Unrepaired, Uprepared

Since last year’s tough hurricane season, hopefully you’ve already repaired your home or business. But perhaps your neighbor’s property remains in shambles.

Loose and broken tiles sit on the roof, metal stanchions from broken pool screens or window frames hang from the building, and plywood boards still cover broken windows and doors.

Hurricane season is here, and South Florida is again at risk of being hit by a major storm. High-speed projectiles from your neighbor’s unrepaired property could crash into your recently repaired structure, causing substantial damage.

Who will be responsible for the damage to your property caused by your neighbor’s failure to timely complete repairs? How will insurance companies react to claims for further damage to existing properties that have not yet been repaired? What can you do to protect yourself? All of these questions are swirling.

The entire construction industry, not just property owners, must address these uncertainties. Contractors who signed contracts to repair buildings in advance of the new hurricane season but failed to timely complete the repairs may find themselves subject to lawsuits alleging that further damage was the natural and proximate result of their construction delay.

Contractors, in turn, may point to suppliers. In the event that material suppliers failed to meet expressed or implied promised delivery dates, resulting in delay, the suppliers may find themselves at the defending end of a legal action.

Insurers also are not immune. Florida statutory law creates liability for unfair claim practices. Excessive delays in resolving claims that subject owners to a hurricane season with an already damaged building may give fodder for the creative plaintiff lawyer.

Delays due to shortages

Most of the unfinished repairs relate directly to a shortage of materials and skilled labor. As a result of the hyperactive 2005 hurricane season, resources have been stretched beyond capacity.

Demand for roof tiles, windows, cement and aluminum for pool screens exceeds available supply. Similarly, the demand for building repairs created by the 2005 hurricane season, coupled with the South Florida development boom, has resulted in a shortage of qualified contractors and construction workers. This too has had a direct impact on the ability of property owners to complete repairs.

First, many insurance companies require estimates from three qualified contractors before settling a claim for any amount above that initially suggested by an insurance adjuster. Many property owners find it impossible to get one estimate, let alone three, to support their claims. As a result, many insurance claims remain open and unresolved.

Second, even if an owner has successfully obtained funds from his or her insurer, finding materials and qualified contractors and skilled labor to perform the work is difficult.

Accordingly, thousands of owners, both residential and commercial, are on waiting lists to get their property repaired. The combination of open and unresolved insurance claims, insufficient supply of materials and scarcity of labor has led to the condition we currently face — a hurricane season with many unrepaired structures waiting.

Uncertainties about liability

The condition of unrepaired structures raises two separate but compelling issues. The first is who will be responsible for additional damage caused to structures with unrepaired damage. The second is who will be responsible for preventable damage caused to adjacent structures by debris flying from unrepaired buildings, such as roof tiles.

The first question is an issue of mitigation. Virtually all insurance contracts impose on property owners the obligation to take reasonable steps to protect their property. Just what is considered “reasonable” will vary on a case by case basis.

But it is likely that insurers will expect owners to take some steps to protect their own property from evident damage. This would include removal of loose roof tiles, hanging stanchions, securing plywood and the like.

The second and more complex issue is whether neighboring property owners have an obligation to secure their own property so as to prevent injury to their neighbors. The general rule is that every person may make such use of his or her own property that is lawful and reasonable, even if it causes some grievance to others.

But unreasonable use of one’s own property that causes injury to adjoining property owners can create liability for the property owner under theories of negligence, nuisance and even trespass. The test for liability is whether a property owner’s particular act represented a reasonable exercise of dominion, having regard for his own interests and that of his neighbor.

So, for example, a landowner in a residential neighborhood will not have any liability for constructing a home on that land, even if it throws a shadow over his neighbor’s pool area. Such is clearly a reasonable use of the property. On the other hand, pile-driving, excavation or filling activities which damage a neighbor’s pool will likely result in liability.

The law attempts to balance property owners’ right to use their own property as they see fit with the right of a neighbor to enjoy their own property. An application of these well-settled principles suggests that a property owner does owe some duty to his or her neighbors to make reasonable efforts to secure their structures so as not to subject adjoining property to damage from anticipated storms.

What is reasonable will, of course, depend upon the nature of the damage, the cost to repair that damage and the status of any insurance claims intended to fund the repairs.

Emergency contracts

Take the time to analyze your situation now. If necessary, expend some resources to secure your own property.

If your insurance claim remains outstanding and you cannot afford to properly secure your own property, demand, in writing, that your insurer take whatever steps are necessary to secure your property to prevent further damage both to your property and adjacent properties pending resolution of the claim.

Commercial property owners should sign contracts with emergency restoration services to secure their properties immediately after a storm. As much damage is done in the hours and days after a storm hits as from the storm itself, because building material cannot remain wet without sustaining further damage.
Based on our experience last year, we know that quality restoration services will not be available for hire immediately after a storm. Plan ahead, put all possible precautions in place and get ready.

Andrew Gold is a partner in the litigation and dispute resolution group at Kluger Peretz Kaplan & Berlin in Miami. He represents national developers of single-family homes, high-rise condominium developers, real estate owners and general contractors in construction, insurance and real estate-related disputes.