N.Y. Ct. Says Plaintiffs in Derivative Action Against HOA Must Represent At Least 5% of the Members

Homeowners that initially represented 5% or more of the members of a homeowners association, commenced a derivative action against the association. Subsequent to filing the action, certain of the plaintiff homeowners ceased membership in the association thereby reducing the plaintiff’s membership percentage to less than 5%. On motion of the association, the trial court dismissed the case, and the remaining plaintiffs appealed, contending that the 5% ownership requirement applied only as of the date of the commencement of the action.