Advice: Condo Bldg vs. Unit Insurance

[flamesrule_kipper34]

Hi all,

Looking for some advice.

I'm the owner of a unit for a condo, unfortunately for our tenant (and ourselves) due to some sort of malfunction between the dishwasher and the water line the unit flooded. Caused issues in our unit and a few adjoining units as well.

I've been less than impressed for a few reasons, one being the condo mgmt company has kept me decidedly out of the loop with what's happened and work/repair performed. I've had to get my information directly from our tenant and obtaining the contact information of the restoration company and get an understanding of the work they've performed and process/timeline. The condo mgmt company has been incredible mum. In addition, my understanding was I'd be contacted to approve certain work/repairs in my unit and I found out after the fact that it was performed regardless. I was told later that this was due to the condo enacting "emergency" procedures to protect their bldg's self interest and this overruled the requirement to need for my approval.

Anyway, now most of the work has been performed and they've handed me the bill for the work performed on my unit and the affected units and have asked to send to my insurance to handle.

My insurance, less than impressed, has told me to send the condo's insurance info and by-laws and has said they do not expect to pay for most of this being the secondary insurance.

I'm wondering if others have found themselves in this situation and what to expect?

I'm also trying to get this resolved expeditiously because currently my tenant is without flooring in parts of the unit due to the damage and I've been asked to hold off by insurance on that until the liability gets resolved. I'm worried how long that will take and also how big of a headache I should expect this to be going forward.

Any thoughts/advice from folks would be greatly appreciated.

[lazypucker]

F-ing condo board and management company.

That's all I am going to say...

[getbak]

The first thing you should do is review the condo bylaws and the corporation's insurance.

The most-important thing to know is that they can't charge you more than the cost of the corporation's insurance deductible -- even if they choose not to make a claim. Check the insurance certificate (which they should send you every year when it renews) to find out what the deductible is.


In the bylaws, there may be a clause under "Insurance" that reads something like this:

In the event an owner incurs or suffers damage or loss to the windows or doors (which constitute part of the unit) or to any interior finishing or improvements of his unit and/or the common property adjacent thereto that is covered or insured under any insurance policy of the Corporation and such owner elects to pursue recovery of such loss or damage under any insurance policy of the Corporation, such owner shall be responsible for and pay the full amount of any deductible on such claim if, in the sole opinion of the Board, such damage or loss was caused by or arose out of any act or omission by such owner, his servants, agents, licensees, invitees or tenants.

The last part is very important: "damage or loss was caused by or arose out of any act or omission by such owner, his servants, agents, licensees, invitees or tenants". That makes it a question of did you (or your tenant) do something (or fail to do something) that caused this damage to occur? A leaky dishwasher is often given as an example for damage that would not qualify as an "act or omission" on the part of the owner/tenant (unless it was improperly installed or installed without approval).



Definitely send the information to your insurance company and let them advise you as to the next steps to take.

[I-Hate-Hulse]

I hate to say this, but if the leak came from a bad connection between your waterline and your dishwasher - you and your insurance could be on the hook to respond. Typically items within the wall are the condo's responsiblity, but anything after that is the resident. If the waterline behind the wall leaked, it would be the condo's fault, but as it's past that - it's unfortunately yours. As Getbak says above - check your bylaws. The devil will be in the details.

Condo boards are being killed for water events in their buildings, and insurers are becoming increasingly aggressive in passing on liability on to individual unit owners. The condo board is just the messenger unfortunately....

That said, your property manager seems to be terrible at communication. On the bright side, you have insurance which is incredibly important as a condo owner for this exact reason. Let your insurance companies duke it out, just like if it was a car accident.

Originally Posted by getbak

The first thing you should do is review the condo bylaws and the corporation's insurance.

The most-important thing to know is that they can't charge you more than the cost of the corporation's insurance deductible -- even if they choose not to make a claim.

Note that this would only apply if the condo's insurance accepted the claim. If they decline to respond, I would suspect the Board / Property Manager would have no choice but to go after the OP's personal liability insurance.

[DoubleF]

It could be a little more along the lines of a bad property manager than a board who is ignoring you. The board might know as little (or even less) than you do. I've seen that before.

