How do you determine liability for interior water damage?

We have a real tricky problem we're dealing with right now with regard to water damage done to a unit owner's interior wall. The skinny is that we had our roofs replaced a couple years back. This past Winter was awful and the sporadic temperature changes led to a buildup of ice around the owners chimney (aka ice damming). This damming has resulted in water making its way into the owner's unit and damaging his wall.

We contacted the roofers and they advised that ice damming is not covered under the warranty. The reason they gave is that it's one of those freak occurrences in nature that no roofing company can adequately prepare for. Our insurance company inspected the damage and advised that the roof install is indeed fine. With the roofing company's liability now released, the HOA has to determine whose insurance is responsible for the owner's interior damage.

I am certain that some of you have experienced similar issues and have some good advice to give. I want to do what's right by the owner and association regardless of who has to bite the bullet here.

RonW,
Who is responsible for the roof? The homeowner or the HOA? Assuming the HOA maintains and replaces the roofs the estimated cost for repairs will dictate whether the Board choses to file an insurance claim or chose not to file a claim and have the HOA pay for all of the repairs. Realize that when claims are filed insurance premiums go up and chances of being dropped by an insurance company increase.

Our experience with an HOA townhome association we manage is they carry a $10,000 per building deductable and only file a claim for very large costs. Such as hail/wind damages to the complex, an fire which causes considerable damage, damages within several units due to backup of the HOA responsible portion of a common sewer line, or repairs in an exterior water line break. Meanwhile, the 1000's of dollars involved in digging up and repairing their portion of sewer lines and water lines are not covered by any insurance company of which I am aware.

Everything you said is correct, but I don't think it addresses my original question of liability. The HOA choosing not to file a claim due to a high deductible doesn't absolve them of being liable for the damages (ie, being the negligent party).

Your first point is valid, but the insurance company has agreed to cover ice damming. It actually would have been in their best interest to determine it to be a faulty roof install because, in that case, they would not cover it. I don't know that we have a "consulting engineer".

Agreed, but what if the common area in question is not flawed? My understanding is that life within an HOA doesn't automatically protect you from the outside forces of nature. In this case, it has been determined that the roof install is proper. We've had a tough Winter this year with sporadic temperature fluctuations. The melting and refreezing of ice has led to the formation of ice dams. When these elevated ice dams began to melt, water found its way into the owner's unit. So, even though the roof was installed properly, the flashing could only do so much (just like an airbag in a car can only do so much).

Still, you're right about having the CCRs reviewed because this is a very touchy gray area.

Ron like it or not IMO the HOA is at fault and should pay for the repairs. Now if your CC&R's are anything like ours the HOA would repair any damaged drywall and any damage inside the wall but it would be up to the homeowners to paint.

Ron

I am not nor do I play a lawyer.

There are two insurance companies at play here. The associations insurance company to repair damages to common (association) property and the unit owners insurance company to repair damages to the unit. It is not up to an association to determine liability. It is up to the insurance companies to sort it all out.

Let us take an example of say a condo with units one on top of another. Toilet in Unit 302 breaks and floods Unit 302 plus units 202 and 102. You will now have 4 insurance companies going at it. Unit 302's insurance company for damage to Unit 302. Unit 202's insurance company for damage to Unit 202. Unit 102's insurance company for damage to Unit 102. The associations insurance company for damages to the common elements between each unit.

Quite common for Unit 202 to say Unit 302 caused the damage so I want to sue them or have them pay versus file a claim with my insurance company and my rates go up. It was not my fault, it was Unit 302's fault.

Quite common for an association to try the same tactic.

I agree with Glen, Ron. I shouldn't have used the word "flawed" re: the common area. If the common area causes damage, the HOA's insurance pays. Your own citation is about the owner's "personal liability," not the HOA's in the cited text.

How much the HOA's insurance covers also is in your documents. Just walls floors? Or more?

