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  1. #1
    Join Date
    Jul 2009
    Posts
    1

    Default My Condo Fees Are Paying Inidividual Owner Lawsuits is That Legal

    My question involves a condominium located in the State of: Connecticut

    My condo association is going too far with their lawsuits. It's a newer condo complex (about 4 years old) and the association is suing the developer for faulty work. I have no problem with that, however, on top of that, they are also using the same lawyers to represent individual unit owner complaints, and having the legal fees paid by our common charges as well.

    I'd be okay with this as well, except that any money awarded based on behalf of these individual unit owner lawsuits, will be paid directly to the unit owners, rather than the money going back to the association. This does not sound legal to me, and if it's not what course of action could I take to stop this from happening? Can anyone provide any insight?

    I've included part of the letter I received from my condo association member:

    On August 18th, 2008 we presented the Association’s counsel to speak about the claims of the Association and also to address the issue which is the primary reason for this correspondence. More specifically, this letter will address your rights to legal redress under the New Home Warranty Act (NHWA).

    Under the provisions of the NHWA, a person or person who have purchase newly constructed residence may legally pursue the contractor for breaches of the express and implied warranties which statutorily are attach to the unit. The NHWA provides new home purchasers the right to sue the contractor (in this case [the Developer]) for any damages suffered by them as a result of unworkmanlike conditions affecting their unit. The conditions must have been identified within the first year of the new homeowner’s possession of the premises. A lawsuit must be initiated against the new home contractor within the applicable statute of limitations, otherwise the owner’s rights lapse and are unenforceable under the statute. If and when the owner’s lawsuit results in a judgment and the defendant contractor is found to have no assets, the owner may apply to the Department of Consumer Protection’s Guaranty fund which is established for the purpose of reimbursing each owner the maximum amount of $30,000.00 of their claim.

    Many of the owners at [the Condo] are still able to pursue their rights under the NHWA. Based upon the information gathered by the Association's Board of Directors, it appears that you may be covered by the protections afforded by the NHWA. The question is how do you as an individual owner wish to proceed, if at all. Although some unit owners believe that they have no articulable claim under the NHWA, the fact is that each unit owner has been adversely affected by the roof, which was improperly and negligently installed by the developer. The cost to the Association to replace the roof has been estimated at approximately $1,000,000. As such, each unit has had their Common Charge increased by $75.00 to pay for the roof replacement and related expenses. There may be other areas similarly covered by the NHWA which will only increase each individual unit owner’s exposure to repair costs.

    Working with the Association’s counsel, the Board has authorized its attorneys to represent the Association against the declarant/developer. The Board has also authorized [the Association's Attorney]. to take on the representation of individual unit owners as part of the lawsuit to be initiated on behalf of the Association. That means that your claim under the NHWA may be litigated by Association counsel if you choose to do so. The Association is paying [the Association's Attorney] as part of the overall litigation against [the Developer].

    You are under no obligation to retain the Association's attorney to pursue your rights as described above.

    Should you elect to retain [the Association's Attorney] to pursue your claims under the NHWA, any monies awarded and ultimately paid from the Guaranty Fund would be paid directly to you, not to the [Condo] Association.

  2. #2
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: My Condo Fees Are Paying Inidividual Owner Lawsuits is That Legal

    I don't have all the facts, especially how many individual owners, and how many different claims these owners plan to pursue, so it's hard to tell what is fair and what is not.

    Sometimes, with these issues, there are other issues such as conflicts of interest, efficiency, and the common good.

    On the surface at least, I don't see any conflict of interest. In other words, I don't see the interests of the individual owners diverging from the HOA, so using the same counsel should not be a problem.

    Then, there is an issue the discovery of facts. I can't imagine the HOA getting evidence of the builders negligience and bad workmanship, and then 10 different owners spending money on 10 different lawyers, hiring 10 different experts on the same issue. Then 10 different complaints gets drawn up looking almost the same.

    In fact, I have read of other cases, where a situation like yours came up, but because of the politics of the situation ( some people complaining why the HOA is paying and then the HO gets the benefit), so 10 laywers and 10 experts gets hired individually, almost the same case, same facts, resulting in the lawyers and experts get to generate 10 different bills instead of just one. In many cases, they are the same lawyer and expert, so they bill mulitple times for the same work.

    Then, I lived in a high rise condo, with severe roof leak problems that the HOA felt the developer was responsible for and got an attorney. However, some unit owners started complaining owners on the top floor only should kick in for attorney fees, since the leaks only affected only those units, and the HOA shouldn't pay. When that came up, some top floor owners said their units had no leaks, and why should they have to pay. I was on a lower floor, and see the argument to be totally selfish, as the HOA should take responsibilty for all claims against the developer for poor workmanship, anywhere throughout the complex.

    Legally, the HOA is responsible for the roof, there should be no argument, but some owners positions illustrate how parochial their thinking is.

    In fact, the condo I lived in was a new conversion, and my belief is, if something happened in my unit, due to bad workmanship, such as a leaky window (common) , badly installed heating units (HO responsibility) , and the developer is responsible, the HOA should get counsel to assist me for both. I think it's grossly unfair and inefficient to have individual owners to get individual lawyers on individual complaints, especially, if the bad workmanship itself all has a common cause.

    A better way perhaps is to see if some owners can kick in a few more bucks, but I don't really see an easy way of doing it without knowing how the lawyers would work, and what the individual claims are.

    From the standpoint of the common good and efficiency, if it was me, I would say use one counsel, and just divide the bills up based on percentage of ownership. Sometimes, just to save yourself a few nickels, you cost everyone including yourself dollars more, with the lawyers and experts being the real winners, especially multiple billing for the same work.

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