Tuesday, September 12, 2017

Associations dealing with unique problems post Hurricane Irma



Thankfully Floridians heeded the call and evacuated where necessary and prepared one and all for the monstrous Hurricane Irma. While Irma was a lengthy and dangerous storm, the effects on Florida were not as devastating as had been feared. However, for thousands of shared ownership communities, volunteer boards, professional managers and residents will be dealing with the aftereffects of this storm for weeks or months to come.

For some communities, these repair and reconstruction projects will be complicated by other issues that pre-dated Irma's arrival. Let's discuss three different scenarios which might complicate your post-Irma recovery.

1. Associations that had contractual obligations (renovation or restoration projects) prior to the storm.  Some communities were in the midst of large and costly repair and renovation projects prior to Irma. I had several clients who were undergoing concrete restoration, lobby and clubhouse renovations and painting projects.  If your community started another project during the summer that has now been impacted due to the hurricane then the Board will need to evaluate if that project needs to be delayed pending completion of necessary storm repairs. Certainly, repairing a roof damaged by Irma now takes priority over that new Lobby renovation. While most force majeure clauses in repair and renovation projects allow the contractor to put the project on hold if the contractor's operations are impacted by a storm or other disaster, the contractor handling your association's renovation project may be ready, willing and able to proceed with a project that is no longer a priority for you and pushing you to continue with the project and your payment obligations. You will need your association attorney to evaluate the contract to see what options are available to you in terms of delaying the project's progression or modifying the scope of work.

2. Associations with fiscal constraints. Did your association head into the path of Hurricane Irma lacking reserves and without a line of credit in place? If so, you will be working under financial constraints when trying to obtain the funds necessary to make any repairs you suffered. At this point, you should discuss with your association attorney how quickly you can levy special assessments (knowing that it will be weeks or months before those funds start coming in and that you are not guaranteed to collect 100% of those special assessments from all owners. You should also explore the possibility of obtaining government assistance in the form of SBA loans, FEMA debris removal, etc.  Homeowners who need financial assistance to repair their primary residence, temporary shelter, or medical assistance should apply for FEMA Individual Disaster Assistance. FEMA asks those with internet access to register for aid at DisasterAssistance.gov. If you can’t get online, call 800-621-3362 or 800-462-7585 (TTY). Registering will enable FEMA to begin the process of determining eligibility for aid and services.  Businesses, associations, and homeowners may be eligible for Disaster Loan Assistance through the Small Business Administration. Visit https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs for more information.

3. Associations with significant ongoing collection challenges. If your community had units in the collection process prior to Hurricane Irma's arrival, it may be tempting to forget about those collection efforts post-storm. After all, you have more pressing things on your mind at present. However, I would urge you to continue with those collection efforts as the Board's ability to undertake necessary storm repairs depends on your ability to collect assessments. Abating or delaying your ongoing collection efforts sends the worst possible message when you need to assemble resources to pay for repairs. 

Hopefully our Florida communities will ride out the rest of Hurricane Season (we're finished on November 1st) without incident. I am sure the rest of you share my opinion that the following visitors are most unwelcome:
Jose
Katia
Lee
Maria
Nate
Ophelia
Philippe
Rina
Sean
Tammy
Vince
Whitney



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