Thursday, January 9, 2014

Natural Disasters -- What Do You Know?

With Huge Thanks to our Forum Friends, Jeremy Stilwell, of Barker Martin, and Duncan Kirk of The Unity Group, and to Steve MacKenzie of the Red Cross Speakers Bureau, our January event sparked a lively conversation and unsettled most in attendance.

Grab a cup: there's lots of great information here, including Personal Preparedness, Association Preparedness, How to Put Together a Pro-Active Natural Disaster Plan for an Association, and Seminar Questions and Answers.

You can scroll down to find the headline you want. 

Personal Preparedness

Steve's experience as a disaster first responder and independent insurance adjuster gave him the heartbreaking stories to tell about what he'd seen in 31 years of working with people involved in natural disasters. 

He underscored the beauty of living in our geography by summarizing that we didn't live with some of the higher-than-human, food-chain predators he'd witnessed in other geographies. He meant snakes, alligators and other creatures turned loose in natural disasters that end up in unpredictable and unexpected places.

He also explained that most of his calls these days involve home fires. Steve discourages candles with live flames just for this reason.

As a Red Cross first responder, Steve asked "You've got four minutes. We're taking you to a shelter. What do you want to grab from your home."

He explained that animals are not allowed in shelters; that owners must find shelter accommodations for pets. But he did explain what is necessary in a disaster kit that you want to keep handy at home.

You can put one together based on your personal needs, and he encouraged everyone to shop at the Red Cross shop for a disaster kit. 

Steve demonstrated disaster tools that one might keep in the car. A tool to evacuate a seat belt and a hammer to break a window. "Don't keep them in the trunk," he admonished.

Take the time, on a regular basis, to review the contents of your disaster kit(s), so that any 'good-until' dates aren't past, and so that the kit contains what you need in the case of an evacuation.

He encouraged people to educate everyone in the home as to exits, escape routes, meeting places, safe-arrival reporting protocols and so forth. Develop a plan for you and yours, hold regular drills and prepare yourself for survival in a natural disaster.

Finally, based on insurance coverage that you carry, do take the time to photograph your home. You will find these photos useful when you asked to list all your possessions covered under a replacement policy.

Association Preparedness

Duncan told of his business being prepared so that after any disaster, the business would be able to recover within 24 hours. This means supplemental equipment, software, telephone systems, processes, and so forth. He conducts regular drills to verify the workability of the recovery systems.

Jeremy and Duncan also support the preparation of an association disaster kit -- it is a business after all. Disasters can affect gas lines, water lines, structures, access and egress, and most of all, people. Here are a few questions you can ask your board. In the event of a disaster, do you know:

  • How visible are our addresses and unit location IDs?
  • Where are the water shut-off valves and the tool to shut them off?
  • Where are the gas shut-off valves and the tool to shut them off?
  • Where are the unit keys or the master key?
  • Who knows how to turn off the water, gas or gain access to units as necessary?
  • Who has the authority to access units as necessary?
  • What central location is designated as an all residents meet-up point, so that the association can account for all residents?
  • Where are the building floor plans so that first responders can locate facilities and people?
  • Who holds the list of all residents?
  • How do we accommodate special needs residents, such as those with walkers, wheel chairs or no access to elevators or stairs?
  • What education has the association provided to residents about how to respond in the case of a disaster?
This is a critical task for an association, based on its responsibility to maintain, protect and preserve -- at least -- its real estate assets. 

Given that this element is probably missing from many association's business records and files, the question can be: where to start.

How to Put Together a Pro-Active Natural Disaster Plan for an Association

Based on all the variables involved in any kind of disaster plan, a board-sanctioned committee is a great way to start. Your governing documents outline how board committees are established, chartered and so forth, what authority and power they can be given and so forth. 

