HOAs and Condo Associations: How to Prepare for Hurricanes

Hurricane season begins in June and ends in November each year, with the hot months of August and September representing the peak of the season. If you manage a property on Hawaii or within 70 miles of the Gulf Coast or Atlantic Seaboard, it's vital to review how to prepare for hurricanes before the next storm hits. It's time to start reviewing your documents, insurance policies, and operations checklists to be sure that your staff is ready.

What To Do Before Hurricane Season Begins

You should have a plan in place that addresses staffing and operation needs at the following stages:

• Normal posture
• Hurricane watch
• Hurricane warning
• Following an evacuation order
• During the storm
• Aftermath: Both before and after power and water are restored

Your plan should include the following action items:

• Maintaining an up-to-date emergency contact list
• Establishing a hurricane shutter policy
• Providing insurance coverage for the board
• Educating owners and residents on insurance coverage
• Backing up and storing records
• Allocating debris storage space
• Providing alternate office space
• Deciding staffing levels at each warning stage: Do not try to staff your building or leasing office if authorities order a complete evacuation—that's what insurance is for—just get everybody out
• Identifying residents with special needs, listing them by unit number in your hurricane execution plan, and developing a plan to assist them in various situations
• Putting together your vendor list and arranging for clean-up and repairs in advance, wherever possible—if you wait until after the storm, you may have to wait a while
• Developing a plan to communicate an evacuation order to all residents, and an "all-clear" when it's safe to return home
• Scheduling an emergency meeting for residents to disseminate information and address concerns before the storm hits (during the hurricane watch period) and one after the storm's passage
• Providing residents with evacuation and emergency shelter information
• Installing hurricane shutters long before the wind picks up (you'll have to decide whether the board will contract with an outside vendor for window boarding, or whether you'll leave it to residents and staff)
• Removing/securing loose objects that could be dangerous when winds pick up, such as trash cans, potted plants, and pool furniture
• Shutting off propane tanks
• Scheduling a conference call the day after the storm that allows all board members, residents, and the property management firm to call in and hear the latest from emergency officials and the property manager
• Obtaining a line of credit to pay for any emergency repairs beyond the reserve fund, if necessary, at least up to the property's insurance deductible (remember to take the co-insurance amount, if you have one, into account as well)

Before the Storm: Insurance Considerations

Residents should not rely on the board for homeowner's insurance. The board's insurance company may pay for the rebuilding of the shell, if needed, but it won't provide protection for individual residents' possessions if their units are damaged by a storm.

In addition, when owners forego homeowners insurance, the cost of refurbishing a destroyed unit may force them to walk away. This means that no dues are coming in to the association from this household, and it may be a long time before a new buyer comes along. Therefore, it's in everyone's best interest for the board and individual owners to have adequate insurance coverage prior to a storm.

It's a good idea to require all condo owners to obtain HO-6 coverage for their units. These HO-6 policies-the standard form for condominium owners' insurance-are designed to dovetail into association insurance policies to eliminate gaps in coverage. Owners of stand-alone homes should have a homeowners insurance policy conforming to at least an HO-3 or HO-5 insurance form. It's a good idea to require owners to retain this coverage as a condition of ownership in your CC&Rs. In addition, you may want to require owners who rent out their units to purchase landlord insurance, and they should require their tenants to purchase renter's insurance, with the association or owner listed as an interested party.

Property managers should also create a video tour and photographic inventory of association assets each year. This could go a long way toward getting a favorable insurance settlement quickly.

After the Storm: Triaging Damage

Property managers and board members should let owners know that they will be entering units following the storm to inspect for damage. Be prepared to act quickly to clean up water-damaged dwellings, replace shattered windows, pull out soaked carpeting and drywall, and take other measures to prevent mold, wet rot, and further damage that could affect other units and residents.

Many residents will have evacuated, and some may take their time coming back. It's important for management offices to have their own keys allowing them to access units in an emergency, such as the aftermath of a storm.

Emergency Powers Granted to Boards in Florida

Florida board members should review Florida Statutes Section 718.1265, which grants them certain powers in the event of a hurricane to ensure that community boards are able to function throughout the storm and its aftermath. For example, the law authorizes condo boards to contract with vendors to provide essential services such as flood/water clean-up, even if units' owners cannot be located, to protect the community as a whole. The board is also authorized to file a lien against the unit, if necessary, to collect the costs of such services from the unit's owner.

Florida also allows boards to borrow money and pledge association assets as collateral without the approval of unit owners, if it's deemed necessary to fund emergency repairs and clean-up efforts. This authority is limited to actions that protect the health, safety, and welfare of the association, its residents, and residents' families, tenants, or guests. It also only applies if the board's actions are deemed reasonably necessary to make emergency repairs and mitigate further damage.

Boards in other states should check with their legal counsel for similar laws.