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Facts

Defendant, Castletown Corner Owner’s Association, Inc. (“Association”), had a duty to maintain a lift station.  Specifically, the declaration imposed an obligation on the Association to pay “all Maintenance Costs in connection with” improvements constructed at the Association.  Maintenance costs are then defined as “all of the costs necessary to maintain the … sewers, utility strips, and other facilities … and to keep such facilities operational and in good condition, including, but not limited to, the cost of all upkeep, maintenance, repair, replacement … for the continuous operation of such facilities.”  Plaintiff, owner of one of the commercial units, sued the Association for failing to properly maintain the lift station after an incident where the sanitary lift station malfunctioned and flooded the building with human sewage, which allegedly caused Plaintiff’s tenant to terminate its lease. …
Continue Reading Language in Declaration Makes Association Strictly Liable

As Is

An AS IS exculpatory clause in a contract does not automatically relieve a party of any liability, especially where that party committed fraud to obtain the exculpatory clause.

The Facts

In both of the cases referenced below, the defendant included an as-is clause in a real estate contract. In Frianco the bank defendant (after discovering that the property that it had foreclosed on had significant water damage, and after paying to have those damages repaired) advised the purchaser of property in the offer contract that “it had little or no direct knowledge as to the condition of the property.” Similarly in Herhold, the defendant first represented to the buyers that they would be able to build a home on property they were selling, despite knowing of significant issues that would make that difficult or impossible. The defendant then included an “AS IS” clause in the real estate purchase agreement that also stated that “neither Seller, Broker nor Agent have made any representation or warranties…”…
Continue Reading AS-IS Clause Does Not Foreclose a Fraud Claim

Does your condominium association or HOA sign contracts for vendor services? Who does the contract protect – the vendor or the association?  What you need to know about condo association and HOA vendor contracts in less than a minute.

Want to learn more about Wisconsin condominium and HOA law from experienced condo and HOA…

Risk
Summary

The US Court of Appeals for the 4th Circuit held that a subrogation waiver provision in a construction contract barred an association’s insurance company from seeking to recover from an allegedly negligent contractor.

Facts

United National Insurance Company v. Peninsula Roofing Company, Inc.:  Pelican Beach Condominium (“Association”) needed a new roof. The Board, after obtaining specifications from an engineer, entered into a contract with Peninsula Roofing (“Contractor”).  The contract was a standard form AIA contract that is widely used throughout the country.  Peninsula Roofing placed a generator in the Association’s parking garage from which the contractor ran extension lines to power its tools. The generator caught fire and caused about $3 million dollars in property damage. …
Continue Reading Association Construction Contracts – What are Risks of that Waiver of Subrogation Term

Slapped w/ Lawsuit

Condominium associations and homeowner associations are sued every day. These suits can arise based on construction claims, contract claims, negligence claims and various alleged statutory violations – We all know about the Fair House Act!  Or the Wisconsin (or whatever state you are in) Consumer Act!  Associations seem to attract people who feel that they are entitled to something because they now live in an association.  Of course they are entitled to what the law and documents allow them, but for some that never seems to be enough.  Often these types of owners or residents make up stuff or read the internet until they find some article or statement that supports their point of view and then cite it as fact. Yes, we have all dealt with those people. However, despite the validity (or lack of validity) of any lawsuit, there are some basic steps that every association should follow once served or notified of a suit.
Continue Reading Sued! What Should Our Wisconsin Condominium or Homeowners Association Do NOW?