Avoid a Multifamily Meltdown

Now more than ever, natural disasters have become the harsh reality for multifamily owners and operators throughout the country.

A comprehensive disaster preparation plan pays off in the long-run

By Johnnie Smith, InStar Services Group

New York—Now more than ever, natural disasters have become the harsh reality for multifamily owners and operators throughout the country. That was hammered home painfully during the violent 2011 spring storm season, which saw the deadliest single tornado since the National Weather Service began keeping records back in 1950. More than 120 Joplin, Miss. residents were killed by the EF-5 tornado, and 30 percent  of the town, including the St. John’s Regional Medical Center, was completely leveled. And now, hurricane season is upon us.

Such extreme weather has become the norm as the earth warms. Since 1990, eight of the top 10 years for extreme single-day precipitation in the U.S. occurred. In the past 12 months, hundreds of daily rainfall records have been shattered. Last year tied the deadly hurricane year of 2005 as the warmest on record. This year’s twisters and floods throughout the Midwest simply added an exclamation point to this new weather reality, yet few facilities are positioned to bounce back from a worst-case scenario. Have you prepped your multifamily community for a disaster and its aftermath?

Encourage residents to have their own safety plans in the face of a looming disaster. In the event of a tornado, residents will need to get to a lower level immediately, whether it’s an underground parking garage or a neighbor’s apartment. In a high-rise, they may not have time and may be better served seeking refuge in a hallway toward the center of the building or a windowless bathroom or closet. Some multi-tenant operations conduct annual disaster drills to determine whether emergency plans are adequate.

Unlike retail, office and industrial buildings, there are many unique considerations for multi-housing facility managers: residents may resist evacuation and you can’t force them out. For example, on Mud Island, a small peninsula inside Memphis city limits surrounded by the Mississippi River, managers of one multifamily development were unable to convince some residents to evacuate, despite the encroaching floodwaters in May. Only an evacuation decree by the city would have been effective.

Insurance considerations

In apartment communities, owners carry the insurance policies on buildings, and residents are responsible for their belongings. And if renters don’t have content insurance, they stand to lose everything. Those with content insurance can hire a restoration provider to assist with recovery. Informing employees of the insurance requirements will save property managers serious headaches following a disaster situation.

In condo complexes, however, homeowner associations and property managers secure insurance for the building itself, but individual condo owners typically cover everything inside their four walls, including valuable appliances. That can lead to a convoluted scene for restoration firms, because there are many owners who can hire different restoration firms, leading to a congested workspace.

When it comes to complete devastation of a multifamily community, as was the case for several complexes following the previously mentioned tornado disaster in Joplin, Miss., Oklahoma and Alabama, owners should understand that the restoration process is centered on clean up as compared to reconstruction. In the case of a total loss, restoration professionals will be brought in to clean up the debris. The property owner must then decide whether or not he or she will rebuild the community.

Storms, fires and other disasters are an imposing fact of life. Well-prepared owners and managers of multi-housing communities who take necessary precautions to prevent, or at least minimize, lasting damage will get back to full strength as soon as possible, keeping residents happy and the bottom line intact.

Include these steps in your pre-loss plan:

✓ Reassess insurance coverage. Flood insurance is too often overlooked, a fact to which Hurricane Katrina victims can attest. While multifamily properties may have adequate tornado, fire and hurricane coverage, most don’t have adequate flood insurance.

✓ Secure a disaster restoration contractor. There aren’t enough of them to mitigate a large-scale disaster, so don’t wait. Thoroughly interview firms months in advance. Ask about response times, emergency communication and code- and environmental-compliance policies. Make sure the contractor can be positioned to promptly respond. The firm you’re hiring should tour your community in order to fully comprehend your building/project size, materials and power needs. You’re free to choose your own contractor; insurers can’t dictate one.

✓ Maintain contact. A comprehensive employee contact list with cell phone numbers and e-mail addresses is key. Make sure this is accessible through various portals.

✓ Secure your records. One seniors community in Alabama was practically obliterated in the deadly tornados this spring, and no physical files were recovered! Multi-housing managers should have all vital information backed up in secure off-site locations.

✓ Inspect. Secure all non-stationary items, including HVAC systems, to ensure that they don’t blow away, which could cause major damage to your roof. Unclog drains to aid run-off and identify all building utility shut-offs.

Post-Loss tips for disaster recovery

✓ Prioritize your contacts. Start with your insurer. That way, the adjuster can get to your site as soon as possible. Then call your restoration contractor. Early arrivals can help prevent additional damage and keep out undesirables.

✓ Photograph initial damage. Have a digital camera ready to document water levels, downed power lines, roof holes, missing shingles, etc. This expedites the claims process.

✓ Know what to expect. The restoration contractor will dispatch project managers, drying technicians, drying equipment, tarps, plywood, generators and the like to the scene. It will focus on the worst-hit areas first, particularly roofs, windows and doors, and form a battle plan with the property manager and adjuster from there. If it is deemed necessary that some damaged building materials are to be removed, they are first tested for any environmental concerns. The typical drying time for an affected building is five to seven days before major repairs can start.

Johnnie Smith is executive vice president of business development for InStar Services Group, a nationwide provider of disaster restoration, reconstruction and technical services.