Case Name: George Kralik et al., Appellants, v. 239 East 79th Street Owners Corp., Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 2004-02-10
Citations: 4 A.D.3d 144
Docket Number: 
Parties: George Kralik et al., Appellants, v 239 East 79th Street Owners Corp., Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 4
Pages: 144–144

Head Matter:
George Kralik et al., Appellants, v 239 East 79th Street Owners Corp., Respondent.
[771 NYS2d 518]

Opinion:
Order, Supreme Court, New York County (Marylin Diamond, J.), entered September 26, 2002, which granted defendant's motion for summary judgment and declared plaintiffs not to be "holders of unsold shares" in the cooperative, unanimously affirmed, without costs.
Plaintiffs contend that they are holders of unsold shares by virtue of their compliance with paragraph 38 (a) of the proprietary lease. However, such a provision, alone, "does not create rights [as a holder], it merely extinguishes them" (Craig v Riverview E. Owners, 156 AD2d 157, 158 [1989]). There must also be compliance with regulatory requirements pertaining to such holders (see Pacella v 107 W. 25th St. Corp., 271 AD2d 342 [2000]).
Plaintiffs concede that they never registered as a broker (13 NYCRR 18.3 [w] [10]), and failed to submit sufficient evidence that the sponsor had guaranteed their obligations under the proprietary lease (§ 18.3 [w] [3]). Thus, as a matter of law, they never became holders of unsold shares. Concur—Nardelli, J.P., Mazzarelli, Ellerin and Friedman, JJ.