We review the proprietary leases for individual coops and oftentimes run into issues when language incorporated into the lease that may have appeared pretty accurate at the time turns out to be less accurate when a situation arises.
There’s a definition that says that the lessor – the co-op – is responsible for repairs to the ceilings, walls, and floors. There’s another section that says that the lessee – the shareholder – would be responsible for repairs in the interior of the apartment and that included the floors. The question is, what do they mean by floors? Typically, you have the slab of the building, which could be a concrete floor or a metal floor. You can have sheetrock walls. You can have a ceiling. Now you get to coverings.
With the floor, you have to distinguish between a basic floor, a subfloor, and a finished floor. You may have another finish above it, such as tiles or finished flooring. So, if there is damage, either caused by a leak in the apartment or some other cause, repair responsibility depends on who caused it. If it was because of an action taken by the board or if it’s behind the walls – a broken pipe in the wall or in the ceiling – the co-op is responsible. If the shareholder caused it, he or she is responsible.
When you get to who’s going to replace the finished floor, the co-op’s position is always going to be, “It’s your problem, not ours.” The shareholder’s reply? “I didn’t cause the problem. Why should I have to pay for it?” So this has to be clarified in the language of the lease.
You may have to be a little more descriptive as to who’s responsible. It also comes up when you deal with insurance companies that insure for building damages. They usually limit their amounts to what is in the building’s structure. Therefore, the board could possibly deny coverage under its insurance policy.
The shareholder also has insurance and must make sure his policy covers the finishes and the floor, as well as the wiring in the walls. Some proprietary leases, especially the newer ones, may put that responsibility on the shareholder. Co-ops have to be careful to look through the document and make sure these responsibilities are defined and that examples of what may be gray areas are clear.
In one of the buildings that we represent, there was a leak from a greenhouse in a unit on the roof. Water went through that particular unit and into the space below, blew out the ceiling, blew out the walls, blew out the floors, and destroyed the furniture and the fixtures of both units.
Who’s responsible? The co-op said the shareholder owned the greenhouse. The shareholder said the greenhouse was part of the structure when the building was converted. The owner of the apartment below the greenhouse said it was either the co-op or the owner of the greenhouse, but not him. The issue always comes down to who’s responsible for the repairs? Who caused the damage? And who has the responsibility under the proprietary lease? The co-op needs to make sure that the proper party pays for damages to the building and the interior of an apartment.