- Court
- New York Supreme Court, Appellate Division, First Department
- Case Name
- Hubshman v. 1010 Tenants Corp.
- Slip Op. No.
- 2026 NY Slip Op 03267
- Decision Date
- May 26, 2026
- Docket No.
- Index No. 157779/24, Appeal No. 6724, Case No. 2025-01399
Background
Barbara Hubshman has been a shareholder and proprietary lessee of a penthouse apartment at 1010 Fifth Avenue in Manhattan since 1979, in a dispute spanning decades against the cooperative and its board. Under the coop’s offering plan, as amended, and paragraph 7 of the original proprietary lease, Hubshman was granted exclusive use and enjoyment of the roof garden and terrace appurtenant to her penthouse. Paragraph 7 further provided that if the coop needed to perform work on the roof, it would submit its proposed contract to Hubshman, who had the right to have the work performed by her own contractors at the coop’s expense. Paragraph 6 of the original lease provided that the rights and obligations under paragraph 7 could not be changed without the lessee’s express consent.
The original proprietary lease expired on September 30, 2024. Four months before expiration, the coop held an annual meeting to ratify a new proprietary lease. The shareholders amended paragraph 6 by lowering the amendment threshold from 75% to 66 2/3% and eliminated the provision requiring Hubshman’s express consent to change paragraph 7. The new lease also eliminated the provisions in paragraph 7 that required the coop to seek Hubshman’s approval for roof garden repairs and allowed her to elect to perform repairs at the coop’s expense.
Hubshman sued seeking declarations, injunctions, specific performance of a 2011 settlement agreement, and breach of the original proprietary lease. Defendants cross-moved to dismiss. Supreme Court (Frank, J.) granted dismissal of the third (specific performance), fourth (breach of proprietary lease), and sixth (attorneys’ fees) causes of action.
Holding
The First Department unanimously modified the order, denying defendants’ cross-motion as to the fourth (breach of proprietary lease) and sixth (attorneys’ fees) causes of action, reinstating those claims.
The court affirmed dismissal of the specific performance claim because Hubshman did not identify any provision of the 2011 settlement agreement that was actually breached. The settlement’s acknowledgment of her roof rights under paragraph 7 was merely a preamble recital, not an enforceable covenant.
However, the court held that the breach of proprietary lease claim was improperly dismissed. The complaint adequately alleged that the coop breached the original proprietary lease by amending paragraph 6 to remove the consent requirement and by modifying paragraph 7 to eliminate Hubshman’s exclusive rights—all without her express consent. These allegations, if proven, would constitute a breach of the original lease’s protective provisions. The attorneys’ fees claim was reinstated because it was dependent on the viability of the breach of lease claim.
Key Takeaways
- Cooperative shareholders with negotiated protective provisions in proprietary leases may have enforceable rights that survive even when a new lease is adopted by the required supermajority.
- A settlement agreement’s preamble recitals acknowledging existing contractual rights do not create separately enforceable covenants absent specific operative provisions.
- When a proprietary lease provides that certain provisions cannot be changed without a specific lessee’s express consent, attempts to amend those provisions without that consent may constitute a breach.
- Attorneys’ fees claims that depend on the viability of underlying substantive claims survive when those underlying claims are properly stated.
Why It Matters
This case is significant for cooperative housing law because it addresses the tension between a coop board’s power to adopt new proprietary leases by supermajority vote and the rights of individual shareholders who negotiated specific protections. The decision suggests that where a proprietary lease contains provisions requiring an individual lessee’s consent before modifying certain rights, the coop cannot simply override those protections by adopting a new lease. This ruling will interest cooperative boards, shareholders with special use rights, and real estate practitioners who draft and negotiate proprietary leases and amendments. It underscores the importance of understanding and properly addressing individually negotiated protections when undertaking comprehensive lease revisions.