If my lender forecloses on my unit, will my loss be limited to the unit or can the owner below come after me personally regarding damage from a leak?

I own a condo on the 4th floor. Chaulking on top of the bath tub which seals it to the wall had a 1/2 inch break and the tenant on the 3rd floor experienced a leak 3 times in about 2 years. HOA had it inspected by a plumber and he pointed out the break in the caulk. I know that 3 minor leaks in 2 year seems minor but if they claim structural damage or want a bathroom renovation from it, I wouldn’t be able to cover that. Since the leak (no matter how small) is from my unit, do I have to pay for everything that they request even if it’s not reasonable. How do you determine reasonability?

Asked on September 24, 2012 under Real Estate Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If your lender forecloses on your rental your loss would be the unit itself and possibly a deficiency judgment (difference between what is owed on the loan and what the property is foreclosed upon is worth) assuming the loan on the property is not purchase money and your principal residence.

You would not be responsible for any costs of repairing the leaks that you have written about.

I suggest that you consult with a real estate attorney about the purchase money loan issue with respect to your unit.


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