“Association Property Damage: Always a Doozy” – Attorney Kelly Elmore walks through the specific steps of assessing and addressing property damage in an association, including securing proper documentation, determining liability, and filing insurance claims. (13 mins.)
The KSN Podcast examines various aspects of association law, landlord/tenant issues, property tax appeals, and more. In each episode, KSN attorneys share their experience and knowledge as they discuss legal updates, best practices, industry trends, and more. KSN Podcast episodes are available at www.ksnlaw.com/podcast.
Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.
For more info about our law firm and legal services, please visit www.ksnlaw.com
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Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.
For more info about our law firm and legal services, please visit www.ksnlaw.com.
Episode Transcription
Bernie: You’re listening to the KSN podcast and today we’re talking about addressing property damage. Welcome to the KSN podcast where you will hear from Kovitz Shifrin Nesbit attorneys as they share their experience and insight on legal issues surrounding community associations, collections, property tax appeals, and landlord tenant law. I’m Bernie and today we’re joined by KSN attorney Kelly Elmore. Kelly practices condominium, townhome, and homeowner association law and has extensive background as a litigator. Welcome Kelly to the podcast.
Kelly: Thank you. It’s great to be here.
Bernie: So our topic today is property damage. Something that if you live in a condo, townhome or homeowner association can be very complicated to address depending on the severity and the scope of the damage.
Kelly: That’s exactly right. There’s a lot of players involved anytime you’re dealing with a situation where damage has occurred. You have the association board, the unit owner. Sometimes there might be more than one unit owner involved in a damaged situation. Certainly the maintenance staff, property management, as well as the insurance adjusters. So you really have to be able to understand each of the different roles that each of these individuals has.
Bernie: So, let’s jump right in. If an association is addressing property damage, where should they start?
Kelly: Well, first and foremost, you’re going to want to get the full story. There’s nothing worse than investigating a claim or sending out notices only to find out later that you didn’t have the entire story. So, first and foremost, what we like to do is define the cause and the scope of the damage. Certainly, you’re going to want to secure the damage area, do any sort of remediation that might be necessary. I know this is a big issue anytime we have water and filtration type issues. So before anything, secure the area, make sure that you have immediately locked up the source of the damage so that further damage is not continuing. Then you’re going to want to identify the appropriate parties to have come out and evaluate the damage such as plumbers, roofers, general contractors. Depending on the scale of the damage, multiple parties might be involved.
Bernie: And that’s where you have not only multiple parties, but maybe multiple agreements or contracts, because you are working with people who are experts in roofing or plumbing and a board who may not be experts in contracts or contract review is essentially working with an agreement that ultimately, and let’s be honest, is to the benefit of the plumber or the roofer.
Kelly: Absolutely. Especially in a water infiltration situation where you’re going to need, not just a plumber to come and resolve the issue, but you might also be hiring a remediation or restoration company to come in and do work before you can actually secure and resolve the issue.
Bernie: So after you define the cause and the scope of the damage, part of getting the full story also involves documenting and inventorying.
Kelly: I think this is the favorite part that us attorneys like to address. Absolutely, you’re going to want to document the damage through photographs, videos, other types of evidence, and ensure that you have a complete inventory of each and every aspect of the property or personal property that might have been damaged. In the case of emergency level type damage, the responding fire or police department should also be able to provide a report upon request and all of that would go into the association’s file on this issue. This documentation is likely going to be essential if the association ultimately files an insurance claim, but it’s also highly recommended just that you have it for your record.
Bernie: So is this where the association should determine liability for the damage? Because there’s a lot of players involved.
