Condo unit sustained major damage: likely costs to repair?

Started by PaulJ6 • 6 replies • 618 views

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PaulJ6
Posts: 990

Posted:

Just when I thought I had problems:

I own a 600 square foot condominium that I rent out as a rental property. It's one of four units in a 2-story building. I bought it for $80k and it's now worth about $150k. Until today.

Today a tree crashed through the front of my unit, through the front wall and roof. There's maybe a 3-foot gash through the wall and roof. The tree fell diagonally, hitting the front door and the 3rd window from the right on the second floor (photo pre-damage at https://www.google.com/maps/place/418+Wakefield+Dr,+Charlotte,+NC+28209/@35.1699344,-80.8472637,17z/data=!3m1!4b1!4m5!3m4!1s0x88569e52275629a5:0x53a2f4902c53925d!8m2!3d35.16993!4d-80.845075)

I checked the CC&Rs, and the condo association is responsible for everything below the interior surfaces of the unit.

I have, unfortunately, only $31k of building property insurance (plus loss of rents insurance, business liability insurance, etc.).

I was already planning to sell the place, so if $31k of insurance proceeds are enough to pay for the damage, so be it and it's fine.

Will the HOA repair everything so that all I'd need to do would be to put up and paint drywall and redo floors? Or is $31k likely not enough? Would someone buy the property once the HOA has repaired its part and once I've put in $31k of repairs?

Thanks.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Ironic enough I just had a tree fall down on my garage/house last night. Part of it went through my deck. We are still getting storms...

It's time to read your CC&R's and figure out your responsibilities of both parties. Our HOA if your house burnt down, you were responsible and had to return the lot to original condition.

We had a tree go through a home. Tree was on neighbor's yard but fell across fence into the kitchen of the other home. Neighbor wasn't insured. So the owner's insurance had to put in the claim. The HOA was responsible for the clean up. Our deductible for insurance is in the 20K range. So we picked up the bill for removing the tree debris. The fence and home damage was on the owners.

Someone posted it best here once. Think of your home as a "Box". Turn that box upside down. Whatever falls out of the box is your responsibility. You can maybe expect your HOA to possibly pay for the tree removal and clean up. After that it's on you to put the claim on your insurance to duke it out with the HOA's.

31K being enough will depend on many factors. Labor and materials are what your looking at. ACC approval may be required on certain details like windows and exterior paints etc... external elements.

As for someone buying it, that's just the luck of the draw there. I passed up a house cause I hated the wallpaper. Good luck!

Former HOA President

PaulJ6
Posts: 990

Posted:

Melissa, thanks again. You give great advice.

The CC&Rs say that the "condo" is the interior surface of walls and floors, but everything below those interior surfaces are "common elements" that are the responsibility of the HOA.

The HOA has already contacted its insurer, which has given a 6-month estimate for fixing everything.

Next time I'm getting more insurance, definitely.

JeffT2 (Iowa)
Posts: 880

Posted:

Check the insurance section of your governing documents. There is a difference between ownership, maintenance requirements, and insurance requirements. Three different things. Some condo associations have insurance on all the units (including interior) and if so this insurance is likely to be primary over your HO-6 policy on your unit, meaning that the association's policy should be covering most of the damage – as long as they know about this coverage.

The idea of a box turned upside down is a good approximation, but exactly what is covered will be in your governing documents and in the insurance policies (yours and the association's policies).

If you own from the surface in, then the wallboard on the perimeter walls is a common element, so the association's insurance should cover all of the wallboard on the perimeter walls, not including paint. The wallboard on interior walls may or may be covered by the association's insurance, depending on whether they cover your unit.

PaulJ6
Posts: 990

Posted:

Thanks, Jeff and Melissa- superhelpful!

PaulJ6
Posts: 990

Posted:

Thanks, Jeff and Melissa- superhelpful!

PaulJ6
Posts: 990

Posted:

Thanks again, Jeff and Melissa.

I checked the condo association CC&Rs. Not only does the association have to maintain insurance covering the whole building, but it takes first responsibility for repairs and insurance proceeds go to repair both the common property and the individual condo property.

I was in a complete panic, worried that I didn’t have enough insurance for interior repairs. Looks like the condo association insurance is even for the interior. This is a huge relief.

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