Condo Media - March 2022 - 20

KNOCK, KNOCK, IS ANYBODY HOME?
A YEAR-ROUND CONCERN
Unoccupied units are not only a concern during winter months due to damage
from the cold, snow, ice, and possible frozen pipes, but water heaters can fail
at any time of the year; closed up units with no air conditioning during hot,
humid summer months can cause mold growth; remaining garbage can be an
invitation for rodents and insects; and vacant units can also be tempting for
squatters and criminals.
While unit owners have an obligation under the condominium documents to
maintain their units in good working order and take no action that would jeopardize
the Trust's insurance coverage, there is no guarantee that a unit owner will
comply. An owner facing foreclosure may vacate the unit, angry over the property
loss, and not caring what happens to it or their neighbors in the aftermath.
Some owners act under the mistaken assumption that their bank is now responsible
for the unit and will take care of it. This is also a common misconception by
condominium boards: The unit is vacant, so the bank is somehow now responsible
for unit maintenance and should bear the expense of winterizing or maintaining
heat. While a bank has the right to maintain and preserve its collateral, it does
not have the obligation to do so. Further, banks require actual written notifi cation
from the unit owner that they have in fact vacated the unit with the intent to
surrender. A national California bank has no fi rst-hand knowledge of a unit occupancy
in Shrewsbury, Mass., and unfortunately, the word of the condominium
board that a unit is in fact vacant is considered insuffi cient as proof of vacancy.
BURDEN OF DUE DILIGENCE
Years ago, I foreclosed on a townhouse
condominium in which the owners
turned off their heat in November
then left for a month-long trip home
to Indonesia, only to have their return
delayed for almost a year due to a devasting
tsunami in their country. During
their absence, several pipes burst, and
the basement totally fi lled with water
before a neighbor noticed his party wall
was " sweating. " While the owners only
expected to be gone for a month, no one
within the condominium community
were aware of their travel plans, and they
failed to reach out to the Trust once their
stay was extended. Insurance covered
the damage to the adjoining units and to
remove the water from the unit, but the
Trust was left with remediation of the
unit to prevent mold and bacteria growth
as the Trust had not met its burden of
due diligence over the owners of the unit.
Lacking a HO-6 policy, the owners were
left with no coverage for their damaged
clothing, furniture, household items,
and electronic equipment.
20 CONDOMEDIA March 2022
In order to demonstrate " due diligence " under the master policy,
a condominium board should consider the following:
● Adopt a rule requiring owners
to maintain heat in their units at
no less than 55 degrees in colder
months, provide suffi cient air
conditioning during the warmer
months, and provide notice to the
Trust of any extended absences;
● Send owners a yearly questionnaire
requiring owner contact information
and, if rented, information as
to names and contact information
of the current tenants. Follow-up
with non-respondents by letter or
door-to-door contact;
● When the condominium board
has actual knowledge or suspicion
of a vacant unit, send the owner a
written demand letter at their last
known address, informing them
that under the owner maintenance
provision in the Declaration of
Trust, they must provide a
written response within 15 days
that the unit is being adequately
maintained;
● Should the owner fail to respond,
enter the unit under the emergency
powers in the Declaration of Trust
solely for the purpose of verifying
heat, drain the hot water heater
tank, and turn off the water inside
the unit;
● If there is no heat, have the utility
accounts placed in the name of the
trust, keep heat at a minimum for
preservation purposes, and pay
the ongoing costs;
● Regularly inspect vacant units
throughout the year to ensure
that no other issues have arisen,
such as wildlife seeking shelter.
Condo Media - March 2022

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