CONDOCENTRIC: Defending Claims In The Small Claims Court

In today’s litigious age, it seems inevitable that a condominium corporation will eventually be faced, at one time or another, with a claim in Small Claims Court brought by a unit owner, an ex-employee, a contractor, or otherwise. Irrespective of whether the claim is clearly contrived, or whether it is without apparent merit, it must be dealt with. A condominium corporation faces a dilemma when met with such a claim.

Generally, the amounts claimed are quite low in relation to the cost of defending it. A further consideration is that a condominium corporation treads a fine line in balancing the costs of defending a claim versus settling it, and the message it wants to send out to all those would-be without merit claimants waiting in the wings to try to extract money from the perceived deep pockets of a condominium corporation.

In one condominium corporation of which we are aware, and which has had a history of disputes arising with unit owners, employees, property managers, etc., the condominium corporation was, at one point, faced with nine Small Claims Court claims served over a period of two days, most involving the same lawyer, and most resulting, apparently, from the prompting of one or two owners. The result on the condominium corporation was more cost, more uncertainty, and less legitimate condominium business being carried out.

Unit owners should be reminded that they ultimately pay for claims they advance. The money they are claiming, as well as the costs to the condominium corporation of defending the claim, and incurred to prevent further claims of this manner, has to come from somewhere. And that somewhere is the common expenses paid by unit owners, including the unit owner who brings the claim.

From “Common Elements” Fall 2003

All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.

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