Extent of responsibility and economic losses in VIRGINIA

Started by JR13 • 27 replies • 924 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

JR13 (Virginia)
Posts: 36

Posted:

++Summary++
Our roof/siding had several leaks due to negligence "gross and extended lack of maintenance to the exterior common elements" that have caused enough damage that an Industrial Hygienist, hired by Association, had to write a mold remediation protocol that requires our persons and belongings to be removed for the extensive tear-out/remediation/restoration work to be completed. Association was made aware of extensive siding damage and roof damage and didn't "patch up" everything until 2 years afterwards. Association has agreed to pay for said remediation/restoration/repair but not the interior build-back or to cover our economic losses (moving, storage, hotel, etc). Association states, according to our CCRs, their responsibility ends with the build back to the framing regardless of the fact the remediation/restoration calls for removal of drywall/trim/flooring/etc. VA STATE LAW 55-79.79, however, states "except to the extent that the need for repairs, renovation, restoration or replacement arises from a condition originating in or through the common elements, in which case the unit owners' association shall have such powers and responsibilities"

My question is this: Since our CCRs do not provide a specific answer to responsibility but 55-79.79 does, are they responsible to repair/replace the damages to the interior of our unit per said law? Additionally, and most importantly, would we be able to legally seek reimbursement for our economic losses? I couldn't find any case law about this specifically as it seems economic losses are only covered if stated in contract. In this case our economic losses would be a direct result of and required for the restoration, for which they've claimed responsibility, to take place.

Also, if anyone can explain. Would this be a contract issue "with our CCRs" for negligence or tort since the law that covers this specific situation is not outline in our CCRs?

++VA CONDO LAW++
55-79.79. Upkeep of condominiums; warranty against structural defects; statute of limitations for warranty.

A. Except to the extent otherwise provided by the condominium instruments, all powers and responsibilities, including financial responsibility, with regard to maintenance, repair, renovation, restoration, and replacement of the condominium shall belong (i) to the unit owners' association in the case of the common elements, and (ii) to the individual unit owner in the case of any unit or any part thereof, except to the extent that the need for repairs, renovation, restoration or replacement arises from a condition originating in or through the common elements or any apparatus located within the common elements, in which case the unit owners' association shall have such powers and responsibilities. Each unit owner shall afford to the other unit owners and to the unit owners' association and to any agents or employees of either such access through his unit as may be reasonably necessary to enable them to exercise and discharge their respective powers and responsibilities. But to the extent that damage is inflicted on the common elements or any unit through which access is taken, the unit owner causing the same, or the unit owners' association if it caused the same, shall be liable for the prompt repair thereof

++OUR BYLAWS++
SECTION TWO: UPKEEP OF THE CONDOMINIUM .
All powers and responsibilities with regard to maintenance, repair, renovation, restoration, and replacement of the
condominium shall belong (1) to the Unit Owners' Association in the case of the general common elements, and (2) to the individual unit owner in the case of any unit and-limited common elements appertaining thereto or any part thereof. Each unit owner shall afford to the other unit owners and to the Unit Owners' Association and to any agents or employees of either such access through his unit as may be reasonably necessary to enable them to exercise and discharge their respective powers and responsibilities. But to the extent that damage is inflicted on the common elements or any unit through which access is taken, the unit owner causing the same, or the Unit Owners' Association if it caused the same, shall be liable for the prompt repair thereof.

++OUR DECLARATIONS++
Subject to the provisions of this Article, in the event of damage to or destruction of all or any part of the improvements as a result of fire or other casualty, the Board of Directors shall arrange for and supervise the prompt repair and restoration of the property (including any damaged units therein, and any kitchen or bathroom fixtures initially
installed therein by the Declarant, and replacements thereof installed by a unit owner, but not including any other furniture, furnishings, fixtures or equipment installed therein
by the Owners.) Notwithstanding the foregoing, each unit owner shall have the right to supervise the redecorating of his unit.

KEYWORDS: ROOF LEAK, INTERIOR UNIT DAMAGE DUE TO LACK OF MAINTENANCE, WATER DAMAGE THROUGH COMMON ELEMENTS, NEGLIGENT

JohnC77 (California)
Posts: 562

Posted:

My suggestion, let your insurance company duke it out with the association insurance comany.

