If you’re facing a water damage issue in your apartment, who ends up paying will depend on where the water is coming from, and in some cases, who caused the leak, says Steven Wagner, a co-op and condo attorney with Wagner Berkow LLP and a longtime board member of his own 420-unit Manhattan co-op. It will also depend on whether your building is a co-op or a condo.
“In a condo, if there’s no real proof that the leak was caused by someone else’s negligence, everything in the ‘unit’ is the responsibility of its owner, and everything outside is a ‘common element’ for which the board of managers is responsible,” says Wagner Berkow partner Ian Brandt.
“It’s a lot more cut and dried, if you’ll excuse the pun, than it is in co-ops,” adds Wagner. However, what is technically defined as your condo unit can get a little tricky. “You have to look at the Declaration of Condominium to see what is considered the unit and what is considered a common element of the building,” says Wagner. “In condos, sometimes they define a unit as being midway through a wall or the exterior. And if the unit owner owns it, it’s their responsibility.”
In a co-op, things are more complicated, but it’s also more likely that the building will be responsible for shouldering the bulk of the costs, both inside and outside the apartments. Besides checking the proprietary lease to determine who owns the area where the leak took place [i.e. whether it’s your apartment or a common area], housing laws such as the Warranty of Habitability, the Housing Maintenance Code and the Multiple Dwelling Law will come into play here, too, and often make the landlord—in this case, the co-operative—responsible for repairs.
The third thing to consider is whether the leak was caused by negligence, whether on the part of one of your neighbors, the board, or a contractor working in the building. “If somebody is negligent and damages someone else’s apartment, or if the co-op or condo is negligent, then that party is the one who is ultimately responsible,” says Wagner.
(Though keep in mind that if the damage is a specific person’s fault, that doesn’t mean that a co-op can shirk its duties and wait for the individual to pony up and make the repairs. “Third party fault is never an excuse for a co-op not to fulfill its contractual or statutory repair obligations,” says Brandt, “But the co-op can sue the cuplable party. It would be a huge mistake for the corporation to say, ‘We’re not doing this because it’s someone else’s fault.'”)
Regardless of responsibility, though, Wagner recommends, in both co-ops and condos, addressing the problem immediately with your insurance company, rather than waiting for someone else to step in. “It’s always a good idea to try to resolve the physical issues, because otherwise things will fester, you could develop mold or other conditions,” says Wagner. “Take care of it. Don’t wait for all of the lawsuits to start and for the insurance companies to resolve the issues. They don’t necessarily move as quickly.”
For this reason, it’s a good idea to have homeowners’ insurance that covers “betterments and improvements,” to guarantee that any upgrades you’ve personally made to the apartment (painting, furniture, new appliances, etc.) will be covered in the event of damage, as the building won’t always be responsible for those.
“If you’re adequately insured, the best thing to do is to go to your own insurance company, and have them adjust your claim,” says Wagner. “And let the insurance company be the one who goes after the other parties. They can bring a lawsuit in your name. Very often what will happen is they will simply tender a claim to the responsible party’s insurance, and work out the arrangement directly with the other insurance company.”
You should also put your building’s management on notice about the damages, and give them access to your apartment as requested. “You have to tell the co-op board and say, ‘Please come back and look, send your adjusters and insurers,'” says Brandt. “If the co-op doesn’t know and isn’t given access, they have no liability.”
“The best scenario is that the co-op’s insurer and the shareholder’s insurer work out an apportionment of the loss,” adds Brandt.