Odd situation- water leak casued damage to neighboring unit
Rental Property Investor · Hartford, CT · Member since 2017 · 168 posts · 163 votes
A unit I own out of state, which is vacant at the moment, had a leak. I wasn’t initially able to reach the PM, but eventually did and they went out and dried up the water. There was no damage to my unit so I did not file an insurance claim.
The water went through the wall into the neighbors unit (she called the HOA) which is how I learned of the leak in the first place. She is afraid mold will now grow and says the baseboards are coming off the wall. She would like my insurance company to fix it.
My insurance company says without filing a claim and having an adjuster do an investigation they cannot tell me if 1. The leak is covered or 2. If her unit is covered. The leak most likely is not covered based on the source of the leak and what I read in my policy documents.
I suggested to the neighbor she contact her own insurance as I am not filing a claim. She was not thrilled because she says she will have to pay $1000 and it’s my fault. While I do feel bad, and if the shoe were on the other foot might even feel the same, I am not sure how to proceed or if I am liable or if this a just a risk of living in a town house?
Thoughts? Advice?
You are not being a good neighbor. You know that the leak originated in your property, not her's. You should file a claim against your insurer and give her a copy of the claim. If your insurance company decides to jerk her around, she can contact her insurer who will then go against both you AND your insurer.
Be aware though, that once her insurance company is done fixing her up, it will go after you on her behalf for damages, her $1,000 deductible and her out-of-pockets, AND her increase in premiums caused by her having to file a claim.
You are not being a good neighbor. You know that the leak originated in your property, not her's. You should file a claim against your insurer and give her a copy of the claim. If your insurance company decides to jerk her around, she can contact her insurer who will then go against both you AND your insurer.
Be aware though, that once her insurance company is done fixing her up, it will go after you on her behalf for damages, her $1,000 deductible and her out-of-pockets, AND her increase in premiums caused by her having to file a claim.
You are not being a good neighbor. You know that the leak originated in your property, not her's. You should file a claim against your insurer and give her a copy of the claim. If your insurance company decides to jerk her around, she can contact her insurer who will then go against both you AND your insurer.
Be aware though, that once her insurance company is done fixing her up, it will go after you on her behalf for damages, her $1,000 deductible and her out-of-pockets, AND her increase in premiums caused by her having to file a claim.
This may or may not be accurate (except the part about her insurance going after OP for increased premiums which is 100% inaccurate). It depends on the location of the unit and the local laws. The main question will be the requirement of negligence for liability and whether OP acted properly or waited too long to address the issue.
Not too long ago I had to go to court to represent an HOA on a water damage claim. A leak in a bathroom destroyed a freshly remodeled bathroom in the unit below. No question of facts, the water originated in the unit above due to degraded caulking/grout and improper installation of shower doors, and the water came down and damaged the unit below. The owner of the upper unit refused to file an insurance claim. Unit below sued both the owner and the HOA. Judge ruled that while all the facts were true, there was no negligence on the part of the upper owner. There was a problem (degraded caulking and improper installation) that a normal person wouldn't have noticed, but when informed they took immediate action to correct. The damaged lower unit LOST the case. The judge explained that there are times in life that a person will be injured and there just isn't anyone to blame or pay for it. That's what YOUR insurance is for.
The last thing a person should do is file a claim against their own insurance for something that won't be covered. This is especially true if it is a water claim, something insurance companies hate. OP needs to find out liability requirements in her area before moving forward.
This may or may not be accurate (except the part about her insurance going after OP for increased premiums which is 100% inaccurate). It depends on the location of the unit and the local laws. The main question will be the requirement of negligence for liability and whether OP acted properly or waited too long to address the issue.
Not too long ago I had to go to court to represent an HOA on a water damage claim. A leak in a bathroom destroyed a freshly remodeled bathroom in the unit below. No question of facts, the water originated in the unit above due to degraded caulking/grout and improper installation of shower doors, and the water came down and damaged the unit below. The owner of the upper unit refused to file an insurance claim. Unit below sued both the owner and the HOA. Judge ruled that while all the facts were true, there was no negligence on the part of the upper owner. There was a problem (degraded caulking and improper installation) that a normal person wouldn't have noticed, but when informed they took immediate action to correct. The damaged lower unit LOST the case. The judge explained that there are times in life that a person will be injured and there just isn't anyone to blame or pay for it. That's what YOUR insurance is for.
