Q: I live in a 104-unit coop building. Recently, the board of directors passed a plumbing resolution that states: “Inside wall pipes serving only one unit is the responsibility of the unit shareholder for repairs or replacement, whether needed for remodeling or any other reason. Inside wall pipes serving multiple units will be the responsibility of the building corporation.”
Shareholders had no advance notice and were not given any opportunity to discuss or object. Prior to this new resolution the building was responsible for all in-wall plumbing.
The corporation has had one excellent plumbing company for over 30 years and no one has ever had any complaint about their work. With this new policy every shareholder will be free to hire plumbers of their choice. This presents potential problems, such as plumbers unfamiliar with our vintage old building performing work that frequently can affect multiple units.
Has the board acted properly? Do shareholders have any recourse? Are there any regulatory laws (state or city) that would pertain to and define the responsibility of in-wall plumbing for co-op buildings? Linda.
A: Dear Linda. I can’t provide you legal advice and I don’t know where you live so I don’t know what laws may be relevant. So my answer must be general in nature.
Did the Board act properly? Yes and no.
First, in a cooperative, typically boards have more power to unilaterally make decisions and policy changes. There is a very good reason for making this change. If a pipe breaks, the association (whether a condo or a coop) generally will to file a claim with their insurance company. Typically, there is a deductible – usually $5 or $10,000. So every time a pipe breaks, the association has to shell out the deductible.
States laws are changing this and applying what I call “strict liability”. If a pipe services only your unit, you have to fix it and pay the cost. In Maryland and in the District of Columbia, the condo laws have been amended to require the unit owner to pay up to $5000 of the association’s deductible.
Does this hurt the unit owner? Not really, because her insurance coverage (called an HO-6 policy) will generally pay $4500 of this amount.
So I take it your coop board was concerned about having to pay the deductible each and every time a pipe bursts. You can – and should – obtain your own insurance coverage for problems that occur within your apartment.
But I also said the board did not act reasonably. First, all shareholders should have been given some advance notice, so you could raise your concerns.
More importantly, you make a good point about having different plumbers coming to the building. In my opinion, this is what the board should have done: adopt the rule that shareholders are responsible for repairing or replacing pipes that service only their apartment–and provid an explanation as to why the new policy was adopted.
Furthermore, the board could have said: ”You have the right to use your own plumber, but because (name of plumber) knows our building and has done good work, we encourage you to use that company. Because they know our building, their cost to you should be less than if you use some one else”.
You should propose this approach to your board.