JR13 (Virginia)
Posts: 36

Posted:

Thanks for the suggestion but that's not on the table.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Lawyer up, then.

JR13 (Virginia)
Posts: 36

Posted:

Please, if you're going to respond, keep it constructive.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Please if your going to respond make sure it's something I want to hear...

Former HOA President

JohnC77 (California)
Posts: 562

Posted:

To the best of my knowledge, no one here is an attorney or an insurance adjuster specializing in HOA's or Condos. In my line of work, I have had to deal with the exact same types of damages, and I have always been told to let the experts, (the insurance companies) handle this.

You asked for advice, advice has been provided.

SheliaH (Indiana)
Posts: 6,964

Posted:

I concur with what everyone else said. Besides there are other questions that need to be answered like:

Is this a detached house, condo or townhouse?
How have you owned it?
When was the problem first discovered (you don't provide any dates)
Did you notify the association when you began noticing problems? Where's your proof (e.g. letter or email - either one should be dated and the email should have a time stamp)
What was the association's response to your initial notice?
Did you contact your insurance company when you first noticed the problem? What was the reaction?

These are questions your attorney may ask, and perhaps more, so start pulling together your information. By the way, you didn't provide the effective date of this state law - in some cases, it may apply on or after a date new HOAs or condos are established and if your community is older than that, it may not apply.

Also, owners are typically responsible for everything IN the home, so go back to your documents and keep reading to see where the association's responsibility begins and ends. I live in a townhouse and our responsibility begins with the drywall in, regardless of what causes the damage, so we'd be responsible for the items you mention. Take a look at your insurance coverage - you may want to add something that will pay your living expenses if the home ever needs extensive repairs and you have to move out until they're done. While you're at it, add sewer and water damage - I know the roof is involved here, but water damage can occur the other way and water damage coverage usually isn't part of a standard policy

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JR13 on 02/05/2021 7:45 PM
My question is this: Since our CCRs do not provide a specific answer to responsibility

I wouldn't say this. From your Declaration: "Subject to the provisions of this Article, in the event of damage to or destruction of all or any part of the improvements as a result of fire or other casualty, the Board of Directors shall arrange for and supervise the prompt repair and restoration of the property (including any damaged units therein... "

Is "improvements" defined in the Declaration?

Quote:

Posted By JR13 on 02/05/2021 7:45 PM

Also, if anyone can explain. Would this be a contract issue "with our CCRs"

-- Nationwide the courts view covenants as contractual terms. You might have an "action" (meaning a lawsuit) based on enforcing the terms of the covenants (contract).

-- I agree with the others that your first call should be to your insurer and see if they can offer insight and information about the situation. One reason I am advising this is because attorney fees add up very quickly. I know mold remediation is expensive, but it might be far cheaper to let your insurer handle this, paying whatever deductible is required.

CathyA3 (Ohio)
Posts: 6,299

Posted:

I've been through the mold business in two different condos, so I know about this stuff. It's not fun.

The quotations from OP's relevant state law and governing docs suggest that this community would handle things the way mine would: ie, the association repairs the roof and other common elements and the homeowner is responsible for repair to the interior, including mold remediation. My CC&Rs also state that owners must promptly report to the association any issues they've found that would indicate there are problems in the common elements. For example, if an owner sees water stains on their ceiling, they must report this right away.

Mold is nearly always considered a maintenance issue, not an insurable event as defined by the association's insurance. This is because it can take a few years of continuous moisture for mold to grow and become apparent. In the case of a small leak somewhere in the common elements, your first hint of a problem may be the mold. (Note: it can be different down south where mold can grow practically overnight after a hurricane, for example.)

This means it can be hard to prove negligence since there may have been no indication of a problem prior to now. In addition, our association's insurance agent said that they don't look at who is "at fault" with things like this, it's strictly who pays for what according to the CC&Rs. (Note: this can be different with insurable events, such as a storm tearing up the roof and damaging the interior of a home. In such a case, my association's all-included insurance would cover some repairs to the interior of the home but not my personal belongings.)

An owner's homeowner policy may well cover the cost of repairs to the interior.

Document everything! You'll probably have to disclose this when you sell your home.

