LIEB BLOG

Legal Analysts

Wednesday, May 09, 2012

Home Sale Can't Stop Divorce

Home Sale Can't Stop Divorce

A most fascinating case was just decided in Manhattan Supreme Court where the parties had agreed (stipulated) that until their residence was sold "neither party shall file any papers to obtain a judgment of divorce". 

So the question before the Court was: "whether the parties can condition their divorce upon the mercurial nature of the New York City real estate market."

The Court would have none of that and deemed this clause unenforceable because the Court felt that public policy was to make a divorce less burdensome and to remove as many roadblocks to its conclusion as possible. 

What is interesting from this case is how people utilize economic coercion as negotiation leverage in a divorce. Had the clause remained, the parties would have either had to accept a lower sales price or remained married. This would have allowed the party less motivated to sell to get concessions from the other party in other aspects of the divorce in order to permit the sale. 

For real estate professionals, you now know that in Manhattan a divorce should not block a sale of the property as the Court doesn't see the sale of real estate as a reason to stop a divorce. Instead, the divorce should go forward and as the Court says: " If the parties are unable to accomplish the sale themselves, then the court can force a sale (CPLR § 5103), appoint a receiver (CPLR § 5106), or order a conveyance by a sheriff (CPLR § 5107)"

To read the case in full, click here. 
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Great class last night - Property Management

Great class last night - Property Management
I just want to send a special thank you to the Mattituck-Laurel Historical Society for donating their fabulous school house for our continuing education course last evening. It was an experience that I will remember for a lifetime. What a thrill to each in an 1840s working school. I only wish that they had left the rulers to smack the naughty students with.

If you don't know about the Society, click here to learn more. While I loved the experience, the Society needs your help to stay erect and safe. In fact, we discussed the need for a walkway from the parking lot to the school in order to make visiting the site safer. Please do your part and donate to this worthy cause by becoming a member. Just click on this form to join.
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Friday, May 04, 2012

Cooperative House Rules Illustrated

Cooperative House Rules Illustrated

A case decided yesterday, 5/3/12, perfectly illustrates the power of cooperative boards. The case addresses whether the board, under the Business Judgment Rule, may create a house rule that restricts subletting. In the situation in the case the restriction imposed was as follows:

 "no [l]essee shall be permitted to sublet the whole or any part of an apartment or renew or extend any previously authorized sublease for more than two years during any four consecutive year period unless consent thereto has first been duly authorized by a resolution of the Directors or . . . by [l]essees owning at least 66⅔% of the then issued and outstanding shares of the Corporation."

The Appellate Court held that the board did have the power to enact such a rule under the Business Judgment Rule. Even going further, the Court rejected a prior decision to the contrary stating cooperative boards have “the authority to freely adopt a new policy in the legitimate interest of the cooperative”.

To read the decision, click here. 
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