Leak in Roof causes interior damages

The subject says it all, or most of it anyway.

This subject has been raised on this forum and others in prior years; I am not reactivating an old thread. In my research, I noticed many posts agreed the association should be responsible for repairs, some however held ancillary damages, such as repainting, and in this case addressing damage to the carpeting, should be the responsibility of the owner. Others have held the owner is responsible based on language in the documents.

Details: roof leak was reported earlier in year, roof was repaired. 8"+ rains in DFW area resulted in more leaking. The contractor cannot tell if previously repaired leak area is at fault or if leak is emanating from nearby area. Contractor did make additional repairs involving sealing material and flashing. Governing documents have the usual horizontal and vertical plane language as well as the usual definition of owner responsible for "studs in".

Association attorney previously advised the association to pay for interior repairs as the roof is a common element and his experience has shown courts will back owners claim Association should be responsible for common element caused interior damages. Cost of repairs should be @ $1,000. If the association tells the owner to call his HO-6 carrier and a suit results, the costs will far exceed $1,000. Even if it goes to Small Claims court there will still be expenses, and a toxic relationship as a result. Deductible on association master policy is well in excess of $1,000.

I'd appreciate insight into how you have handled this, key learnings, etc.

Thanks

What is Texas law for insurance claims in condominiums? Do your own docs contain language for claims, deductible, etc.?

The usual procedure is for the owner to put in a claim. If necessary, the owner's insurance adjuster will contact the association's insurance company to work it out. It usually does not go to court, since the adjusters know the law and know that court will cost extra and they like to settle when possible.

If it does go to court, your insurance company will defend you at no extra charge, assuming you have the usual insurance package, which includes liability coverage.

explaining

Yep, that is what Bill asked for, when he wrote:
"I'd appreciate insight into how you have handled this, key learnings, etc."

My condo association's insurance agent explained that an insurable event must be sudden and unanticipated (eg. a tornado tears off part of a roof, resulting in water damage). We have "all in" insurance, and in this case the association's insurance would cover repairs to things like cabinetry and flooring, but not personal belongings. A roof leak, on the other hand, is considered a maintenance issue - in that case the association is responsible for repairing the roof and the homeowner is responsible for repairing any damage to the interior, including mold.

Surprisingly, negligence on anyone's part does not affect who pays for what, which seems unfair, but this is straight from the agent's mouth. The laws may be different in other states.

Our master policy says homeowners are responsible for everything inside the unit, so they need to have homeowner's insurance or enough money to pay for those damages, while the master policy will pay for the roof repair. When I was on the board, we would remind homeowners on who was responsible for what and a month ago, we got a long letter from the association attorney that reviewed all of this again, along with citations from the CCRs.

In this case, I wonder if the age of the roof might also be an issue - you may have had good work on the repair, but maybe it's so old that what you really need is a new roof (usually required after 25 years or so, depending on wear and tear). You've also had rainfall of 8 inches or more - if that came all at once, that may have been too much for the roof.

I don't know if satellite dishes on the roof might be an issue, but it's possible if the installation wasn't good to begin with or someone's installed more than one dish because he/she has had different carriers. All of that stuff on the roof could also affect its function, in which case, I'd say the homeowner bears some responsibility, especially if you're in a townhouse community (we ban dishes on our roofs for that reason - which we can do because it's considered common area according to the FCC rule).

The big lesson learned in my experience? Periodic evaluation of the master policy is always a good idea - hopefully you have a good agent that can help you look at trends in your claims history and help come up with approaches that might reduce the association's risk (such as losing the policy due to too many claims). Periodic reviews of the roof would also be a good idea - catch small problems and take care of them before they turn into major problems that lead to a fight as to who's responsible for what. As coverage changes, advise the homeowners as well, so they know to review their policy with their own agents to ensure there's no under or over insurance coverage (the association covers what it covers and the homeowner has enough coverage for whatever is his/her responsibility)

The above would have been my recommendation from the get go.

It's not how I would go, given that the contractor cannot tell whether this leak is due to improper prior repair, but you've decided so keep us updated.

I presumed you do not have flood insurance and neither does the condo owner, I was asking because going to their insurance carrier won't do any good. They won't cover it. We have the HOA or our own pockets for water problems from nature.

Usually the HOA. We are not in charge of roofs and gutters and ground drains and my understanding is therefore not responsible for anything that happens connected to them unless of course WE are directly responsible through act or omission.

82.111 specifies 'to the extent reasonably available'. Flood insurance is not reasonably available for everyone. Also, just to be super-accurate for future reference, it only applies to condos 'with horizontal boundaries', so one story condos, this would not apply.