Kelly: At this point, I certainly would recommend the board or manager to reach out to the association’s counsel. We’ve been asked over the years for draft opinion letters as to if water damage occurs, whose responsibility it is and what I always advise my clients is that it really depends on the facts of each and every particular situation. What our job then to do is to determine the liable party for each damaged element. In the case of a condominium association, for example, the Illinois condominium property act specifically defines the boundaries of units as well as each element of the property as belonging to a specific party, unless otherwise outlined in the association’s declaration. So in this context with a condominium association, liability can shift depending on the cause and extent of the damage. So it’s important to contact your association attorney and refer back to the association documents in any applicable law when making the determination.
Bernie: And this is where insurance gets involved.
Kelly: That’s right. So it’s really imperative that anytime there’s a substantial damage type of claim that every party is filing a claim with the insurance company. So not only should the insurance for the association likely be notified, but also in the case of a unit owner, they should be contacting their insurance company with their homeowners insurance and if there is by chance also a tenant involved, the tenant should likely be contacting their tenant insurance company.
Bernie: And are all claims covered under the association’s insurance?
Kelly: Not necessarily. What the association’s insurance company is going to do is to determine whether or not a claim is actually an insurable loss and if so, under which policy does it apply. So there are many types of damage situations that might not be considered an insurable loss under the associations insurance and it might not be in other cases, even worth filing a claim if we’re talking about damage that is very, very small. So again, as association counsel, this is what we work with the boards and the property managers to work through to determine if a claim should be submitted and if it’s likely going to be covered.
Bernie: All right, Kelly and I are going to take a quick break, but when we get back, we’ll get into the next steps when addressing property damage in an association.
Joseph: Hi, I’m attorney Joseph Scharnak and I’d like to ask you if you’ve downloaded the KSN app? Here are some of the apps features; 24/7 real-time access to KSN collection status online, the CSO, it’s a portal that features updates on active collections, foreclosures and landlord tenant matters, articles and booklets authored by KSN experienced association taxed and landlord tenant lawyers, access to our schedule of upcoming educational events and you can view snapshot profiles of all of KSN’s attorneys with their contact information and mobile accessibility. The KSN app is now available for free download in the iTunes app store for your iPhone and iPad. The App is also available for download in the Google play store for your Android phone or Android tablet. Just search for Kovitz Shifrin Nesbit We invite you to download the KSN app and learn what our law firm can do for you. We look forward to demonstrating how Kovitz Shifrin Nesbit has earned the trust of thousands of clients for over 30 years.
Bernie: And we’re back. I’m here with attorney Kelly Elmore and we’re talking about addressing property damage in an association. So Kelly, we’ve talked about all the work involved in determining the scope and liability, as well as filing with insurance, is it time to start making repairs?
Kelly: So, in making repairs time is of the essence. Mitigating the source of the damage is often the most critical step. As I mentioned earlier, anytime you’re dealing with water infiltration situations or even fire, one of the primary aspects of proceeding down this path is making sure you’ve remediated the damage. Mitigating the source of the damage is often the most critical step as well, and should be done as quickly as possible to prevent further harm to the property. I will note that although associations do want to quickly address the property and address the source of the leakage or other type of damage. Repairs to damaged properties should not be made until the insurance provider has been able to inspect and respond to the claim. So kind of going back to what we were talking about keeping documentation and creating a record, we also want to be able to give the insurance companies ample time to come out and make their own record as well. To not allow the insurance company to do so could potentially jeopardize their analysis on whether or not something is an insurable claim. In addition, negligence and making repairs could also escalate claims. For example, if the condo association was negligent in repairing a damaged common element, then the claim for any resulting interior damage could evolve from a property damage claim into a liability claim by the owner. Similarly, if an owner fails to make repairs to the source of damage within their property, for example, a leaky toilet or overflowing shower type situation, then the condominium association can often perform the repair and charge the cost back to the owner.
Bernie: And all of these parts are essentially reactive; taking pictures of water damage, filing an insurance claim. This is all after the fact, but really step four when we’re talking about property damage response is having a plan in place so that way you can quickly respond to issues.
