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Subject: Emergency Repairs Invoice - Who Pays?
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AlexG6
(California)

Posts:3


09/04/2020 10:05 AM  
Hello HOA Talk!

We had an emergency repair on a backed up sewer line that resulted in significant damage to common areas, and two individual units. We've split up the cleanup, abatement and repair costs accordingly and all three parties have agreed to the amounts. The issue is that one of the units is waiting for insurance to pay an invoice ($5k). Our HOA management company is demanding that the HOA pay this unit's invoice, and submit a reimbursement request to the unit. In other words, we'd be issuing a loan for this unit.

The management company sated the following:
Since our company technically dispatched the vendor to your property (through the emergency afterhours line), the HOA is responsible for paying this invoice. We then charge the Unit this amount through a reimbursement assessment which is tacked onto his account. My other concern is that this Unit has a large outstanding balance that he is slowly paying down.

Is the management company right, in that the HOA is responsible for the costs and requesting reimbursement? Or do we continue to say that this is the Units responsibility for payment?

This is in Pasadena, CA and we are a small HOA with limited reserves.
JohnC77
(Washington)

Posts:136


09/04/2020 10:27 AM  
Is this a condo or stand alone homes. Being it's in Pasadena, I am guessing they're condos. Which means the sewer system might very well be the responsibility of the HOA.

I am guessing the invoice is made out to the HOA. The HOA, through it's agent made the call. I am sure the conversion went like, you'll get paid when the owners pay us (Good Luck, wink, wink).

So, yes, the HOA is on the hook to pay the invoice.

What your association needs is a HOA/Homeowner Responsibility Checklist drafted by the HOA management company, approved by an attorney and the insurance company, voted on and attached to your CCRs.
AlexG6
(California)

Posts:3


09/04/2020 10:31 AM  
These are townhomes. The sewer backup started in the main sewer lateral to the property, but backed up to inside the units as well. Both units and Board are in agreement that there is a shared responsibility here -- the HOA is on the hook for cleanup/repairs of common area, and the units are responsible for walls-in.

The question is does the HOA front the money for the Units responsibility and invoice, and then request reimbursement?

All three parties will eventually be reimbursed by the contractor's insurance that caused this issue. But that may take some time.
AugustinD


Posts:3889


09/04/2020 10:50 AM  
Posted By AlexG6 on 09/04/2020 10:05 AM
The management company sated the following: Since our company technically dispatched the vendor to your property (through the emergency afterhours line), the HOA is responsible for paying this invoice.
There's no technically to it: The HOA, via its agents, arranged for a contract with the vendor. The HOA is on the hook for the bill.

I hope separate agreements with the owners to divvy up the bill are well-documented.

Posted By AlexG6 on 09/04/2020 10:05 AM
We then charge the Unit this amount through a reimbursement assessment which is tacked onto his account. My other concern is that this Unit has a large outstanding balance that he is slowly paying down.
I do not think that this is the plumber-vendor's problem.
JohnC77
(Washington)

Posts:136


09/04/2020 10:54 AM  
Sorry, if it started in the main sewer line, then it is the HOA responsibility to pay for, meaning a shared expense of ALL homeowners. If the backup started in the garage disposal or toilet of a specific unit, different story.
AugustinD


Posts:3889


09/04/2020 11:01 AM  
Posted By AlexG6 on 09/04/2020 10:31 AM
These are townhomes. The sewer backup started in the main sewer lateral to the property, but backed up to inside the units as well. Both units and Board are in agreement that there is a shared responsibility here -- the HOA is on the hook for cleanup/repairs of common area, and the units are responsible for walls-in.
When the cause of the damage to the inside of units is due to something that happened on the common areas, in my experience as a director and owner, who is liable for the damage is not so clear. For now, I am going on the assumption that, whatever the facts are, all parties involved have agreed to divvying up the bill as you described. I think this is wise, especially if insurers are involved in determining and agreeing to the divvy-ing up. The insurers do this sort of thing all the time. Your HOA/condo and the owners involved here will likely spare themselves the expense of getting attorneys involved.
AlexG6
(California)

Posts:3


09/04/2020 11:09 AM  
I appreciate the advice everyone. What you're all saying makes sense -- the HOA (via its agent) engaged in a contract with this vendor and is thus responsible for payment. We'll be submitting this invoice for payment and add to the respective units statement for reimbursement.
CathyA3
(Ohio)

Posts:1231


09/04/2020 11:19 AM  
Posted By AugustinD on 09/04/2020 11:01 AM
Posted By AlexG6 on 09/04/2020 10:31 AM
These are townhomes. The sewer backup started in the main sewer lateral to the property, but backed up to inside the units as well. Both units and Board are in agreement that there is a shared responsibility here -- the HOA is on the hook for cleanup/repairs of common area, and the units are responsible for walls-in.
When the cause of the damage to the inside of units is due to something that happened on the common areas, in my experience as a director and owner, who is liable for the damage is not so clear. For now, I am going on the assumption that, whatever the facts are, all parties involved have agreed to divvying up the bill as you described. I think this is wise, especially if insurers are involved in determining and agreeing to the divvy-ing up. The insurers do this sort of thing all the time. Your HOA/condo and the owners involved here will likely spare themselves the expense of getting attorneys involved.




I second Augustin's comments. This is an insurable event, and the insurance agents for the HOA and the homeowners should work out who pays for what. It will likely depend on the nature of the HOA's insurance. Some HOA/Condo insurance policies will cover portions of the units' repairs, others will not.

Agreeing to anything with the homeowners before involving the insurance companies was premature, I believe. I appreciate that this was an emergency, but the management company should cool their jets until you have solid answers to this.
JohnC77
(Washington)

Posts:136


09/04/2020 11:32 AM  
I am curious, how much was the repair?
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