Q&A: Water Leak Problem

Q I am a condo owner in good standing and a former board member. Several months  ago my hardwood floors were damaged by a leaking radiator. In our bylaws, it  explicitly states that the radiators are the property of the building; and that  the building is liable for any damage to a owner’s unit caused by building-owned equipment such as the radiator. As the radiator  could not be repaired, it was replaced by the building at the building’s expense. However, the board has informed me in writing that any damage to my  apartment is my responsibility and that I should file a claim with my homeowner’s insurance policy. I have spoken to our managing agent about this, who  understands our house rules and bylaws; however, she is unable to get a  response from the board to the contrary.  

 At this point, what should I do? Should I go ahead and make the repair and file  for reimbursement from the board? Should I make a homeowner’s insurance claim? Should I commence legal action against the board in an  attempt to force the building to pay for something that I know is the  responsibility of the building? What recourse do I have and what should my next  course of action be?  

          —Don’t Be Floored

A “Getting the board to follow the provisions of the association's declaration and  bylaws ("governing documents") can often be an uphill battle,” says attorney Peter Jagel from The Law Offices of Peter H. Jagel in Naperville.  “A Board of Directors has a great deal of discretion and power given to it from  the Association's governing documents and state statutes. However, just as  owners are bound by the terms and provisions of these documents, so too is the  Board of Directors. In fact, courts have ruled that Boards of Directors have a  fiduciary duty to the owners to follow the association's governing documents.  

 “Your immediate course of action is somewhat dependent on the status of your  floors. If they are damaged to the point where normal living is difficult and  you have the wherewithal to replace them, I would do so. You should be careful  to keep track of all of your expenses and have copies of all the estimates and  final invoices involved. If they need to be replaced, but the damage is more  cosmetic, then you can decide if the floors are OK to live with while you  attempt to resolve this matter with your Board.  

 “The next step is to find out why the board has made this determination. Did the  board get advice from its counsel that the association should not pay for this?  From your letter, it sounds as though the property manager knows that the  Association should be paying for the repairs. Is the board ignoring this  advice? A board that follows the advice of its respective professionals,  garners the protection of a defense called the Business Judgment Rule. If you  are required to litigate this matter to force the board to follow the  association's governing documents, this will be an important factor.  

 “If the board is still refusing to pay for the repairs to your floors, then you  will have to get legal counsel involved to try to either convince the board to  do so, or file a complaint to get a court to enter judgment in your favor for  the cost of these repairs. If the board did not follow the association's  governing documents and was not following advice from its counsel and property  manager when it refused to pay for these repairs, then the court could also  find that the board breached its fiduciary duty to you as an owner and impose  an additional award of the damages you incurred in filing and litigating the  lawsuit, including your attorney’s fees. Due to the cost of litigation, this can be an important factor in your  decision to go forward and also can be important leverage in trying to convince  the board to pay for the repairs without litigation, as the board may be faced  with these additional expenses if it loses.  

 “There are more long-term and less direct ways of dealing with this type of  problem as well. If a board is not looking out for its owners and not following  the provisions of the Association's governing documents, then there should be  some interest amongst the owners in rectifying this situation. Try to get them  removed as board members through the political process of voting them off the  board. This can be done both at the annual meeting or a special meetings called  for this purpose.”    

 

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