Your board can shift a $250,000 deductible to your unit. New York sets no limit.
A deductible resolution transfers the cost of your building's master insurance deductible to the unit owner whose apartment triggered the claim. Maryland capped that amount at $25,000 by statute. New York has no equivalent. Companion: New York's condo insurance law sets no coverage floor either.
The deductible on a New York City condo or co-op building's master property policy can now reach $100,000 to $250,000 for a single water-damage event, according to insurers active in the NYC market. The building pays that amount before coverage begins, unless the board has adopted a deductible resolution shifting responsibility to the unit owner whose apartment triggered the claim. New York State law sets no ceiling on how much a board may shift, imposes no disclosure requirement on sellers, and requires no license from the managing agent who drafts the resolution.
How a deductible resolution works.
When a co-op or condo building files a claim under its master property insurance policy, the deductible is due before any coverage begins. Traditionally, the board paid it from the operating budget: every owner absorbed the cost through common charges, regardless of which unit the damage came from.
A deductible resolution changes that. The board adopts a rule, either a standalone board resolution where the governing documents already grant the board that authority or a bylaw amendment requiring a supermajority owner vote, stating that the unit owner whose apartment was the source of a covered event bears the deductible rather than the building. Some resolutions cap owner exposure at a fixed dollar figure. Others assign the full deductible with no ceiling. Whether negligence is required to trigger the shift varies by building.
Habitat Magazine reported in August 2026 that per-event water-damage deductibles at NYC buildings now reach $100,000 to $250,000 as fewer carriers offer coverage and those that remain set higher deductible floors. At those amounts, a single pipe-burst claim can impair a building's annual operating budget. Boards frame deductible resolutions as a way to contain the building's aggregate loss experience at renewal, and to signal to insurers that individual unit owners, not the building, absorb the first-dollar risk on unit-source claims.
What New York law requires of such a resolution.
Very little.
New York Business Corporation Law §701 gives co-op boards authority to manage the business and affairs of the corporation, including building operations governed by the certificate of incorporation and bylaws. For condominiums, Real Property Law §339-v lists the items a declaration and bylaws must contain. Neither BCL Article 7 nor RPL Article 9-B sets a maximum dollar amount a board may shift to a unit owner through a deductible resolution. New York Insurance Law does not cap owner-level deductible liability in residential associations.
No state agency reviews whether a deductible resolution is fair or consistent with the governing documents. If a board passes a resolution that shifts an uncapped $200,000 deductible to a unit owner and the resolution was not properly authorized under the governing documents, the owner's remedy is a court proceeding. As we detailed in why the NY AG can't help with most condo governance disputes, the Attorney General's Real Estate Finance Bureau has no jurisdiction over board governance decisions once the offering plan is accepted.
What Maryland did.
Maryland's approach offers the direct comparison. Maryland Senate Bill 332 (2026), which amended Maryland Real Property §11-114, raised the maximum insurance deductible that a condominium council of unit owners may charge to an individual unit owner when damage originates in that unit from $10,000 to $25,000.
Both the prior cap and the current one appear in statute. A Maryland condo board cannot shift more than $25,000 of the master policy deductible to a unit owner, regardless of what the association's bylaws say. A buyer reviewing a Maryland purchase has a specific dollar ceiling that operates as floor protection, independent of the board's internal governance choices.
New York has no equivalent provision in BCL or RPL. A board here may adopt a deductible resolution capping owner exposure at $5,000 or at $250,000, and state law is silent on both.
What Fannie Mae did.
Fannie Mae's Selling Guide, updated effective July 1, 2026, sets a $50,000 maximum for the per-unit deductible under a condo project's master property insurance policy. Projects with a master policy deductible above $50,000 per unit cannot obtain full eligibility for conventional financing. The Fannie Mae unavailable-list post covers what that means for NYC buildings already on that list.
