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Ohio HOA experiences major fire, has questions about insurance claim


Ohio HOA has questions about insurance claim after fire 011415 resized 600

Our 52 unit HOA in Ohio recently experienced a huge fire in a 12 unit building, resulting in the death of a long-time neighbor and an insurance claim of $1,300,000! The cause was legally determined to be a grease fire.

The restoration was extensive, requiring condo owners to live offsite for a year. We are a self-managed HOA, and have five people on our Board of Directors. This process required a steep learning curve for the Board, dealing with the owners, their insurance adjustors, our HOA insurance adjustor, and the contractor selected to restore the building.

A public insurance adjustor had approached our HOA, but as much as we felt the need of their knowledge, our financial position was such that we felt we could not obligate our Association to their fee. They kept in touch in case we found ourselves overwhelmed, and occasionally offered free advice, which we were grateful for! Our insurance adjustor was excellent, as was our choice of contractor, and we made it through a year of hard work with a successful outcome. As we entered the homestretch, the insurance adjustor informed us that management companies typically charge a 1-5% fee based on the total cost of the claim to manage the details of a large fire. It is a time-consuming process, and time is money to them.

We have a group of 5 homeowners in our Association who have been against self-management since the HOA began in 2008. They had suggested upfront that we could not handle this, and that a management company would have the necessary knowledge. At our last meeting, the community was told of the final closure on the claim, and the charge a management company would have imposed in such a situation was mentioned.

Shortly after the minutes for the meeting were sent out, those opposed to self-management sent an email stating that they had contacted two management companies, an attorney, and a realtor, and none were aware of such a charge. I am a realtor myself, and would have never had knowledge on this subject were it not for this incident. This fire was the largest ever to take place in this city, so it is possible that those contacted would not have had the knowledge to respond with any authority.

So, my question is this. Do any of the readers on this site have firsthand knowledge to add to what we have already been told? If so, we would appreciate hearing from you! Thank you!

Answers (6)

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