Can a Condo Sue Its Property Management Company?

Question:

I am a new condo owner and just became a member of the Board of trustees. The property management company is closing down next month and put the condo association in the red and spent a lot of money this past year. The expenses were way too much for the work. I am an attorney, but do not know this area of law. I moved back to Massachusetts in April 2022. What would you suggest we do. We have 37 units. A lot of things were not done. Please call me at 559-329-1038 or email me at paulamarie417@gmail.com. There are five trustees and we have to do something fast.

– Paula

 

Answer:

Hi Paula,

First of all, consider parting ways with your management company. You should review the condo association’s contract with the property management company to see if you can initiate legal action. Typically, these contracts include an indemnification clause whereby the association indemnifies the property management company. A court may hold the property management company directly liable if it committed a crime or if it acted grossly negligent or if its actions constitute willful misconduct. Gross negligence and willful misconduct tend to be difficult to demonstrate, though.

The condo board will likely need to levy special assessments if your current operating budget can’t cover the expenses of the association. Other than that, you may want to cut back on non-urgent costs.

Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.

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