When co-op and condo boards see something leaking into the building, they need to do something. Now. No questions asked.
“Regardless of whether it is a co-op or a condo, the board is fully responsible for any water penetration coming in from the facade or roof, and your building’s priority is to make the necessary repairs,” Steve Wagner, a partner at the law firm Adam Leitman Bailey, tells Brick Underground.
The board's first step will be to hire an architect to figure out the cause of the leak and establish whether it is due to a leaking facade, a construction defect, faulty pipes, bad drains, or if the roof needs to be replaced. Then the board needs to get bids on the work and employ a project engineer who can oversee the repairs. Next establish whether you have insurance coverage.
“Irrespective of the cause — even if the shareholder or unit-owner is to blame — it doesn’t absolve the board from the responsibility to make repairs to the common areas and, in some cases, the units,” Wagner says.
In a co-op, the warranty of habitability mandates that the landlord is responsible for keeping the shareholders' apartments and the building safe and livable at all times. The way co-ops are structured means boards take on a landlord’s responsibility in the eyes of the law. So a co-op board has the same apartment repair obligations to shareholders as regular landlords have to ordinary, non-investing tenants.
“The buck stops with the board,” Wagner says.
In a condo building, there is no leasehold relationship between the board and the owners, so the warranty of habitability does not apply. However, if there’s flood damage in a condo, the board will want to be involved to establish where the water is coming from.
“The bylaws will usually outline that the apartment owner is responsible for interior repairs to the apartment, but there is usually a contractual provision for a negligence claim if the cause of the water damage originates from the common elements,” Wagner says.
To avoid litigation over water damage, boards need to be willing and financially prepared to make structural repairs to the building promptly, Wagner says. Roof replacements are a good example of capital investments that make a board less vulnerable to water-damage disputes.
“The notion of delaying repairs is very dangerous," Wagner says. "When repairs are delayed, the costs can increase exponentially.”
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