Condo Leaks

Condo Leaks

Ask Phyllis: a blog series of frequently asked real estate questions previously published in the Crescenta Valley Weekly.

Dear Phyllis,

I enjoy your column, and I have a complicated question. My daughter recently closed escrow on a condominium in Orange County. On the afternoon her loan was funded, the homeowner’s association notified her Realtor of a leak. The leak was in the vacant unit she was purchasing, leaking into the unit below. At this point, it was too late to cancel the closing. It seemed odd that her Realtor was informed just hours before the end of business on the day the loan was funded.

I advised my daughter to ask the association when they first learned of this leak, but she never received a straight answer. The seller had moved to Arizona several years ago, and this unit had been a rental. After escrow closed, the seller paid a plumber to fix the leak in my daughter’s unit. Apparently, the unit below the one my daughter purchased had damage to its ceiling. I know my daughter isn’t responsible because she was not the owner then. I am curious how the unit below might rectify this situation.

Curious George

Dear George,

Assuming the seller had their own insurance policy (as a supplement to the Homeowner’s Association Policy), it seems this would be an insurance claim. Although I am a real estate agent and not an attorney, I believe you are correct in assuming it is not your daughter’s responsibility, as the leak was before her taking ownership.

If the seller did not have an additional insurance policy, this lower unit owner should contact her insurance carrier. Otherwise, it seems that the owner of the unit below would have to seek redress from the seller. Depending on the repair cost, it may simply be a matter for small claims court. However, it is my understanding that a person cannot sue for more than $10,000.00. I am not confident that the other unit can use California Small Claims Court for an Arizona resident.

If all else fails, this unit may attempt to file a claim against the homeowner’s association policy.