Could be. I am not an insurance guru AT ALL. Learning as I go.

I got this from online:

"What's considered a flood?
A flood typically involves external water rising onto your land, such as you might get from an overflowing river, tsunami, mudslide — even heavy rains. Damage caused by flooding is generally not covered by your home insurance policy; you need separate flood insurance coverage.

What's considered water damage?
Water damage, on the other hand, involves instances of water hitting your home before touching the outside ground — and is usually covered by homeowners insurance. Depending on your home policy, things like a roof leak, busted pipe, faulty sump pump, or other plumbing issue, could all qualify.

Remember, because the distinction between flooding and water damage is so fine, it's always best to talk with your insurer after any incident."

So, to your point, if it is something that would be covered under the master policy, then they pay if it's under the deductible amount.

No, that is not how I read it. If the law applies (condo, horizontal boundaries, whatever else) and if less than the deductible, then the owner pays for their unit, unless the association is negligent.

How long before you resign this avatar from the board and then reappear with yet another? I don't know why you do that.

If it flaots your boat

floats

please maintain syntax when self correcting

yes, but, once again, correct



laugh, it is free

Bill

It seems you now that you are stating Drywall-in and not Studs-in?

Inside interior surfaces, the meaning is drywall is the common area, not unit area.
So drywall would be association responsibility to repair.

How much damage was caused?

I personally would sit down with the owner and work something out. Here my insurance wouldn't cover any damage from this situation. I know first hand on that in Ohio.

I would even argue with the Insurance company that this was an event that caused the damage and they should pay for all damages but not if needed the repair.

This kind of thing should also be discussed with all the members to come up with a rule that would let both the association and it's members know what would happen if it ever came up again.

Cathy

Just because it isn't covered by insurance doesn't take the responsibility away from the association.

Mold caused by water damage from the association common area is still the responsibility of the association.

Also, the Interior is part of the All-in it isn't part of the unit.

You say the unit is only property of the owner.

If the unit owner caused water damage or mold then they would be responsible not the association.

Read your doc's on who is responsible to repair, replace and maintain the common area.

Also, owners insurance company would deny the claim because it is association responsibility.

I think the way you say it to be that the common area is only the roof shingles and the siding or brick the rest is owner property which isn't all-in.

I suspect we're saying the same thing in different ways, but just to be clear...

"All in" refers to an insurance policy only; it doesn't describe the provisions of the Declaration. Our Declaration states that the association is responsible for maintenance and repair of the Common Elements, and that the unit owner is responsible for maintaining and repairing the Unit as well as the Limited Common Elements attached to that Unit. In order to make the association responsible for maintaining parts of the Unit, there would have to be language spelling out the circumstances in which this happens. Our Declaration doesn't have that, and you can't read things into a Declaration that aren't there, no matter how "fair" or "reasonable" those missing things are.

In my community, if we have moldy drywall, it all depends if it resulted from an insurable event such as damage from a storm. If we have a leaky roof due to normal wear and tear that caused the mold, it's a maintenance issue and the Declaration governs. The association would be responsible for repairing the roof (Common Element) and framing (Common Element) as needed, and the owner would be responsible for drywall (Unit), insulation (Unit) and any utility or service lines inside the exterior walls that serve only that unit (Unit). Things change when "all in" insurance comes into play since you're no longer talking about maintenance. In this case, the association's insurance would cover repairs to the unit in excess of the deductible.

No, we haven't changed the Docs regarding the definition of "Unit" and "Common Elements". Drywall has always been defined as part of the Unit, and the owner is responsible to maintain that. A few years back we changed to a different legal firm, and the first thing they did was to review our docs to make sure they were in compliance with 5311, so we're solid there.

I think we're getting stuck because we're conflating routine maintenance with an insurable event. Our docs clearly state that the unit owner is responsible for routine maintenance of all parts of his unit as well as the limited common elements attached to that unit. However, the docs also require "all in" insurance that covers certain parts of the unit and limited common elements in the event of an insurable loss. Around here all instances of mold have resulted from routine wear or failure of certain components - not insurable events - thus the owner is responsible for the drywall repairs per the declaration, insurance doesn't come into play here.

Yes, it's weird and confusing, and our insurance agent says that even the pros scratch their heads over it. However, I'm pretty sure that you can't have an external agreement (insurance policy) changing the terms of a contract (the declaration). So using the policy to justify the association paying for routine maintenance of the unit is legally pretty shaky, I would think. But I'm not a lawyer or an insurance agent, so consider my comments to be worth exactly what you paid for them. :-)