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Landlords and property managers deal with winter water damage.

Look on just about any street in Manhattan and you will see renovation work in progress.

A lot of it is facade work repairing bricks and lintels. It is not unusual, when such work is needed, to have leaks occurring in the building. In the past few weeks I have gotten calls about leaks in three different buildings.

Even though the building ownership may be taking steps to eliminate the problems, tenants may be suffering from water damage until the work is complete. There may be openings in the brick or the flashing may not be intact.

There may also be leaks from work on the roof. Some people who have just had new roofs installed report water damage which may have resulted from faulty installation.

One landlord called me to complain that even though his building has a new roof, every time it rains, they have leaks and water damage. Some water damage may be from the negligence of tenants.

No matter how many signs a landlord posts, some people still let sinks run or overfill toilets and water damage may result. Water travels all over the building in unpredictable ways. It can cause direct damage, such as damage to the structure and personal property and indirect damage, such as causing mold to grow.

It bears reminding that not only should landlords have their own insurance coverage, but they should make sure that their tenants do as well.

Landlords and their managing agents should be named as additional insureds in the tenant's policy. This insurance must be in place before the tenant moves in and before the tenant engages in any renovation work.

Landlords need to see plans showing exactly what work is being done. They must also have their own architect or engineer check the work to see that what is shown in the drawings is what is being built. Once the wails are closed up, it is hard to determine if the flashing was installed properly on a terrace. Damage can occur from a combination of factors--some involving work done by the landlord and some arising from work done by the tenant. It is better to have overlapping coverage than to not have enough. The possibility of a tenant's work causing damage, is a major reason why some landlords only allow work in their buildings to be done by certain contractors on a list that they distribute to tenants. It lessens the likelihood of damage being caused to their buildings by companies they have not previously worked with.

Of course everyone in the chain of contractors who works on a building must have insurance. This is why building owners need to be aware that subcontractors are working on their building.

A general contractor may ask a subcontractor, in the contract between them, to name the company as an additional insured.

If that does not happen and there is a loss, the general contractor will need his own carrier to respond to the loss. I have seen instances where a subcontractor did not purchase the required insurance before the work began, but purchased it a couple of weeks into the work. Naturally the loss occurred during the period before the insurance was purchased.

Giving timely notice of such claims to the insurance carrier is especially important and can mean the difference between being covered and not being covered. There may be one or more small leaks and no notice is given, then a short time later there is a major leak.

A question arises as to whether the carrier should have received notice when the first leak occurred and whether the notice they are now being given is late notice.

There are times when even though the building owner has begun to address the problem and hire contractors and engineers, disputes arise with neighboring buildings.

Neighbors may complain that their property has been damaged as a result of the repair work or that the repair work itself is taking too long and is causing damage to retail tenants.

Whether or not these cases ultimately prevail at trial, a lot of litigation and anxiety occurs over these kinds of disputes and consulting with knowledgeable counsel is essential.

C. Jaye Berger is an attorney in Manhattan.
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Title Annotation:Insiders outlook
Author:Berger, C. Jaye
Publication:Real Estate Weekly
Geographic Code:1U2NY
Date:Jan 14, 2004
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