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LEGAL/FINANCIAL

HOW LEGAL/FINANCIAL PROBLEMS ARE SOLVED BY NYC CO-OPS AND CONDOS

The Gray Area of Liability When Building Systems Fail

Victor M. Metsch in Legal/Financial on March 15, 2018

New York City

Gray Areas
March 15, 2018

A pipe bursts. An apartment floods. The resident files a damage claim against the co-op or condo board, contending that the flood was caused by the board’s failure to provide necessary maintenance of building systems.

The board should not simply write a check for the damages. Instead, it should check the declaration, offering plan or other governing documents to determine if the pipe is located in the so-called “common area,” for which the board is responsible. If it is not, the shareholder or unit-owner must deal with the problem on her own. 

In many governing documents, everything inside the walls of an apartment (including the wallpaper) is the responsibility of the apartment owner, while everything outside the apartment walls is the responsibility of the co-op or condo. However, which party is liable for certain damages is a mixed question of fact and law, and therefore caution is advised. 

A  recent case is illustrative. The plaintiff was the owner of unit in a townhouse complex and a member of the homeowner’s association. According to the complex’s governing declaration, the association had the duty to maintain any pipes that serviced more than one unit; the owner of an individual unit had the duty to maintain pipes that serviced his or her unit exclusively. 

A unit was flooded during a severe rainstorm. The unit owner sued for negligent maintenance, claiming the flood was caused by the failure of the association to provide adequate maintenance for the drainage pipes underneath the unit. The association moved to dismiss the claim on the ground that it had no obligation to maintain the problematic pipes because they did not service more than one unit. The trial court agreed with the association and dismissed the claim. The unit-owner appealed. 

The appellate court noted that the common areas in a cooperative or condominium are usually tailored to conform to the physical layout of the premises. And the fact that a particular pipe is physically connected to, and accessible from, or associated with, a single unit does not end the inquiry. Where the pipe provides a common benefit to more than one unit, it may be deemed to service more than one unit and may be classified as a common element for which the association is responsible.

The association asserted, through the testimony of the plumber who repaired the drainage pipes, that the pipes were wholly within the footprint of the damaged unit, and that the pipes provided drainage solely for that unit. Thus, the association claimed that  the pipes did not qualify as a common element. 

For the unit-owner, a professional engineer contended that that the pipes served as a communal surface water drainage mechanism for a block of four townhouses, of which the damaged unit was a part. The engineer's opinion was based on the slope of the block of townhouses and the absence of any other communal drainage system. 

The appellate court reversed the lower court’s decision and sent the case back to the trial court. The unit-owner was to be afforded the opportunity to prove at trial that the pipes were common elements to be maintained by the association. 

This case illustrates how it may be difficult to determine whether a fixture (such as pipes) is a common element, to be maintained by the association, or lies within a particular unit and thus has to be maintained by the unit's owner. And that threshold determination may be necessary to decide who failed to meet an obligation to maintain the fixture and is responsible for any resulting damages.

Lesson learned: if a building system fails, reach for your governing documents (or have your attorney do so) before you reach for your checkbook. Liability can be a gray area, and it needs to be cleared up before a board pays any damage claims. 

Victor M. Metsch is of counsel at the law firm of Smith, Gambrell & Russell.

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