So You've Been Sued — Now What? Handling Lawsuits

 Lawsuits are usually not an association’s go-to method for dispute resolution. Expensive and time-consuming, they can  quickly turn into a financial burden and may create strained relations in the  community. Unfortunately, in some cases there’s no other way out. Last year a couple filed a suit against a neighbor, the  association, individual board members, and property managers who all neglected  to respond to the couple’s complaint of odors infiltrating their unit, the result of 20 cats inhabiting  the neighbor’s unit below.  

 This may have been an extreme case but most associations will be involved in a  lawsuit at some point, though the length and certainly, price tag may vary. “The variables are how complicated are the causes of action. I could file a  simple complaint but if the defendant hires an attorney and cross claims, it  could get very complicated. It depends on how much discovery is necessary,  depends on how much motion work, if it goes to trial. It's impossible to  predict, really,” says Anne Ward, an attorney at the law firm of Ehrlich, Petriello, Gudin & Plaza in Newark, New Jersey.  

 Regardless of the cost or type of complaint, there are a few basic points about  lawsuits that all associations should be aware of.  

 The Basics

 Unless you live in a utopian condo association, lawsuits are bound to happen.  The most common ones include noise complaints between neighbors, construction  defects in units and attempts to collect delinquent payments from residents.  Boards should know what to do if they're the target of litigation. “The first step when a board is sued is they should first immediately reach out  to their attorney,” says Eric Goidel, a partner at the Manhattan-based law firm of Borah,  Goldstein, Altschuler, Nahins & Goidel in Manhattan. “The attorney should reach out to the insurance broker because all co-ops and  condominiums should have general liability insurance and that will cover you  for things like personal injury and property damage issues, and almost all  boards have directors and officers liability, which will cover the actions of  the board taken over the course of representing the interests of the co-op or  condo,” says Goidel.  

 In the case of maintenance fees, boards have to be strategic in going on the  offensive. “The board has to decide whether they want to take legal action against that  delinquent unit owner. Under the Fair Debt Collection Practices Act, the  attorney or any debt collector is required to send a demand letter, that says  how much is owed, who the creditor is, and they have 30 days to dispute that  amount,” says Ward. “If the debt has not been paid by the 30th day, the association files a  complaint. If it's less than $15,000, and it typically is, I usually file it in  the special civil court as opposed to the criminal court. The process is easier  and quicker. It's very limited discovery, so you get a quick decision,” says Ward.  

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2 Comments

  • Isn't it unethical for a tenant to contact the other owner lawyer. They should go through the coop lawyer.
  • can a tenant go directly to the coops lawyer when he has a complaint about a board member? in answer to the other question....no it is not ..since this is another way to resolve the problem.