The nature of condominium buildings—that is, units stacked on each other—means that occasionally an accident in one condo will affect the adjacent unit. Flooding is a common cause of damage to multiple units, and it can happen from appliances like dishwashers and washing machines that leak. So when an adjacent unit is affected by a leak in the original unit, who is responsible for fixing the damage? Does the association have a duty to get involved?
These situations typically are unit-owner-to-unit-owner disputes. However, the situation can be complicated depending on the exigencies of the situation, which may include the possibility of damage to the common elements between units. It’s important to be aware of the insurance issues that can become part of the equation.
Things like a master insurance policy and condo insurance should come into play and cover certain expenses in a multiple-unit damage scenario. While that’s being worked out, the association should remain neutral—no matter what. Despite the role that insurance plays in accidents that affect multiple units, there could be some initial panic on the part of the affected owners and demands made upon the association to “do something” about the problem. You, your management staff, and the board should refrain from the knee-jerk reaction of calling contractors in and expending common funds. It’s easier not to spend them in the first place than to have to recover them later.
For tips on how to use a no-fault provision in your governing documents to protect the association from the outset of a multiple-unit damage situation, and a Model Clause you can adapt, see “Use Governing Documents to Determine Responsibility for Multiple-Unit Damage,” available to subscribers here.