Fire Remediation

We have tornadoes here in the south alot. Which means we have to address such issues. After the last outbreak that killed over 300 people, insurance companies dropped customers like flies. Many owners may get the house replaced by insurance just to find themselves without it.

The waters get murky on cleanup. The city or county usually do have an enforcement polcy. However, in some HOAs it may be them on the line and NOT the owner. The HOA may face the fines. Which means tracking down the owner to collect. The HOA insurance may be on the hook for the cleanup but not the rebuild. All things to discuss with the insurance.

We had a tree go through a roof of a home. The HOA had to pay for the cleanup but not the house damages. Why? We planted the tree and it was on common area. The HOA is responsible for clean up of common area but not the individual lots. The owner owned the lots the house sits on.

Our documents had what happens in case of disaster. Owner to cleanup the lot and rebuild back to standards. We worked on the timeline part and approval of plans. One should know and have an emergency plan in place overall. Suggest this subject discussed atleast once and something drafted in th notes.

One of the things I did as President is investigate "Worst Case scenarios". It's one of the best things ever did. It relieves ALOT of fears and misconceptions. I highly recommend meeting with your HOA insurance carrier and discuss it. Find out the worst case scenario situations with them.

I also suggest covering the topic of board member liability coverage. Exactly what is covered and what does it mean? You may be surprised that if a board member acts completely irresponsible or not within context of board responsibilities, the insurance may not cover them individually. Wanton behavior may have certain consequences. It could even cancel the insurance after they handle the matter. That person is now too much of a risk.

Plus many HOA require at least a 1 million dollar insurance policy. Not only of the HOA but anyone the HOA hires. This does NOT mean a million dollars is paid out. Matter of fact upon my research, a claim/payout caps at around 80K. The rest of the million dollar policy basically goes to pay off the lawyers/legal expenses. If the lawsuit award is more, then the HOA members could be on the hook for the difference.

If you have any property covered by your insurance. Make sure to review it's actual replacement costs. You can save money by agreeing the insurance pays only 80 - 90% of the replacement costs. However, means the 10 - 20% cost is on the HOA members. That is why knowing the replacement costs in more current conditions is valuable to know.

NPS

My experience is Covenant Amendments aimed at protecting the majority are often viewed/voted on approvingly ala the 75 days.

The insurance requirement could be trickier (legally) but if done legally and presented properly, I believe it could be done.

Np,

As you know, I also live within a townhome community.

We had a property with a fire. Due to finger pointing between insurance companies, fire inspectors and contractors, it was several months before clean up was allowed (as it was now considered evidence).

Unless you are involved with the process or have talked to those who are involved, you would not be aware of what is causing the delays. Therefore, having a time line can be good but don't make it a rigid timeline. Leave room for variances if there are issues beyond the owners control that delays cleanup.

About 6 months.

So it seems like John's 75 days is on target.

Thanks for setting this up as a new post – everyone’s come up with questions and information I’ll add to my inquiry of my board.

As far as NpS’s questions are concerned, the county health department would get involved if the building wasn’t cleaned up and was becoming a health or safety hazard. How long the owner would have would depend on the order – I would think somewhere between 30-90 days, depending on the extent of the damage

I know dickering between the insurance companies can delay things, but I would hope something would get started within 90 days. The last time we had a fire in the community, I think it took 6-12 months to get things cleaned up – and for some reason, it cost the Association $60K to do it. The owner was out of state and I seem to recall he had conventional homeowner’s insurance that may not have paid much, if anything and the people renting the place at the time didn’t have renter’s insurance.

(in the end, the owner went seriously delinquent, the association started foreclosure proceedings, but just as things were wrapping up, along came a company that had purchased a tax lien on the house! Our attorney had to refund us some of the foreclosure costs for missing that major tidbit and the new owners ended up paying a little less than half of what was owed to clear the lien – had no choice but to take the offer and write off the rest).

In our current situation, it looks like the townhouse has been gutted – our property manager had the place boarded up, but I don’t know if there’s an owner (thinking to my old days as Board treasurer, this may have been yet another house that had gone delinquent). Sadly, I suspect whoever owns this house may not have had insurance at the time – which would certainly add to the insurance problems. I’m also concerned the Association will wind up with another $60K or more to pay (the master policy covers the skin of the unit, but somehow the last time we paid, repairs included the interior)