Must Co-ops Make Paint/Decoration Repairs After Exploratory Work in Apts.?

The co-op had been experiencing problems with its plumbing and the building had leaks, although longtime shareholder Rudolph Baker did not. However, in an attempt to locate the source, the co-op made holes in one bathroom's ceiling and walls and destroyed wallpaper in the other. The co-op hired a painter to plaster and prime the walls and ceilings, but refused to pay for any painting or application of wallpaper on the theory these were "decorative" items for which Baker was responsible. Baker paid a contractor $850 to do the work.

All shareholders, including Baker, signed an occupancy agreement where they agreed to follow the rules. Article 11 stated that the co-op "shall provide and pay for all necessary repairs, maintenance and replacements, except as specified by clause (a), an exemption that included: "any repairs or maintenance necessitated by [a shareholder's] own negligence or misuse" and "any redecoration of [a shareholder's] own dwelling unit."

Getting Plastered

On December 10, 2007, the co-op issued a memo to all shareholders clarifying its policy concerning repairs. The memo was filed with the co-op's rules and regulations and stated that "the [shareholder] agrees to repair and maintain his dwelling unit at his own expense for any repairs or maintenance necessitated by his own negligence and misuse and any redecoration of his own dwelling. In the event of leaks caused by broken pipes or rain, the Cooperative is responsible for plaster[ing] walls and ceilings … and [to] prime coat the walls and ceiling. However, painting is considered decorative and is the responsibility of the shareholder."

The court discussed three issues in play: (1) Were the repairs necessitated by Baker's negligence or misuse? (2) Was the co-op's "exploratory work" to locate the origin of the leak an event caused by broken pipes or rain that would make it responsible for plastering walls and ceilings? (3) In the case of restoration required by "exploratory work," is painting considered decorative?

The co-op required access

in order to perform exploratory work.

Courts have determined that they must read a contract as a whole and consider the entirety of the agreement in the context of the parties' relationship. It is improper to cull distinct provisions from the agreement. The court discussed the longstanding rule that when the terms of a contract are clear and unambiguous, they must be read according to their terms.

Negligence or Misuse?

The court, first, determined that Baker's repairs were not necessitated by his own negligence or misuse. There were no leaks into his apartment and the co-op's plumber entered the apartment to do exploratory work in search of a leak, ultimately located in another apartment.

Courts have, when necessary, looked to the dictionary to determine the ordinary meaning of words in a contract. "Decorative" was defined as "serving to make something look more attractive or ornamental." The court found there was paint and wallpaper on the walls of Baker's bathrooms before the co-op started its exploratory work. The paint and wallpaper would have remained unaffected if the co-op had not entered Baker's apartment, and he would not have incurred an expense but for the co-op's work.

The court, which deemed it significant that the co-op came to Baker, not vice versa, found that the co-op damaged his bathrooms in pursuit of a solution for the entire building and that there was no contract provision for exploratory work or damages caused to a shareholder's apartment by the co-op. Thus, the court found co-op was liable to Baker for $850.

Comment: Specific contract language is important and must be reviewed when determining the rights of a co-op and its shareholders. The occupancy agreement required the co-op to maintain the premises in good repair, except under certain circumstances. Those exceptions did not include the situation here , where the co-op required access in order to perform exploratory work.

Because the court awarded Baker the full $850 he spent to paint and wallpaper, it is implicit that the co-op was responsible for the cost of restoring what Baker had in place prior to the exploratory work. This is an important consideration where a shareholder has expensive finishings in place.

Boards should review all their governing documents concerning responsibility if repairs need to be made through no fault of the apartment owner. If it is the building's responsibility, it is important that the board understands the cost of restoring the decorations. 
 

Richard Siegler is a partner in the New York City law firm of Stroock & Stroock & Lavan.  Dale J. Degenshein is a special counsel for that firm.

Illustration by Liza Donnelly 

Adapted from Habitat September 2010. Join our Archive >>