So... it all depends on:

* the exact wording of the CC&Rs and state laws
* the details of the HOA's and the owner's insurance

If I were dealing with this same issue, I'd start with getting bids from some mold remediation companies, and then talking to my insurer if the bottom line would exceed my deductible by a significant amount. The bottom line may include things like hotel stays while the work is going on (ask me about living with mold containment chambers, honkin' big HEPA filter machines, and bad smells from mold and anti-microbials). My rule of thumb is to fix things first and argue about the money later when delaying can result in more damage/larger repair bills or significant inconvenience or health issues. All three of these things can occur when you're dealing with mold.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By MelissaP1 on 02/05/2021 8:54 PM
Please if your going to respond make sure it's something I want to hear...

Well said......LOL

JR13 (Virginia)
Posts: 36

Posted:

MelissaP1, you do this every time I post something. You offer nothing to the conversation and only make it increasingly more difficult for those who come across this thread to find the information they're after.

JohnC77, I did not ask for advice. I asked pointed questions. Are they responsible? To what extent? Is this a contract or tort case? Nobody asked you about your line of work, the professions of other website users, or what you were advised to do in your case.

SheliaH, I cited condo law and our bylaws, that I included, which state it's a condo. I said they were aware of damages and didn't make repairs until 2 years later. Assume, for the purpose of this thread, there are no technicalities and that what I've stated is accurate, that there was gross negligence, that insurance is not involved at all, and that the state law applies. This will serve to better focus the discussion on the three pointed questions I had which relate to responsibility, extent of responsibility, and whether this is a contract or tort claim. The Association's claim of responsibility, in my original post, is correct per our CCRs, generally. I'm not disputing that, as I've mentioned, I'm disputing their responsibility as it pertains to state law "I think". I'm not sure what "how have you owned it?" means. If you meant, "how long have you owned it?", just assume, for the purpose of this thread, from the date they were made aware the damages. All damages are directly related to their gross negligence in not maintaining the common elements to the point, and this is true, you could stick your hand through the exterior siding because it was completely rotted out. This is almost every unit in the development: https://imgur.com/a/mXDRPm1

AugustinD, "as a result of fire or casualty". At first glance I too thought this was sufficient to argue my case but federal law defines casualty loss as anything that is sudden, unexpected, or unusual. Something you cannot foresee and are powerless to prevent because of the suddenness. So they use the word casualty as an extension to elaborate on similar events such as "fire". Our declarations do not provide a definition of Casualty or Improvements. Declaration states they are required to maintain casualty insurance. I contacted their insurance company and there is no coverage for "damage due to lack of maintenance". I too read that CCRs are viewed as contracts but have seen cases dismissed/appealed if, for example, I'm arguing tort "the state law" for their responsibility to cover damages and the court sees that it is more in relation to their negligence "contract". This is the part that confuses me. I have some developing information I plan on posting here soon about this once I understand it better. I think will be helpful to those who come across this post.

CathyA3
Our CCRs sound similar in nature. Proving negligence isn't the issue. I have everything needed to prove this. There was indication several years ago as to the repairs needing to be made. Again, assume negligence is proven, and insurance is not involved at all. I'm trying to focus on the issue of responsibility between the unit owner, us, and our Association. We have everything documented. It's a lot. I would say this, while I agree with your rule of thumb, I don't want to burden the other unit owners further. If I have to pay for my own IH protocol, remediation follow ups, and more work to make sure remediation was done properly and am displaced for a longer period of time due to the Associations lack of conducting things in a timely manner, for which is common behavior, this financial burden will increase for the other unit owners. If I can make the Association acknowledge their responsibilities financial burden would presumably be far less. Not to mention, if they don't, unit owners would be responsible for said costs. The only delay thus far has been in them getting the exterior repairs made which is a requirement of the IH protocol and must be completed prior to remediation efforts... for obvious reasons. As you can see here, this is clear negligence: https://imgur.com/a/mXDRPm1

SheliaH (Indiana)
Posts: 6,964

Posted:

I typed my response on a tablet and sometimes thunder thumbs take over, so yes, I did mean how long have you owned your home.

That said, assuming anything in legal matters, especially if you're talking about who's responsible for what is a dangerous thing. (I work for attorneys and see this played out at least once a week on both sides). You wanted to know if the association is responsible, but as others have said, most of us, including me are not attorneys and it's still a bad idea to get legal advice on specific legal matters from the internet. Not everyone lives in your state, so the answer in my state may be different from the law in yours or someplace else.

