Having represented both individual condominium unit owners (sometimes known as condominium “trustees”) and condominium associations in the past, we recognize that there is sometimes confusion as to the rights and responsibilities inherent to condo ownership and management.
First, let’s clarify the basic principles of condominium ownership, which differ slightly from ownership, say, of a single-family home. When an individual purchases a condominium, he or she typically receives exclusive and possession ownership to the individual unit, along with an undivided interest in all common areas and condominium services (for example, recreational facilities and security services). The management and control of common areas and condominium facilities and services is entrusted to an owners’ association, usually organized through a condominium trust, by which individual owners become trustees.
Confusion often arises when defects in the construction of condominium common areas and facilities are discovered, and especially when these defects lead to property damage within individual condominium units. Who has the capacity to bring suit for such damages — an individual unit owner, or the condominium association? The answer is based on where the defect is found, and what collateral damage it has caused or may cause in the future:
1. For damages found strictly within an individual unit, affecting only that unit: the implied warranty of habitability (discussed in other blog articles) attaches to the sale of new residential condominium units by builder-vendors in Massachusetts, just as it applies to the sale and rental of new homes. Individual unit owners, and only individual unit owners, may bring claims against the developer and contractor(s) for breach of contract and breach of warranty, as well as statutory claims under the Massachusetts Home Improvement Contractor’s law. Unit owners may also potentially be able to sue for negligence as well, depending on whether the defects have caused additional personal injuries or property damage. Damages stemming from defective renovation work performed within an individual condominium would be addressed according to the terms of the construction contract.
2. For damages found within a common area or facility, affecting only that area: pursuant to state statute, the condominium owners’ association has exclusive right pursue legal action against the developer or contractor. The association will likely possess claims for negligence, breach of contract or breach of warranty in such cases.
3. For damages found within a common area or facility causing additional damage to individual units – In this case, the owners association is allowed to bring suit on behalf of individual unit owners to remedy defective work, including claims for breach of the implied warranty of habitability and violations under the home improvement contractors’ statute for newly constructed units. If the owners’ association refuses to take legal action, individual unit owners are able to seek redress against the owners’ association, in addition to the developer of the property from whom the unit was purchased.