Q&A: Water Damage Woes

Q: I live in an 18-year-old, 40-unit townhome association in the community of Des Plaines. It seems that, according to our declaration and bylaws, the association owns and maintains the entire shingle roof system including the skylights and flashings. Due to the poor condition of our original roof, the association replaced our entire roof system approximately 7 years ago. Also, according to our declaration and bylaws, each unit owner is required to have their individual homeowner’s insurance policy include any casualty losses to their roof elements in lieu of the association having general coverage in theirs. In the wake of the hail storm we had last spring, about 30 percent of the unit owners sustained significant damage to their roofs to where they have to be completely replaced by making claims to their own insurance companies. I’m included in this count. The board deferred to the management company for possible assistance with regulating or keeping some sort of control over this program.  Since everyone is self-insured for their roofs, the management company seemed only to respond by requiring that all unit owners have their roofs inspected under a (hail damage) claim to their insurance companies and send the management company copies of those reports for review. Meanwhile, the management company is instructing the owners that have already had their roofs inspected and approved for replacement to go ahead and find a roofing contractor and have the work completed on their own. Hence everyone is doing their own thing, hiring their own contractors and having their work done with little or no involvement or regulation via the association or the management company. I have several questions or concerns regarding this situation:  1. Is this scenario typical for associations like ours that have the unit owners insuring and repairing elements that are owned and maintained by the association? 2. After having their roof replaced under their own insurance claim, how does a unit owner turn the ownership and maintenance back over to the association? It’s my guess that it would after the contractor’s warranty period? 3. My insurance policy, like most of the others, carries a $1,000 deductible. When applied to a roof claim, is the association in any way accountable for this payment especially since the association gets a new roof out of the deal?  

                                       ---Roofing It

A: “This is a good example of how a poorly drafted declaration can cause confusion and difficult situations for an association's board of directors,” says Naperville-based attorney Peter Jagel of the Law Offices of Peter H. Jagel, P.C. “If the association owns and maintains the entire roof system, then why are the individual owners insuring and repairing these common areas? I would imagine that if one were to add up the total of all the individual policy premiums for the roof system, it would far exceed the cost of one premium for the association. Although it sounds like the board is trying to follow the declaration, these declaration provisions may be in conflict and need to be amended.  

“Your example also highlights the additional problems of lack of uniformity, quality of workmanship and warranty issues that this procedure invites. Does  the association have architectural rules that require a certain brand of  shingle? Color of shingle? Quality of shingle? The association must take an active role in any replacement or repair of an exterior element of the townhomes, particularly when it owns and is responsible for that element. The  only way to ensure uniformity and prevent a "pig in a poke" situation is to  control this replacement/ repair process.  

“If the declaration and bylaws do not provide for the deductible to be refunded from the association, then it is probably the responsibility of the respective owner. Remember that the amount of the deductible is usually tied to the amount of the premium and, as the premiums are currently determined by, and paid by,  the owners, the deductibles would be paid by the owners as well.  

“Your association needs to have consistent provisions in its governing documents.  If the board cannot adopt rules to supplement the declaration and bylaws to deal with these declaration conflicts, the association may have to consider an amendment to the declaration to resolve these issues once and for all.” 

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