An important concern for co-op and condominium boards and managers is obtaining reimbursement of legal fees incurred by the entity from apartment owners, where appropriate and warranted, so that all apartment owners do not bear the burden of legal fees attributable to the actions or omissions of only one or a few apartment owners. To that end, co-op proprietary leases and condominium by-laws generally provide for such reimbursement when legal fees result from the default of or act/omission by an owner. Nonetheless, legal fees remain difficult to recover from apartment owners, and reimbursement provisions are subject to strict scrutiny by the courts and (with regard to co-ops) statutory constraints. See generally Richard Siegler and Eva Talel, “Legal Fee Recovery When Disputes Arise with Apartment Owners,” NYLJ (March 4, 2009) p. 3, col. 1.

This column updates the earlier one cited above, and discusses a recent Appellate Division, First Department, decision limiting legal fee recovery rights of co-ops, statutory provisions limiting such recovery, and provides guidance to boards, managers and counsel in light of the same.

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