Page 7 - New England Condominium November 2021

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. www.jbutlerpropertymgmt.com 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