Twenty-one years ago last month, the seminal case of Levandusky v. One Fifth Avenue Apartment Corp.1 adopted the business judgment rule as the judicial standard for reviewing challenges to co-op and condominium board actions. The Court of Appeals reaffirmed the rule 13 years later in 40 West 67th Street v. Pullman,2 holding that it applied to a board’s properly carried out termination of a proprietary lease for objectionable conduct. Today, the rule established in Levandusky and Pullman retains its vitality.
Since our 2009 column dealing with the business judgment rule,3 New York courts have adjudicated at least 33 reported co-op or condominium cases in which the rule was implicated. Virtually all of these cases were summarily determined in the board’s favor. The cases discussed in this column demonstrate the courts’ continued deference to boards, unless the apartment owner establishes that the board acted in bad faith, without authority, or not in furtherance of the condominium’s or co-op’s legitimate interests.
Repairs and Alterations
