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Neponsit Property Owners’ Association v. Emigrant Industrial Savings Bank

Court of Appeals of New York
278 N.Y. 248, 15 N.E.2d 793 (N.Y. 1938)



Neponsit Realty Company (Neponsit) subdivided a plot of land for residential development. The deeds contained a covenant requiring the purchaser and all successors to pay an annual fee to an owners’ association for maintaining common areas like roads and other public purposes. The covenant gave Neponsit or its successors or assigns the right to foreclose a lien for failure to make payment. The covenant expressly stated that it was a real covenant running with the land. The Neponsit Property Owners’ Association (POA) (plaintiff) was formed. Emigrant Industrial Savings Bank (Emigrant) (defendant) bought a property in the subdivision at a judicial sale. Emigrant’s deed contained the covenant. Emigrant failed to pay the fee, and the POA sued to foreclose on the lien. Emigrant counterclaimed and moved for dismissal or judgment on the pleadings, which was denied. The POA’s motion to strike affirmative defenses and dismiss the counterclaim was granted. The appellate court affirmed but granted Emigrant leave to appeal to the Court of Appeals of New York on certified questions.

Rule of Law


Holding and Reasoning (Lehman, J.)

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