According to our property manager, our governing docs contain no requirement to notify neighbors or the association before performing this type of test. This was news to us! We've lived here over 16 years and thought the rule was always to notify the association before doing any work that could impact other residents or common elements. The manager has been no help at all, and won't even notify the neighbor of the incident. What is our recourse?"  —Looking for Accountability 

A: “In the condominium setting, casualty losses caused by neighboring units can be frustrating,” says Stefan Richter, Esquire, Fellow, College of Community Association Lawyers Becker NE P.C. and Office Managing Shareholder, Doylestown, PA law firm, Becker and Poliakoff. “As is true with many condominium issues, traditional notions of ownership and responsibility must yield to the governing documents, statutory scheme, and common law.” 

“Specifically for Pennsylvania, Section 3312 of the Pennsylvania Uniform Condominium Act requires that associations maintain ‘property insurance on the common elements and units exclusive of improvements and betterments installed in units’. Accordingly, even without an assignment of fault or negligence, the loss should be reported to the association’s master policy carrier. To the extent damage is to the unit (as opposed to the common elements), the deductible portion of the master policy is ordinarily the responsibility of the affected unit owner.   The loss should thus also be reported to your own HO6 carrier (individual condominium owner policy). In your scenario, if the master policy has a deductible of $20K, your HO6 carrier should cover the entire loss.”

“A fault-based analysis does not necessarily apply,” Richter adds. “While your association’s governing documents may vary the foregoing general rule, the master policy does not assign fault among unit owners once the deductible is met. In fact, the Pennsylvania Uniform Condominium Act mandates that the master policy insurer ‘waives its right to subrogation under the policy against any unit owner of the condominium or members of his household’.

“However, no such waiver applies to your HO6 carrier, nor to subrogation claims made by the master carrier against third parties,” Richter continues. “This means that your own HO6 carrier could make a subrogation claim against the unit owner (and the plumbing contractor who performed the pressure test) for negligence; the master policy would be limited to making a claim against the plumbing contractor.”

“The association’s governing documents (Declaration, Bylaws and Rules and Regulations) may also permit you to make a direct claim against the neighboring owner and their contractor. Depending on the master policy deductible amount and the extent of any uncovered losses, you may wish to consider such recourse. In any case, a thorough review of these documents is vital."