Managing Risk While Managing Cash
by Marlone Madamba
Jan 2019 issue of Building Management Hawaii Page 34
20 years ago when i started in property restoration we didn't have the litany of concerns that we do today. With most industries as they grow, the technical service elements become way more detailed. Over the years the following complexities or concerns have showed up in property restoration as a result of an increase of awareness and/or regulatory pressure.
4. Category 3 water
In addition to these the building envelopes and interiors have become multi layered. All of this means that the finishes we used to feel comfortable drying, we're now removing because of these concerns. This obviously has a direct impact on the total bill for restoration. A $2000 to $5000 drying project is now a $20k-$50k removal and restoration project -That's a 10x increase for the exact same event!
This is also further compounded by the increasing liability and exposure to the association and its board members. Layer on top of that an aging infrastructure, a lack of solid reserves and increasing insurance premium costs you start to have a no-win situation. The association is forced to make a choice between doing the right thing from a health and safety perspective or doing the right thing from a fiscal perspective. I could scare you with story after story about the aftermath and consequences of not properly mitigating but I'm sure every Property Manager out there could do the same from a fiscal position. Talk about a hard decision to make! Unfortunately, I don't have a magic answer or technological solution for this problem. I do however have a few helpful tips that can dramatically reduce the cost of mitigating.
1. Call a contractor immediately - roughly 50% of the building finishes we recommend removing instead of drying could have been dried if we were able to respond within 48 hours of the incident. The quality of water gets worse every day the materials are left wet. A quick response can keep that $2k to $5k mitigation project from turning into something worse.
2. Clean, Disinfect and Stabilize - For category 3 water issues we're constantly running into situations were people don't want to remove building finishes right away. If that's the case, still contact your mitigation contract and request for them to clean, disinfect and stabilize the environment. While this does not eliminate the concern of leaving building materials impacted by category 3 water in place it does reduce foul odors and prevent adjacent unaffected materials from becoming affected.
3. Review and know the limits of your commercial policy – There are some things that are specifically excluded. Knowing what they are can assist in making split second decision during a water event. Also knowing what the deductible is key in determining whether or not you should make a claim.
4. Consider developing an in house response team - more frequently we're seeing associations and resorts start to handle their own small projects. This is so common in fact that many mitigation companies are offering free training for in house engineering staff. This is a great way to become much smarter about how to service your property. The mitigation companies also appreciate this because they’re now only responding to the infrequent big project only. The smaller, lower margin work is being self performed by the AOAO.
5. Consider alternatives to costly infrastructure projects - advancements in pipe lining technologies have made this more reliable and less costly as an alternative to a full re-pipe project.
6. Install early warning water alarms - these are little sensors that sit under or adjacent to a potential source. They can either be connected to a central monitoring system or be a simple as a sensor that alarms audibly when water is detected. A more complex version will actually shut off the water main to a unit if its alarmed.
7. Partner with a mitigation company that offers free inspections - this way you can contact them for advice on everything, without the risk of having an invoice delivered.
The bottom line is having a solid plan when the issues occur is the best way to keep claim costs down before your next water event occurs.
Should you have any questions or concerns regarding your building or home's safety in the event of an unexpected water loss event, call us today!
Our entire team is IICRC Certified Water Damage Restoration Technicians and we are standing by 24/7 to help.