After the first leak, the condominium manager (közös képviselő) promised that a roofer would come. Since then six months and two more rainstorms have passed; the stain on the ceiling has spread across half the room, there is mould in the corner and the parquet has buckled. The resident pays the common charges properly, yet the building does nothing – and the question I hear as a broker in such cases is invariably the same: is the condominium liable to its own resident, and will the building's liability insurance pay for this? The short answer: the building may be liable, but insurance is rarely a good solution in this case, because under the policy conditions damage from a defect knowingly left unrepaired is typically not paid. This article goes through both the legal and the insurance side, and shows what the resident can do. The basic situation – which policy to turn to when water comes in from above – is covered in the article on leaks from above; what follows here is the special case where the source of the damage is known and the damage persists because the building has failed to act.
- The upkeep of the commonly owned roof, risers and floor slabs is the condominium community's job: under Section 43(1)(b) of the Condominium Act (Tht.), the condominium manager (közös képviselő) must take all necessary measures to ensure the upkeep of the building, and under Section 3(1) the community can be sued in its own right.
- If the building knows about the defect and still fails to act, it may owe compensation under the Hungarian Civil Code (Ptk.) even to its own resident – but ultimately the debt is borne by the co-owners in proportion to their ownership shares, the injured owner included.
- The building's liability insurance follows its legal liability, but Hungarian policy conditions typically exclude from cover damage resulting from a known defect knowingly left unrepaired, damage that develops slowly and gradually, and recurring damage – in such cases the loss stays with the common fund.
Whose job is the roof?
The roof, the roof structure, the floor slabs and the shared pipes are typically in common ownership – each building's deed of foundation decides – and the upkeep of common property is the obligation of the condominium community. Under the Condominium Act (Tht.), the condominium manager, acting within their powers, must ‘take all necessary measures to ensure the upkeep of the building’ (Section 43(1)(b)), and must prepare and implement the resolutions of the general meeting. According to the Act's interpretative provisions, upkeep includes operation, maintenance and renovation, and maintenance in turn includes repairing faults that require urgent intervention. In practice this means that temporarily covering a leaking roof or shutting off a dripping riser is not a matter for a general meeting decision: the manager must have it done within the framework of the condominium's organisational and operational rules (SZMSZ), while the general meeting must decide on the lasting solution – a new roof, renovation of the risers – and, if there is no money for it, also on raising the common charges or on a special levy. Whether the manager failed to act or the general meeting did not vote the money makes no difference to outsiders: it is the community that bears the obligation.
Is the building liable to its own resident?
It may be. Under Section 3(1) of the Tht., in the course of the upkeep of the building and the management of matters relating to the common property, the community can acquire rights and assume obligations, and can sue and be sued in its own right – so a resident can sue their own condominium too. The basis for compensation is the general liability rule of the Hungarian Civil Code (Ptk.), Section 6:519: anyone who unlawfully causes damage to another must compensate for it, and is released from liability only if they prove that they acted as is generally expected in the given situation. With a known roof defect that has been reported in writing and left unrepaired for months, this defence is hard to make out. The resident's position is also strengthened by the Ptk.'s rule on damage caused by buildings (Section 6:560), under which the owner of a building is liable for damage that others suffer as a result of the building's defects, unless they prove that the maintenance rules were not breached and that they acted as is generally expected to prevent damage. So the building is liable for the damage to the ceiling, the paintwork, the parquet and the ruined furniture – but only from the point at which the failure is attributable to it, that is, once it knew or should have known about the defect and did not act within a reasonable time.
Two things are worth thinking through soberly here. The first is that under the Ptk. the injured party, too, has a duty to mitigate the damage: if the resident puts nothing under the leak, leaves the wet parquet for months and the damage grows as a result, the building is not obliged to compensate the additional damage. The second is that, under Section 3(3) of the Tht., the co-owners are liable for the community's debts in proportion to their ownership shares – or in a different proportion set out in the organisational and operational rules – as simple (secondary) sureties: in other words, whatever the building pays out as compensation is borne by the common fund and, ultimately, by every owner, the injured one included. A lawsuit against your own building is therefore costly even if you win: the resident pays the part of the damages corresponding to their own ownership share themselves, through the common charges. This is not an argument against a justified claim, but it is an argument for making the lawsuit the last resort, and fixing the defect the first step.
Does the building's liability insurance pay for this?
