It doesn’t pay to repair a condominium on the cheap!

By Henry A. Goodman, Esq.

A pipe breaks. A plumber tells you it can be welded and may hold for a few years.  He says it will cost $250 but notes that the pipe is worn and could spring a leak in another area at any time.   He also says that if you replace the pipe for $750, it will last for 20 years, and he’ll give you a warranty for 10 years.

You decide to go for the less expensive repair, and the pipe leaks again a year later.  Are you negligent?

In a case I recently tried, the judge asked the attorneys, at the beginning of the case and outside of the hearing of the jury, whether the repairs were attempts to fix the problem “on the cheap.”   He stated that if the evidence showed that the repair was “on the cheap” and problems persisted, it would warrant a jury verdict against the association and its manager for negligence.  Fortunately, the repairs were appropriate, and the association and management won the case.

The above case involved not pipe leaks but leaks of a more serious nature.  We share this information with you because of the principles involved, since negligence can take many forms, and taking short cuts can be very costly!

Before our firm became involved with this case, in 2004, the plaintiff had filed a lawsuit against the association.  At trial she presented the jury with the following story: She owned a basement unit in a condominium along the Atlantic Ocean. It was built on a hill over the site of an old fort with a paved parking lot at the top of the hill.  Her unit had been inundated with water during heavy rain storms for approximately eight years.  After four years of water and mold, she sued the association.  At that time, there was insurance coverage.  As she and the association thought the problem had been corrected, she settled for about $100,000.

Two years later, in 2006, significant leaks returned.  According to the unit owner, it leaked every time there was a major rain storm.  She testified that when she got out of bed and stepped onto her bedroom carpet, she sank into ankle-deep water.  Her carpet was taken up, dried out, and replaced after a large crack in the foundation was filled.

The next leak was in her living room.  Again, the carpet was taken up, dried out, and replaced after a large crack in the foundation was filled.

When Band-Aids Don’t Work

After the third leak, the association, on the recommendation of the manager, brought in a geo-technical engineer to determine the source of the water.  They used high-tech equipment to survey under the unit and made recommendations.  The board and management followed those recommendations, which involved re-directing gutters, installing sump pumps, trenching, installing French drains, etc.  The carpets were removed, and holes were put in her walls. Unfortunately, the holes were not repaired for at least a year because, as the unit owner conceded, it was necessary to find the source of the problem, which could only be done with the walls open. While unattractive, the holes did not present any problems to the unit.

By the time the problem had been fixed, the association spent approximately $100,000.

Notwithstanding the extensive work done by the association, the plaintiff sued the board and management.  In the suit, she alleged mold and mildew infestation.  She also claimed emotional distress due to the condition of her unit as well as breach of contract, breach of the covenant of quiet enjoyment, negligent infliction of emotional distress, intentional infliction of emotional distress, fraud, misrepresentation, deceit, trespass, and the maintenance of a nuisance.  Her demand for damages was in the hundreds of thousands of dollars.

In 2009, the condominium association engaged GSL to defend them at the insurance company’s cost.  Recently, after six days of trial in front of a jury, we won a victory for the board and management on all counts.

The message to be learned from this case?  It is the board’s duty to maintain, repair, and replace as needed. When the board spares no expense in hiring the proper professionals to determine the cause of a problem and follows the recommendations of the professionals, there should be no liability to a unit owner.  Indeed, concern for the budget is secondary to the needs of the property.  Any other philosophy could result in liability that might cost the association far more than the cost of the necessary repair.

Overall, this problem was complicated to correct, but the board and management persevered with our counsel.  In short, they did not try to fix the problem “on the cheap.” And by acting responsibly, their strategy paid off.