The last thing a person should do is file a claim against their own insurance for something that won't be covered. This is especially true if it is a water claim, something insurance companies hate. OP needs to find out liability requirements in her area before moving forward.
I'm not sure your case fits with the scenario that the original poster stated. In your case the owner "wouldn't have noticed" the leaks even though he lived there, but the original poster stated that the property manager immediately found water on the floor. Since you cannot avoid liability by playing ostrich, the test is how quickly someone living in the unit would have noticed the leak. Yes, I know the unit was vacant, but you can't fail to inspect and then claim that you're not liable for what an inspection would have discovered. If you close your eyes when you approach an intersection you can't claim as a defense that you didn't see the stop sign.
So it looks like the original poster should have noticed the water leak well before it damaged the other person's unit. I have dollars to doughnuts he'll be held to that standard anyway. The fact that he wasn't there to see it will not save him. That was his decision. Given that the water leak was readily discovered by the property manager upon inspection, I am confident that a judge would say "Negligence, res ipsa loquitur." Whether the negligence took the form of allowing bad workmanship for installation, failure to replace components at the end of their useful lives, or failure to inspect frequently enough to catch failing components before they damaged neighboring properties would be irrelevant -- negligence on his part existed.
He should be a good neighbor and notify his insurer, which can investigate. If it finds that he is not covered for damage to the third party's unit, then he tried to do the right thing. Refusing to file an insurance claim, however, is not justified. Let the insurer determine coverage. If the guy's not a lawyer, why should he take it upon himself to determine whether his policy covers damage to a third party's property?
@Greg M.
Thanks that’s helpful.
I live out of state, and have never been in the unit. It was inspected prior to purchase and I replaced everything old or worn out. It was the hot water heater that leaked and it was while vacant. The HOA manager turned the water off, I spent 4 hours calling not only the emergency maintenance line for my PM but when I failed to get a clear time line of when they would arrive hired a locksmith to unlock the unit and a water mitigation company to come. However the PM did get my emails/messages/calls and sent the maintenance man over and the locksmith found him inside after popping the back door open. I was literally willing to drill the locks to get this cleaned up asap. There was no way this could of been predicted. The HOA manager told me the area of water in The adjacent unit was very small.
Now that owner is talking about mold could grow etc. the unit was dried so I doubt that will happen.
My insurance doesn’t cover leaks from water heaters- I checked. And my unit had no damage, which I was grateful for since I just put in new LVP floors in July. If I file a claim, my rates will go up for all my rentals and all future rentals for the next 5 years. Plus it is not covered, and the area of concern will cost less than the deductible to fix.
I do feel bad, but I also need to be smart when it comes to business and filing a claim when it’s actually listed in the excluded clause on the insurance documents seems like a bad business decision.
@Greg M.
Thanks that’s helpful.
I live out of state, and have never been in the unit. It was inspected prior to purchase and I replaced everything old or worn out. It was the hot water heater that leaked and it was while vacant. The HOA manager turned the water off, I spent 4 hours calling not only the emergency maintenance line for my PM but when I failed to get a clear time line of when they would arrive hired a locksmith to unlock the unit and a water mitigation company to come. However the PM did get my emails/messages/calls and sent the maintenance man over and the locksmith found him inside after popping the back door open. I was literally willing to drill the locks to get this cleaned up asap. There was no way this could of been predicted. The HOA manager told me the area of water in The adjacent unit was very small.
Now that owner is talking about mold could grow etc. the unit was dried so I doubt that will happen.
My insurance doesn’t cover leaks from water heaters- I checked. And my unit had no damage, which I was grateful for since I just put in new LVP floors in July. If I file a claim, my rates will go up for all my rentals and all future rentals for the next 5 years. Plus it is not covered, and the area of concern will cost less than the deductible to fix.
