As condominium developers add more
amenities to their buildings to win over buyers, disputes
over repairs are becoming increasingly complex, and can lead
to lawsuits.
The condo life can be a much different setup than those who
live in a single-family home. Condo owners largely have
control of the units they own within a building but do not
own the entire building itself. Condo owners pay a monthly
mortgage like traditional homeowners, but they set aside
money to fund maintenance and renovations to the building
like fixing an elevator or repaving a new walkway.
But that's not always what happens, some condo residents
have argued. The most recent example took place two weeks
ago in New York.
Residents of a six-story condo in Brooklyn's Red Hook
neighborhood filed a lawsuit, alleging that repairs done on
their property were shoddy and had become unsafe. Members of
the condo board at 160 Imlay St. are accusing owner Est4te
Four Capital of fraud, breach of contract, unjust enrichment
and other charges. The residents are seeking $60 million in
damages.
'Substandard' work
In the lawsuit, the condo residents allege that Est4te Four
"stole funds comprised of the residents’ common charges to
perform some additional construction work, much of which was
also substandard." Est4te Four hired a contractor to
complete the construction, but some of the renovations —
including a new deck on the roof — were either poorly done
or not finished at all, residents alleged.
"The promised roof deck is severely over-pitched and was
constructed atop old, re-used and re-purposed PVC pipe
remnants, creating an unstable walking surface which,
coupled with the poorly constructed parapet walls,
constitutes a seriously hazardous condition," the lawsuit
states.
Residents said in the lawsuit that their building "is
riddled with cracks, holes and other defects in its facade
and roof, resulting in leaks and delamination of mortar and
other condominium building materials onto the sidewalk and
street below."
The attorneys who represent Est4te Four and the 160 Imlay
residents did not respond to a request to comment after
multiple attempts to contact them.
Complicated repairs
The number of condo lawsuits centered on repairs isn't
necessarily growing but they are becoming more complicated
to settle because of how many different living spaces a
developer is responsible for renovating, according to Mary
Ann Ruiz, a real estate lawyer in Florida who specializes in
condo litigation.
"In South Florida, we are seeing more complex developments
such as condominiums comprising several floors within a
hotel building or several condominiums sharing parking
garages, pools and other amenities," Ruiz said in an
interview.
Newly built condos these days typically have playgrounds,
coworking spaces and rooftop decks and, Ruiz said, "as
developments become more complex, so do the claims and
cases."
The condo residents in Brooklyn aren't the only ones turning
to the courts for relief with similar cases popping up in
recent years in Colorado and Washington, D.C. In March, a
group of condo residents in Rhode Island said poorly done
renovations from developer Sathuan K. Sa led to flooding on
their first floor and cracked windows in their building,
according to a local news report.
Condos, co-ops and homeowners' associations account for more
than 30% of the U.S. housing stock and roughly 75.5 million
residents, according to the most recent estimate from the
Foundation for Community Association Research. That's an
increase from the 65.7 million estimate the association
reported in 2013. And as the number of condo residents
increases, so does the likelihood of someone being
displeased with repairs.
Earlier this month, a group of condo residents in Miami
Beach sued their building owner for allegedly not fixing
widespread flooding in the parking garage and common areas.
In a separate case, a group of condo residents in Aventura,
Florida, sued their building owner in 2020 after its
developer YCM Acquisitions allegedly failed to fix a water
leak in the building and renovate the ground-floor lobby.
The cases may have emerged in different states, but there's
one commonality among them, according to Ruiz. At their
core, condo repair lawsuits are about who will have to foot
the bill for expensive repairs, Ruiz said.
"For construction defects, the repairs will have to be made
no matter what," Ruiz said. "Either they will be funded from
proceeds of litigation against the developer or they will be
paid for out of pocket by the owners."