Two things are worth noting about Fannie Mae's ceiling. First, it protects lenders and the secondary mortgage market, not unit owners. A Fannie Mae-ineligible building can still adopt a deductible resolution and still shift whatever deductible it carries to individual owners. Second, the Fannie Mae limit addresses the master policy deductible level, not the board's authority to reassign that deductible internally. A building can carry a $45,000 master policy deductible, maintain conventional financing eligibility, and adopt a resolution shifting the full $45,000 to whichever unit owner is responsible for a given event, with no disclosure required to buyers and no state statute limiting the amount.
The buyer's disclosure gap.
New York Real Property Law §461 explicitly excludes cooperative apartments and condominium units from the Property Condition Disclosure Act. A seller in New York has no statutory obligation to inform a buyer about any of the following before signing:
- the building's master property policy deductible and whether it exceeds the Fannie Mae $50,000 threshold;
- whether the board adopted a deductible resolution making the buyer fully liable for that deductible if a pipe bursts;
- whether the building is on Fannie Mae's unavailable list as a result of the deductible level or any other condition.
A diligent buyer's attorney may request the current house rules and bylaws and find a deductible resolution embedded there. That requires knowing to ask. Most standard NYC co-op and condo due-diligence checklists treat the governing documents as static reference items. A board resolution adopted since the last amendment cycle may not appear in the buyer's package unless specifically requested, and no state statute requires that it be provided.
As we covered in what NYC condo and co-op owners can legally demand from the board, the inspection rights under BCL §624 and RPL §339-w run to existing owners, not to prospective buyers. The disclosure rights that matter at the point of sale are those in the offering plan and PCDA, and PCDA exempts condos and co-ops entirely.
The managing agent's role.
In practice, the managing agent typically proposes a deductible resolution, drafts the language, and coordinates the owner-approval process when a bylaw amendment is required. New York State imposes no license requirement on managing agents of residential buildings. S.71, the managing-agent registration bill, has not received a committee hearing in eleven consecutive sessions.
The firm that drafts a resolution shifting $200,000 of contingent liability to a unit owner holds no credential a regulator can revoke if the resolution is legally defective, improperly approved, or inconsistent with the governing documents. As covered in Local Law 58 and managing-agent liability, the city's 2026 co-op application timeline law added enforcement teeth to one narrow area of board procedure and added no license requirement to the rest.
| Jurisdiction | Statutory cap on unit-owner deductible shift | Buyer disclosure required | Managing agent license required |
|---|---|---|---|
| Maryland | $25,000 (raised from $10,000 by SB 332, 2026) | Yes: resale disclosure packet required | Yes |
| Fannie Mae (financing standard) | $50,000 master policy deductible ceiling | No (lender standard, not disclosure law) | N/A |
| New York | None | No: RPL §461 exempts condos and co-ops from PCDA | No: S.71 never enacted |
Bottom line.
Hard insurance market conditions are pushing NYC condo and co-op boards to adopt deductible resolutions, and the deductibles those resolutions cover are rising. Maryland enacted a $25,000 statutory ceiling on what a board may shift to a unit owner. Fannie Mae set a $50,000 ceiling on master policy deductibles as a condition of conventional financing eligibility. New York State set nothing. A buyer can close on a co-op or condo unit with a deductible resolution on the books, face a six-figure liability the next time a pipe bursts in the unit above, and have no state law that limited the amount or required anyone to disclose it.
Primary sources: Maryland SB 332 (2026), amending Real Property §11-114 · NY BCL §701 · NY RPL §339-v · NY RPL §461 (PCDA exemption) · Fannie Mae Selling Guide, condo insurance requirements (eff. July 1, 2026) · Habitat Magazine, "Co-op and condo boards shift deductible costs to owners" (August 2026)
Companion resources: New York's condo insurance law sets no coverage floor · When your building loses conventional financing, NY requires no seller disclosure · What NYC condo and co-op owners can legally demand from the board · Why the NY AG can't help with most condo governance disputes · NYC just made managing agents liable. They still need no license. · Regulatory gap inventory