One of the most devastating incidents that can occur in a condominium is a fire, especially if it involves personal injury or loss of life.
By Deborah Goonan, Independent American Communities
When a fire occurs in a condominium association, owners and residents are affected on multiple levels.
Initially, for some residents, there is the shock of losing one’s home and personal belongings. And of course, there is the emotional toll of the loss of a neighbor, a good friend, or a loved one as a result of a fire. Survivors may experience stress and anxiety from the traumatic event.
Then in the months that follow, residents of damaged units must relocate, either temporarily or permanently. However that can be a daunting task, especially on short notice in a tight rental market. Condo owners are especially hard hit, burdened with paying rent in addition to any mortgage, taxes, insurance, and assessments for their damaged condo.
Owners of affected units must also cope with the seemingly endless insurance bureaucracy. Disputes over who will be responsible for paying for repairs and reconstruction are common. Who will ultimately bear the financial burden: the condo association’s insurance company, the unit owner’s insurance company, all of the owners in the association, or only the owners of individual units?
Repairs can can take months to complete, sometimes more than a year. Frustrations run high as condo owners of all units in the association, whether directly involved in the fire or not, must continue to pay regular assessments, and possibly special assessments to cover insurance deductibles and certain repairs that are not covered by insurance.
Sometimes the cost to repair and rebuild is much higher than insurance reimbursements. When the condo association or unit owners cannot afford to rebuild, burnt out units get boarded up and remain abandoned. The resulting blight and stigma can create a downward spiral to financial ruin for the association.
Although unit owners are required to maintain insurance policies for repairs to the interior of their own units, there is no guarantee that all of one’s neighbors are doing so.
In addition to all of these challenges, a condo association might also face a lawsuit from victims of the fire, or the estate of a deceased former resident, as in this example from Texas.
Briarwick Condominium Owners Association accused of negligence after fire on property
by Philip Gonzales | Jul. 13, 2017, 3:19pm
HOUSTON — Parents and an estate administrator are suing condominium owners’ association and project manager, citing alleged gross negligence.
Lizzi Cherian, Cherian M. Cherian and Susan Cherian Thomas, independent administrator of the estate of Shirley Sara Cherian, deceased filed a complaint June 2 in the Harris County District Court against Briarwick Condominium Owners Association Inc. and Simple Management Solutions, alleging they breached their duty to maintain the condominiums in a reasonably safe condition.
A lawsuit such a this one recently filed against Briarwick COA makes it especially difficult to heal social and emotional wounds following the disaster. It also creates additional negative publicity and financial stress on the association.
Worst of all, owners in a condo association can end up paying for willful negligence of their condo board and manager, even though unit owners have no control over the daily operation of their associations. In fact, owners may be completely unaware of deferred maintenance that could create a fire hazard. And in cases where poor maintenance is obvious, sometimes a condo association manager or board has been unwiling or financially unable to respond to complaints from residents.
A condo association board is responsible for obtaining and maintaining adequate insurance, too. Condo owners have no direct control over the policy decisions made by their association board, yet all condo owners end up paying the price if the associations leadership fails to choose appropriate insurance coverage.
Practically speaking, condo owners have few options to force their association to perform necessary duties. Furthermore, many condo boards also lack necessary knowledge and guidance to make wise management decisions.
Therefore, it should come as no surprise that recovery from a significant fire can devastate or bankrupt a condo association, especially when facing costly liability litigation on top of recovery efforts.
The consumer should note that none of these inherent risks of ownership are disclosed to buyers or heirs of association-governed residential property.
Previous reports of Briarwick condo fire: