Co-Op Management Company Error
My question involves real estate located in the State of: New York
I own my apartment in a co-op. I recently discovered that the management company has been inadvertently undercharging me on my monthly bill for the past two years. The error was fully theirs. Now that I've discovered the error, am I responsible for making up the accumulated difference between what they should have been charging me and what they actually billed me for? If not, should the management company have some kind of E&O coverage that would come into play in a situation like this?
Thanks!
Re: Co-Op Management Company Error
E&O is for cases where an error or omission caused damaged to you, resulting in you paying MORE than what it would have been.
I had a bank, deducting a tax escrow, but DID NOT pay the taxes on time, resulting in penalties. They might be covered under E&O. A lawyer not sending in paperwork on time resulting in you losing a case would be another.
In this case, it appears you would be paying exactly the same amount, though years late. You derived some benefit where the money was in your pocket all this time. You did not incur any out of pocket expense or damages, over and above what you are supposed to pay.
Re: Co-Op Management Company Error
Thanks for the reply and information.
I wasn't thinking of damages to me; I was thinking of damages to the co-op as a result of their management company having undercharged. I understand what you're saying in your last paragraph, but having to pay that amount as one lump sum would be a burden, whereas if I'd been charged the correct amount each month, it wouldn't have been. If I hadn't noticed this and told them to correct the amount they were billing me each month, this could have gone on indefinitely and become an (even more) incredible amount of money.
Re: Co-Op Management Company Error
Quote:
Quoting
rp_mcmurphy
Thanks for the reply and information.
I wasn't thinking of damages to me; I was thinking of damages to the co-op as a result of their management company having undercharged. I understand what you're saying in your last paragraph, but having to pay that amount as one lump sum would be a burden, whereas if I'd been charged the correct amount each month, it wouldn't have been. If I hadn't noticed this and told them to correct the amount they were billing me each month, this could have gone on indefinitely and become an (even more) incredible amount of money.
No, all the COOP and CONDO had to do is to issue a correct billing to any and all units that are underbilled. No monies were actually lost.
Usually, COOPS and CONDO's have credit lines to draw on in the event of cash flow problems. The most you can do is to say that the interest expense in utitlizing the line is higher now due to the underbillings, and you would have to compute the amount of the damages alleged and prove it, i.e the higher interest paid as a result.
Having been a condo owner, the COOP or CONDO board can impose special assessments to catch up, and if the sums are large, some owners may not be able to come up with it call at once, which is why a credit line is a good thing to have.
In E&O cases, you have to compute and prove the amount of the damage. If no added interest is incurred, all you can say is it's going to be tough going trying to catch up with added billings, but you can't pin down a dollar amount for damages. Inconvenient?? Yes. Damaged?? No.
Re: Co-Op Management Company Error
Thanks again. One last question:
The management company has said they they're not going to hold me responsible for the accumluated amount, but that if I want to send something in, I can send whatever I want. If I elect sent in money to cover part of the accumulated charges, would that potentially obligate me to eventually pay the entire amount?
Re: Co-Op Management Company Error
Quote:
Quoting
rp_mcmurphy
Thanks again. One last question:
The management company has said they they're not going to hold me responsible for the accumluated amount, but that if I want to send something in, I can send whatever I want. If I elect sent in money to cover part of the accumulated charges, would that potentially obligate me to eventually pay the entire amount?
I think they're trying to work something out with you, being it wasn't your fault, so send something to show good faith..
You are responsible for the shortfall, so perhaps you should work out some payment plan for the remainder.
Are you the the only one that they made the mistake on?? Are there others??
Re: Co-Op Management Company Error
I think there are a few others.