Tsunamis, earthquakes, tornadoes—these are just a few of the devastating disasters that have made headlines already in 2011 and the emergency situations that resulted many never thought possible.
As the past year’s calamitous snowstorms, earthquakes, and even dreaded bedbug infestations have demonstrated, sometimes you just can’t plan for everything, and that’s especially true when you are living in a co-op or condo.
Any financially solvent co-op or condo building has both an operating budget to cover day-to-day expenses associated with running the building and a reserve fund that’s in place to pay for larger repairs and capital improvement projects. But what would happen if something devastating were to happen?
“The best thing a co-op/condo can do is to prudently take care of hazards or developing hazards at the building, mitigating risk,” says Todd Ross, president of Manhattan-based TM Ross Insurance Brokerage, LLC. “Putting in place proper risk transfer documents between the building and contractors that enter the building or between unit owners and their contractors, enforcing the requirement for unit owners and [general contractors] to have proper insurance, and to sign proper contract with hold harmless and indemnification provisions, are things a building can do to manage risk.”
Smart boards will prepare and plan financially for a worst-case scenario, say the pros. Building some ‘wiggle room’ into a building’s budget can help fill the gaps between operating and capital expenses, and can spare residents from huge assessments and/or maintenance increases.