Condo Media - February 2016 - 22

SOFTENING
the

Blow

SPRINKLER PIPE BREAK
A three-story, two-building, multipleunit condominium complex constructed
around 2002 had a PVC sprinkler line
burst open at two different locations:
one in each building and both originating on the third floor.
Almost identical events, the third-floor
units had major damage but only to the
bedroom just below the break. Secondfloor units had major damage to the same
bedroom and the adjoining kitchen and all
of the flooring because that level is a concrete substrate and the water runs across
the entire unit. First-floor units sustained
major damage in every room because the
water traveled across the second-level
floor and came down along every exterior
wall and floor opening. Property mitigation and demolition took two weeks.
ROLES AND EXPECTATIONS
The property manager and trustees are
responsible for two things: mitigation of
damage to the common areas and notifying the master policy insurance company
of the event. Unit owners are responsible
for notifying their own HO6 homeowners' policy insurance company.
Unit owners need to remember their
property manager and trustees are bound
to the overall insurance process and
limited in what they can do. They have no
power or influence over the schedule of
the insurance company's adjuster, mitigation contractor's schedules, etc.
Insurance adjusters will be notified by
the carriers, and then, they will schedule
a property visit to ascertain the extent
of the damages. The unit owner's homeowners' adjuster only has to make their
determinations in their specific unit.
The master policy adjuster has to do the
same but for every unit affected.
This is the first piece of frustration for a
unit owner. In our event, eight units were
affected, some with significant damage,
along with several common area hallways,
a community room, and lower-level
garage ceiling. It generally takes weeks for
an adjuster to put larger claims together;
in this case, it took six to eight weeks.
The unfortunate part for the individual unit owners is their individual claims

22

CONDOMEDIA

The first thing to realize is the resolution of this type
of event will take months, not days or even weeks. As
soon as a condo unit owner accepts this fact, it makes
the rest of the process somewhat easier to handle.
(which all exceeded the master policy
deductible) cannot be settled until the
entire claim is processed. This process
gets more complicated in smaller claims
because now both insurance carriers
have to agree on who's responsible to
pay for which part of the claim.
Once the insurance carrier offers the
claim, the property manager and trustees
determine the dollar amounts to be distributed to the unit owners who are then
responsible to hire their own contractor.
Unit owners need to remember at this
stage that the property manager and trustees will need time to review the claim to
protect the interests of the association.
One way to help the process along is
for the unit owners to obtain contractors' quotes based on what they think
needs to be done to restore the unit
while the insurance carriers assemble
the claim offer. Then, as soon as the
claim money is allocated, they can compare the quotes and determine if there's
enough money being offered.
UNFORESEEN HICCUPS
Remember, this can be a slow process.
The adjuster inadvertently missed a few
items in each unit. Also, the eight unit
owners hired two different contractors
to work in multiple units. The first
contractor got out ahead of the process
and presented the adjuster with the necessary increases for the missed items in
five of the units, but because the second
contractor's schedule lagged behind
the first, the adjuster needed to wait to
process all of the claim supplements
together. This is one large claim, and
you're all in this together.
In the construction stage, we discovered a few issues. The manufacturer no
longer offered the cabinets used by the
developer. In addition, the engineered
hardwood flooring was no longer available by the manufacturer in the same

thickness if the unit owner wanted to
stay with the same finish color/stain.
Contractors had to submit
supplemental claims for unforeseen
conditions and ask the insurance
company for additional funding for the
cabinetry upgrades. In some cases, only
the lower units were affected and not the
upper ones, but with the unavailability
of the cabinetry lines, the entire kitchen
had to be replaced. Same story for the
engineered hardwood flooring which
couldn't be matched: The entire floor of
the unit had to be replaced.
Due to lead times for replacement cabinets, specialty-engineered flooring, code
upgrades, and additional supplemental
claim processing, the construction period
resulted in another 10 to 12 weeks.
Our event had an overall timeframe of
six to eight months, as some owners occupied their unit sooner than others and one
contractor finished ahead of the other one.
This is a real-life event. "Reality TV,"
where they renovate and flip a home in
two or three weeks, doesn't show the
weeks of behind-the-scenes preparation,
material ordering, and design. Older
properties built in the 1980s and 1990s
are potentially subject to additional issues
regarding code upgrade requirements
determined by the local building officials
and materials/components that either no
longer exist or cannot be reutilized.
Unfortunately, in cases like this,
homeowners must be prepared to be out
of their homes for several months and
try to make the best of it. Inquire with
your insurance agent regarding coverage
for loss of use.

■ TONY CHIARELLI IS PRESIDENT
OF LANDMARK ASSOCIATES INC.
IN MILFORD, MASS.
Condo Media - February 2016

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