Condominium Associations in New Jersey and New York Continue to Deal with Flood Insurance Issues
As homeowners and businesses continue to fight with insurance companies regarding damages sustained by Hurricane Sandy, condominium associations face the same issues — with the added difficulty of trying to do it as a group. I have spoken to many condominium association boards about their flood insurance claims in places like Ortley Beach, Mantoloking, Seaside Heights, Point Pleasant, Sea Bright, Lavallette, Jersey City and Hoboken. Unfortunately, at this point many of them are in severe trouble. For anyone who ever served on a condominium association board, you understand the challenges. Under normal circumstances, the issues can be difficult – parking, noise, pets, landscaping, snow removal. Now image trying to rebuild all the condominium units in the complex because they have flood damage. Or even harder, rebuilding half the units that have been damaged by flood and asking the other half – who have no damage – to pay for it. Condominium association boards are not developers and many are tearing themselves apart.
The worst part of this situation is that those that have the best intentions, who have selflessly volunteered their time to make the community better, may be creating liability for themselves. Condominium association boards have a fiduciary duty to their members – i.e. the other unit owners. Now in the context of rebuilding post-Sandy, there are many decisions that have to be made and not much time to make them. Probably the earliest and potentially the most important decision is whether the board is satisfied with the amount of money they received from their flood insurance policy. In many cases, condominium boards may not even be aware yet that they don’t have enough money to repair the damage.
For a Hurricane Sandy claim, under an NFIP flood insurance policy, a Proof of Loss with supporting documentation must be filed with the insurance company by October 28, 2013. But given that many condominium associations are still submitting supplements to insurance companies and working with the insurance adjusters, the deadline is very quickly approaching (not to mention that many boards only meet periodically – monthly or quarterly). Even if condominium boards are submitting supplements and working with insurance adjusters, this will NOT extend the Proof of Loss deadline. If a Proof of Loss is not filed before October 28, 2013, condominium boards may be precluded from seeking additional payments under their flood insurance policy. If this occurs, unit owners may have a case against the condominium board for breaching its duty.
To avoid creating liability for themselves, condominium association boards would be well advised to have a professional review the recovery they received from their flood insurance company to see if additional recovery is possible. At Wolff & Samson, we review and analyze flood insurance recoveries on behalf of condominium associations throughout New York and New Jersey related to Hurricane Sandy damage. We will undertake this review for free and in most circumstances, if we are confident there is a case, will take the case on a contingency fee basis.
About the Author: Christopher W. Gerold is an attorney in Wolff & Samson’s Disaster Recovery Claims Group. Chris represents homeowners, businesses, and condominium associations with their Sandy related insurance claims with a special focus on flood insurance. For more information on flood insurance and ways Wolff & Samson can help you with your flood insurance claim, please contact Chris at (973) 530-2061.