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Handling Lawsuits As A Co-Op or Condo Board

Posted by All Area Realty Services Team on Oct 2, 2018 4:14:43 PM

Lawsuits are expensive and time-consuming, and can quickly turn into a financial burden. And unfortunately in some cases it is the only option for resolution.

The Basics

The most common lawsuits include noise complaints between neighbors, construction defects in units, and attempts to collect delinquent payments from residents. If you are the defendant the lawsuit will begin with you being served with a complaint. You will have 20 days to answer the complaint with either an answer or to file a motion to dismiss. You can seek to dismiss the complaint on two grounds: you can say that suit is not strong enough for “a cause of action” or you can try to dismiss by virtue of an “affirmative matter.” 

Also, keep in mind most cases are settled before the going to trial, or the completion of a trial. 

iStock-660743394Don’t Go Through a Lawsuit Alone 

If you attempt to resolve the dispute yourself it could ultimately create more legal challenges. You could find yourself in the trap of selective enforcement. Inconsistent rule enforcement could not only get you in trouble, but empty threats can result in issues as well. In the first phase of a lawsuit, the involvement of your attorney is crucial in steering you to a successful path to resolution.

Although all lawsuits are public record if you have an attorney all of your discussions will be protected by the attorney/client privilege. If you discuss the lawsuit or seek advice to anyone else you will not have this confidentially protection and could have personal information about the lawsuit leaked. 

It is important to note that if you’re covered by general liability insurance or Directors & Officers coverage you could have your defense provided by your carrier.  

How Much Will a Lawsuit Cost 

Predicting the cost of a lawsuit is difficult. The more actions necessary to take place during a lawsuit and the longer it is all run up the price. If you come into the situation with reasonable expectations, a willingness to compromise and communicate you can really save yourself a lot of time and money. 

Alternatives 

You can try to meet with the other party and resolve the issue amongst yourselves. However, as mentioned above this is a gamble and could end up costing you even more money in the end. At the very least an attorney should be present as a mediator. 

The Consequences of Constant Litigation iStock-478524467

A long history of litigation may hurt your standing with prospective buyers and lenders. Prospective buyers may question the building’s financial stability, if the board is ruling effectively, or if the residents have hostile relations with the board. Also, lenders may take the constant litigation into consideration when underwriting their loans. 

Lawsuits can be expensive and time-consuming experiences. However, if you keep all the points above in mind it can help to cheapen and shorten the time span of your lawsuit. 

If you serve on a co-op board and need professional property management services, contact All Area Realty Services and find out why our over 30 years experience and loyal clients makes us experts.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

Topics: Co-Op Board, Co-Op Building, Co-op Insurance, Condo Board Association, Co-Op Board Lawsuit