Imagine this. Your contractor has finally completed the renovations to your bathroom - taking three months rather than the three weeks he promised. The wallpaper, special order wall and flooring tile match perfectly, and although you exceeded your budget, you are very pleased with the results. You leave for a trip and upon returning to your building, you are told by your doorman about the "big flood" in your apartment and how lucky you are to have been away. Filled with anxiety, you rush to your apartment and look in horror at your bathroom. The flood is gone and, essentially, so is your wallpaper and tiling which have been destroyed during the repair of the pipes in the wall. You call the managing agent of the building to ascertain what happened and to confirm that the building will completely restore your formerly beautiful bathroom. You are told it will not. You then call your insurance agent to notify him or her of the damage and to file a claim. Finally, you call your travel agent to book the next flight out of town to avoid dealing with the problem.
The above scenario describes an uncertainty shared by many co-op and condo residents: Just who is responsible for making repairs within apartments and common areas? If you encounter a similar situation, will you have to fork over the money to repair the mess? As a frequently-raised issue affecting cooperative living, this is the source of significant controversy and expense to many cooperative corporations and their shareholders.
In order to analyze the question of which party is responsible for making repairs to a cooperative apartment, it is essential to understand the relationship between a cooperative corporation ("Lessor") and a shareholder ("Lessee"). The resident of an individual cooperative apartment, unlike a condominium unit owner, is not the "direct" owner of the apartment, but a shareholder in a corporation. The corporation, in turn, is the title or leasehold owner of the land and improvements constituting the cooperative property. Ownership of shares in a cooperative corporation entitles the lessee to a long-term proprietary "lease" that grants the shareholder the right to occupy an apartment.
The lease is signed by an officer of the cooperative corporation, as Lessor, and the shareholder, as Lessee, and contains, among other things, provisions regarding the responsibility for the repairs of both parties. A lease will generally provide that the lessee is responsible for maintaining and repairing the interior of the apartment, while the cooperative corporation will be obligated to maintain and repair all other parts of the building. A typical lease contains four paragraphs dealing directly with repairs: Lessor's Repairs, Lessee's Repairs, Damage to Apartment or Building, and the Right of Entry paragraph.
The co-op is responsible for keeping all of the building, including all of the apartments, sidewalks surrounding courts, equipment and apparatus in good repair. The co-op must maintain all of the items except those portions that are expressly stated to be the responsibility of the shareholder pursuant to the lease agreement. The shareholder is responsible for repairs, however, if they have been rendered necessary by his own act, negligence or carelessness, or any of his family, guests, employees or subtenants.