Who Pays When Things Go Wrong?
Litigation partner, Deborah Koplovitz, sat down with Habitat Magazine for their November 2021 issue feature, "Cases & Consequences", to discuss where responsibility lies for shareholders and the board in a cooperative in NYC - in particular in a case where a radiator leak turned into a lawsuit.
Habitat: There is a case winding through the courts that began with a radiator leak in a small four-unit co-op on the Upper East Side that involves complaints against the board and all the other shareholders and has become a huge mess. That begs a question: When there are complaints about damage to apartments, whose responsibility is it to fix things?
Koplovitz: If a radiator is leaking, 99.9% of the time it’s going to be the shareholder’s responsibility. Everything inside of the walls is, generally speaking, the shareholder’s responsibility, which is usually governed by Paragraph 18 of the proprietary lease. Sometimes you bounce around between Paragraph 4, 7 or whatever, it depends. But at the end of the day, the co-op governs repairs. Without checking this particular lease, it would be a good guess that it’s the shareholder’s.
What’s the proper process if a shareholder notices a leak from another apartment?
If you’re having water damage or water infiltration into your unit, obviously call the doorman if you have one. If you have a super, call the super. If it’s during the week, call or email the managing agent. If there is an issue with the pipes or the plumbing in the building and the leak is coming from that, you want to get someone in there to shut off the water immediately. Getting the water shut off is going to prevent any further damage. Communication is key. And then pretty quickly you should be able to know if the leak is coming from the building’s pipes or the plumbing or if it’s an issue with your neighbor. If they’ve overflowed their toilet or faucet or sink or there’s a fixture within their apartment that’s broken and leaking, that would be their responsibility.
Should the ‘leaked on’ shareholder notify the board, or simply knock on the upstairs neighbor’s door to request a fix?
The point of contact really should be the managing agent for these types of issues, and hopefully you can get them resolved with the agent or maybe the super on an immediate basis. I wouldn’t go knocking on board members’ doors. They’re volunteers; they have other lives, jobs and other responsibilities. And they will not be able to get the water shut down faster than having the super do it, or someone else in the building, like a porter.
Let’s say that the neighbor doesn’t fix the radiator, and it’s still leaking. What’s the next step? In the case I mentioned, obviously someone sued.
Well, you would hope that communications can be sent basically on your behalf to the upstairs neighbor that the problem needs to get fixed and that it’s ongoing. If you’ve reported it to your homeowners insurance carrier — and of course all shareholders and unit-owners need to have their own insurance for their apartment and their personal property — It could be that your insurance company has a subrogation claim or is dealing with the neighbor to get this resolved. But if it’s an ongoing problem and it keeps happening and the board hasn’t reached out, certainly you can reach out to your neighbor directly.
How should you do that?
I would have a letter sent on your behalf by your own lawyer that says: “Hey, this is still going on. I’ve told you, the managing agent told you, the super’s told you, the door people have told you, and you’re still not fixing it. I really need this fixed. You’re damaging my property, and I’m getting very frustrated.” Hopefully then they would fix it. And if they don’t, then of course your last resort would be to go to court and sue them. I believe what the downstairs shareholder did in this case is sue everyone in the building. Fixing the leak wasn’t the board’s responsibility, so I would not recommend suing anyone that isn’t responsible, because it’s not going to get you anywhere. In this case, it ended up costing the shareholders, I think, $150,000 in the co-op’s legal fees. So that’s not really a good idea.
Is there something boards can do to remind shareholders what their responsibilities are? It may be in the proprietary lease, but perhaps only a lawyer is going to read that.
There’s a lot of common questions or complaints about repairs that go to the managing agent, and I think it’s a great idea to have your agent work with the building’s lawyer to address the most often requested items to be fixed. Then they can write a memo that the managing agent or super or even the doorperson can hand out to a shareholder. Windows are a common issue, and sometimes they’re the board’s responsibility, and sometimes they’re the unit-owner’s or shareholder’s. It really depends building by building. In the memo, there can be a list of five to 10 items that are often complained about. You can explain that pursuant to these paragraphs in the proprietary lease or this section of the bylaws in the condo which problems are your responsibility to repair, and to please make sure that you’re on top of that. Hopefully that would give people clarity.
Deborah Koplovitz is a partner at Herrick, Feinstein LLP, New York, N.Y.
This article originally appeared in the November 2021 edition of Habitat Magazine. Access may require a subscription.