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."