Natural Disasters: Where Should Your Focus Be?
Put people over property…but don’t forget the property!
Natural disasters are rare, fortunately, but they happen — and when they do, they can bankrupt an investor and leave a property manager shy a client and a building. So what can we do, if the worst comes to worst, to help our clients survive a major emergency?
Preparing for Natural Disasters: The Generalities
The first step toward preparing for a natural disaster is knowing which are the most likely to strike any given property. Sometimes, that’s obvious — like preparing for a tornado if you live in Kansas City or an earthquake if you live in Los Angeles. But dangers also vary from neighborhood to neighborhood and block to block. Check your flood maps, your sewer mains, look for hills above or below the property, and basically make it your business to know what every property is endangered by.
Then, naturally, make sure that insurance is in place to cover all of the dangers that are actually dangerous to that property. This always includes fire, and almost always includes flooding. Have all of those insurance companies’ phone numbers and other contact information easily available in your office and on your phone.
A Property Manager’s First Actions
The moment that a tenant or other report informs you of a natural disaster, you must send someone out to the property. Your first step is always to ensure the safety of the tenant, and your second step is to take whatever action (if any) you can to preserve as much of the property as possible without endangering yourself.
Communication is the key to everything. Repeat that again please! Communication is the key to everything.
As soon as you find out about a natural disaster communicate it to any tenants AND owners that might be affected. Do your best to let them know as much as possible and try to anticipate what may come next.
Then, call the insurance company(/ies) that are relevant and ask them to get someone out there ASAP.
If necessary, relocate the tenant to a safe temporary place they can live. Continue to deal with the insurance adjusters, inspectors, and start contacting contractors to get the damage taken care of efficiently. Your focus should be on minimizing the expense to the owner while also minimizing the amount of work that the owner has to put into dealing with the disaster.
As an example, let’s look at the metro Detroit flash flooding that occurred August 11, 2014 and what we did:
- As news reports and tenant phone calls alerted us to the scope of the flood, we quickly composed an email alert message and blasted it to all our tenants. Since all our tenants were basically in the affected area, we didn’t use any filters. We also took the stance that even if a tenant wasn’t going to be affected, sending it to them should build up some good karma with them and they might appreciate us more.
- We obviously responded to the tenants contacting us and tried to physically get to as many as possible. We contacted every Service Tech we had to alert them that we’d be needing their assistance around the clock. Unfortunately, many of them were personally dealing with the flood at their own homes. Something very important to keep in mind!
- We eventually realized that the scope of the flooding made it impossible to physically get to all the affected properties. We also discovered there was little we could actually do about the flooding as there was no way to stop the water from entering (it was coming up through the sewer & storm lines) or anywhere to pump the water. So, we sent out another email to our tenants doing our best to communicate these challenges.
- We also sent an email alert to our property owners, including links to local news reports and videos showing the extent of the problem. In addition to communicating the problem, we did this to minimize the number of calls we would get from owners asking for more details. We also included in the email that per the management contract, we would be taking whatever actions necessary to avoid legal liabilities with tenants and to protect their properties without their approval, and to anticipate future expenses related to the flood.
- The morning of August 12th, our monitoring showed that the flooding was mostly receding as the overwhelmed storm & sewer systems cleared. Most affected basements drained on their own. So, we switched to cleanup mode.
- We researched how to best address the flood damage. We also contacted our attorney to clarify our responsibilities and potential liabilities and then sent out an email to tenants to alert them of what they should do for proper cleanup. We sent an email out to our owner clients asking them to contact their insurance agents to find out if flood damages would be covered (majority weren’t).
- We also ran a report on all properties with basements, used a map of the affected areas to filter out properties in unaffected areas and created a list of properties potentially affected. We cross referenced this list against the list of tenants we’d already heard from and started calling everyone else on the report. This allowed us to create a list of properties to monitor and focus on.
- We also had a Service Tech visit all the vacant properties in the affected areas and added them to our monitor list.
- We sent another general email blast to tenants another to owners and then switched to sending them to only those affected.
- During this whole disaster we ramped up our documentation of communications and actions to protect our owner clients and our company from potential liability issues.
We’ll stop there as the important point we’re trying to make is how we communicated. There’s always room for improvement, but overall we think we did pretty well (we’d appreciate any ideas in the comment area at the end of this post!).
The Hardest Work Comes Before the Disaster
As much as that sounds like hard work, and it’s not easy, the real work should have come and gone already. Whenever you first accept a contract with a client to manage a property, you should have an inspector examine the site and look for any potential dangers that could become problematic in the event of a disaster.
- Rickey retaining walls that could collapse in an earthquake,
- Brush from a nearby wooded area that reaches near a home and could carry fire,
- Yards with poor drainage that could hold water up against the outside of the basement wall during a flood,
- And so on.
If you put in the effort to identify and prevent these currently-minor issues before they become major issues, you can be the hero of a disaster story that never happened…and that’s a great place to be.