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More questions about HOA common area liability and water damage

Posted on Sat, Jul 31, 2010 @ 11:24 AM

We have two different issues at two different condo buildings, but similar problems. In both instances, there were water leaks originating from the common areas which are the HOA responsibility. In both instances, interior condo units were damaged including floors, ceilings and drywall. The condo association insurance coverage for the condo states that the common area is covered by the condo insurance but the damage incurred in the units is the unit owners responsibility. We are getting significant complaints and protest from the condo owners stating it was an HOA problem that caused their damage and the HOA should pay for their repairs. Have any other HOA's experienced this problem?

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If the water damage came from something that the condo association is responsible for then yes tey are also responsible for taking care of the units that were damaged. But you need to get both insurance companies together and decide what must be done. You did not say how the water damage came about. Where did the water come from? A leaking pipe that was shared by others is the responsiblity of the association. But a leaking pipe that came from another unit but caused damage to other units would be another question. If the pipe that caused the damage belonged inside another unit, then I would say that unit owner is responsible. Let the insurance companies figure this one out.

posted @ Saturday, July 31, 2010 12:03 PM by s

In New York the HOA is responsible for repairing property owned by the HOA. The HOA can recover most of the repair costs on a current loss by filing a claim against the Condo's Master Insurance Policy. Homeowners should contact their insurance coverage to see if their homeowners policy covers the current loss. The two insurance carriers can settle the current claim(s). At our condo, a homeowner must carry homeowners insurance and the "deductible" of $500 per loss on the homeowners policy is covered by the HOA if the repair costs exceed the insurance proceeds.

posted @ Saturday, July 31, 2010 12:29 PM by Marty Morris

Just requested in writing a copy of our master insurance policy. Our indentures say that our building has to have basic coverage but anything above that is up to the Board. We have a new company insuring our personal belongings but they want to see the master to confirm we have the proper coverage that we want - or we will pay for a rider on our own.  
When I asked for an appt to come in and review and make a copy of the policy the Board President came back with "verbiage". Nothing else. I emailed the property manager also, nothing from them. 
On Tuesday, which is 7 business days since the request, I will forward the email to the insurance company. We have a new rule and reg that says we are not allowed to talk to any vendors. 
Our statutes allow us to get certain information legally from the holder of the master policy.  
How sad our Board withholds and makes us beg. But that only begets the continuing question - what are they hiding from us.  
Can't remember what the specific statement is, but our bylaws require the Board to step in and force the unit owner where the leak started to fix it before more damage happens. This is where we started three years ago - the board refused and alot of damage happened. Took 9 months of the two owners arguing to get the damage fixed while the inbetween common areas continued to get wet.  
Please keep us informed. It is a great help to everyone.  

posted @ Saturday, July 31, 2010 1:23 PM by maryann

There are two issues here. One is the cause of the loss and the other is what property the insurance policy covers. 
First is the cause of loss, in most property policies water that is not flood related is a covered cause. The property policy does not look at "who" is at fault, only what the damage was (this would be the same as an irresponsible smoker causing a full building fire, the cause is fire, not the smoker). So now we have a covered cause of loss under most policies. The next item is "what is covered". State laws are varied here, but typically you will see 3 types of insurance coverages for condos. Most popular is "original specs or single entity" This covers ALL building coverage back to the way the builder originally built the property, INCLUSIVE of unit owners building portions. This would include, carpets, cabinets, fixtures, etc., but only to level of builder grade (your insurance would be responsible for upgrading to ceramic tile from vinyl). 
The next coverage is called "bare walls". This is where the associations policy only is responsible for unfinished sheetrock, unfinished floorboards, no fixtures, etc. Essentially the associations policy will put an unfinished shell back. Finally and very rarely we see "all in". This is typical only for resort type of policies. The associations insurance is responsible for putting the unit back the way it was INCLUSIVE of upgrades. 
This addresses the "property" portion of the policy. When discussing "who is at fault", there must first be a determination if there is a waiver of rights of subrogation in the association documents. In NJ, this is very common. This basically keeps the property insurance carrier from going back to the unit owner who is negligent in causing damage and causing the insurance company to pay. This really puts a lot of stress on the associations insurance carrier because they have to pay out for irresponsible unit owners that don't replace water heaters, washer hoses, etc. It is imperative for associations to impliment resolutions to manage the replacement of older untilities in order to minimize losses. 
Ronald Hicks, CIC, CRIS 
Bollinger Insurance

