J.N. from San Francisco, California writes:
Dear Mister Condo,
I have a condo in a 65-unit complex. My building has 5 units and it shares 1 water heater. This water heater started leaking and caused damage to the common area and my unit, including my flooring and kitchen cabinets. The CCRs require me to file with my HO6 insurance first, but it seems that since this water heater is the building’s responsibility and a shared resource, they should be responsible. They refuse to pay for any of the damage. Are there any existing CA/SF laws that require them to take responsibility for the damage they caused? They have a 10K deductible and are not even claiming against their policy.
Mister Condo replies:
J.N., I am sorry that you experienced damage from the association-owned water heater. This is not an uncommon event and is exactly the reason condo owners need to protect themselves with homeowner’s insurance (HO-6). As you have stated, your agreement with the association requires you to maintain insurance and the primary claim for damage inside of your unit needs to be placed against your policy. I understand that this flies in the face of reason seeing as the damage was clearly not caused by your own doing but, for better or for worse, that is exactly how this insurance is meant to work. I am not an attorney nor do I offer any legal advice in this column. I am not aware of any laws that would supersede your condo documents in this matter but you may wish to speak to an attorney for a proper legal opinion. I hope that your insurance covered the majority of the damage and repair expense. All the best!
3 thoughts on “Condo Building Water Heater Damage Covered by Unit Owners Insurance”
Hello. We have a similar situation involving a backup caused by a septic line clog. We rigidly maintain the systems (18 units) every 2 or 3 years on schedule and have inspections checks every 3 or 6 months and filter cleanings as needed. We have a long list of restrictions for safe use of the systems. We have even incorporated use of a monthly bacterial additive into each tank. There is no “neglect” or “history” of this problem here as I am the Maintenance Coordinator on the Board and I’m “demanding”. Anyway, the clog in the underground line caused a backup into an unfinished basement. (Septic company says that Covid 19 puts a major strain on septic systems.) The Association paid to clear the line, pump the tank 1-year early, and hired a company to thoroughly sanitize the basement (unfinished). This cost about $2600 total from an already tight budget. The homeowner is now demanding a replacement for a piece of carpet; estimate $936. Their homeowner’s insurance has a $2500 deductible (so they say) and no “flood coverage” though strangely, their insurer said that they would cover about $250 to replace the rug. The residents demand the difference from the Association. Also, we DO have statements in our Rules and Regs saying that the Association is NOT responsible for repair/replacement of personal property. A call to our attorney is next.
Does an Association Board have a right to require a specific deductible amount in a homeowner’s policy for its residents? It seems that any Association that has residents with very high deductibles and no insurance requirements in place to protect the Association is in real jeopardy of becoming “the insurance company” themselves for irresponsible, greedy, or dishonest condo owners. Protect yourselves, Condo Boards!!! I’m even questioning whether our Association should have paid for the sanitizing of the basement as this was not caused by neglect or a defect in the septic system.
Thanks so much for your time and comments. You write a terrific column!
A.G., I am not aware of the association’s requirement to have a deductible limit on insurance, simply that the insurance must be purchased by the homeowner. Deductibles are a personal choice and I don’t think that requiring a lower deductible would actually release the homeowner from liability and transfer that liability to the association. The homeowner is still liable for damage that occurs within their unit. Your association attorney will certainly sort this out but I have a hard time believing that the homeowner would prevail, regardless of their demand. Stomp your feet all you want, it doesn’t change the outcome. 🙂 All the best!
Hello again, Mr. Condo.
You are absolutely correct in that our attorney determined that the Association is NOT responsible to replace the rug/carpet damaged by the septic line clog/overflow. Notice will be going to the homeowner shortly. They aren’t going to be happy, but I don’t want our Board accused of inappropriate use of Association funds if we were to replace the rug (which we won’t). Nor do I want residents who are inadequately insured (HO-6) to consider our Association funds to be available as “their personal bank” for repairs that they did not insure for!
Many thanks for your guidance! Alan in New Hampshire