HOA, Property Manager and My Own HO Insurance

[twelvegates]

I own a cottage in a retirement community in Colorado. I am required to carry insurance on the cottage, which I do, under a landlord's policy. Brookdale Senior Living manages the community. There was a hail storm this summer and I my unit requires a new roof. Brookdale wants me to send them the total estimated repair amount for the damage. They have indicated that Brookdale entered into a contract with a roofing repair contractor, and that they wire the money to them to get the repairs done. I told them that I wanted to sign a contract, and they said that they aren't providing the work, so they will not enter into a contract with me regarding the work, and that the contractor is not required to sign a contract with me because they are contracting with Brookdale. What happens if the work isn't done appropriately, or there is some other mishap, and I don't have a contact with the roofing people?

 

[adjusterjack]

What happens if the work isn't done appropriately, or there is some other mishap, and I don't have a contact with the roofing people?

If you mean "contract" you don't need a contract with the roofing company to sue them for negligent damage to your property or improper installation.

What confuses me is why you have to use the management company's roofing company. Why can't you hire your own? It's your house. Presumably your homeowners policy covers replacing the roof.

 

[twelvegates]

The covenants state that the management company is responsible for all exterior repairs, using the contractor of their choice.

Maybe I'm getting paranoid in my old age, but without a contract between me and the contractor, how do I know what the contractor has agreed to do?

 

[adjusterjack]

Maybe I'm getting paranoid in my old age, but without a contract between me and the contractor, how do I know what the contractor has agreed to do?

Roofing isn't rocket science. Since you aren't paying for it there shouldn't be too much to worry about. You can arrange to be home when the contractor comes and have a conversation about what he is going to do. I suggest staying home during the project anyway. Photograph the old roof and take pictures during the work.

Make sure that the job includes tearing off the old roofing before installing the new roofing. It's not a good idea to have two layers of roofing.

 

[twelvegates]

I'm supposed to send Brookdale a check for the entire estimated cost of repair, including my deductible and the amount being withheld pending completion of the repair.

 

[adjusterjack]

Wait.

First you say that

the management company is responsible for all exterior repairs, using the contractor of their choice.

Now you say you have to send them the insurance check. There's a contradiction there.

If your insurance is paying for your roof you should be able to choose the roofer.

 

[twelvegates]

The covenants say that the management company is responsible for the repairs, not for paying for them. They get to choose the contractor according to the covenants. I have to pay for the repairs according to the covenants.

 

[adjusterjack]

Oh well.

We all have our bears to cross.

 

[Zigner]

The covenants say that the management company is responsible for the repairs, not for paying for them. They get to choose the contractor according to the covenants. I have to pay for the repairs according to the covenants.

If THEY are responsible for the repairs, then YOU don't have to pay for it. That's what being "responsible" for it means. I'm not sure why your insurance was involved. If you end up having to send the insurance check to them, make sure that your insurance knows that the management company is responsible for the repairs, per the covenants. That way the insurance company can go after the management company for reimbursement (and it won't affect your rates.)

 

[adjusterjack]

The covenants say that the management company is responsible for the repairs, not for paying for them. They get to choose the contractor according to the covenants. I have to pay for the repairs according to the covenants.

Quote that provision word for word so we can determine if the proper interpretation is being made.

I wouldn't be surprised if board members and management people are clueless.

 

[twelvegates]

Thanks for your help. I sincerely appreciate both of your inputs.

Here is the pertinent section from the covenants (Brookdale bought Skyline, so all references to Skyline = Brookdale):

ARTICLE III

Powers of Skyline and Maintenance

Section 3.2 Skyline Maintenance. Skyline shall provide such maintenance and repairs as follows:
(a) Paint, repair, replace, maintain and care for exterior appearance of Living Units as follows: repair and replacement of roofs and gutters and sidewalls and repainting and preparation of exterior building surfaces. Such maintenance shall not include any work or repairs to the walls, beams, foundation, concrete or structure of the Living Units, nor any repair or replacement of doors, windows, screen and exterior light bulbs, all of which shall be the Owner's responsibility.

Section 3.3 Insurance Proceeds. Notwithstanding any other provision in this Declaration, each Owner shall be obligated to maintain insurance on his or her Living Unit. Each Owner shall also be obligated to and responsible for filing insurance claims with his or her insurance carrier for all
applicable damage which is to be repaired by Skyline and for promptly delivering all insurance proceeds to Skyline to be applied toward the cost of such repairs. As set forth in Article 12 hereof, if the insurance proceeds are insufficient to pay all costs of repair or replacement of damage to a Living Unit, the Owner thereof shall be responsible for paying Skyline all amounts in excess of such insurance proceeds which are
necessary to rebuild or repair such Living Unit.

 

[adjusterjack]

Wow. That sucks.

Unfortunately, it's correct.

You sign your check over to the HOA. You add your deductible. Then you hope that's enough to pay a roofing contractor that you have no control over. If the contractor charges more than you get from insurance you pay the difference out of your own pocket. That's because your insurance company figured the cost based on prevailing construction costs and won't pay any more even if your management company pays more to the contractor for whatever reason.

That type of system is ripe for corruption and kickbacks.

 

[LdiJ]

Wow. That sucks.

Unfortunately, it's correct.

You sign your check over to the HOA. You add your deductible. Then you hope that's enough to pay a roofing contractor that you have no control over. If the contractor charges more than you get from insurance you pay the difference out of your own pocket. That's because your insurance company figured the cost based on prevailing construction costs and won't pay any more even if your management company pays more to the contractor for whatever reason.

That type of system is ripe for corruption and kickbacks.

No kidding. I can just see the management company negotiating a big discount with the contractor, and then pocketing part of the insurance proceeds.

 

[twelvegates]

No kidding is right.

There are only four models of homes in this community. Brookdale owns many of them. I asked what the price would be to do a tear off and replacement for the roof on my home. They said they wouldn't know because all of the damage was different. I then said, just assume that the roof needs a complete replacement. They still wouldn't provide me with a figure. I said that replacing all of the shingles for model "A" homes should cost the same for everyone with a model "A" home -- they would NOT agree with that statement.

 

[PayrollHRGuy]

The would be correct. The cost of shingles and labor can vary greatly ON THE SAME house depending on many factors.