Building liability insurance follows the building's legal liability: if the building causes damage to someone else and is liable for it under the Ptk., the insurer relieves it of paying the compensation in line with the policy conditions. Whether damage caused to the building's own co-owners is also covered varies from one set of conditions to another – some Hungarian condominium policies expressly cover damage caused by the building to the co-owners' separately owned property, while with others this has to be requested separately. This is discussed in the article on building liability insurance. The problem lies elsewhere: Hungarian policy conditions typically do not pay for damage that results from a defect known to the insured but not repaired, that develops slowly and gradually (water coming in over months, damp penetration, mould), that can be traced back to a failure of maintenance, or that recurs from the same cause under unchanged circumstances. The first leak through a roof damaged in a storm is therefore often still a payable claim, but the third one, six months later and from the same place, typically is not: in such cases the insurer argues that what happened was not an unforeseen event but the consequence of a known defect. The article on refusals of recurring claims explains when this argument is justified.
The same logic applies to the resident's own home insurance. For the first leak, the water-ingress cover of the resident's own policy – if the contract includes it – may pay in line with the conditions, and the insurer can recover the amount paid from the building. After that, however, the resident's insurer may also invoke an exclusion or a breach of the duty to mitigate if the source of the damage is known and nobody has eliminated it. The lesson is simple: step by step, delay takes the loss outside the cover of both policies and leaves it to the common fund and the resident's own pocket.
What the resident can do – in order
First, put it in writing: report the defect and the damage to the condominium manager in a way you can prove – by e-mail or registered letter – with the date and photos, and ask for a deadline for the repair. This letter will later be evidence that the failure was attributable to the building. Second, mitigate your own damage: containers, plastic sheeting, moving the furniture away, drying out – this is your obligation under the Ptk., and the building can hold you to it. Third, report the loss on your own insurer's claims line, and ask the manager to report it to the building's insurer as well; if the manager does not do so, the resident's options are described in the article on a manager who fails to report a claim. Fourth, take the matter to the community: under Section 35(2) of the Tht., a general meeting must be convened if co-owners holding one tenth of the ownership shares request it in writing, stating the agenda, the reason and the proposed resolution – a proposal to repair the roof may well find allies among the other affected residents. If the manager does not convene the general meeting for a date within 30 days of receiving the request, under the same subsection the audit committee may convene it for a date within 15 days after the thirtieth day, and failing that, the co-owners who requested it may do so themselves. If a resolution of the general meeting breaches the law or seriously harms the legitimate interests of the minority, any co-owner may, under Section 42(1) of the Tht., bring an action in court within sixty days of the resolution being adopted, asking the court to declare it invalid. Legal oversight of the condominium's operation is exercised by the municipal clerk (jegyző) under Section 27/A of the Tht. – this concerns whether the condominium operates lawfully; the clerk does not award compensation. Finally, if the damage has already occurred and the building does not pay for it, a written demand may follow, then an order for payment or a lawsuit – for this, legal help is warranted.
What should the community do when a resident raises the problem?
For the manager, the first and most important thing: do not wait for the general meeting before having the fault repaired. Temporary covering or shutting off a riser costs little compared with the damage that would otherwise grow, and it also matters for the building's property insurance: repair of a roof damaged in a storm may be paid by the policy's storm cover in line with the conditions, whereas delay may amount to a breach of the duty to mitigate, which puts the payout at risk. Document the defect and the measures taken, reply to the resident in writing with a deadline, and put the lasting solution, with a cost estimate, on the agenda of the next general meeting. If the building's claim gets stuck or the insurer invokes an exclusion, I act on the manager's behalf and help where I can – but here too, the primary route for reporting a claim is the insurer's claims line.
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Sources
- Act CXXXIII of 2003 on Condominiums (Tht.) – Section 3(1) and (3), Section 27/A, Section 35(2), Section 42(1), Section 43(1)(b)
- Hungarian Civil Code (Ptk., Act V of 2013) – Section 6:519 liability for causing damage, Section 6:560 liability for damage caused by buildings, the injured party's duty to mitigate
- Financial Arbitration Board (PBT, MNB) – for a resident's dispute with their own insurer (the condominium as a community is not a consumer; disputes over the building's insurance go to court)
Related articles
- Building liability insurance: when the building causes damage to others
- A leak from above: whose insurer pays – the building's or the neighbour's?
- Water came in a second time and the insurer won't pay: is rejecting a repeated loss justified?
- The representative does not report the claim: what can a resident do under the building's insurance?
