New York's Cooperative and Condominium Community
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A small construction mishap can build to a big insurance problem.
Hole in the wall. We had a unit-owner in a condo on the top floor of the building who decided they were going to put in a California Closet by themselves. They went to put up a stud so that they could put the bracket in and hang the shelf, and punctured the gas line in the wall behind them. They called Con Edison to report a smell of gas and then called me after that. I got plumbers over there immediately, and we tried very hard to restore the gas service.
The building uses gas for heat, hot water and cooking stoves. The hole that he had made was not allowing the gas line to hold pressure, and Con Edison requires you to have a certain amount of pressure in order to restore the service. We could not pass the test, and Con Ed locked our meter. So no one had heat or hot water, and they couldn’t cook on their gas stoves. And thus started a saga that took almost a year before the problem was fixed.
Emergency event. The first thing the board and I had to contend with was the immediate need for heat and hot water. And because it was the meter that serves the boilers that was locked, we had to put in a temporary electric boiler in the boiler room to make hot water. And we had to pipe that water into the system to provide heat. It was $20,000 just for the boiler setup. With that and the plumbing work and all of the repairs, at the end of the day it was about a $35,000 insurance claim.
The right insurance. We definitely had good insurance, because not only did it cover everything, less our $5,000 deductible, but then they subrogated against the unit-owner’s carrier to get the deductible. So at the end of the day, except for $500 for some painting when we repaired the closet — because we had to open the wall to get to the pipe behind it — my clients were made whole.
People will talk. It’s a small building, and while we of course did not disclose who had done what or any of the details, everybody figured it out. There were already some issues between this particular unit-owner and the board. So I think the main repercussion for them was the embarrassment in front of their fellow homeowners and residents. You have to ride in the elevator with these people.
Abundance of caution. A board is only as good as its rules and its position on enforcing them. It was particularly frustrating with this unit-owner, because they had previously done work without the board’s authorization. And it’s not like they didn’t know that they had to go to the board. I guess they just thought they could get away with it and it was such a small thing. But, nothing ever is such a small thing. You never know, and better to ask first and not have to issue a mea culpa after the fact.
You can never have too much insurance in a building. You need to have a good carrier who’s going to pay on a claim. You need to have a broker who has worked with the carrier and has adjusters that they have worked with. You need to have a good team in place. But I also think unit-owners need to make sure that they have good insurance as well, because obviously this unit-owner’s insurance came into play, and they wound up writing my clients a $5,000 check.
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