A leaking pool, a wall in need of repair, a faulty exhaust system, chimney and furnace repairs… Who’s responsible for fixing them? Generally, most leases provide that “structural” repairs are the landlord’s responsibility and that “nonstructural” repairs are the tenant’s. However, what constitutes “structural” versus “non-structural” repairs or alterations are frequently disputed issues with potentially far-reaching financial ramifications for cooperative corporations and commercial tenants.
A recent decision of note, Excel Associates v. Excelsior 57th Corp., 2011 N.Y. Slip Op. 32117[U], 2011 WL 3471228 (Sup. Ct. N.Y. County, Aug. 11, 2011), decided by the New York Supreme Court in August 2011 (Hon. Judith J. Gische), illustrates how complex these issues can be. While the court’s holding that the repairs at issue were “non-structural” is consistent with legal precedent, the court also noted that the definition of a structural repair is a “flexible” one, which is determined on a “case-by-case basis.”
The repairs in question were of a leaking pool in the health club on the fifth floor of the Excelsior, a co-op building at 303 East 57th Street. Both Excel, the master commercial lessee of five floors of commercial space at the building, and Excelsior 57th Corporation, the cooperative corporation/landlord, had sought declarations stating that the other party was financially responsible for the repairs to the pool. Pursuant to a provision in its long-term commercial lease with Excelsior, Excel was obligated, at its sole cost, to make all “non-structural repairs” to the premises and to make all “structural repairs” which were caused by its own negligence or the negligence of its subtenants and their respective employees or agents.
All into the Pool
In June 1984, Excel sublet the health club to Megafit Corporation, which assumed certain responsibility for the pool. In 1986, Megafit installed a new pool within the existing pool and subsequently made some patchwork repairs after the pool developed severe leaks, flooding the floor below. When the repairs performed by Megafit proved insufficient, the pool was drained to determine the cause of the leaks. In 2010, Excel performed repairs to the pool, which involved the replacement of components of the pool’s gutter system, including the filtration and drainage systems, and the installation of a new waterproof membrane at a cost of approximately $50,000.