Residents sue the managing agent constantly, and often without much thought about why. The agent sent the letters, the agent answered the phone, the agent's name is on the notice taped to the door — so the agent goes in the caption alongside the corporation, the board and sometimes the superintendent.
Sometimes the agent genuinely belongs there. Frequently it does not, and the right outcome is an early dismissal rather than three years as a nominal defendant in someone else's case. Either way, two questions should be answered in the first week: can you get out, and who is paying for the lawyer while you try.
We defend management companies against claims by shareholders, unit owners and tenants. Call 212-233-1233 or email [email protected].
What Residents Sue Over
- Water damage, mold, leaks and conditions in the apartment
- Personal injury in the building or on the sidewalk
- Discrimination and refusal of a reasonable accommodation, including assistance animals
- Harassment claims, particularly where enforcement notices have gone out repeatedly
- Denial of an alteration, a sublet or a sale, or delay in processing one
- Improper charges, late fees and assessments
- Failure to act on complaints about another resident
- Privacy and improper entry into the apartment
- Selective enforcement of house rules
The First Week
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Tender to the building
Your management agreement most likely obligates the building to defend and indemnify you for claims arising out of your performance. Tender the claim to the board in writing, promptly, and ask for a defense — not just eventual indemnification. This is the single most valuable step available and it is regularly overlooked.
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Check whether you are an additional insured
Many management agreements require the building to name the agent as an additional insured on its liability policies. If yours does, the building's carrier may owe you a defense directly. Locate the certificates and tender to that carrier as well as to your own.
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Notify your own carriers
Both general liability and errors and omissions, depending on the claim. Notice requirements are strict and claims-made policies are unforgiving about delay.
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Preserve the file
Work orders, complaint logs, inspection records, correspondence with the resident, board minutes, vendor invoices and any photographs. In a conditions case the maintenance history is the case.
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Stop communicating with the resident
Including the conciliatory email explaining what happened. Route it through counsel.
The Agency Defense
The central defense available to a managing agent, and the one that produces early dismissals.
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An agent for a disclosed principal
Where the agent acted within its authority on behalf of a building everyone knew it represented, the obligations at issue are generally the building's, not the agent's. The resident's contract — the proprietary lease, the bylaws, the lease — is with the corporation or the board, not with you. Claims that are really about those obligations often cannot be maintained against the agent at all.
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The limits of that defense
It is not absolute, and it is important to know where it stops. An agent can be directly liable for its own affirmative negligence — conduct that created or worsened a dangerous condition rather than merely failing to fix one — and for its own wrongful acts, such as discriminatory conduct by its personnel. The distinction between failing to act on the building's behalf and doing something harmful yourself is where these cases are won and lost.
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Where the board made the decision
Denials of alterations, sublets and sales are board decisions that the agent merely communicates. Naming the agent for conveying the board's decision is common and usually misdirected.
Discrimination and Accommodation Claims
These deserve separate treatment because they carry the greatest exposure and because the agency defense is weakest here.
Fair housing claims — including refusal of a reasonable accommodation such as an assistance animal, a parking space or a modification to a unit — can reach the agent directly where the agent's own personnel made or implemented the decision. These claims can be brought in several forums, they carry the possibility of attorney's fees, and they do not settle on the same logic as a water damage claim.
They also frequently arise from a request that was mishandled procedurally rather than refused outright: a request that went unanswered, or one processed as an ordinary house rules matter. For managing agents, having a written intake process for accommodation requests is worth considerably more than any defense.
Speak With Our Firm
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Out of the case, or defended at the building's expense
For a managing agent, the goal in most resident litigation is one of two outcomes: dismissal on the agency defense, or a defense funded by the building and its carrier rather than by you. Both depend on steps taken early, and both are routinely lost by agents who simply forwarded the complaint to their broker and waited.
Call 212-233-1233 or email [email protected]. See also enforcement proceedings against residents.
