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Subject: Water damage by contractors

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DouglasD
(Texas)

Posts:8

02/07/2007 7:21 PM
I am new in the COA board member business and every day is a learning experience. Here is my newest challenge. We had a contractor working on the third floor condo and they left a water hose on and it split and flooded the two units below them. The contractor had no insurance and nether did the owners. The two units below them are suing the owner of the top floor. Not sure how that is going to work out and floor number two had no insurance and floor number one did not have enough to cover all damages. Now for the real issue, the person on the firs floor wants us to go in and inspect the top floor unit for mold. She wants us the COA to pay for inspectors. I am not sure what our liability is on this and what do are the by-laws or rules do other associations have in place to prevent this. Thanks For listening and any help is welcome Doug

BrianB
(California)

Posts:1748

02/07/2007 7:30 PM
i am not terribly positive, but i would suggest the COA let the insurance companies battle it out. Unless you get a demand from an attorney, that should be your line in the sand: let the insurance work first, then figure out what to do after they are done.

WilliamT
(Arizona)

Posts:489

02/08/2007 6:13 AM
The HOA caused the work to be performed and contracted with a contractor who had no insurance. That is the fault of the HOA. If the contractor has no insurance, then it's up to the HOA to cover the damage. You should contact the HOA insurance, and they could deny coverage, and could even cancel your coverage on the basis that they feel the HOA was negligent in it's fiduciary duties by hiring an uninsured contractor. You can talk this over with your insurance agent who may tell you it's best to cover this damage yourself rather than to face a huge rate hike, or a cancellation. My recommendation is to consult an attorney right away. In the meantime you can begin to go after the contractor. The owners should be suing the HOA, and when they learn that, they will. So I suggest you get pro active and find out all you can about the contractor, while trying to get him to pay for the damage he caused. Get his home address and see if he owns it. They you can sue him.

DwightT
(Idaho)

Posts:474

02/08/2007 6:43 AM
William - Just curious - where do you read that the HOA caused the work to be performed? I read the original post as the owners of the third floor unit were having the work done, and those owners (and the contractor) did not have insurance. If it was the HOA that hired the contractor, then yes, the HOA is on the hook for damages. Otherwise it's up to the unit owner to cover it.

WilliamT
(Arizona)

Posts:489

02/08/2007 6:50 AM
He said he's on the board, and then he said "we" had a contractor. That makes it sound like the board had the contractor there. If he means that the owner hired the contractor, then I agree it is the owner's problem.

BradP
(Kansas)

Posts:1742

02/08/2007 7:06 AM
Whoever hired the contractor is the one in trouble. You should always make sure a contractor is insured before letting them work for you.

DwightT
(Idaho)

Posts:474

02/08/2007 7:58 AM
Posted By WilliamT on 02/08/2007 6:50 AM He said he's on the board, and then he said "we" had a contractor. That makes it sound like the board had the contractor there. Ah. I can see that now. I saw the "we" as a general "We have a problem", not as the specific "we did this". The joys of on-line communications. Shows that we all need to be careful in choosing our words.

JoeW1
(New York)

Posts:728

02/08/2007 8:38 AM
DouglasD - owners in a COA are typically required by their mortgage lenders to carry adequate insurance. Why don't they have it?

DouglasD
(Texas)

Posts:8

02/08/2007 11:48 AM
Sorry about the miscommunication The Condominiums use to be a retirement community and they are now being converted to Condos. People had an option to purchase the condos as is or fully remodeled. The unit in question was bought as is and the owner hired a contractor without insurance. We immediately messaged out that future remodel will require some sort of proof of insurance ether by the owner or contractor. My real question is that one of the residence wants use to require that the COA goes in after water damage to determine if there is mold after a certain time frame. This would have to be paid for by the COA and then possibly billed to the home owner. We are not sure how to address this because we don’t want to have a mold problem and of course we do not have unlimited funds.

JM2
(Oregon)

Posts:439

02/08/2007 12:50 PM
The Unit Owner's insurance company will have to work with the COA's insurer to work out the details on who pays what. It would be in the interest of the COA to make sure that all moisture problems are resolved prior to any reconstruction taking place. In general, if it is all dried up and there's no moisture problem left behind, there should be no mold above normal background levels. You may want to look up one or more of the following: An engineering firm that specializes in your type of building and deals with construction & construction defect issues. A mold remediation company. An environmental testing company. If you've dried everything out, there is no mold beyond background levels, there are no leaks in the building, then you should be able to proceed; but work with a specialist if you have concerns, and rely on their contractor's license and insurance and expertise to guarantee that the problem is properly remediated. This is an issue where a visit with your COA's attorney may be worthwhile, to check out any issues regarding who should pay for what, as well as to discuss the request for mold testing later on. I would suggest relying on the local experts. Also, be sure that any contractor that comes on premises to do work, give the COA a certificate of insurance, naming the COA as a co-insured; if a homeowner hires, they should name the homeowner as well; and that they are licensed by your state. J. Patrick Moore, CMCA Compliance Coordinator Forest Heights Homeowners Association Portland, Oregon

GeorgeG
(California)

Posts:6

03/04/2007 10:45 AM
I'm a licensed insured and bonded contractor in los angeles county. Ha Ha to the HOA. I see these contractors and know that's it's just a matter of time before their low bids are greatly off-set by the problems they create. There's a reason that the state requires licenses and bonds and HOA's require insurance. Why would anyone let a contractor who cant measure up even step foot on their property. You can't afford to be a general contractor until you're good enough to be a general contractor

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