I've also seen condo boards are incompetent jackasses who do everything to fight everyone... but let's assume you don't have a board like that.

Having insurance on your condo and also requesting the tenant to have their own tenant insurance is a great way to ensure less headaches going forward. I think for your case, you forward the info to your insurance and let them duke it out with the management company/board/condo insurance. It should be relatively painless for you since you have multiple layers of insurance that should cover everything. I'd also mention to your insurance that you're consider offering a rent reduction while the tenant has no floor and whether they'd cover that too. I seem to recall I had heard of a situation like that recently and insurance was willing to cover a portion but not all of the rent reduction. I think it's worth looking into to be fair to the tenant who based on limited information sounds to be quite reasonable with the situation.

[flamesrule_kipper34]

Originally Posted by getbak

The first thing you should do is review the condo bylaws and the corporation's insurance.

The most-important thing to know is that they can't charge you more than the cost of the corporation's insurance deductible -- even if they choose not to make a claim. Check the insurance certificate (which they should send you every year when it renews) to find out what the deductible is.


In the bylaws, there may be a clause under "Insurance" that reads something like this:


The last part is very important: "damage or loss was caused by or arose out of any act or omission by such owner, his servants, agents, licensees, invitees or tenants". That makes it a question of did you (or your tenant) do something (or fail to do something) that caused this damage to occur? A leaky dishwasher is often given as an example for damage that would not qualify as an "act or omission" on the part of the owner/tenant (unless it was improperly installed or installed without approval).



Definitely send the information to your insurance company and let them advise you as to the next steps to take.

Originally Posted by I-Hate-Hulse

I hate to say this, but if the leak came from a bad connection between your waterline and your dishwasher - you and your insurance could be on the hook to respond. Typically items within the wall are the condo's responsiblity, but anything after that is the resident. If the waterline behind the wall leaked, it would be the condo's fault, but as it's past that - it's unfortunately yours. As Getbak says above - check your bylaws. The devil will be in the details.

Condo boards are being killed for water events in their buildings, and insurers are becoming increasingly aggressive in passing on liability on to individual unit owners. The condo board is just the messenger unfortunately....

That said, your property manager seems to be terrible at communication. On the bright side, you have insurance which is incredibly important as a condo owner for this exact reason. Let your insurance companies duke it out, just like if it was a car accident.



Note that this would only apply if the condo's insurance accepted the claim. If they decline to respond, I would suspect the Board / Property Manager would have no choice but to go after the OP's personal liability insurance.

Thanks for the tips guys, after reviewing some of the documentation including a CPer sending me the Govt of AB's general Condo Act info and pairing that with my condo by-laws here's what I see:

I was encouraged originally to see the general condo act insurance info:

"the insurance placed by the corporation is deemed to be
first loss insurance,

the insurance placed by the owner of a unit in respect of
the same property that is insured by the corporation is
deemed to be excess insurance." and " a
corporation must place and maintain insurance against the
following perils: ...water damage caused by sewer back-up or the sudden and
accidental escape of water or steam from within a
plumbing, heating, sprinkler or air conditioning system or
a domestic appliance that is located within an insured
building..."


Condo By-Laws
"an owner shall pay the insurance deductible for the losses claimed where the owner or occupant of the unit causes the loss..."

Condo Insurance Deductibles
Sewer Back-up $50,000
Water Damage $50,000
Equipment Breakdown $2,500
Property Damage $1,000

The total damage was ~15K and the deductibles are much higher than that it seems, so I can see the hesitancy to go thru that source of coverage on their end.

[Weitz]

You will likely be on the hook with your insurance as it doesn't raise to the value of the buildings deductibles and I don't think you will be able to lay it on the Tenant IMO. Which, is where it would go anyway (someone can correct me). Your issue caused this so even if the Boards insurance covered it they would be coming to you for the deductible (or more).

[Cecil Terwilliger]

I recently spoke to my insurance company about this. My understanding is your insurance will cover if you pay the deductible. They will then cover the cost of repairs or they will pay the much larger deductible for your condo board’s insurance if that’s where the claim goes thru.

I can’t speak for any issues surrounding negligence and that sort of thing tho.

[blankall]

Something similar happened to me.

