Recently, the Appellate Division, First Department—the state’s second highest court located in Manhattan—announced a decision with far-reaching implications for the state’s condominium owners. In the case Pekelnaya v. Allyn, the court ruled that individual condo owners cannot be held liable to third parties for injuries sustained as a result of a defective condition in the “common elements” of the building.
As most apartment-dwellers know, common elements are the parts of the property which are necessary or convenient to its existence, maintenance and safety, or normally in common use. Common elements include (but are not limited to) the land on which the building sits, the foundation, roof, halls, lobbies, stairs, stairways, fire escapes, entrances and exits, as well as the basements, cellars, yards, gardens, recreational or community facilities, parking areas, storage spaces and any elevators and escalators.
The case of Pekelnaya v. Allyn involved a lawsuit against a condominium association and 11 individual unit owners on 106th Street. In the suit, a father and his son claimed they suffered head injuries when they were hit by a section of chain-link fence that fell from the building’s roof. The plaintiffs’ lawyers argued that the condo board’s insurance policy covered only $2 million in damages, which they claimed was insufficient. They therefore decided to target each of the individual unit owners and their liability insurance policies too.
This case is especially important because in it, the court addressed the public policy issue of whether condo unit owners should be financially liable just because their building’s board of managers has an inadequate amount of insurance coverage. The court ruled that the condominium board in this case had obtained substantial insurance coverage, and that although the law affords a means of recovery, it need not guarantee that the defendant will have sufficient resources to provide full compensation for any and all losses sustained by an injured person.
The court also noted that the questions of whether boards should be required to carry a minimum amount of general liability insurance, and what the amount of such coverage should be are matters that the New York State Legislature must address. The court urged the legislature to require condominium associations to obtain a minimum amount of insurance deemed adequate to protect the public—although it did not state the amount.