Roof leak and mold in townhouse - I'm going bankrupt, aren't I?
August 9, 2017 1:59 AM   Subscribe

I live in a townhouse as part of an HOA, and our side had a roof leak over my unit. The HOA kicked the can for too long and now I have mold. I'm pretty much going to go bankrupt, aren't I? More details inside.

Many Background Details
House is a townhouse, middle unit, in two banks of homes. Ten total households, five on each side. Roof is old, and at the end of its' natural lifespan. Last year I told the HOA president that I was getting water stains on my second floor ceiling after rain, and he's send some roofers to "fix" the leaks. They would sometimes fix, sometimes not, and I'd get more stains/leaks popping up. I'd report them all, but I'd define the response as kicking the can, not really understanding the seriousness of the situation. This spring we had an HOA meeting and agreed to increase assessments slightly to save up for a new roof.

So I decided to pay for a mold test out of pocket from a reputable lab not affiliated with a mold remediation company - I didn't want a company who had a stake in a costly clean-up telling me I had the thing they needed to clean up. Much to my horror (but not so much surprise), I have a serious mold problem above my ceiling between ceiling and roof. Three kinds, in fact, and two of them are the toxic kind in very high spore counts. I gave these results to the HOA president and this spurred him into action. A mold remediation company was hired. The HOA is paying, because the roof is a common element that failed and it's the HOA's responsibility.

I had to move everything out of the second floor of my home for them to work; I am now staying with a friend and am effectively homeless, the first floor of my already-small townhouse is acting as a storage unit. The crew got to work yesterday and started opening up bigger parts of the ceiling, as they are taking down all the drywall from the ceiling, gutting the moldy insulation, etc. They discovered that above the ceiling line, all space is shared between the row of five homes. The mold has already spread to the homes on either side of mine because of this, displacing two more families with small children who are evacuating this week. The original cost of remediation for just the one unit was around $5K, re-insulation and drywall replacement and repair and painting another $5K on top of that. But now we need to do it x3 or possibly x5 depending on what they find when they open up other ceilings in other units, and we're looking at our entire reserve and possibly more, with no more savings for the roof replacement either.

My understanding is that the HOA is looking at trying to get insurance to pay for this, but the roof was at the end of its' life and the insurance doesn't cover mold anyway, so it's uncertain how much of any of this the insurance will pay. (My own insurance will not pay because this was a failure of a common element and none of my belongings have been damaged.) And honestly, the kick-the-can mentality of the HOA board is what caused this to play out the way it did. If the already-at-the-end-of-its-lifespan roof had been replaced at the first sign of a leak that I reported, this wouldn't have happened. I think the HOA is liable for this preventable catastrophe past the first report of a leak and repair.

Understandably, I am in shock. I know logically that while I am not paying these vendors, a large special assessment is in my future; I can't afford the $10,000 in cash, and certainly not even more additional for a new roof and building back our reserves. I am struggling with feelings of hopelessness and shame and regret. This house was the biggest investment in my life, a symbol of stability, a part of my identity. I literally can't pay to fix this, that's why I bought into an HOA with a healthy reserve.

Key Questions
If you have ever been through something like this, or have seen this from afar, what are some of the possible outcomes? I'm having trouble even knowing what's normal for mold remediation, shared spaces, HOA liability, etc. I can't think straight. Do I need to hire a lawyer (with money I don't have?) Will I need to walk away from my home once it's repaired if I don't have the money to pay the HOA with a special assessment? Should I just sell my home ASAP? Will I even be able to sell it with the history of mold? What are some key questions I should be asking myself in my situation right now? What are all the possible ways this could play out? I am someone for whom more information is better because it lets me see all facets of an issue, but I am paralyzed.