You should be on for the strata insurance deductible, and the strata should cover anything in excess of that. If the damage is less than the strata insurance deductible, then the strata's insurance is no longer responsible. Through your own insurance, you are basically insuring the strata's deductible payment, which you are responsible for. You will have to pay your own deductible on your insurance of the stata's deductible.

Don't know if that makes any sense. However, the strata may be correct here, and it is likely your insurance that is on the hook, as the loss is less than the deductible. It's a courtesy for the strata's insurance to keep you in the loop during the repair process, but they don't have to.

Honestly, I know this sucks, but you're very lucky to only be responsible for $15,000 of damage with a water leak. If someone finds any spot of mold somewhere, they can start tearing apart entire walls, sets of tiling, etc...and the cost will begin to spiral out of control dramatically.

[calf]

Are you sure they weren't standing in the dishwasher?

[bizaro86]

Originally Posted by blankall

. If someone finds any spot of mold somewhere, they can start tearing apart entire walls, sets of tiling, etc...and the cost will begin to spiral out of control dramatically.

This. Also, the people who recommend how much more work is necessary (restoration company) are also the people who are getting paid to do much of the work. Not huge incentives for them to minimize costs there.

[flamesrule_kipper34]

As a follow-up.

I received the final invoices from the condo board today.

The final bill was 15k: 5k in emergency work (for my unit and affected units), 5k in repair work for my unit (non-emergency and I was given an estimate and asked if I'd like to go with this company or someone else as it was up to me to decide).

The first two repairs mentioned above were not a surprise and I had no issue with and would fall right at the nose of my insurance coverage which includes 10k less the deductible.

The third invoice I received was a surprise and not communicated earlier which was another 5k for non-emergency repair work to the other affected units. This was done by the original restoration company and I wasn't in the loop whatsoever in terms of those original estimates, 'shopping' around/comparing quotes and etc.

I'm a bit baffled by this, I understand that I/my insurance could be on the hook to repair the affected units...but given it's non-emergency work, shouldn't I be in the loop/process to confirm/approve those repairs? Seems like we could have had this repaired at a much lower price given it was non-emergency work from other contractors and it would have impacted my decision making in the the repair I did for my own unit given this could be potentially 5k out of pocket.

Has anyone come across this situation before? Just want to have as much info as possible ahead of speaking with my insurance and the building.

Thanks again in advance.

[Weitz]

Should you have a say in who someone uses to fix their own unit? Even if you are footing the bill? I'm not so sure. Probably should have been at least kept in the loop though. Its like if you got in a car accident and want to get the other persons car fixed out of your own pocket instead of insurance. I wouldn't be shopping around I would be taking it to whoever I trusted the most.

[flamesrule_kipper34]

Originally Posted by Weitz

Should you have a say in who someone uses to fix their own unit? Even if you are footing the bill? I'm not so sure. Probably should have been at least kept in the loop though. Its like if you got in a car accident and want to get the other persons car fixed out of your own pocket instead of insurance. I wouldn't be shopping around I would be taking it to whoever I trusted the most.

I see what you're saying, but in the scenario you listed don't you typically get a 'couple of estimates' before the liable party agrees on the payment? Especially if it may or may not be 100% covered by their insurance? I thought legitimately there typically is more than one estimate in a scenario like that...because it seems to highly incentivize abusing and getting the most expensive repair possible at the cost of someone else/third party..?

[Weitz]

Originally Posted by flamesrule_kipper34

I see what you're saying, but in the scenario you listed don't you typically get a 'couple of estimates' before the liable party agrees on the payment? Especially if it may or may not be 100% covered by their insurance? I thought legitimately there typically is more than one estimate in a scenario like that...because it seems to highly incentivize abusing and getting the most expensive repair possible at the cost of someone else/third party..?

I wouldn't. If its 100% the other person's fault you either pay to get it fixed where I want or go through insurance. I'm not getting estimates.

My wife had her car hit a few years ago and was going to get 3 estimates and I stopped her and told her to go to X store get your estimate give them the option to pay or call insurance. Saved her a ton of a time and headache. You shouldn't be given a favor for inconveniencing someone else (not trying to be rude or mean here just sort of stating where I am coming from).