posted @ Thursday, August 05, 2010 8:27 AM by Ronald Hicks

water damage problem

posted @ Friday, August 20, 2010 10:37 AM by bo

Above all else, make sure to check for mold issues with any water damages. There are a few different types of toxic, illness causing molds that can only be taken care of by professional mold remediators. Do NOT bleach or use paint to cover, it will only come back worse and cost more to repair in the end. If it was caused by a real water leak and the property has insurance coverage for it, most companies and repair and bill insurance companies direct. Home owners can also hire mold testing companies to do "air testing" to see if the mold is a toxic one or not and if the amount is high enouh to cause illnesses.

posted @ Thursday, November 11, 2010 2:23 PM by Pamela Costa

Thanks, can you imagine our Board is still denying we have any mold issues. We have a structural engineers and a mold remediation guy's independent reports. They have ignored all but the front hall which they said didn't exist but they still wiped the edges of the door off and said it was gone now. There's nothing we can do - no law on our side anywhere.

posted @ Thursday, November 11, 2010 2:45 PM by mary

We are slowly getting our water issues resolved. However, the mold is another story - we found out that NO ONE cares whether you have hired an authorized mold inspector to do a report. There are no local, state or federal laws, etc. governing mold. However, our municipality building inspector told us to go on the water angle - no sitting water. They can cite our Board on that.  
The second thing they told us is they will cite us on the fire retardant or whatever it is called wallboard that has been damaged in our lockers "if it is under living space". The code allows for that. 
It's so unfortunate that mold is such an issue and there is truly nothing that can be done. Our Pres totally said there was "no mold" in the front hall and still denied it at the Board meeting last month - but they washed it off. It's so well documented with pictures that someday someone may be in hot water for ignoring this.  
We have a great building inspector in town - years and years of experience. Ran into him the other day and he asked how it was going. He shook his head and couldn't believe it.  
The real problem is the Board is ignoring that there is still mold in the lockers even though some aren't leaking now and no one thinks it is an issue. I think people have moved here to live out their life and just die. So sad. He told me it will finally come to a head when someone gets sick and files a lawsuit. Then the pictures and insurance policy come out and there will be a huge mess. Some of these Board people may be long gone as well as the property manager by then.  
If anyone comes up with any "new" ideas other than sue or the district attorney's office please let me know. Next step if they try to ignore fixing the drywall which is limited common area and they say it's our problem - we call in Action 2 News. That's only if there are no areas of living space above the damaged drywall. We have to obtain the building plans from the Pres of the Board. How long do you think that might take??  
Good luck.

posted @ Sunday, November 28, 2010 8:25 AM by mary

this is why you have your own individual policy. you can not assume that the master policy is going to cover repairs in your unit regardless if it was caused by a common problem or not. your insurance company will subrogate on your behalf with the associations coverage you need to read your master deed. I was responsible for repairs to my unit when our common fire sprinkler pipe froze and burst. my insurance company sent our a clean up crew & my insurance covered the damages to my unit. If here were a fire the common insurance is only responsible to put up the walls. good luck I hope you all have condo insurance.

posted @ Tuesday, December 07, 2010 6:23 PM by mary

Our condo shares a water shut off valve with 3 other units. If we want to replace our rusted angle stops to replace the dishwasher and have to have the water shut off who pays the bill for water shut off or should the association have someone available to do this?

