In early January, our Board and Community Association Manager shared an update that SouthernCAT would be back on January 5th to start the repair process and that we were close to getting approval from the insurance company on replacing our roofs.
We’ve since received a few more updates, but they kind of need piecing together to work out any possible conclusions. Here’s what we have:
February 2nd at 6:40am
We are waiting for two items to happen before SouthernCAT will return and begin the “repair” process for us. Our Contract with them needs to be finalized and approved, and the Insurance Company needs to approve funding.
Board President (via newsletter)
February 2nd, 1-4pm
Our public adjuster spoke to individual phases regarding updates with the insurance company. In short, the first phase, mitigation, has already been completed by SouthernCAT, with a bill totaling $18-20 million. The insurance policy covers the cost of mitigation if certain conditions are met, such as protecting the property from additional damage and making temporary repairs. The insurance company is currently reviewing thousands of pages of documentation. It has only made a small advance payment of $2 million (we owners have chipped more than $4 million as part of a special assessment). The second phase is repairing the roofs, which is the most pressing matter and is still disputed with the insurance company.
February 15th:
The Board is in the process of developing a new contract with SouthernCAT. We are working with our Attorney to address several issues we feel strongly about. We are willing to work with them on the reconstruction, but need to come to a mutual understanding.
Board President (via emailed letter)
February 22nd:
During a Board meeting, our President said SouthernCAT doesn’t have the contract yet. They’ll be getting bids to replace the roofs and choosing the best fit. A benefit of having SouthernCAT subcontract our roofs to a roofing company is that they will front the bill while we wait for the insurance company.
In short:
- The insurance company has not yet agreed to pay for new roofs.
- We have not received bids to replace our roofs, so we have not chosen a roofing contractor.
- SouthernCAT is still being considered for our roofs.
My takeaways:
I understand that insurance companies prioritize saving money, but there may be a more proactive solution to our current situation. We have roof reserves available to us that could be utilized to “protect the property from additional damage,” which would ultimately save us money in the long run. Unfortunately, these reserves are not being utilized, and as a result, I have to pump out water from my unit every time it rains (and even when it’s not raining). This has not only resulted in more billable hours by SouthernCAT, but it has also led to further damage to my unit.
Although they’re currently exploring other options, it feels like the Board has become comfortable with the idea of paying SouthernCAT 21% to subcontract (outsource) our roofs.
It would be beneficial if they considered other solutions, such as getting a loan from a bank for 7-10% to hire a roofer directly while we wait for the insurance to pay. Last time I checked, 10% is significantly less than 21%. Working directly with a contractor can often be more beneficial than hiring a middleman (i.e., more control over the quality of work, warranties, etc.).
Other large condo associations in the area are taking proactive measures to protect their owners, and our Board should do the same.