The goal in the committee is to open the dialog regarding a disaster plan and ultimately to advise the board. Elements to consider include:

  • Based in our CC&Rs, what action can the board take, should the board take, must the board take in the case of a disastrous event?
    • Language is probably 'significant damage' or 'damage to structure' -- disaster is not used
    • Existing language was written for the developer, not for an operational board
    • Do our CC&Rs require an amendment to give the board the power to act?
  • What repair or reconstruction process must the board follow and what are the time limitations involved in the process?
    • Don't let the time limits slip by
    • Time line is usually quick and non-standard
  • What are our CC&R insurance requirements?
    • Does our current coverage match our requirements
    • Do we carry earthquake insurance and is it useful
    • Do we carry flood insurance and is it useful
    • Have we polled our owners to verify that earthquake insurance is desired
    • Do we require that owners carry HO-6 policies. Why or why not
  • What are our insurance deductibles?
    • Who pays them
    • Is the deductible language equitable given the disaster
      • In a single unit fire, should all owners pay a share of the deductible
    • Does the budget include a deductible fund held for access when needed
    • Can our collective owners pay a deductible for earthquake repairs, if required
  • If our master policy is an 'all-in' policy -- covers real estate including furniture and fixtures of interiors: cabinets, bathroom fixtures, etc. -- what improvements are owners required to report to the association and how is this done?
    • What is the reporting provision in our CC&Rs regarding upgrades
    • Does the association require photos, invoices, what documentation
    • Is there a dollar limit over which owners must report and document upgrades
  • How have we educated owners about natural disasters?
    • Central meeting location
    • Security -- buildings and units
    • Best practices for our physical structures' exits and entries
    • Assistance requirements
    • Emergency contact details
    • Actions to take
    • Welcome packets
  • What do we need to pay attention to on our property? Consider --
    • Seismic shut-offs for gas and water lines 
    • Rescue ladders
    • Fire extinguishers
    • Educating building or floor captains (Jeremy cautioned: don't just name them)
    • Identifying resident contact tree
    • Old or diseased trees
  • What is in the association's disaster kit?
    • Shut off valve locations for water and gas
    • Floor plans
    • List of residents
    • Copies of master policy declaration page -- carrier and policy number
    • Copies of owners' HO-6 policy declaration pages -- carriers and policy numbers
  • To whom to we report a disaster?
    • Who is authorized to know
    • Who needs to know
    • Who reports
    • Form of report
Once the committee has researched the elements, the association may want to engage the services of association counsel to review the process, and may recommend crafting an amendment to the CC&Rs.

It's a good idea to announce this committee to all owners, since a majority of owners' votes are required to amend the CC&Rs.

At least, an association should perform a regular insurance check-up, to verify that what must be covered is covered, and adequately.

Seminar Questions and Answers

Q: Do I have to carry an HO-6 policy as a condominium owner?
A: Your board may require that you carry one, but the HO-6 policy covers your personal possessions, potentially in the case of a disaster, can pay your assessments, your living expenses if you cannot live in  your home and include earthquake coverage if the master policy carries it.

Q: Do I pay assessments if I can't live in my home/ unit because of a natural disaster?
A: Yes.

Q: What happens to my mortgage if my home/ unit is condemned after a natural disaster?
A: Your lender expects to be paid, regardless of the damage.

Q: What insurance covers improvements I've made to my home/ unit?
A: Depending on the CC&Rs and those reporting requirements, the master policy may cover these improvements. Best practices dictate that you send photos and invoices to the association, as evidence of your upgrades should any be required.

Q: How does the association know about improvements I've made to my home/ unit?
A: Every association has its unique requirements for owners reporting upgrades. Read your CC&Rs for the details you need.

Q: Who decides whether or not to condemn the structures?
A: This is a professional decision, that may be determined by the local municipality if the structures are not inhabitable.

Q: What is the time limit involved in deciding how to proceed with reconstruction or demolition after a natural disaster?
A: This data is available in your governing documents under 'significant damage' or 'damage to the structure', and is usually quick and tight -- documenting deadlines that are not to be missed.

Q: What are the association's legal responsibilities to owners regarding natural disasters?
A: A pro-active list of actions show the association's intent to honour its responsibilities; the lack of any action by an association in this regard may place the association at risk.

Q: What are owners' responsibilities to the association regarding natural disasters?
A: Owners are responsible for the deductibles and to pay assessments, including special assessments required to pay for repairs.

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