posted @ Monday, December 13, 2010 7:21 PM by Julie

at our condo assn, we have a possible negligence issue, which caused water damage to common area and 1 private unit. The problem here is that the master condo policy (there are 2 - one for standard ins, which excludes ground water, which is their finding; and another flood policy, that only covers incidents from the adjacent brook, which is not the case here.) In the melt in New England this spring (Feb 2011) a comprised downspout contributed to groundwater accumulation which came into the building from an outer door into common area. The common area borders 1 unit, which suffered damage underneath the wall at the ground level. If the damage were from above, that is not an exclusion from the policy. If the water came down through the walls, that is not an exclusion in the master policy. The same results are reported from the homeowner's policy of unit owner impacted. The board was aware of the compromised downspout prior to the incident, and made no repairs.  
The property manager and board is now assuming there is no responsibility to that home owner.  
Legal advice says $7K plus is the threshhold for action against the insurance policies, which is over the cost of repairs. The altnerative is small claims court, or pay the repairs.  
Is there a precedent for success in legal suit or small claims in this matter? and if so, would legal fees be covered for that homeowner in the results of the case? 
Also, does the burden ultimately fall on assessment or the homeowners anyway?

posted @ Friday, April 08, 2011 9:19 PM by You

The HOA by laws claim responsibility for sump pump. The by laws also say that if an owner causes damage to the community or surrounding properties the HOA has the right to step in to correct the problem and bill the owner that caused issue. 
I live in a townhouse style 8 unit building. The sump pumps are installed at each end to protect all of the units. The homeowner of the two ends units is responsible for the electricity that powers the sump pump. One of the end unit owners walked away from their property and the unit is now vacant and owned by the bank. Once in Feb and twice in March my basement flooded because the power was turned off in the unit that is vacant. I called the HOA each time to let them know about the flooding. Eventually the water began pushing up through the floor as well as walls causing several cracks in both in addition to flooring, furniture, drywall and now mold. My insurance will not cover the damage because it was not causing to "natural" flooding, but was due to negligence. The HOA sent someone from their insurance co and they said the same thing. The bank owned property will not return calls or take any responsibility either. The HOA told me they put a lien on the bank owned unit but they are not stepping up to repair my damages. 
The worst of it is that a friend of mine is on the board and he has informed me that the property management company has joked about dragging out handling the issues within my unit until the bank owned property pays up to have the lien removed. 
I failed to mention that the HOA's insurance coverage has a $10K deductable. The home owner is supposed to cover the first $10K. 
I have no idea what to do. 
Who is at fault?

posted @ Saturday, May 07, 2011 4:19 PM by Mary

Once again, two issues are being confused. Property Insurance and legal responsibilty. Property Insurance claims do NOT look at WHO is at fault, only the cause of the claim and if it is a cause covered under the policy definitions.  
Legal Responsibility needs to be determined in the courts. If the bank is the unit owner, then they are not exempt from the bylaws and owner responsibility. Take them to court if you can prove that they are negligent in causing damage to your property. If they don't answer the claim in court, you should be able to obtain a default judgement against the bank and you will be able to collect what you are due.

posted @ Monday, May 09, 2011 7:44 AM by Ron Hicks, CIC, CRIS

Mr. Hicks,  
imagine my surprise at your recent post. are you still out there? this must be the most common confusion between HO and HOA. 
thank you for your continued replies. 
the original topic is under liability when water damage originates from common area for unit owners interior damage. 
unit located on top floor, water damage from outside wall and/or roof and source of leak verified by structural engineer. tuck-pointers have repaired outer damage. 
board claims no liability for interior unit damage due to "ordinary wear and tear". 
insurance adjusters can't seem to agree. both HO and HOA insured by same insurance company.  
i believe that our building carries a "bare walls policy" which means the water damage may not be covered by master insurance, but if i understand correctly, since the damage arose from common area the association is legally responsible for the interior unit damage also. 
must this be taken to court or can the association be advised of their legal responsibility in some other way?

