Page 10 - CooperatorNews NY July 2022

10 COOPERATORNEWS — JULY 2022 COOPERATORNEWS.COM because at some point, you arrive at ONE POINT One Point Brokerage is an independent insurance brokerage offering a comprehensive suite of risk transfer and insurance solutons to New York Cooperatves, Condominiums, and Real Estate owners since 1965. 450 Park Avenue South, 8th Floor • New York, NY 10016 Todd M. Ross • tmr@onepointib.com •212.696.0101 • www.onepointib.com attributable to her unsold units unless and until the offering plan is amended to identify which units are withheld from sale; ordered a reset election for all board seats; and ordered that for the six annual elections following the reset election, no more than two of the sponsor, her hus- band, and other family members may sit on the six-member board at any time. He also ordered that the management agree- ment with the husband’s company be ab- rogated and that the new board determine whether to continue with the husband’s company or another. Recent NYC Case Reaffirms the Business Judgment Rule In the 2021 case of 800 Grand Con- course Owners v. Thompson, the co-op board voted to terminate a s hareholder’s stock and lease due to the shareholder bringing a series of frivolous and dupli- cative lawsuits against the board and its members. This resulted in the board in- curring considerable expense and the loss of insurance coverage. (For more on the damage that frequent and ongoing litiga- tion can do to a community, see this issue’s companion article, “The Impact of Litiga- tion in Co-ops & Condos.”) Attorney Geoffrey Mazel, founding partner of New York law firm Hankin & Mazel PLLC and counsel and executive from other rising costs—by Local Law 97 member of the Presidents Co-op & Condo (LL97) enacted in 2019. The law requires Council (PCCC), says, “The court specifi- cally noted that the board followed proper carbon emissions or face steep penalties, procedures and had acted in good faith with the goal of achieving 80% emissions within the scope of their authority and in reduction by 2050. The first cap takes effect the best interests of the other shareholders. in 2024, with annual fines for excess emis- In addition, the court noted that the share- holder was provided multiple opportuni- ties to be heard, to defend, and to abate the and complied with laws in effect prior to objectionable conduct. In light of all this, LL97, the law as it stands still forces them the court found that the board’s decision to take on the significant expense and dis- to terminate the shareholder’s stock and ruption of major renovations and retrofits lease was protected by the Business Judg- ment Rule, and deferred to the board’s to determine greenhouse emissions do finding and decision.” Co-op & Condo Group Sues NYC Over Local Law 97 Mazel is also tangentially involved in a older cooperatives to undertake costly lawsuit recently filed by PCCC members retrofitting of heating, hot water, and ven- Glen Oaks Village Cooperative and Bay tilation systems to meet current building Terrace Cooperative Section I, both in standards, regardless of need or ability to Queens, along with a Manhattan mixed- use-building owner. While he is not rep- resenting the plaintiffs in this case, he is of working-class families living in some of helping to get the word out and to cham- pion for the cause. The suit focuses on the financial onus posed.” put upon the city’s large buildings or build- ing complexes—many of which are co-ops plaintiffs allege that the State’s Climate or condos populated by middle-income Leadership and Protection Act of 2019 pre- families who are already feeling strained empts LL97 and should forbid the imposi- buildings over 25,000 square feet to cap sions kicking in in 2025. Even if buildings already took measures to reduce emissions to comply or pay fines that escalate as the caps become more stringent. As we’ve previously reported (https:// cooperatornews.com/article/climate-act- compliance), New York City’s buildings produce 70% of the city’s carbon emis- sions, which is one reason climate legisla- tion focuses on these structures. Howev- er, luxury buildings like 838 Fifth Avenue, 101 Warren Street, Trump Park Avenue, and Trump Tower contribute to this out- put disproportionately, according to web- site 6sqft. And, as the lawsuit points out, LL97 fails to account for building factors such as density, hours of operation, or the specific nature of a building’s occupan- cy—effectively penalizing more efficient buildings that house more people or con- tain essential businesses that necessar- ily use more energy, like grocery stores, laundromats, and restaurants. “The one-size-fits-all algorithms used not work for many buildings,” says Bob Friedrich, president of Glen Oaks Village and co-president of PCCC. “LL97 requires pay for such equipment. The burden of compliance sits squarely on the shoulders New York’s older buildings, and there is no way to escape the crippling penalties im- In their suit filed on May 19, 2022, the THE YEAR IN... continued from page 9 “The court specifically noted that the board followed proper procedures and had acted in good faith within the scope of their authority and in the best interests of the other shareholders.” —Geoffrey Mazel