You should consult your coop attorney and not rely on your managing agent only.
It is unusual to have this kind of waiver in a property lease.
The purpose of a property lease is, among other things, to protect the interests of the buildings structure.
As a corporation, you should be able to seek "reasonable" damages from a shareholders due to negligence.

> Join the conversation

Sounds as though insurers are involved.

http://library.findlaw.com/1999/Mar/1/128637.html

Check with your co-op's insurer.

> Join the conversation

Here's the clause as it appears in our Proprietary Lease and probably in many others:

"4(d). Waiver of Subrogation: The Lessor agrees to use its best efforts to obtain a provision in all insurance policies carried by it waiving the right of subrogation against the Lessee; and, to the extent that any loss or damage is covered by the Lessor by any insurance policies which contain such waiver of subrogation, the Lessor releases the Lessee from any liability with respect to such loss or damage."

I'm not a lawyer -- and you should definitely consult yours -- but here are a couple of comments.

First, note that this is only a "best efforts" clause. Your coop's insurance policy may not actually include a waiver of subrogation. If it does, it means that the insurance company has agreed not to go after the offending shareholder to recover money paid to the coop to settle a claim. This is true even if the shareholder's negligence caused the damage: see Indian Harbor Insurance v. Dorit Baxter Skin Care, http://www.allbusiness.com/legal/trial-procedure-summary-judgment/14662665-1.html

Furthermore, the clause says the coop releases the shareholder from liability to the extent that the loss or damage is covered by such an insurance policy. Presumably, this means that the coop *can* go after the shareholder for any damages not covered by the insurance. But again, I'm not a lawyer, so let us know what your attorney says about this.

> Join the conversation

HabitatReporter here with an opinion from Edward T. Braverman, Esq., of Braverman & Associates , P.C.:

"The Managing Agent who has denied coverage for a water leak emanating from the negligent maintenance of a toilet is incorrect in denying repairs based upon a claim of “Waiver of Subrogation”. Subrogation is the legal contractual concept generally applied to insurance carriers. It is the insurance company’s ability to make claim against the party causing the damage after the insurer makes payment of the funds necessary to correct the damage. Waiver of subrogation is a contractual provision where the insurance carrier agrees that after payment it will not seek to recover the money it paid from the negligent party. Many Proprietary Leases do contain provisions mandating that both the Co-op’s insurance policy and a Shareholder’s policy must contain such a waiver. However, the concept requires that the carrier has initially paid the full amount of the damages to the person who made the repair. Obviously, in the instance presented the doctrine would apply only if the writer had been paid the full amount of the damages by his insurance carrier. This is obviously not the case, and the Managing Agent has misinterpreted the meaning of the Proprietary Lease provision which would prohibit the writer from being paid. Had the writer been paid, the principal would be applicable because it would prevent the writer from receiving a double recovery (both from his insurance company and from the negligent party or that party responsible to make the repair)."

> Join the conversation