posted @ Sunday, May 15, 2011 2:14 AM by dafna_orly

i have just been reading my by-laws. 
under description of unit: 
unit consists of... 
"air space between the horizontal and vertical planes delineated by undecorated interior surfaces of perimeter walls, floors and ceilings"  
which seems to me to mean that the ceiling and wall in my suite which has sustained water damage from the "exterior of the building" is actually part of the common area.  
am i correct? 
a built-in book shelve has also sustained damage, but the "description of unit" specifically excludes "built-in book shelves" even though it was likely the unit was originally built this way with the book shelve. 
any help would be appreciated.

posted @ Sunday, May 15, 2011 6:30 PM by Dafna

Without reading your insurance policy, bylaws and knowing your specific state laws I can only make generalizations and it should be understood that your particular state laws may take precidence (both under condominium law and insurance law).  
"Ordinary wear and tear" is not a covered cause of loss. However the damage ensuing from the wear and tear being water, in most insurance policies are covered (assuming the subsequent cause of loss is water damage from the leaking roofs). From a pure property insurance stand point, the damage from the water would be covered, but not the repairs to the roof. This is similar to the person who has a water heater leak. Insurance is not going to pay for the water heater (wear and tear), but typically would pay for the water damage resulting from the leak. Makes sense right? 
The board claims of liability are moot. Property damage deos not look at liability. Just "what" caused the loss to the property. Fire/lightning,hail,wind, etc. In fact most policies are written where they name the exclusions and NOT the causes of loss (ie: your covered for all losses except those excluded in the exclusions section... flood,insects,vermin,mold,etc). There is also an exclusion of what specific items are excluded like fences, antennas, signs, etc. (none of which you probably should be normally concerned with).  
If your building is on a bare walls, there is another set of excluded items that the HOA insurance will not cover. Depending on the carrier, it typically excludes, wall coverings like paint, wall paper, fixtures, flooring, and always your own personal property. In essence, after a claim has been settled and repairs are complete, the HOA carrier would rebuild the unit to a unifinished sheet rock shell with subflooring. 
As far as the bickering between the HO-6 carier and the condo carrier, someone needs to make them move forward on the damages. Most HOA carriers that have the condominium endorsement will state that they are primary over the HO-6 carrier in areas that they both have coverage (once again neither carrier should be looking at "who" is at fault, but "what" caused the damage.) The dueling carriers should be challenged as to what the hold up is. If they are going to hold back on adjusting a claim, they best have a valid reason.  
Regarding your second post. In my state, the definition of a unit is irrelevant. There are always insurance requirements for the HOA. Typically (allthough not always) they are spelled out as to how the insurance must cover the units. I often see language such as....  
Must be an "all risk policy" (this is the type that they name the exclusions as noted above),  
"full replacement cost" (building must be insured for the cost to replace and not allow for depreciation),  
must insure the building and its units as they were sold by the grantor." This would be original specs not bare walls. 
Bare walls usually reads something like "must insure common elements" or must insure the units from the sheetrock back to common elements or something similar. 
My point is that the definition of a unit might not be parallel to the insurance requirements for property damage.  
Finally, we oftern see a waiver of rights built in to the documents (I always encourage an association to try to have this removed). The waiver of rights basically removes ALL LIABILITY of a negligent unit owner. As mentioned many times, property damage does not pay according to who is at fault. However, if there is negligence, the property insurer would like to be made whole and will attempt to subrogate against the negligent party. If there is a waiver of rights in the insurance section of the master deed or bylaws, the HOA carrier will not be able to attempt to recover damages from the negligent party. This is not an uncommon practice in contract law.

