INTERIOR DAMAGE…WHO IS RESPONSIBLE?

Interior Damage to Townhome Units

One of the common questions we receive from townhome associations is regarding damage to the interior of a townhome unit resulting from a roof leak or ice damming that causes water to infiltrate into a unit and damages carpeting, flooring, furniture, etc. The owner of the unit then seeks reimbursement from the townhome association for the costs of repairing the carpeting, flooring, furniture, etc. For detached single-family homeowner associations where each owner is responsible for maintenance, repair, and replacement of his/her own home exterior, absent some type of unique provision in the association’s declaration or some other unique situation the responsibility for repairing/replacing the interior damage will be the homeowner’s. But, for attached townhome units, where the association has some responsibility for maintenance, repair and/or replacement of the walls and/or building exteriors, the answer as to who is responsible for the interior damage can be more complicated.

 Maintenance Responsibility:

In general, the townhome declarations we have reviewed make each owner responsible for maintenance, repairs, and replacements to his/her own unit interior. So, the starting point for deciding responsibility for interior damages is to consider the owner responsible for the maintenance, repairs and replacement of the carpeting, flooring, and furniture within his/her own unit.

However, there are circumstances under which associations can be responsible for the costs of repairing/replacing damaged items within an owner’s unit. This responsibility, though, likely would not arise based on the terms of the declaration, but rather under some type of general liability or breach of fiduciary duty claim where an owner claims the association did not act in a reasonable manner. These circumstances would be very fact specific and an association’s liability for internal unit damages would vary depending upon the circumstances of each case. But, in general, a number of these cases often come down to whether an association had notice of a potential maintenance issue in an area the association is responsible for (such as an external wall or roof) and then a consideration of what steps the association took to investigate and, if necessary, remedy the issue.

Therefore, if an association becomes aware of a potential roof leak, ice damming, or other situation where it appears that some maintenance may be necessary to an area of a townhome exterior for which the association is responsible, it is important for the association to act within a reasonable time frame in investigating the issue and, if necessary, take the appropriate steps to repair/replace the item at issue.

If a specific situation arises where an owner wants the association to pay for repairing/replacing a damaged item within an owner’s unit, the association should seek a legal opinion from its attorney regarding whether it has any potential liability in that situation. As we mentioned, these types of matters are often decided on a case-by-case basis, so it is difficult to give a general, hypothetical response to cover all situations. Thus, it is important for the association to go over the facts of the situation with its attorney who should be able to advise the association on the best course of action given those particular facts.

 Insurance Responsibility:

One other factor that frequently comes into play with damage to interior items within townhome units is insurance coverage. Although we have seen a few exceptions, in general most townhome declarations make each owner responsible for insuring the items within his/her unit, such as carpeting, appliances, furniture, etc. It is important to remember that the obligation to insure items within a unit is separate and distinct from any obligation to repair/replace items within a unit.

Therefore, while an association may be found liable for the costs of repairing/replacing items within a unit under some general liability theory given a particular set of facts, this would not necessarily change an owner’s obligation to insure the items within his/her townhome unit. Furthermore, several declarations have provisions whereby owners waive claims they may have against the association for damages to the extent that those damages are covered by the owner’s insurance. Therefore, even if an association may be liable for damages to the interior of an owner’s unit, there could be a provision in the association’s declaration that limits the association’s liability to only those damages that are not covered by insurance.

Considering the variables presented by insurance coverage for interior damages as well as possible language within a declaration limiting an association’s liability for damages to only those damages not covered by insurance, we will again stress the importance of treating a situation where interior damage occurs and an owner seeks reimbursement from the association on a case-by-case basis. Since all townhome declarations are different and the situations in which interior damage to a unit arise are different, an association would be prudent to consult with its attorney regarding how to handle each such situation. Consulting with the association’s attorney should help the association’s board of directors make an informed decision regarding any type of reimbursement to an owner or, conversely, a refusal to reimburse an owner for interior damages to a townhome unit.