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TxLRS Articles

These TxLRS articles are provided by Texas Lawyer Referral Service and are often representative of the types of matters on which Texas Lawyer Referral Service provides assistance.

Will the HOA Pay | High-rise Sustains Water Damage

The Home Owner Association (HOA) at the Royalton has a major event to contend with the current water damage.

At 7 pm Thursday night, the Houston Fire Department was summoned to 3333 Allen Parkway in Houston. An automated alarm had alerted the Fire Department.. Upon arrival, the Fire Department discovered the Royalton flooded with water from a water main break.

Royalton HOA
Royalton at River Oaks

The 33-story luxury high-rise condo building in the River Oaks neighborhood suffered extensive water damage. Subsequently, the concrete had buckled from the water. Unfortunately, a wall sustained structural damage as well.

Reports indicate that additional water pipes on some of the resident floors also burst. The first floor houses the management office and other common area amenities.

As a result on Friday, August 12, 2022, residents were required to evacuate the building. Residents were only let back in to collect medications and other valuables. There is no indication of when the building may be cleared for occupancy again. The city pulled the occupancy permits for the time being.

What is next for the HOA?

Before residents can again occupy their homes in the Royalton, an assessment of the structural integrity of the damaged wall and building will have to take place. It requires structural engineers to assess the damage and remediate the damage to ensure the safety of the building. Once complete the Royalton management will have to reapply for a new occupancy permit. Currently, there is no time estimation on how long residents may be out of their homes.

Who is responsible?

The city already stated that the water main break was not a result of a problem with the city’s water system. So that leads to the question of who is responsible for the repairs.

Water Damage

Built-in 2003, The Royalton consists of condo units that are either owner-occupied or for lease by the owner. Units for sale listed on the Royalton website range from $314,000 to $1,399,995. An HOA (Home Owner’s Association) manages the building.

Typical condo and HOA agreements state that private owners are responsible for everything inside the walls of their unit. Likewise, the HOA is responsible for everything outside those walls. Therefore, water damage inside the unit/home would be the responsibility of the individual homeowner. Hence, damage to the building and common areas would be the responsibility of the HOA.

Who pays for repairs; HOA or Insur?

It is likely that the HOA has insurance to cover much of the cost of the damage and repairs. The deductible and any non-covered damage will paid for out of pocket by the HOA. The resident may or may not have insurance coverage for the repairs needed within their home.

Insurance

When an HOA opts for a high deductible the residents are at risk of a special assessment . The only method of revenue generation an HOA has is through the collection of monthly HOA dues and special assessments for larger ticket items.

Policies that each homeowner carries on their individual unit may vary greatly. HOA covenants require minimum insurance coverage. It s up to the individual homeowner to have adequate coverage. Many residents may find themselves underinsured facing costly repair costs, facing a special assessment, and having to find alternative housing for a long period of time making this a costly event.

Lessons learned

Check your individual insurance policy to understand both covered and exclude events. Ask if you need to have a special rider for water damage from busted pipes. Is your deductible manageable? Ask to see your HOA’s insurance policy, make sure it is current, and ask what is the deductible. Understand the overage to understand your liability. Above all look at the HOA financial statement to determine if they have reserves to cover things such as the deductible without having to make a special assessment.

Where to get help?

If you have damage to your property you feel should be covered by your HOA dues, then you may want to consult an attorney. If you don’t understand the covenants of your HOA agreement you may want to review this with an attorney. You can find help by contacting the Texas Lawyer Referral Services (TxLRS.org)

Posted: 8-15-2022
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