An unfortunate reality is that occasionally communities can be confronted with disaster, when earthquake, wildfire, or other calamity can transform a community within a few hours. Planning for the unthinkable can improve the association’s recovery prospects.
- Enhance communication. Embark upon an aggressive campaign to build email contact points for every association resident or owner. The ability to flash bulletins to owners is critical in emergencies and saves labor and postage and increases communication in normal times.
- Check the association insurance. Does the association have replacement cost or code upgrade coverage? What is covered? Some years ago an association sustained hundreds of thousands of dollars of landscaping and irrigation equipment destroyed in a major brush fire. Fortunately, their policy covered landscaping and the insurance paid to restore common area hillsides. Does the association have earthquake coverage? Check the deductible and inform members of the amount that will be association responsibility in the event of major seismic damage. A meeting with your broker may reveal gaps or inadequacies in the association’s insurance protection.
- Create emergency policies and plans. The manager should be empowered to respond to emergencies, and each director should know association policy regarding who makes emergency calls to vendors if the manager is not available.
- Risk management. Is the association adjacent to any hillsides or other brush areas? When was heavy vegetation last cleared from the association perimeter? Your local fire department or a consultant may provide a risk assessment.
- Immediate Actions. Call first responders. Call management. Issue an update via email and bulletin board, avoiding unsubstantiated reports or anything promoting panic. If evacuation is not required, and if circumstances allow a safe property tour, assess the number and location of affected homes. A board representative should establish a single point of liaison with first responders, to avoid unduly burdening them with multiple points of contact.
- Control emergency contractors. Contact emergency restoration contractors, but limit them to only what is necessary to prevent further property damage or personal injury and secures the affected properties. Do not allow demolition beyond what is immediately necessary, so that a damage assessment and scope of repair can be developed by an independent consultant for contractor bids.
- Security. Some temporary security may be required at vacated or damaged homes, such as boarding up windows, temporary fencing, or security guards.
- Don’t Rush to Public Adjusters. Major property casualties draw out public adjusters, who represent insureds against their insurance company in damage claim situations. They are not attorneys and must hold a specific state license. They charge a percentage of the insurance proceeds for their services, which percentage can be negotiated. The association’s attorney and a competent construction consultant may be able to provide more expert representation at less cost, so check with association legal counsel first.
- Emergency assessments. Civil Code 5610 allows boards to impose emergency assessments without membership voting. Per Civil Code 5615, the assessment will not be due until 30 days after the Notice of Assessment is issued.
- Keep members informed. Once the HOA has a recovery plan in place to restore the property, share it at a “town hall” meeting and then distribute it to all.
Prepared associations can reduce calamity’s impact and rebound faster. Be prepared for the unthinkable and respond responsibly.