A claim was made against the building's master insurance policy due to the extensive damages caused by the water leak, which impacted 21 out of the 88 units in the building.

@Arun MaheshwariThe Real Estate Crash of 2008-2010 caused real estate prices to crash across the country - but didn't affect rent amounts.

Perhaps in a situation in which you were responsible for re-leasing they could state the case that your efforts (or lackthereof) caused a loss of income for them, but in this case, I think you're correct.

However, building codes vary by municipality, so what works in one area might not work in another.Unfortunately if you didn't use a design professional, these kinds of issues often arise during plan review and during construction, which can cause you very costly delays.

My guess is in upcoming years as the baby boomers start passing away there will be a glut of 2-5 year old properties available which will cause the builders grief.  

Does Investor A have assets worth the pursuit of a plaintiff's attorney if insurance does not cover the harm? 

The subprime crisis of 08 crashed the SFR market and the use of floating rate bridge debt has caused huge problems in the commerical real estate space. 

These usually are the best deals cause you can negotiate all this stuff from these owners, the true professionals will have this tighten up (leases, expenses, and all) and they'll be selling for a lot more.

I personally think leverage is appropriate for syndications, and isn't the principal cause of the kind of financial distress I'm hearing about and seeing on my statements.

Also didn't know how much hail storms occur and causes damage in CS = increased insurance exp.