posted @ Monday, May 16, 2011 8:35 AM by Ronald Hicks

I have enjoyed reading the posts. As president of our HOA we are wrestling with the following problem. A unit owner had his HVAC system hit by Lightning. He contacted our property manager about filing a claim against the HOA wind, Hail,Fire etc. policy. The agent for the company with which we have coverage, responded by saying the Board of Directors first has to determine if the item is covered, much to our suprise. When I asked for a copy of our policy which should state if the item is covered, I got stone-walled. Our (Board) position is that the underwriters of the company should be the ones to determine if the claim is a covered claim. Comments please.

posted @ Tuesday, August 09, 2011 9:34 PM by Leonard Lundquist

had a roof leak an aug 2011 at my condo an going on dec 2011 nothing has been done the mold is so smelly and has made me sick it took them 40days just to put up a piece of paneling to the 4 foot hole an they wont replace my ac an ducks are filled with mold an ac unit thanks dan nalezyty can i sue and is it worth it

posted @ Sunday, November 27, 2011 2:21 PM by dan nalezyty

A flood occurred in a unit where the tenant did not have insurance for her unit causing damage to a total of 3 units to common areas totally 50k. The tenant was away at the time. The common area insurance remediated and buildback of all units affected and common areas and are seeking reimbursement for the 10K insurance deductible from the whose toilet angle stop exploded while she was away. The Tenant within a week or so of the incident hired a plumber and did a pressure tests and the plumber determined the pressure coming into the unit was excessive (80 PSI is limit / pressure tested above 95 PSI). The HOA billed the 10K to the tenant. The tenant is disputing the root cause of the flood. If this case goes to arbitration, is there a precedent set for who will prevail in arbitration? (of note: she did not have insurance for her unit at time of flood, not did other two tenants whose units were affected)

posted @ Wednesday, June 20, 2012 11:21 AM by B Blogger

We are bottom unit, sustained water damage 2x one in2010 and2012 
No proof as to which unit caused damage which may have occurred over long period of time. Our ins. has paid out some but not all of remediation cost. Is it possible to collect deductable which is $2000. Or once you have collected from your ins. co that's it? 
No one will take responsibility for long term damage that required specialists to be called for mold and fungus which our ins. does not cover. However I was told state of 
Fl. mandates HOA's to cover mold up to $10,000. True or False and what steps should we take now?

posted @ Monday, August 20, 2012 2:15 PM by P. Tangelder

HOA insurance carrier in FL paid out 11,500 for drywall repairs to our unit after coomon area leaked 3 times. The HOA now will not give us the 11,500 unless we sign a waiver saying we can never file another claim. Can they do this?

posted @ Tuesday, April 30, 2013 9:04 PM by Sue

Would it be more productive to support legislation which protects the condo/co-op owner. In reading nearly ten blogs, 99% of what I read is the lack of legal clarity to quickly correct obvious property damages to owners who faithfully pay due but have very little leverage when it comes to fair action. Hiring a lawyer, a technician, a contractor and a engineer is often more expensive than the repairs. As I am aware of. This is victimization, discrimination and injustice. And a "love thy neighbor" kill-joy. I suggest a side panel of supportive topics to push legislation on the federal level.

posted @ Thursday, October 24, 2013 10:29 AM by Linda

What Governing body oversees HOA,s? The sundeck above our bedroom has been leaking and we cannot repair our ceiling until the common area is repaired. We are being stonewalled and were trying to sell due to job relocation. We had to remove the unit from the listing because of the damage not being repaired. Since last August, the HOA has installed a 5X5' plastic water "catcher" with a 12 ft Waterhouse running down into a 5 gal bucket!  
Any suggestions??? 

posted @ Sunday, February 16, 2014 12:15 PM by Michael in Miami

The above comment by Sue 4/30/13: "This is victimization, discrimination and injustice.. I suggest a side panel of supportive topics to push legislation on the federal level." WHO OUT THERE KNOWS HOW TO GET THIS DONE? And can this site start such a "side panel" of interested parties?