I'm not involved in the legal profession either, but I can't agree with JohnC46. If 305 has a leak that damages the '05, '04, '03, 02, the '05 pays for all of them as the others did not cause the water damage. We had a big one here a couple of years ago, which damaged 25 units to a greater or lesser extent. Some units were not directly below. Only the unit's insurance that caused the damage paid--none of the others were to blame. The water simply followed the path of least resistance. As they say, "Gravity rules!"

some, not all, agents 'may' get a bonus for minimizing claims

sometimes this will take the form of 'agency with the least claims' awards

sometimes more direct

GET INDEPENDANT ADVICE / COUNCEL

OR

'bite the bullet' and pay up

it was the common element which leaked (for whatever cause)

is a 'chimney cricket' or 'chimney diverter' installed ?

if not, why not ?

ice dams should ONLY occur at the eave rain gutter

see: http://www.bing.com/images/search?q=roof+chimney+diverter&qpvt=roof+chimney+diverter&FORM=IGRE

Carol, from what I've read and experienced, it is rare to have that in your docs. I think you are lucky to have such a statement. Can you copy the wording here?

Some condo associations are required by the docs to carry "all in" insurance to cover unit damages and without proving negligence. (It can get really interesting who pays the deductible.) I think it is rare to have these statements, in part because it is different than what the courts have worked out. If the governing docs do not have such a statement, then it defaults to common law for property damage, in other words what a court would decide. As always, one needs to read the governing documents for each association.

It is definitely not a universal principle that an association is automatically liable for damages coming from a common element.

As I understand it (common law), to recover damages one has to show negligence. This was developed by the courts as the standard to decide cases of property damage.

There is a well-known example of a tree falling from one property and damaging another property. Who pays for the damage, the owner of the damaged property or the owner of the tree's property? It depends. If the owner of the tree knew that the tree was rotten and failed to take precautions to protect the other property, then the owner of the tree was negligent and has to pay damages to the other owner. On the other hand if the owner of the tree did not know that the tree was rotten, then the other owner has to pay his own damages and cannot recover from the tree's owner. You can Google this.

When this doctrine is applied to a condominium, the damaged party has to show negligence on the part of the other owner, tenant, contractor or the association. No negligence = no award of damages.

I've been through several insurance claims (water damage from plumbing mostly), and the adjusters will ask what happened looking for negligence, but if no negligence is found, then everyone has to pay for their own damage. The insurance companies try to follow the courts.

In the case described here, it does not appear that the association was negligent, although we don't really know all the facts and Ron has not yet answered my questions about what the association knew about the problem.

Hi Ron ... As you stated the insurance company has agreed to cover ice damming. Therefore, I would agree with Tim and John in that the Board turn the situation over to the insurance company, and at which time they potentially would have performed their duty. If you have an opportunity to avoid confict between the Board and Homeowner ... my advice would be take the opportunity and run. The HOA insurance if they feel are not responsible will then most likely ask for homeowner insurance information. Why make a mountain out of a mole hill ... just let insurances resolve.

Carol thanks for taking the time to post about your least favorite HOA topic. Insurance is full of contrasts. I wish I understood it better.

I found this on davis-stirling.com:
"Many homeowners mistakenly believe that their associations are strictly liable for any damage... For example, a plumbing leak damages an owner's unit does not automatically make the association liable for the damage. The standard for HOA liability is negligence (unless the governing documents establish a different standard)."

In another place they recommend changing that standard:
"Amend CC&Rs to...add exculpatory language for simple negligence"

I don't think the language you quoted means that your association is automatically liable for all water damage, but I can't say for sure, and that liability may be somewhere else in your docs. If the standard is negligence, then the language you quoted says your insurance covers water damage if the association can shown to be negligent. It is like liability coverage for slip and fall: the injured party has to show that the association is negligent, and not every slip and fall results in paid damages.

I think you won't find "negligence" in most governing documents and insurance policies, because it is court term in common law. But if you look up the definition of liability, you will usually find the concept of negligence before too long.

Thanks again for your post.

based upon the already invested man-hours: at least $100,000.00



if a 55+ community maybe $100

http://www.bing.com/images/search?q=chimney+cricket&qpvt=chimney+cricket&FORM=IGRE