In a condominium, an individual who owns a unit shares with other unit owners an undivided interest in the common elements of the property. Generally, the unit holders form an association to manage and regulate a condominium. Actions by and against a condominium association should be conducted as per the bylaws and declarations of the condominium association. A condominium association has substantive capacity to sue. It can initiate both tortuous and contractual actions. Actions with respect to common interest by an association can be brought as class actions or as a derivative action[i].
A member of a condominium association can sue a condominium association for tortuous act on the part of the association. The member can obtain a judgment both against the condominium and the condominium association. However, their liability is limited by bylaws[ii]. Generally, absolute liability of an association excludes individual liability of a unit owner. A bylaw can also limit the liability of a condominium council from damages caused by a unit owner. Liability from damages arising out of natural calamities can also be limited. An action can be brought against an association for waste of association fund by a member. Moreover, an association can be sued in a suit affecting common interest. An owner of a condominium unit can bring a claim for breach of implied warranty of habitability by establishing:
- that s/he purchased a new residential condominium unit from the builder-vendor;
- the condominium unit contained a latent defect;
- the defect manifested itself to the purchaser only after the unit’s purchase;
- the defect was caused by the builder’s improper design, material, or workmanship; and
- the defect created a substantial question of safety or made the condominium unfit for human habitation[iii].
The duty of condominium association towards its unit owners is fiduciary. The officers and members of a condominium association must fulfill fiduciary duties owed to unit owners with reasonable care, diligence, good faith. In case of failure on the part of an association, it will be held liable for any negligence. An association exercises powers as per its declarations and bylaws. However, bylaws and declarations also limit its liability. An association has a duty to manage insurance proceeds on behalf of its unit owners. For personal negligence, unit owners cannot hold the association responsible[iv]. A breach of fiduciary duty of members of board is controlled by the substantive laws of agency, contract, and equity[v]. A condominium association’s declaration can expressly limit the association’s liability. Generally, members of the board shall not be liable for any mistake of judgment or for any other acts or omissions of any nature except for acts or omissions found by a court to constitute gross negligence or fraud. Moreover, directors of condominium associations are not personally liable for the decisions they make in their capacity as directors of condominium associations[vi]. Individual officers of a condominium association, while acting in that capacity, are not personally liable in contract to either the condominium association or the owners. In Robinson v. LaCasa Grande Condominium Ass’n,[vii] the court held that “the directors of a condominium association could not be held liable in tort for the drowning death of a 10-year-old girl who resided there because their liabilities extended only to breaches of fiduciary duty”.
Generally, a condominium association has standing to assert claims on behalf of condominium unit owners in connection with alleged construction defects. Standing to sue extends to defects in the common interests. Under the federal standard for associational standing, an association has standing to bring suit on behalf of its members when:
- its members would otherwise have standing to sue in their own right;
- the interests it seeks to protect are germane to the organization’s purpose; and
- neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit[viii].
A unit owner is entitled to sue an association, another unit owner and a developer or constructor. A unit owner can sue an association[ix]:
- for damages and an injunction to compel the association to enforce the provisions of the declaration
- for failing to comply with a condominium’s bylaws
- to compel compliance with the condominium bylaw requiring a condominium board to make repairs to common areas.
Moreover, an individual unit owner can also bring a claim against another unit owner for a breach of the condominium bylaws. A unit owner can bring an action to recover his/or her proportionate share of the damages to common property. A unit owner can maintain an action against a developer or general contractor for alleged breaches of duties owed in common to all unit owners concerning construction defects in the common areas[x].
[i] Plymouth Pointe Condo. Ass’n v. Delcor Homes-Plymouth Pointe, 2003 Mich. App. LEXIS 2742 (Mich. Ct. App. Oct. 28, 2003)
[ii] Wolf v. Ford, 335 Md. 525 (Md. 1994)
[iii] Berish v. Bornstein, 21 Mass. L. Rep. 530 (Mass. Super. Ct. 2006)
[iv] Board of Managers v. Fairway at N. Hills, 193 A.D.2d 322 (N.Y. App. Div. 2d Dep’t 1993)
[v] LaSalle Nat’l Trust, N.A. v. Board of Dirs. of the 1100 Lake Shore Drive Condo., 287 Ill. App. 3d 449 (Ill. App. Ct. 1st Dist. 1997)
[vi] Sonny Boy, L.L.C. v. Asnani, 879 So. 2d 25 (Fla. Dist. Ct. App. 5th Dist. 2004)
[vii] 204 Ill. App. 3d 853 (Ill. App. Ct. 4th Dist. 1990)
[viii] Greater New Haven Prop. Owners Ass’n v. City of New Haven, 2006 Conn. Super. LEXIS 2351 (Conn. Super. Ct. Aug. 2, 2006)
[ix] Trahan v. Townhouse III Condo., 2009 Conn. Super. LEXIS 1470 (Conn. Super. Ct. May 28, 2009)
[x] Berish v. Bornstein, 21 Mass. L. Rep. 530 (Mass. Super. Ct. 2006).