Is the Board Liable When a Worker on an Apartment Alteration Project is Injured?

High Rise Construction Workers

If a worker employed in an apartment owner’s alteration project is injured due to some lapse in safety practices or equipment on the job, is the condominium or cooperative liable under New York’s Labor Law? Unfortunately, a decision of the New York Court of Appeals earlier this month, Guryev v. Tomchinsky, __ N.Y.2d __ (Dec. 11, 2012), addressed this issue by distinguishing between cooperatives and condominiums in a way that makes little intuitive sense.

New York’s Labor Law, §241 requires, generally, that “All contractors and owners and their agents, except owners of one and two family dwellings who contract for but do not direct or control the work, when constructing or demolishing buildings … shall comply with…[a lengthy list of work and work-site safety practices identified in the statute or promulgated by the Commissioner of Labor].”

In Guryev an employee of a contractor hired to perform alterations in a condominium unit owner’s apartment was injured during the performance of the work.  While using a nail gun to install molding, a nail ricocheted and struck his eye.  He did not have eye protection.  He sued the unit owners, the condominium, the condominium’s board of managers, and the board’s managing agent for, among other things, violation of Labor Law §241 and regulations concerning eye protection.

The apartment alterations were contracted for by the unit owner and were being performed pursuant to an alteration agreement in which the condominium board retained the power to approve the alteration plans, require changes thereto, and enforce compliance with all applicable laws and regulations.

In a split decision,  the Court of Appeals majority held that the condominium and board of managers are not liable under Labor Law §241 because each condominium unit is a separate parcel of real property and the condominium and board are neither the “owner” nor an agent of the owner of the unit, notwithstanding that the condominium “owned” the land under the building, managed the building and exerted control over the work in the unit by way of the alteration agreement.

The result should be the same in a cooperative, right?  In both cooperatives and condominiums, apartment alterations are undertaken by the apartment owner pursuant to an alteration agreement with the board.  But no.  The majority opinion in Guryev notes and distinguishes other opinions holding cooperative corporations to be “owners” with liability under §241 to workers injured in the course of shareholder apartment alterations, because in a cooperative title to the building is held by the cooperative corporation and the shareholder is a proprietary lessee.  The dissent strongly disagrees and reasons that the same rule should apply to both cooperative corporations and condominiums.  It suggests, we think rightly, that the Legislature should amend the Labor Law in light of the majority’s conclusion.

While the rule may change in the future, at present cooperatives may have liability under Labor Law §241 for injuries to workers engaged in apartment alterations, but condominiums do not.

This reinforces the importance for cooperatives to use alteration agreements that require shareholders (a) to comply with all applicable laws and regulations in performing alterations, including Labor Law §241 and its regulations, (b) to indemnify the cooperative against all liability in connection with violation of such laws and regulations, and (c) to have adequate insurance coverage.

Please let us know if we may assist you with any of the foregoing.

 

This memorandum was initially issued by the cooperative/condominium practice group of Balber Pickard Maldonado & Van Der Tuin, PC which joined Smith, Gambrell & Russell, LLP on February 1, 2017 and now practices as part of SGR’s cooperative/condominium practice group.

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