It’s that time of year again. As the days get longer and the weather gets hotter, we know that hurricane season is fast approaching. Therefore, this is a good time to review some of the “best practices” to prepare for and protect the association in the event a hurricane comes our way.
Ideally, the board should have a hurricane/disaster plan/guide in place. This is a document that may be distributed to the owners and contains important information should an emergency occur. For example, the guide will contain a list of telephone numbers (i.e., fire rescue, police/sheriff, FPL or other electric company, animal shelters, local hurricane shelters, hospitals, etc.). The guide should also include each of the directors’ telephone numbers as well as the property manager. The guide may include a list of pre-planning activities such as gathering canned food, water, prescription medications, first aid kits, battery-operated radios, flashlights, candles, and other supplies; identifying a safe evacuation route; providing help for elderly and/or disabled residents; removing personal items from porches and balconies; taking photographs or videos of the unit and personal property to be used in the event of damage and when filing a damage claim; and parking/storing vehicles. Boards should establish a safe place located in an area far away from the association to store copies of important documents and computer servers so that information will be preserved should a hurricane cause damage.
In condominium associations, the law requires the board of directors to adopt hurricane shutter specifications detailing the type, color, and size of hurricane shutters (or other hurricane protection) that unit owners may install. The board should now review these specifications (or adopt them if the board hasn’t done so) and make sure that all the owners are aware of them. If the board does not have hurricane shutter specifications, owners will be able to install anything (even plywood) to protect their units when a hurricane is forecast to impact their location.
What about insurance? A hurricane will cause property damage. Therefore, owners and associations must make sure that they have adequate property insurance to cover property damage. Condominium, cooperative, and homeowners associations must maintain adequate property (casualty) insurance to insure all the common elements/common areas and association property. The board should consider purchasing what is called “law and ordinance” insurance. This coverage will pay the costs incurred to rebuild or repair a damaged item up to the current local code requirements. Often, local codes/ordinances change over time. Without law and ordinance coverage, the association’s insurance will not pay to rebuild or repair an item to meet the current code.
Although not required by law, most governing documents require owners to have property insurance. This is especially important in condominium associations because the Condominium Act specifies exactly those items that the association and unit owners must insure against hurricane/casualty damage. The Condominium Act provides that whoever is responsible to insure a particular item against casualty is responsible to repair that item when its damaged due to a casualty event (such as a hurricane). The Condominium Act requires unit owners to insure the following items (“unit owner list”) against casualty: ceiling, floor, and wall coverings; appliances; water heaters and water filters; built-in cabinets and countertops; electrical fixtures; personal furnishings/property; window treatments; and all improvements or upgrades the owner makes to the unit. If a unit owner doesn’t have insurance for these items, the owner will personally absorb the cost to make repairs to such items if damaged by a hurricane.
What happens when a hurricane is expected? First, the board must notify all owners/residents of any hurricane watch or warning issued by the National Weather Service and inform them to start taking protective measures as identified in the hurricane plan/guide, or as recommended by local emergency officials. This may be accomplished by making telephone calls, sending emails, or going door-to-door. If there is an evacuation order, the board must also notify the owners/residents to leave the building or property as soon as possible and move to a local hurricane shelter or other residence away from the storm. Depending on the situation, the board may close all common elements/areas until the storm has passed and it is once again safe to reopen.
What happens after the storm hits? First, assess the damage. Make sure that all the owners are safe. If there are injuries, assist in obtaining medical treatment and contact emergency officials as appropriate. If there is property damage, notify the insurance company as soon as possible. The board must take reasonable efforts to protect the association property from additional damage. This means the board may need to enter units to remove water soaked carpeting and other items and to install fans to dry out the unit(s) to prevent mold. Likewise, the board may need to secure damaged residences by placing locks on entry doors or repairing damaged doors to prevent trespassers from entering. If any of the foregoing is required, the board must take photographs or videos of the damaged property/units prior to mitigating any damage. This will assist the association and/or owners when filing damage claims with insurance.
Some condominium governing documents contain an “automatic termination clause” when more than half of the units are damaged and are rendered uninhabitable. These provisions require the unit owners to vote within a certain time to rebuild the units, otherwise, the condominium will terminate. Thus, depending on the extent of the damage, it is important to immediately review the association’s governing documents to determine whether the owners need to vote to prevent termination.
When there is damage, the board likely has certain “emergency powers.” These powers are enumerated in the Condominium, Cooperative, and Homeowners Association Acts of the Florida statutes. Specifically, when federal or local officials have declared an emergency, boards may hold board meetings and membership meetings in person or remotely without posting notice; use money in reserve accounts for “non-reserve” purposes; levy special assessments or borrow money without owner approval; and close portions of the common elements until it is safe to re-open. Speaking of money, boards may wish to consider arranging for a line of credit before any storm or casualty event occurs. This will enable the board to have immediate use of funds needed to start the clean-up and repair process before insurance funds become available.
Lastly, after the storm has passed, the board will likely be inundated with offers from construction companies, emergency repair outfits, and public adjusters. While many of these entities are legitimate, the board should not sign any contract or other agreement without first allowing its legal counsel to review it. Such contracts are often “one-sided” and are written to benefit the contractor at the association’s expense. Having the association’s legal counsel review such contracts before signing them will ensure that the association’s interests are properly protected.
Kevin Edwards manages the community association practice in the firm’s Sarasota office and serves as corporate counsel to hundreds of condominium, cooperative, mobile home, and homeowners associations located in Sarasota, Manatee, Charlotte, and Highlands counties. He is also one of only 190 attorneys statewide who is a board certified specialist in condominium and planned development law.