In a case of first impression, Adam Leitman Bailey, P.C., attorneys obtained a victory that could benefit homeowners associations throughout New York. The issue in the case was whether the Board of Directors of a homeowners association – a residential development located in Arverne, Queens County, New York, which consists of 121 privately deeded homes and common elements – had authority to sue the developer for damages resulting from construction and design defects affecting individual homes. While it was already settled in New York that Condominium and Cooperative boards have such legal standing, no court had yet ruled on the question in the case of a New York Homeowners Association.
In this case, certain objecting Association members sought a preliminary injunction to prevent the Association from expending funds to retain attorneys and engineers to investigate and prosecute construction defects litigation. Adam Leitman Bailey, P.C., defeated the motion. Siding with the firm’s argument, the Supreme Court in Queens County found that “the Board has plausibly argued that the applicability of [New York’s Condominium Act] should be extended to Homeowner’s Associations.” The court also sided with the firm’s argument that it would be inequitable to enjoin association members from acting collectively to protect their individual interests, finding: “It would be very burdensome to these members if they had to prosecute their claims individually against the developer. The court is reluctant to leave the individual homeowners without an effective remedy, especially since some of the construction defects appear to be dangerous.”
The decision allows the Association to continue prosecuting its construction defects case and is likely to be cited as precedent in future actions brought by New York Homeowners Associations.
The case is McSweeney v. The Board of Directors of Harbour Pointe at Arverne By The Sea Homeowners Association II, Inc. Adam Leitman Bailey, P.C., attorneys John M. Desiderio and Emily Tejerina Pennell represented the Association.