The sad reality is that when a hurricane, flood or fire strikes, often the greatest damage is not caused by the crisis itself, but rather by poor decision making by boards in the aftermath of the event.
In the aftermath of a disaster or other crisis, communities are often inundated by individuals offering 'quick fixes' to the damages caused by the event. Some will offer to clean up the premises and restore the buildings for little more than a signature on a single-page 'agreement' signing over “all insurance proceeds” to the restoration company.
Some states have voided similar agreements finding them to be without merit. For a contract to be enforceable, it must be specific as to the compensation to be received and obligations to be performed—it must also state the scope of work to be performed for the proceeds received.
While cleaning up the premises is among the first actions which need to be addressed by the board after a damage event, waiving the building or association's legal rights is not. In the immediate aftermath of a storm or fire, the first order of business is accounting for the whereabouts of all residents. After that, concern shifts to cleanup, mitigation of water damage by drying out any wet areas that could lead to mold, and shoring up any openings in the structure such as blown-out windows or holes in the roof.
Avoiding Common Pitfalls