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November 11, 2015

Stroock Special Bulletin

By: Eva C. Talel, , , Penny L. Levine

A recent 2015 appellate decision makes clear that broad indemnification provisions in co-op alteration agreements and proprietary leases – ones that fail to expressly exclude liability for the co-op’s own negligence – are unenforceable, even where no negligence on the part of the co-op has been alleged.  Although the 2015 case – Nolasco v. Soho Plaza Corp. et. al. – was decided by the Appellate Division, Second Department (which is not considered “controlling” law in Manhattan), the defendant was a co-op located in Manhattan.

This Stroock Special Bulletin discusses the implications of the Nolasco decision for co-op proprietary leases and alteration agreements, which, if not properly crafted, may result in a co-op losing its right to recover against a shareholder who causes damage to the building or other shareholders’ apartments, even if there was no negligence on the part of the co-op.