Yes, I've scheduled some mental health appointments. I'm starting to have panic attacks, can't sleep, uncontrollably sobbing when it rains. The above is me trying to get a handle on the practical stuff; I know what I need to do to get a handle on the mental health stuff.
posted by anonymous to Home & Garden (7 answers total) 1 user marked this as a favorite
First off, kudos to you for having the mold test and getting the HOA to finally deal with this.

I am not an expert but I recommend you request to read the HOA's insurance policy to see what is covered.

I also recommend that you look into getting a home equity loan that could cover your costs up front if there is a special assessment to pay for the new roof. Spreading out the cost means it may not add that much to your mortgage.
posted by mai at 4:54 AM on August 9, 2017 [1 favorite]

This experience is from the community my parents live in Florida. Once the builder the completed and a certain percent of the units in the community the HOA was entitled to purchase the clubhouse and pool. The purchase resulted in the $10,000 assessment to each home owner. The home owners were able to pay it all up front or had the option to pay over time. Your HOA may be able to make a similar arrangement. I suspect this would result in a lien being placed on your townhouse that would have to be paid should you sell the unit before paying the loan.
posted by tman99 at 5:49 AM on August 9, 2017

This sounds terrible, and I'm sorry you're having to deal with it.

But, I can offer possible reassurance about the special assessment -- every building I've ever heard about that does special assessments over a couple thousand dollars has also offered a payment plan for residents who can't afford the lump sum. My building actually does it as a normal feature and doesn't ask people to pay lump sums (I'm paying an extra $20/month to cover our current special assessment). I would talk to your HOA board about how they're planning to cover the cost of the mold remediation and let them know that you would like them to offer a payment plan.
posted by snaw at 5:50 AM on August 9, 2017 [1 favorite]

You can have a consultation with a lawyer to talk about the cost of the mold remediation and if you have a claim of some type.

While you might not want to threaten or sue anybody, I agree this is an egregious failure on the part of the HOA. You're right, instead of just paying for a new roof, now your money is paying for remediation and a new roof. Also, yours might not have been the only leaks reported. Do you know of other leaks? Who has access to the HOA funds and how are those managed??

It might be worth peeking under this rock, just for your own peace of mind. (I'm also sorta wondering if your anxiety is not really about the costs, but rather about this failure on the part of the HOA folks and whatever's behind that. They did not look out for your best interests at all, that feels unstable and unsafe. Allow yourself to ask questions and accept the answers, whatever they are. Maybe as a result of your inquiry you decide to sell. Maybe you decide to serve on the HOA board? Maybe you find multiple errors of this type, maybe you find this was a one-time mistake, maybe you find evidence of criminal embezzlement - who knows! But now that this is has happened, the toothpaste can't go back into the tube. You will have to do your due diligence and find out your rights + what combination led to this egregious and avoidable outcome.)
posted by jbenben at 7:11 AM on August 9, 2017

Go talk to a lawyer who does plaintiff side mold litigation so they can tell you if this looks like a construction defect case, an HOA negligence case, or what. There is a well-greased legal apparatus for this sort of thing.
posted by fingersandtoes at 7:17 AM on August 9, 2017 [1 favorite]

My condo insurance had a special assessment clause that covers $20K in this kind of thing. Ask and see if you have that, it's common.
posted by fshgrl at 9:12 AM on August 9, 2017

My mom's 5-yr old top-floor condo unit has a leaky roof due to a common-use rooftop deck being installed on/through the roof membrane and not being sealed correctly. She just got handed an $87,000 (!) special assessment to fix it. It only affects her unit. She was getting ready to sell her unit but feels like now she just has to stay there forever and pay off the special assessment over time.

She's on the board so she had some input on getting this issue resolved. I suggested a lawyer but she said something about how once some percent of the building is sold the developer is no longer responsible for anything, and that the developers around there dissolve their companies after every build and start a new one, so there's apparently no one to sue.

Her previous condo had crazy special assessments because of damage to the building caused by specific other owners who somehow did not have to pay any more because of their damage.
posted by MonsieurBon at 12:19 PM on August 9, 2017

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