House Lawyer: In seeking storm relief, condos and co-ops find not all homeowners are equal
By Benny L. Kass, Published: August 15 | Updated: Friday, August 16, 9:55 AM
Thousands of condominium and housing cooperative owners whose properties were damaged when Hurricane Sandy battered the East Coast last year learned – after the fact – that they were not eligible for financial grants from the Federal Emergency Management Agency.
Unlike single-family homes, which can get both grants and loans, condos and co-ops are considered “business associations” and are entitled only to loans. As we all know, Loans have to be repaid; grants do not.
Sandy was a Category 3 storm, with sustaining winds of 115 miles per hour. It was the most destructive storm in 2012 and considered the second costliest in American history. And although much progress has been made to restore the New Jersey coast, thousands of community association homeowners are still basically homeless.
Last month, Rep. Steve Israel (D-N.Y.), along with several other lawmakers from both parties, introduced legislation to correct this matter. ”A storm does not discriminate where it hits,” Israel said, ”and FEMA should not be discriminating what type of homeowners it helps. It seems clear that FEMA ‘s policy is the result of not understanding the role of co-ops and condos in our community.”
Israel, in drafting his bill, gave one example from a constituent. Bob Friedrich is president of Glen Oaks Village, the largest cooperative in New York with 10,000 residents. According to Friedrich, “it is unconscionable that FEMA refuses to help the working-class community of Glen Oaks Village that sustained more than $250,000 of damage from Hurricane Sandy because we are a co-op. Let remind FEMA that the mothers, fathers and children of Glen Oaks are not different than the mothers, fathers and children who live in private homes.”
The storm impacted the Washington area, but fortunately we did not experience the extent of damage and destruction that took place in the Northeast.
This does not mean, of course, that those of us who live in this area should be complacent. There are countless condominium and cooperative associations in our area, and they could face the same issues if a storm strikes us more directly next time.
The bill that was introduced (H.R. 2887) would amend the Robert T. Stafford Disaster Relief and Emergency Assistance Act. That is the Law, first enacted in 1988, that, among other things, created FEMA. According to Israel, when it became clear that neither the Department of Homeland Security nor FEMA was willing to unilaterally change the policy toward community associations, he “came to the conclusion that a legislative solution is needed to make the change.”
The bill, if enacted, would make it clear that condos and cooperatives should be considered the same as single family houses. However, instead of the maximum amount of disaster relief that single-family homeowners can get, the bill would allow the president of the United States to adjust by regulating the cap for those associations.
The Community Associations Institute, a national association representing homeowners throughout the country, has endorsed the bill, saying it “is a big step forward for community associations receiving equitable treatment under FEMA disaster guidelines.”
However, the institute cautioned that “it does not address all of CAI’s areas of concern …. Homeowner associations are not included in the bill.”
Israel’s bill was referred to the House Committee on Transportation and Infrastructure, whose chairman is Rep. Bill Shuster (R-Pa.).
Benny L. Kass is a Washington lawyer. This column is not legal advice and should not be acted upon without obtaining legal counsel For a free copy of the booklet “A Guide to Settlement on Your New Horne,” send a self-addressed, stamped envelope to Benny L. Kass, 1050 17th St. NW, Suite 1100, Washington, D.C. 20036.