Is condo board’s new rule about water leaks appropriate?
Q: Our condominium association recently added a new rule regarding water leaks and the damage to other units or the common elements. Our new rule states that any water leak (whether due to plumbing issues, water heater, washer, toilets, faucets, tubs, etc.) which causes damage to other units or common elements is automatically the financial responsibility of the owner of the unit from which the water originated — regardless of actual cause or fault. Once it is determined that the leak originated from the unit, the responsibility for the damage shall automatically rest with the unit owner from which the leak originated. Is this proper?
A.Unit-to-unit/common element water damage is a common occurrence in condominium buildings and the source of many disputes. Often, condominium boards often feel compelled to adopt rigid rules regarding responsibility for the damage caused to other units and/or the common elements. This type of automatic responsibility for damage without regard to the actual cause or fault is also called “strict liability” in the legal world. In a strict liability situation, it doesn’t matter whether there was any negligence, actions or omissions on the part of the responsible unit owner. The mere fact that water originated from the unit and caused damage to another unit or the common is sufficient to hold that unit owner responsible for the damage.
This type of rule you describe may be considered contrary to your association’s declaration and bylaws. Most condominium governing documents require the existence of some type of act or omission in order to hold an owner responsible. For example, common declaration language states that if, due to the act or neglect of a unit owner, damage is caused to the common elements or to other unit(s), then such unit owner shall pay for such damage and such maintenance, repairs and replacements as may be determined by the board, to the extent not covered by the association's insurance. Your association rule disregards any showing of an act or omission leading to water damage. Therefore, the rule could be considered contrary to the declaration and thereby unenforceable.
The Illinois Condominium Act does give some relief or remedies to condominium association and condo owners, though. The board can simply adopt “Mandatory Unit Owner Insurance Coverage.” Under Section 12 (h) of the Condominium Act:
(h) Mandatory unit owner coverage. The board of directors may, under the declaration and bylaws or by rule, require condominium unit owners to obtain insurance covering their personal liability and compensatory (but not consequential) damages to another unit caused by the negligence of the owner or his or her guests, residents, or invitees, or regardless of any negligence originating from the unit. The personal liability of a unit owner or association member must include the deductible of the owner whose unit was damaged, any damage not covered by insurance required by this subsection, as well as the decorating, painting, wall and floor coverings, trim, appliances, equipment, and other furnishings.
The Condominium Act also provides deductible relief to the association in the event a damage claim is covered by the association’s insurance policy regardless of any negligence by the unit owner. In the case of a damage claim to a unit or the common elements, Section 12(c) of the Act allows the board to (i) pay the deductible amount as a common expense, (ii) after notice and an opportunity for a hearing, assess the deductible amount against the owners who caused the damage or from whose units the damage or cause of loss originated, or (iii) require the unit owners of the units affected to pay the deductible amount.
Therefore, your board’s adoption of such a rule creating automatic responsibility without regard to an act, omission or negligence must be done with caution. The board should consult with the association’s attorneys to see if the proposed rule is contrary to the declaration, bylaws and/or other relevant statutes.
• Matthew Moodhe is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. Send questions for the column to him at condotalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.