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Ask an Expert: Who pays for pipe-leak damage?
I live in a co-op, and recently a water pipe inside my wall leaked, probably because of its age. Even though it was repaired promptly, the leak caused some water damage to the apartment below mine. According to the building, the pipe is my responsibility, which I don't dispute. But who's responsible for repairing my neighbor's damage?
Standard practice is for everyone involved -- the building and both co-op owners -- to file claims with their respective insurance companies and let them sort it out, our experts say.
While you are usually not liable for a situation like this which does not appear to involve negligence on your behalf, the claim should be reported promptly to both the building's insurance carrier and your own insurer or broker, says apartment insurance broker Jeff Schneider of Gotham Brokerage. If you are sued, or held responsible under the proprietary lease for the damage and/or repair, you must put the carriers on notice as soon as possible -- certainly before permanent repairs are made.
Your insurance company can pay the claim, and then go after the buildings insurance policy if the water damage turns out to be the co-ops responsibility, says attorney Terry Oved, who heads up the real estate department at Oved & Oved.
Where water from one shareholders unit causes damage to another's unit, the damaging units individual insurance policy will generally cover [it], or the two insurance companies will resolve the claim between themselves, says Roberta Axelrod, a real estate broker and asset manager at Time Equities.
On the other hand, if the fixes are too minor to seek coverage from an insurer, work it out with your neighbor, says property manager Thomas Usztoke of Douglas Elliman Property Management. An additional neighborly response of the responsible party to the damaged party is to offer to pay the deductible, he says.
Though it sounds like your situation is a little different, leaking pipes are typically the responsibility of the co-op building, not the co-op owner. The building is usually also on the hook for repairing damage to ceilings, floors or walls, while additional fixes would be the shareholders problem. For example, the co-op would generally paint or prep a damaged wall but the shareholder would be responsible for replacing wallpaper or carpeting, Axelrod explains.
In some cases, a pipe may become the shareholders responsibility if it serves their apartment alone or if they make changes to it, Axelrod says. The offering plan should be checked as this may differ from case to case, she adds.
Leigh Kamping-Carder is a senior editor at BrickUnderground.com, the online survival guide to finding a NYC apartment and living happily ever after. To see more expert answers or to ask a real estate question, click here.