posted @ Sunday, February 16, 2014 1:02 PM by Linda

Water damage occurred. HOA sent their restoration company who has spent 3 weeks at the jobsite. Estimated that it would take 4 to 6 weeks to complete the restoration. It has been a week since the premise was clear for  
repairs alleged CC & R article. HOA refused to discuss any other bringing other contractor to complete the repairs. Owner received estimate that work can be done for half the time. HOA manager hung up the phone and alleged that owner introduced litigation.  
What are owner's alternatives since it is governed by Alternative Dispute Resolution and having the issue discussed before a board meeting would take even more time and delay the restoration process? It would drag it our further. Owner is willing to waive any residual problem from construction defects issue from independent contractor. 

posted @ Sunday, February 16, 2014 2:02 PM by Kim

Our condo unit has roof leaks since Feb 2014 with wet interior which was reported and they still have not done any repair. What recourse do we have? I am afraid since one leak goes inside the wall to the ceiling of the room below---that after all these weeks we have MOLD. I have an immune dysfunction and I am concerned for my health. What can we do?!?!?

posted @ Wednesday, April 02, 2014 1:32 PM by Cynthia Doniger

Great question. We had the same issues in the building storage areas. I have bad allergies and my husband is a transplant patient. The board ignored the water leaks forever. I could barely stand in front of some of the locker areas in the garage and actually be able to breath. We finally had our Municipality building code inspector come in - they cited the Board many many times for a number of different violations. Sitting water "anywhere" was what they were cited on - as mold doesn't seem to be a viable issue. But a pool of water on the garage floor coming from a leak was considered a code violation - even though it was inside. Needless to say - we got the mold and water issues fixed. But it took the city coming back and forth many times. Board of Health was no help re the mold. Good luck. We are now dealing with vandalism and an assault. Hoping we vote camera's in finally this coming weekend at a board meeting. But of course - the police have been here many time too - and we live in a beautiful area, neighborhood and have expensive condos. Good luck.

posted @ Wednesday, April 02, 2014 1:56 PM by mary

Thanks Mary. At this point our HO Insurance is advising us to call an attorney....and as my husband says this is going to cost the HOA a whole lot more than just fixing the problem in the first place. I am in the condo all day everyday and I can smell mold.WHAT is the deal? They carry insurance, why not fix the problem?

posted @ Wednesday, April 02, 2014 2:18 PM by Cynthia Doniger

Oh this just gets worse and worse. Looks like our Condo Assoc did not purchase insurance as is outlined in the By-laws, but has a policy that only kicks in when OUR HO is exhausted EXCEPT the Condo Assoc has told us that we are not allowed to repair the common elements and we can't do anything until the roof is fixed...what a mess! 

posted @ Wednesday, April 02, 2014 2:55 PM by Cynthia Doniger

Our condo has insurance. The Board won't turn anything in. One person has been treasurer for years on the board. Let's see - no one else seems to be able to obtain that position. What do you think an auditor would say about that. The Board is a clique and anyone normal that gets on - leaves as fast as they can. It's a no win situation in these condos. And the Boards also have insurance that covers them from liability. Again - no win - they know it. Not being sarcastic. Just have been there.

posted @ Wednesday, April 02, 2014 9:20 PM by Mary

Since reading the last post from Mary, I have been searching the web for the Mold Insurance Requirement for Florida. What I have Found so far Are a bunch of mold remediation lawyers, or remediation companies. I Was chatting with one who would not confirm the exact statute without referring me further(before getting all my contact info) and I believe there in lies the answer. It is the lawyers who write these laws for only the lawyers to interpret......again, follow the money...far be it for the individual to easily access and execute action from a supposed statute.  
Time to take a closer look at who we are sending to create laws....this is a party neutral issue.  
Shame on them for holding the homeowners hostage!

posted @ Thursday, April 03, 2014 5:37 AM by Michael in Miami

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