Leak Investigation, Remediation and Restoration Follow

Leak investigation and damage repair can be challenging to navigate. Often, owners need to learn their responsibilities or have an incorrect understanding of them. Be transparent with the Board and affected owners regarding this process to avoid as much confusion as possible.

Consider sending written communication to the homeowner outlining the responsibility (sample). Before dispatching a vendor, make sure expectations are set with the owner. We suggest this statement be read to the caller, or included in an email response, "Thank you for reporting this issue. We can dispatch (vendor name); however, per state statute or the governing documents of your community, individual owners may be responsible for any water damage within their unit, regardless of the source. Responsibility for the issue, whether it falls on the unit owner, your neighbor or the association, will be determined once the vendor investigates. Before dispatching, we need your acknowledgment that you may be billed for the service call. If you choose to hire your own vendor, please note that reimbursement from the Association is not guaranteed."

Leaks are usually from unit to unit and are plumbing related. However, they can also be association to unit, unit to association, or association to association leaks. There are also other types of leaks, like rain related.

Usually, when informed of a leak, the first step is asking the affected resident, who is reporting the leak, if they will go upstairs and knock on the door of the unit above. Usually, if that resident is home, the two can work together and see if they can find where the leak is coming from and take action to prevent further damage. 

Sometimes it's a one-time occurrence like a toilet overflow, or the water can be shut off to prevent further damage. 

If they can not find the source, arrange for a plumber to enter both units and investigate. Inform the owners that if the plumber determines the water source is a unit owner's responsibility, that owner will be billed for the plumber's work.

In the Declaration, you can find owner and association responsibilities listed. Below is an example showing how this may look - 

If there is any question, have the attorney write an opinion stating who is responsible for the leak and damage repair, even if you know the answer. Then, the opinion can be shared with the Board and the affected unit owners, taking the manager out of the middle and putting the attorney as the person who determines the responsibilities. 

If there is damage to the unit below, per the Condo Act, that unit is responsible for repairing and replacing anything in their unit, from the floor covering and paint inward. Examples include cabinets, countertops, appliances, and any personal items. The association is responsible for water damage behind the paint or underneath the floor, including drywall and the area separating units under the floor. You should advise the homeowner to submit an insurance claim for their unit repairs as soon as possible. 

If there is any question that water remains under the floor or behind the paint, bring a restoration company (ServPro, etc.) to the damaged unit for moisture readings. They will provide a report of their findings, including a proposal for the work needed to prevent mold. This report can be shared with the Board and affected unit owners so they know the damage and the process to repair it. After receiving the quote, the Board should hold an emergency meeting where they approve the work.

In the event there is concern that mold is in the unit or common elements, an accredited remediation company like Servpro MUST be utilized to investigate and treat. They may refer a mold specialist, in which case, that mold specialist should be utilized to review, test, and create a treatment plan. Mold should NOT be cleaned up by janitorial or maintenance staff, including Pros, unless noted as just surface mold that needs scraping and Killz. It MUST properly be treated and remediated by a licensed company. In the event the board insists on not following this, they must complete this form and return it.

The affected owner may be upset about this work, but being transparent and upfront through each step of the process will go a long way in keeping things calm. Advise them to contact their personal insurance immediately when there is damage to get a claim open and an adjuster scheduled. Often, owners think the association insurance will cover the repairs in their unit, especially when the water source comes from the association. Unfortunately, this is not the case. Per the condo act, the unit owner is responsible for the repairs of their unit (paint and floor covering inward) regardless of the source of the water. 

The association is responsible for paying the restoration bill for the areas they are responsible for (unfinished drywall and under the floors). However, they can bill back the amount of these repairs, up to their insurance deductible, to the unit that caused the damage.

Example: (in Illinois) An overflowing bathtub cost the association $20,000. The association insurance deductible is $5,000. The Board can vote to bill $5,000 to the owner responsible for the overflow and submit a claim for the remaining $15,000. 

This may upset the unit owner billed back for the association deductible; however, their homeowner's insurance will take responsibility for reimbursing them for the cost. 

Again, if there is contention or confusion, get the attorney involved. It's better to have the attorney over-involved vs. under-involved, especially if they are on a monthly retainer.