Sorry, but you're going to have to have an attorney and your insurance company hash this out. You may also heed what Cathy said - in the end a judge may have to decide and that doesn't happen without evidence. You can think whatever you like, but unless you can get an insurance company or a judge to agree, your opinion means squat. That doesn't mean you're wrong, but it does mean you have to do the work to make your case or pay an attorney to do it. Good luck in whatever you decide to do.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Called it...

Former HOA President

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JR13 on 02/06/2021 10:21 AM
AugustinD, "as a result of fire or casualty". At first glance I too thought this was sufficient to argue my case but federal law defines casualty loss as anything that is sudden, unexpected, or unusual.

Your citation of "federal law" does not make sense to me. Case law? Federal case law? State case law? Insurance company law?

Quote:

Something you cannot foresee and are powerless to prevent because of the suddenness. So they use the word casualty as an extension to elaborate on similar events such as "fire". Our declarations do not provide a definition of Casualty or Improvements. Declaration states they are required to maintain casualty insurance. I contacted their insurance company and there is no coverage for "damage due to lack of maintenance".

I trust you are aware that insurers frequently fight to deny coverage.

Who is in the right here would require going to court, and possibly to appeal. If figuring out who is responsible for what, and definitions are not sufficiently precise, then you might be better off having the insurers duke it out.

Is your home insured?

Quote:

I too read that CCRs are viewed as contracts but have seen cases dismissed/appealed if,

I suspect the law of contracts is likely not as simple as you think.

Understandably, I think you are hoping for some kind of legal information here, or possibly some legal education. In my experience, the questions you want answered are beyond the scope of the expertise (such as it is) here. More importantly, even if some of the veterans here had legal answers, I doubt any person new to this forum could understand them.

I suggest you hire an attorney. The attorney would start with a review of your governing documents and the facts as best you know them. Figure the mere consultation will cost you at least $3000.

Talk to your insurer. Get this fixed. Run for the board. Let it go. Or, as many rightly do, move.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By JR13 on 02/06/2021 10:21 AM
... snip ...As you can see here, this is clear negligence: https://imgur.com/a/mXDRPm1

I watched the video, and my first thought was: what are your reserves like?

Siding replacement is often a reserve item (although we handle routine damage in small areas - think weed wacker damage - as an operating expense).

Inadequate reserves can result from:

* failure to get regular reserve studies done, or poor quality studies that don't include all necessary items
* failure to fund the reserves in accordance with the reserve studies
* raiding the reserve accounts for operating expenses
* CC&Rs that require owner approval for the annual budget and/or for assessment increases over a certain amount, regardless of the reason for the proposed increase
* and yes, negligence.

So the video supports negligence as a possible explanation, but it doesn't necessarily prove it. We'd need to see the history of the HOA's finances in general, board meeting minutes, are the budgets historically inadequate, spending patterns, how maintenance requests were handled, is there evidence of incompetence vs. deliberate neglect, etc.

(And I'd be more worried about varmints getting inside my home. Mold I can deal with. Mice? I'd run off screaming into the night...)

AugustinD
Posts: 5,144

Posted:

I wonder if that siding is the cheap, paper-based stuff and not real wood or even some kind of plywood.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By AugustinD on 02/06/2021 12:10 PM
I wonder if that siding is the cheap, paper-based stuff and not real wood or even some kind of plywood.

I was an owner in an HOA consisting of 173 owners with 3 or 4 townhouses per building. Value of about $400K per townhouse.

Our siding was a "man made" vertical siding product from one of the largest names in the building materials business. As this was up north, we had ice dams and water intruding between the siding and the building wrap thus causing swelling of the siding. We were always replacing/patching siding until the manufacturer discontinued the product. The HOA put together a plan to replace all siding along with garage doors as it paneling was an alike product. We also need to replace the brick stairs (2 or 3 steps) leading to front doors

Bottom line is there was a Special assessment of $25K to $35K per townhouse. The BOD did such a good job presenting the situation via informational meetings, mailings, spread sheets, photographs, that over 90% of all owners approved the Special Assessment.

The pics posted remind me of the old siding.

JeffT2 (Iowa)
Posts: 880

Posted:

It is tort and contract. The contract gives the association a duty of care, which they breached, which is the proximate cause of the damages. So if you can prove that, then the association is liable.

