Death, Taxes & Hurricanes
By Jay Roberts, Condo Owner Magazine, June 15, 2013
Death, Taxes, and Hurricanes
“…in this world nothing can be said to be certain, except death and taxes.”
– Benjamin Franklin (1789)
In 2013, Gulf Coast condominium owners know there is a third certainty: hurricanes. This article will not help you with death and taxes; as to those certainties, you should contact your doctor and CPA. Rather, the following should serve as a general guide of steps to take prior to a hurricane making landfall and what steps to take immediately following a hurricane in order to efficiently manage restoration projects.
Document, Document, Document
— As a member of the board of directors concerned with how to deal with the insurance company regarding damage to the condominium’s common elements, pre-storm documentation could be key to your claim. I recommend taking both digital pictures (with time/date stamp) and filming the current state of the common elements or unit (and contents), as applicable, at least once per year prior to each hurricane season. Clearly showing the insurance company the status of your property pre-storm can do wonders to shorten negotiation/litigation with the insurer as to what should be paid on the policy following the storm damage. Be sure to store a set of the pictures/videos at a location other than the condominium property, as they are useless if lost to the storm damage.
Insurance Policies & Agent Details – Ensure all insurance policies are current and coverage is adequate and compliant with State law; full contact details for insurance companies and agents should be readily available in the event of a storm.
Backup Computer Files – Confirm that computer files crucial to running the building and association are backed up to CDs, Portable Storage Devices, and/or Digital Cloud Storage so that the information can be accessed from a remote location.
Emergency Generators & Supplies – Verify emergency generators are in working order and have adequate fuel supplies. Stock emergency supplies in storeroom (flashlights, batteries, water, etc.) for use by residents and employees in the aftermath of a storm.
Emergency Lists – Have on hand current hard-copy and digital-copy reference lists complete with the names of all property owners, emergency contact numbers and details of second residence addresses, as well as a list of all association employees, with full contact details. Make sure all members of the Board of Directors and all association employees have copies of these lists. Further, it is a good idea to have a list of contact information for all local emergency response departments. If the association has a website, place the contact information for Board of Directors members, association employees, and the local emergency response departments on the website.
Vendor Lists – The vendors you trust before a storm should be the first vendors contacted after a storm hits. This usually includes a water damage restoration company, an HVAC servicer, an electrician, a plumber, a general contractor, and a fire prevention company. If your preferred vendor is not able to timely perform the work needed, your general contractor may have ideas for other reputable alternatives. Again, it is good to have this list in multiple formats (digital and hard-copies) and stored at multiple locations.
Bank Account Details & Signatories – Keep handy a list of all bank account numbers, branch locations and authorized association signatories. Make contingency plans for back-up signatories in case evacuation or relocation becomes necessary.
Evacuation Routes – Establish clear building or community evacuation routes and be sure that all community members are provided with copies or printouts. These routes should be clearly marked as storms approach.
Create a Storm Committee – Having a committee of owners designated with the task of compiling and distributing the information listed above is a good way to ensure the projects get done and the lists stay current.
Pre-Storm Summary – Be proactive in aggregating the information discussed above and flexible in storing the information in multiple formats (hard-copies and digital). Lastly, make sure the information is distributed to multiple people.
“The best laid schemes of mice and men oft go awry…”
– Robert Burns (1785)
No matter how well you plan, hurricanes can, and often do, cause damage to the condominium property. Do not make the mistake of complicating the post-storm reconstruction efforts by trading expediency for “doing the right thing” following a storm. The following is a list of practical post-storm considerations for dealing with damage to the condominium property.
Within hours of any disaster, affected communities will be besieged by companies and individuals offering disaster recovery assistance. Resist the urge to contract with these initial offers until you have done the following:
- Once residents are safe, the community must begin surveying the property and assessing the damage. A designated information facilitator should set up a system of information sharing among local homeowners and a disaster coordinator should serve as liaison to emergency services providers.
- Secure your community from acts of vandalism and looting; if needed, hire temporary security guards to keep watch over the community.
- Remove storm debris to prevent accidents from occurring on the property.
- Secure building structures to mitigate further damage.
- Determine needs for immediate reconstruction and evaluate financing options, including advances from your insurance company for construction needs. Beware of any insurance company offering money in exchange for releases or settlements.
- Suspend or cancel on-going contracts, such as lawn or pool maintenance, if allowed for in your contract.
- Review governing documents, particularly anything related to “repair after casualty” provisions in the insurance section, to establish the process for reconstruction.
- Initiate reconstruction planning using the five phases of reconstruction: project planning/scheduling; construction bidding; contract negotiations; construction/repair; project completion/close out.
- Review insurance policies to determine filing requirements for proof of loss forms.
- Meet with licensed professionals familiar with your community including: a) architect/engineer to assess damage and prepare plans; b) construction manager to oversee selection of a general contractor and begin competitive bidding process; c) attorney to review insurance policies, governing documents, construction contracts and any vendor agreements; and d) public adjuster who is independent of your insurance company’s adjuster who can be helpful with the nuances of an ambiguous insurance policy. Most independent adjusters work for a fee based upon percentage of insurance proceeds.
- Best Advice: Prior to signing, make sure every contract is with a licensed and insured contractor and that every contract is reviewed by a licensed attorney.
- Although an eventual certainty, once a hurricane nears, panic and haste will ensue amongst board members and unit owners alike, potentially leaving important details overlooked. Implementing the actions above will help your community recover more efficiently from the next storm.