Kelly: Absolutely and you’ll want to set your association up for success. So the time spent in setting up prevention and response strategies is well worth the time saved when disaster inevitably strikes. What I mean by that is conducting an annual review of association documents and policies, which might include reviewing the associations, declaration, and bylaws to ensure they’re in compliance with the act, reviewing the governing documents to ensure that they clearly define ownership and liability for all portions of the property, including the common elements, limited common elements in units. In addition, reviewing the association’s insurance coverage to ensure compliance with the act and the association’s requirements under the governing documents. And lastly reviewing the associations insurance coverage to ensure all reasonable risks are covered. In addition to conducting the review of the associations documents, we would also recommend that the association schedule regular inspections and preventative maintenance. I can tell you that as my time as a litigator for over a decade, those associations who did not have preventative maintenance plans in place often found themselves years later in court with very angry owners who had their property destroyed because simple maintenance was not completed on the property and damage that could have been prevented was never addressed.
Bernie: And while you’re working with regular inspections and preventative maintenance, like you mentioned, you’re developing relationship with trades people where you come in, where an attorney can help is in reviewing those governing documents, all those vendor contracts to make sure that an association is again in a good place to have a plan.
Kelly: That’s right. And then these vendors and professionals will also help you reduce the association’s liability by ensuring that the common elements and limited common elements are in optimal shape year round.
Bernie: So, Kelly, what do you recommend for association board members or property managers who are looking for more guidance?
Kelly: Association should be diligent in monitoring the condition of the common elements. Good maintenance can prevent a lot of problems. As I mentioned previously, an attorney can help an association review governing documents and also help you vet those vendor contracts.
Bernie: That was KSN attorney, Kelly Elmore. She practices condominium, townhome and homeowner association law in the city of Chicago and the surrounding suburbs. Kovitz Shifrin Nesbit is an experienced legal resource ready to provide you with quality advice and exceptional service. We look forward to demonstrating how we’ve earned the trust of thousands of clients over the past 35 years. If you’d like to reach Kelly or any of KSN’s experienced attorneys, please call 855-537-0500 or you can visit ksnlaw.com, complete the contact form and send us a message. Thanks for listening.
Bernie: The music for this show is brought to you by freepodcastthemes.com. Please note that the material contained on the KSN podcast is for informational purposes only and does not constitute legal advice. No attorney client relationship is established by your review or receipt of the information contained on the KSN podcast. You should not act on the information discussed on the KSN podcast without first obtaining legal advice from an attorney duly licensed to practice law in your state. While Kovitz Shifrin Nesbit has made every effort to include up-to-date information on the KSN podcast the law can change quickly, accordingly please understand that information discussed on the podcast may not yet reflect the most recent legal developments. Material is not guaranteed to be correct, complete or up to date. Kovitz Shifrin Nesbit reserves the right to revise or update the information and statements of law discussed on the podcast at any time without notice and disclaims any liability for your use of information or statements of law discussed on the podcast or the performance of the podcast generally. The KSN podcast may be considered advertising in some jurisdictions under applicable laws and or ethical rules and regulations.
Please note the material contained on the KSN Podcast is for informational purposes only and does not constitute legal advice. No attorney-client relationship is established by your review or receipt of the information contained on the KSN Podcast. You should not act on the information discussed on the KSN Podcast without first obtaining legal advice from an attorney duly licensed to practice law in your State. While KSN has made every effort to include up-to-date information on The KSN podcast, the law can change quickly. Accordingly, please understand that information discussed on the podcast may not yet reflect the most recent legal developments. Material is not guaranteed to be correct, complete, or up to date. KSN reserves the right to revise or update the information and statements of law discussed on the podcast at any time, without notice, and disclaims any liability for your use of information or statements of law discussed on the podcast, or the performance of the podcast generally. The KSN Podcast may be considered advertising in some jurisdictions under applicable law/s and/or ethical rules/regulations. © 2020 Kovitz Shifrin Nesbit, A Professional Corporation.