Page 7 - New England Condominium November 2021
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A Property Management   Company You Can Trust  At J. Butler Property Management, LLC.,   we measure our success in terms of client   satisfaction and take a long-term view of   every relationship.  978.694.9004  James R. Butler IV  Executive Manager  •  Family owned and managed Massachusetts   based property management company  •  Blends management expertise with open   communication between the board, unit owners   and managing agent, making for a healthier property  •  Superior cost cutting strategies and vendor pricing  •  Community website, work order system,   online payments  •  An in-house maintenance team that is able to reduce   costs and offer an unparalleled level of service   NEWENGLANDCONDO.COM  NEW ENGLAND CONDOMINIUM   -NOVEMBER 2021      7  with  Schechner Lifson Corporation in  amenity is worth; it’s how much that ame-  Summit, New Jersey. “Oftentimes though,  nity will cost to rebuild. And those esti-  a seller sells the board rather than edu-  cating  them.  Only  when a  board knows  ally, the association will try to argue down  nately, your HO-6 condominium owner’s  an accident.  precisely what it’s buying can it make an  how much something is worth, while the  insurance policy won’t cover that loss, as   informed decision.”  The Fixins  Different amenities can carry with  tion may be unaware as to how expensive  the unit to me. And this can get extreme.  —residential properties are constantly in   them a varying degree of risk, and can af-  fect insurance rates accordingly.  According to Resnick, “In an applica-  tion for insurance, and in an inspection  mon  for  condo   by the insurance company, the insurer  owners (and co-  will look at all the amenities, and ask vari-  ous questions along the lines of  ‘is there   a pool? Does the pool have a lifeguard? Is  much  lesser de-  there a diving board? How about a club-  house? If so, can you bring guests? Will  unit to a tenant as   there be alcohol on the premises?’ and so  an investment or   forth. And this refines the exposure that  revenue property.   the underwriter has.”  The association has the option to bring  pens, there are in-  in  an  outside  appraiser  to  ensure  that  a  surance complica-  potential insurer is assessing an adequate  tions that need to   value  to  each  amenity.  “It’s  a  very  com-  mon thing today to have a variance as to   what an amenity is actually worth,” says  ium unit and rent it to me,” posits Paul   Neis. “From an insurance standpoint, it’s  Kaliades, president of Renters Legal Li-  not what an association paid for an ame-  nity,  or  what  the association thinks  that  Reaching all branches of the multi-family  subletting is taking place, and all involved   mates can be off by as much as 50%. Usu-  insurance company will try to argue up  you have invalidated the policy by engag-  the value. In all likelihood, an associa-  something will be to rebuild.”  Rental Tenant Considerations   It’s very com-  op  shareholders  as  well,  but  to  a   gree) to rent their   When that hap-  be addressed.   “Let’s say that you own a condomin-  ability LLC, based in Salt Lake City, Utah.  owners within the property. If renting or  price their insurance every year,” he says.   industry, the company also offers a Con-  dominium Legal  Liability program. “If  regard to insurance, everyone involved   I cause a $25,000 kitchen fire, unfortu-  ing in a commercial endeavor by renting  units are constructed, the façade is altered   Even when there are renting restrictions  flux, and thus may require adjustments to   in an association’s bylaws, they aren’t al-  ways  heavily  policed   by the board. So we’ve  proposal  with  a  summary  of  their  cov-  seen some dramatic  erages,” says Daly. “And every few years,   problems come  up  they may want to compare prices with   in mid-rise or high-  rise buildings, where  tion is particularly antsy regarding insur-  you have a flood in  ance charges or what they pay for reinsur-  an upper unit that  ance, we’ll even do comparative shopping   seeps into four or five  annually. But at the very least, it’s always   neighboring units be-  low, such that you’re  thorough reading-through of your cover-  talking a $75,000 or  age policy. And if there’s construction go-  $100,000 repair bill.  ing on, any relevant effect on insurance   Without  protection  in place for the renter,   you’re in trouble.”  So it’s imperative that a board be aware  shopping: “The worst case example of   of the activities and conduct of individual  prudent directorship is if they go out and   parties don’t do their due diligence in   could face steep penalties in the event of   Ch-ch-changes  Amenities are added or removed, new   the association’s insurance coverage.  “Every year, I present to my clients a   other insurance companies. If an associa-  good to do a quick yearly sit-down and a   warrants more attention.”  Daly’s colleagues concur, but Neis   warns against overdoing it with bargain   “It’s always good to   do a quick yearly sit-  down and a thorough   reading-through of   your coverage policy.”           — Sean Daly  continued on page 18

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