 N.Y.2d 38, 45 (1985)."
Our authors note, "In the context of the sale of a coop apartment, a prospective purchaser is not a third-party beneficiary of a proprietary lease between a seller and the cooperative corporation, and therefore has no standing to sue the corporation. See Woo v. Irving Tenants Corp., 276 A.D.2d 380 (1st Dep’t 2000). There is typically a provision in a proprietary lease which relates to a board’s ability to enact house rules to regulate conduct in the building. Therefore, it is not surprising that litigants have attempted to attach liability to other neighbors under a breach of contract claim, even though there is no privity between neighbors."
The article continues, "In 2019, the Appellate Division, First Department reviewed such a provision in a proprietary lease, and whether that provision permitted – or precluded – standing as a third-party beneficiary. Ran v. Weiner, 170 A.D.3d 425, 425–26 (1st Dep’t 2019). Given the particular language of that lease, which provided that the "Lessor shall not be responsible to the Lessee for the nonobservance or violation of House Rules by any other lessee or person", the Ran court found that there was no intent to create a specific benefit for other lessees. Id."
In Andrew and Deborah's experience, many, if not most, proprietary leases contain the same limiting language as in Ran and O’Hara. Accordingly, third party beneficiary claims among neighbors may continue to be severely, if not completely, curtailed as in O’Hara and Ran.
Regarding the Warranty of Habitability, Real Property and Proceedings Law § 235-b provides for an implied warranty by the landlord that the premises are "fit for human habitation and for the uses reasonably intended by the parties and that the occupants of such premises shall not be subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety."
The article concludes, "With respect to the alleged noise into the plaintiffs’ apartment, the O’Hara court explained that "the noise was [not] so excessive that it deprived plaintiffs of the essential functions of a residence". O’Hara, 206 A.D.3d at 478.
It would seem that the O’Hara court has tacitly recognized that noise from other neighbors and their children in apartment buildings is not unexpected, and unless it is so unreasonable that it precludes a tenant from enjoying the intended function of the apartment, a warranty of habitability claim may not make the kind of good fence that some neighbors wish it would.
This is discussed in the full analysis that originally appeared in the August 31, 2022 publication of the New York Law Journal. Access may require a subscription.