The Storm Continues at the Yacht Club
Hurricane Sandy deposited a boat called Misery on a lawn at Yacht Club Condominium
March 11, 2016 — (Editor’s note: This is the second in an occasional series of first-person articles by Stewart Wurtzel, an attorney who lives at the Yacht Club Condominium on Long Island and helped the property recover from the devastation of Hurricane Sandy. The story picks up after Wurtzel was elected president of the board.)
We were fortunate to have a collection of new board members with skill sets that were particularly useful for the problems we faced: there was Gary Smith, a CPA; James A. Smith, a construction contractor; John Cestaro, a local real estate broker; and Alex Krupnick, the man who spearheaded the petition drive and was determined to improve communication between the board and the residents.
The list of major problems we faced was enormous, and the first one involved communication and trust issues.
At our initial meeting, Alex Krupnick was blunt. He said we had to restore the confidence in the board that many unit-owners no longer had, and eliminate the “deep disconnect” between the board and the residents. Therefore, within the first month of our election, we set out to create new lines of communication with the residents: we held a pizza party on our lawn to introduce ourselves and get feedback from unit-owners; we started publishing summaries of the board meetings in our monthly newsletter; and we increased the e-mail communications to residents, keeping them up to date on major developments.
While we were doing that, we needed to understand the extent of our flood insurance coverage, and how it was computed and distributed. Many residents mistakenly believed that the condo’s flood insurance covered them completely, and that, therefore, they did not have to have their own coverage. They were also still upset that the previous board had deducted $5,000 from “their” insurance proceeds. And even though siding was missing from every one of the buildings, our wind policy claims adjuster told us that the loss determination was less than our deductible. So our carrier was giving us nothing.
There were more issues. We attempted to file claims for damage to our common areas with the New York Rising Housing Recovery Program (NYR), a state effort set up to assist victims of recent storms in the region. But NYR would not even consider our application unless two-thirds of individual unit-owners submitted claims. We subsequently spent weeks cajoling, requesting, and pleading with residents, trying to get a sufficient number of them to act. Board member Gary Smith characterized his futile 19-month interaction with NYR as the “most disappointing” aspect of his board service, as NYR has continually changed its rules, still has not paid the condominium’s claim, and even issued a stop-work order that held up our repairs. At one point, NYR demanded to inspect the 40 units of owners who had filed individual claims. In March 2015, it required inspection of all 128 units. New York Rising has still not committed to any payment.
We also assisted many of our unit-owners with their supplemental insurance claims because they believed that their original insurance adjustments were erroneous or did not include everything to which they were entitled. Gary Smith spent substantial time helping residents fill out claim forms and interacting with the adjuster and the insurance agent on their behalf. Our insurance coverage consists of 16 different policies, and payments to unit-owners were not being made at the same time. In fact, 11 unit-owners have still not received their supplemental payment, and there are a number who are still dissatisfied with the adjustments that they did receive.
Many of our residents were dissatisfied with the remediation company. In the rush to begin repairs after the storm, our predecessors had hired a Texas-based company to perform the remediation and base level reconstruction of the first floor of all the units. Many unit-owners were not happy with the work or the amount of insurance money paid, and many were screaming that the remediation company had stolen millions of dollars from the condominium. They were clamoring for a lawsuit.
We now needed to determine whether there was any basis for those claims. Our insurance adjustor was not always responsive to our requests for information. Months were spent reviewing unit-owners’ claims, and once that was done and submitted to the company, the board negotiated with the Texas remediation firm. In the winter of 2014, when we were close to a resolution, a few of the 39 unit-owners who had filed claims were not satisfied with the offer that had been received, and we were forced to go back to the table. In the end, the firm went out of business and no payments were made to any of the unit-owners.
When the board decided not to pursue legal action against the defunct company, the overwhelming majority of unit-owners acquiesced; however, a small number of residents expressed their disagreement in terms ranging from understandable frustration to vitriol against the board. This grew out of our particular situation. For years, the condominium had been run very loosely, and many residents did not fully understand the roles, power, and obligations of a board of managers, their own rights and obligations as unit-owners, or the interplay between the two. So they complained.
Coming next: Making the condo whole again.