I do feel bad, but I also need to be smart when it comes to business and filing a claim when it’s actually listed in the excluded clause on the insurance documents seems like a bad business decision.
Aloha,
Although I am not familiar with CT HOA's, typically the HOA has a "master" policy that provides certain coverages, and each homeowner has their own HO6 or similar. Events like this often result in claims by all parties, depending on total damages AND depending on your specific HOA Governing Documents.
The HOA will likely have a high deductible, which is where the individual policies come into play. The neighbor is right to be concerned about mold growing...if proper and thorough drying processes were not implemented quickly, the sheetrock can wick up a lot of moisture from the floor, including the space in the framing between the units on the back of the sheetrock. It will remain damp for many days, usually with mold blooming, if not properly addressed, which requires warm air being directed into every affected space. Your policy, as the original source of the leak, should cover the neighbor's deductible and damage/remediation up to the master policy deductible, "as built", not upgraded floor and wall coverings or cabinets. The neighbor's policy should pay for their later upgrades. You need to be sure your individual policy properly meshes with the HOA master policy, or you could pay a lot out of pocket. Your HOA management SHOULD provide clear guidance on how your specific process works...there is nothing unusual about it at all!
@Richard F.
There is not an HOA master policy because this isn't a condo. It's a townhouse. Every owner is individually responsible for everything on their units on the inside and outside. The HOA just does lawn care basically.
OP-
Your water heater leaked and caused damage to another's property.
You are responsible for this. It doesn't matter that you didn't know about it.
If I were your neighbor, and you were acting this way, I would sue you in small claims just to cause you a bigger headache than you are causing me, since you are out of state.
I recommend being a good neighbor and taking responsibility for your problem.
It comes down to this. Do you want a disgruntled neighbor? Are the repairs less than lawyer fees if they sue you? I would have sent in servpro to do mold remediation and then put new baseboard up for them. Its probably easier and cheaper in the long run. Imagine if that neighbor decided to make life hard for you... your out of state.
How much would it cost to replace the piece of trim and paint that wall? Guessing under $500.
Your PM should have gone to the adjacent units to let them know about the water leak, so they could check. It is easy enough for the other side of the wall to contain a cabinet or closet and go unnoticed.
A-See if it's covered by the HOA (Probably not)
B-File a claim with your insurance. If they don't cover it, go to option C
C-File a claim with the neighbors insurance and pay their deductible and other related expenses.
I can tell you now that I have a client where this exact same thing happened. The neighbor is suing them over the matter. The water came in from the outside into her unit and then to the neighbors unit. She sued the HOA, the neighbor sued her.
Save the money on lawsuits and get this fixed.
Heidi,
In a Condo situation, you need to determine the cause of the water damage. If it is a pipe, then the ownership of the pipe needs to be determined from the Condo documents (declarations and bylaws). I would suggest that ether you or your neighbor inform the association that there has been a leak and they need to open a claim. The adjuster from their company will need to respond and make the determination. If it turns out that the leak occurred in a pipe that is a "common element" of the association, their policy would be responsible for the loss. if the leak occurred in a pipe or other area that is part of your unit, then you may be liable and should let your carrier make that determination.
Offer to send your handman today to cut out the molding trim gently $50, remove bottom six inches of drywall $50, HomeDepot giant blue fan $35, $50 for extra utility and reinstall drywall and same molding repaint the wall $300. The repairs are cheap. Handyman can do the mold kit, you can be sure she already did one or pay an expert mold dude (state specific laws as to need a license) to do the test and keep it in your pocket if she later says there are long term problems.
Be sweet. Be fast. Make her whole.
Your water heater caused her damage. There is no master insurance and you chose cheaper underinsured policy.
You lose in a lawsuit and her insurance goes after you personally. Cost $150000.
Your water heater leaked and caused damage to someone else's home...... fix it.
Don't be the "well, legally I don't have to fix it" guy
If your insurance company wont pay for it, then pay for it yourself or at minimum her deductible for her insurance to cover it.
Don't be that guy........ do the right thing