The association will have insurance coverage for property damage, which as you note, will not cover this. However, the association's insurance will also have liability coverage, which might cover it unless their gross negligence is excluded. I would start by going back to the association's insurance for a liability claim (not property damage), and get them to explain why it may not be covered.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

JR

Why is contacting your insurance company not on the table?

JR13 (Virginia)
Posts: 36

Posted:

SheliaH, I assumed if someone responded, especially someone that works for "lawyers", they would have understood laws are state specific. I haven't offered any opinions.

AugustinD, you're hyper-focusing on things that aren't important. In short, a casualty was not the cause of damage therefore our CCRs do not provide an answer to responsibility. Insurance is not involved at all. I've said that number times now. I'm seeking information as it pertains to responsibility between the Association and I. Not whether or not the insurance company of either party would step in and subrogate or not. Again, and lastly, insurance is not involved. I was hoping someone could point me to case law as it applies or provide an answer and their reasoning behind it to help me in researching the issue.

MelissaP1, I read "former" and it makes me happy for some reason. I can imagine others feel the same.

CathyA3, it being a reserve item or not is irrelevant as it doesn't exclude them from their obligation to maintain the common elements.

JeffT2, that's what I was thinking. Thank you for taking the time to reply. I did call their insurance company, back when all this started, and it is not covered. The guy I spoke with told me, "Could you imagine if insurance companies offered maintenance clauses? If we did that these places would just let the whole place fall apart and then file a claim with us to fix it for whatever their deductible is. *laughed*"

++
I have since found very exacting VA case law that not only answers my questions but explains how VA interprets the economic loss doctrine as it pertains to negligence claims dealing with both contract/tort. I would love to share the details but it seems people here are only interested in discussing /other/ things. If I have any insurance information I'll be sure to report back...

GeorgeS21 (Florida)
Posts: 3,808

Posted:

JR13,

I would prefer you not.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JR13 on 02/06/2021 2:02 PM
I have since found very exacting VA case law that not only answers my questions but explains how VA interprets the economic loss doctrine as it pertains to negligence claims dealing with both contract/tort. I would love to share the details

From layperson's experience reading case law and observing trials for over a decade now (IANAL): I expect a few appeals court decisions from your state are not going to be the answer to your prayers for clarity on the issues here.

I would be interested in what an attorney says about the details of your specific case. Especially how much it will cost you to 'fix' the situation.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JR13 on 02/05/2021 7:45 PM

++VA CONDO LAW++
55-79.79. Upkeep of condominiums; warranty against structural defects; statute of limitations for warranty.

A. Except to the extent otherwise provided by the condominium instruments, all powers and responsibilities, including financial responsibility, with regard to maintenance, repair, renovation, restoration, and replacement of the condominium shall belong

The phrase "Except to the extent otherwise provided by the condominium instruments" that has my attention at the moment.

For fun (and without confidence that this will resolve the OP's questions), eight Virginia Supreme court decisions, that mention 55-79.79, come up on a google search using:
"55-79.79" site:https://law.justia.com/cases/virginia/supreme-court/

Rinsing and repeating for the Virginia Appeals Court (published and unpublished decisions) sites turned up nothing.

If the OP has already located these decisions, great.

If not, they might help in the furtherance of his education. Of course I do get that one wants to understand one's rights here, especially on the important subject of severe damage to one's home, especially when mold spores may affect one's health.

AugustinD
Posts: 5,144

Posted:

My sources say 55.79-79 was repealed effective October 1, 2019. I think the correct statute section is 55.1-1955. See

https://law.lis.virginia.gov/vacode/55.1-1955/

Seven of the aforementioned eight Virginia Supreme Court decisions appear wholly irrelevant to the OP's situation. They seem to be about a declarant's/developer's responsibilities under the old 55.79-79. The eighth decision describes a situation that maybe is a bit like the OP's but alas, is focused on attorney fees.

More to come on 55.1-1955 .

JR13 (Virginia)
Posts: 36

Posted:

AugustinD, still hyper-focusing on irrelevancies. You are correct in that 55.79-79 has been repealed and replaced with 55.1-1955. I should have posted the correct and current law in my original question but the part I cited remains the same in both. The case laws I found answers my questions in regards to how VA courts view economic loss/tort as it deals with contracts/CCR's.

AugustinD
Posts: 5,144

Posted:

Dude, I am posting for the archives.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Hahahahaha.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here