Surrounding Leak from My Condo Unit to Another Unit

**pruneduke** · 06-17-2012, 08:26 AM

My question involves a condominium located in the State of: Salt Lake City, Utah

I'll try and keep it as brief as possible

I own a condo. I rent it out.

The owner below told the hoa management that their walls had water damage and was getting worse. It was reported to be coming from my water heater I assume they made a guess based on the location of the leaks)

My personal management company came out and looked around, fixed one possible culprit in the bathroom but saw nothing obvious, water heater or otherwise. After another week of back and forth the hoa management sent somone out and they found that it was a pipe under my tub. I belive it's a pipe that, technically, branches off a main pipe and services only my unit.

I filed a claim, and my adjuster says according to the CCRs, it's an hoa responsibility. He also points to a law here (http://le.utah.gov/~2011/htmdoc/sbillhtm/SB0167S01.htm) that backs this up for Utah, where the condo is. I'm not sure I really see that, but he does this all the time, so...

2 months later I get a subrogation notice from the owner's insurance company demanding payment. My adjuster let's them know basically what he told me. That I'm not negligent and they should have pursued collecting from the hoa's insurance. He says even though it's a pipe to my unit, it's not visible and I'm not negligent.

2 months again and I get a letter from a collections agency saying I have 30 days to pay or respond. My claims adjuster reponds to the letter and to the other insurance why he believes it's not my responsibility

My questions are not so much about who is at fault, as the following

1. Is it ok for the other company to send such a letter from a collections agency when they've had no judgement? It seems wrong to me and my adjuster commented the same. He seems dumbfounded wrt their behavior on this. He says it's pretty common and it's pretty cut and dry and their actions are unusual. Is it a common practice to send such letters just to see if someone will simply pay, and it works often enough that it's worth a minimal legal fee?

2. Shouldn't the other insurance be expected to 'work with' my insurance just a little more? My adjuster says they never call back, and the one time he caught the 'subrogation specialist' in the office she just said that I 'should have maintained my water heater'. It sounds as if the 'water heater' theory which was the original theory on the source of the leak, was never clarified by the other owner, or maybe the hoa never clarified TO the owner.

4. Yes I know it's hard to comment without knowing the specific state hoa/condo laws and the CCRs but I'm wondering if there's anything I should be doing or asking? Or do I just wait for the next move? From what I understand my insurance will cover legal fees if it goes any further, I have a business owners policy on this unit.

5. Is there a time limit for the other insurance to file suit from the date of the incident or the claim? It's been over 30 days now since the collections agency letter, about 6 months since the incident, about 5 since the claim

any input is appreciated.

**SChinFChin** · 06-17-2012, 04:31 PM

In these cases, as I'm sure you have "liability insurance", insurance for when others sue you, then you'll have the liability insurance carrier arrange to hire a lawyer for you, or use their in house attornies. It's the same as an auto accident where the insurance company gets you a lawyer, and the other party has to talk to the lawyer, not you. Usually, it's the same carrier insuring your physical damage. After you have the names of the attornies, you'll notify the "collection agency" and tell them they should be contacting them, not you. If they call you in the meantime, tell them to contact your insurance carrier, and to no longer call you.

Usually, it the other party sues you, or get a collection agency to sue you, you notify your insurance, the insurance company opens a claim with a claim number. I had a business, a customer tripped and fell, decided to sue, so I notified my insurance, and they opened a claim. When my cutomer said he found an attorney, I gave him the claim department's phone number and the claim number, and told him I am NOT THE ONE handling it, so don't bother to call me.

At one point in my career, I was a credit manager, I refer claims to collection agencies, and appear in court for my compnay. I recall a case (I was in court but I don't recall it had to do with us) where it went to a collection agency, and it this case, neither the collection agency attorney, nor the defendents seem to know what was going on. The judge in frustration said "people too lazy to review the facts send stuff to collection agencies too lazy to review the facts, and I get stuck with it, and I'm sick and tired of it." It seems that would be the case if the collection agencies go to court and mention the water heater.

If it was me, for fun, I'd say "bring me to court and complain to the judge about my water heater".

I owned a few rental condos for through the years, and in the CC&R's of these condo complexes, the HOA is responsible if the damage is "within the walls". The unit owner's responsibility ends at the inside walls of his unit. From what you described, your CC&R would be the same.

Depending on your insurance policy, if it turns out YOU are responsible, not the HOA, then the liability insurance should even cover you here. But, if I was the insurance company, I would also insist the HOA is responsible.

It seems in the final analysis, you won't be paying anything out of pocket.