Q&A: Does our co-op owe a shareholder for unauthorized repair work?

“Two shareholders who were on the verge of moving out undertook a repair in their home on their own, not hiring a professionally licensed mason to conduct the repairs. They are now submitting a bill for personal reimbursement. The shareholder is not a professional or licensed mason nor a repair person. Their claim is “we told you we wanted that wall fixed” but they never, ever informed the board that they themselves would undertake the repair. They knew their interior wall leak issue was a part of a much larger capital improvement project 799 Greenwich Street will undertake in spring of 2015, so they knew they had to wait for that to be done for the leaks to go away permanently. This exterior project was discussed at length over two years. One or both of them were in attendance at each meeting. Now they are moving out of 799 Greenwich Street on this Monday and they just submitted a bill from the husband/ shareholder for 15 hours of his personal time. Does 799 Greenwich Street Tenants Corporation owe them anything? The co-op officers, board and building committee had no idea the shareholder undertook this alleged 15-hour repair himself. He never gained the board or building committee’s permission to make this repair nor was he ever promised reimbursement. Here we have strict policy that only licensed and insured persons conduct any repair, no matter how small. He is neither. Do we have to reimburse for the repairs?

—-I Owe U

“The tenant shareholder is not owed anything,” says Phyllis Weisberg, a partner with the New York City law firm of Montgomery McCracken Walker & Rhoads, LLP. “More importantly, a tenant-shareholder who undertakes unauthorized work not only violates the proprietary lease, and potentially the law, if, for example, a Buildings Department permit was required and not obtained, but also may be liable to the co-op for any loss or expenses incurred by the co-op resulting from the unauthorized work.

“By doing unauthorized work, the tenant shareholder deprived the co-op of the opportunity to review the nature, extent and quality of the work. Work performed by someone who is unlicensed may actually cause damage that may cost substantial sums to repair or impair existing warranties on parts of the building. Work done without proper insurance deprives the co-op of protection in the event of property damage or physical injury caused by the work. Work done without proper permits exposes the co-op to violations. Finally, whereas if the co-op had hired someone to do the work, the co-op would have obtained a warranty of some sort, the co-op was deprived of that as well by unauthorized work.”    

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