Published on: September 15, 2011
All too frequently, property managers find themselves named as defendants in connection with lawsuits brought against the condominiums they represent. One case may concern a contract that the manager helped negotiate on behalf of the condominium. Another might involve a unit owner who has a dispute with the trustees and decides to sue the manager too.
With all the great work that property management professionals perform for their associations, it can be frustrating to be “rewarded” for the effort by receiving a summons and complaint. Fortunately, certain strategies can be employed to help shield property managers from liability and expense when they are sued.
Typically, the manager’s contract with his association will require the association to defend and indemnify him against legal action brought by third parties. Thus, the condominium association’s condominium lawyer can often step in and defend the manager in any litigation. The manager and the association will hopefully be on the same page concerning any given case, and there will be no conflict in having the attorney provide a joint representation to both the trustees and the property manager. Managers and trustees alike should recognize that if there is a conflict between them, then the attorney may not be able to represent both of them, or in some cases either of them. Everyone involved should make sure that their interests are aligned in order to enable the attorney to provide the best representation possible. The Massachusetts real estate lawyer (or any other state) may ask the association and its manager to sign a joint representation letter prior to doing any work on the matter, which explains the anticipated benefits and potential drawbacks associated with joint representation.
The manager should also notify the association’s insurance carrier that a suit has been brought, even if the manager is the sole named defendant in the case.
Oftentimes, the attorney should take steps to move to dismiss the property manager from the case. We argue that the property manager is the wrong party to sue, and to the extent that the plaintiff may have any claim at all, that claim is properly brought only against the condominium association. For example in Massachusetts, the Condominium Act specifically provides that, “[a]ll claims involving the common areas and facilities shall be brought against the organization of unit owners . . . ” G. L. c. 183A, §13. Accordingly, any claim that a unit owner may have regarding the care and maintenance of condominium common areas and facilities should only be brought against the association, as an entity, and not against its managing agents.
Such an argument is well supported based on general principles of agency law and has also been applied in the specific context of condominium law. In this regard, a property manager is merely an agent who carries out the instructions and provides services for a disclosed principal, the condominium association. “The organization of unit owners may appoint a manager or managing agent . . . ” G. L. c. 183A, § 10 (c). Massachusetts jurisprudence has interpreted this section to recognize that a managing agent is appointed to perform the duties incumbent upon the condominium association. In various cases, we have seen courts dismiss claims brought against condominium managing agents for defamation, negligence, and G. L. c. 93A. Additionally, in one case the court recognized that there is no contractual or fiduciary relationship between a property manager and a condominium unit owner, leading the court to shield the manager from liability.
Even in cases where we seek dismissal of only that portion of the complaint which alleges claims against the property manager, the association may yield a considerable benefit as well. By highlighting deficiencies in the plaintiff’s case early on, we are often able to create a more advantageous atmosphere for the condominium to resolve the matter as a whole.
If you would like further information please regarding this article, please contact Robert Nislick at firstname.lastname@example.org or at 781-843-5000 (x152).