Same Planet, Different Worlds Co-op vs. Condo Liability

While there are many similarities between co-ops and condos, are the two very different when it comes to things like insurance and liability?

The answer is both yes and no. There are similarities, but some significant differences as well. One such difference, for example, is simply the kind of ownership residents have over their living spaces. In a co-op, shareholders are essentially stockholders in a private corporation whose shares entitle them to live in the corporate-owned building. In a condo, unit owners are owners of real property that just happens to be stacked on top of other real property, rather than a freestanding development.

Differences and Commonalities

Is it possible then that the ramifications of lawsuits and insurance claims against co-op and condo buildings can differ significantly? Well, all of this might sound like a lot of legal mumbo jumbo, but you don’t need a law degree to comprehend it; it’s actually pretty easy.

Two laws in New York State basically govern the liability assumed by co-op shareholders and condo unit owners—the Business Corporation Law or BCL, and the Condominium Act. So it’s important to understand why knowing the hows and whys of insurance and liability would even be of importance.

To illustrate what we’re talking about, let’s say it’s cold and icy in the middle of winter and Mrs. Jones slips on some ice on your condo building’s sidewalk and falls, breaking her hip. Although the building employs a maintenance staff member to clear snow and ice off the sidewalks, perhaps he or she missed a spot. As a result, the injured Mrs. Jones sues your building because the ice should have been taken care of.


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