[Geraldsh]

I would ask to see the estimates before paying the bill. Assume you are in the right to do so and let them try to justify why estimates were not required.

[Firebot]

Originally Posted by flamesrule_kipper34

As a follow-up.

I received the final invoices from the condo board today.

The final bill was 15k: 5k in emergency work (for my unit and affected units), 5k in repair work for my unit (non-emergency and I was given an estimate and asked if I'd like to go with this company or someone else as it was up to me to decide).

The first two repairs mentioned above were not a surprise and I had no issue with and would fall right at the nose of my insurance coverage which includes 10k less the deductible.

The third invoice I received was a surprise and not communicated earlier which was another 5k for non-emergency repair work to the other affected units. This was done by the original restoration company and I wasn't in the loop whatsoever in terms of those original estimates, 'shopping' around/comparing quotes and etc.

I'm a bit baffled by this, I understand that I/my insurance could be on the hook to repair the affected units...but given it's non-emergency work, shouldn't I be in the loop/process to confirm/approve those repairs? Seems like we could have had this repaired at a much lower price given it was non-emergency work from other contractors and it would have impacted my decision making in the the repair I did for my own unit given this could be potentially 5k out of pocket.

Has anyone come across this situation before? Just want to have as much info as possible ahead of speaking with my insurance and the building.

Thanks again in advance.

I know you are looking this in your eyes, but take it from the other side, if your unit got flooded by no fault of your own, and caused from a tenant occupied condo. Do you think the owner of that condo should have a say whatsoever if your own flooded unit needs to be repaired?

To the board / property management company / insurance / affected condo owners, you are the party responsible. You do not get a say, as an owner you are subject to the condo bylaws, any appeal or discussion will be immediately rejected.

Restoration is extremely expensive, especially when it comes to water damage. I have dealt with it before. 5K bill for impacted units is fairly normal for water damage and actually on the lower end. Only takeaway is to take this as a lesson learned and do regular maintenance on your units to prevent this possibiity from happening again. Very likely your tenant plugged up the dishwasher or did something, but it will be hard to prove and harder to collect anything from the tenant.

The caveats of being a landlord and the risks that come from renting (speaking as being both a landlord and on a condo board with multiple stories of both).

[Geraldsh]

I see Weitz has a different opinion- doesn’t mean we’re both wrong, just means there may be room to negotiate.

[flamesrule_kipper34]

Originally Posted by Weitz

I wouldn't. If its 100% the other person's fault you either pay to get it fixed where I want or go through insurance. I'm not getting estimates.

My wife had her car hit a few years ago and was going to get 3 estimates and I stopped her and told her to go to X store get your estimate give them the option to pay or call insurance. Saved her a ton of a time and headache. You shouldn't be given a favor for inconveniencing someone else (not trying to be rude or mean here just sort of stating where I am coming from).

Originally Posted by Firebot

I know you are looking this in your eyes, but take it from the other side, if your unit got flooded by no fault of your own, and caused from a tenant occupied condo. Do you think the owner of that condo should have a say whatsoever if your own flooded unit needs to be repaired?

To the board / property management company / insurance / affected condo owners, you are the party responsible. You do not get a say, as an owner you are subject to the condo bylaws, any appeal or discussion will be immediately rejected.

Restoration is extremely expensive, especially when it comes to water damage. I have dealt with it before. 5K bill for impacted units is fairly normal for water damage and actually on the lower end. Only takeaway is to take this as a lesson learned and do regular maintenance on your units to prevent this possibiity from happening again. Very likely your tenant plugged up the dishwasher or did something, but it will be hard to prove and harder to collect anything from the tenant.

The caveats of being a landlord and the risks that come from renting (speaking as being both a landlord and on a condo board with multiple stories of both).

Hmm an interesting perspective. If this is really how it's looked at, I think the lesson learned here would be to up the insurance coverage. For a condo especially for so many unknowns 10k seems low given what's happened. My concern going forward is that there is no incentive for the condo to keep costs low/manageable for non-emergency repair work (the emergency work I understand).

[FlamesKickAss]

The bylaws likely state they can only come to you for the condo corporations deductible, and nothing more.