Tue | Sep 28, 2021
ADVISORY COLUMN: RISKS & INSURANCE

Cedric Stephens | Policing the building code

Published:Sunday | August 1, 2021 | 1:32 AM

Jamaica’s standards watchdog, the Bureau of Standards.
Jamaica’s standards watchdog, the Bureau of Standards.

Are there any lessons that we in Jamaica can learn from the June 24, middle-of-the-night collapse of the 40-year-old Florida apartment building, Champlain Towers South?

The building was a 12-storey oceanfront condominium. Nearly 100 persons lost their lives in the incident. The question is pertinent given the ongoing construction of many multistorey buildings that are altering the skyline of St Andrew and raising questions. Some of these structures are apartment blocks or condos.

Four years earlier, on the other side of the Atlantic Ocean, just before 1 a.m., a fire started and destroyed a 23-storey residential building, Grenfell Tower, in North Kensington, West London. Within minutes, according to BBC News, the fire had raced up the exterior of the building and then spread to all four sides. By 3 a.m., most of the upper floors were well alight. Seventy-two persons died.

Because the Grenfell Tower fire was the subject of thorough investigations by the United Kingdom authorities, it is hoped that Jamaican authorities have enacted policy measures and regulations to mitigate the particular risks associated with the high-rise buildings that are being built. Information posted on the Bureaus of Standards website indicates that a 2018 Building Act took effect on January 15, 2019, but it is not clear whether the new building codes, which have been in gestation for over a decade, have been adopted.

Insurance companies have important roles to play in the risk-management process. Do they have employees with the necessary expertise and experience to properly assess risks and ensure compliance with minimum regulatory standards? Do the fire services have the manpower, assets, other resources, and training to do the job in relation to the increasing number of high-rises?

The cause or causes of the Florida condo collapse remain a mystery. David B. Haber is a lawyer certified by the Florida State Bar in condominium law. He represents condominium associations. His other practice areas include construction, complex business litigation, and real estate law. “It is likely to take months, if not years, for experts in forensic engineering to determine why Champlain Towers collapsed,” he wrote in an essay. The article, ‘I Know All About Condo Living. Change Is Coming’, was published in last Thursday’s New York Times.

His comments may be of interest to local condo dwellers and others who invest in these types of developments. The most intriguing part of the essay was his assertion that ‘condominium living … can lead to calamity’. He also cited weaknesses and omissions in regulations,’ which, I suspect, exist here.

I have never lived in a condo. However, many of the things that he wrote about sounded familiar. His opinions echoed those of friends who live in apartment buildings or other premises in Jamaica and many other persons who wrote to me about insurance problems with real estate governed by local law and regulations, The Registration (Strata Titles) Act.

Important takeaways

1. Maintenance issues abound, sometimes exacerbated by the strident politics that can erupt among condominium owners over how they manage their building.

2. Repairs are sometimes delayed or ignored by owners trying to balance their personal financial interests against the complicated and costly preventive maintenance needs of their building – needs that only licensed engineers may fully appreciate.

3. Life-safety decisions about structural, fire, and electrical issues must always be made by professionals, not members of condo boards (referred to as strata corporations in the local law).

4. Members of these boards are volunteers; some serve for only one or two years. They often find themselves between a rock and a hard place. If the board sets aside reserve funds for building repairs, they are often criticised, and in some cases, defamed and replaced by new board members less intent on raising maintenance fees or passing special assessments. The general attitude has often been: Why pay today for what you can put off for tomorrow?

5. Even the most well-intentioned and fiscally prudent condominium board members may have a hard time envisioning the possibility of a catastrophic building collapse or fire.

6. There is a need for ethical, licensed, and experienced experts to make determinations about what repairs are required on a regular basis. If those decisions involve life-safety repairs, the engineers should have the final word.

Decisions about property and liability insurance, from my experience, are often made by persons who, according to Bill Wilson, one of the premier insurance educators in the United States, do not understand the potential complexity of collective ownership of property, have little or no understanding of risk management and insurance, are ignorant about the requirements of the laws and regulations governing condos, and do not have the skills to determine if the property is adequately insured, under both master policies and individual unit-owner policies, from the standpoint of limits and perils.

“If anything,” he concludes, “the tragedy of the Champlain Towers South dispels the myth that someone can buy insurance in 15 minutes or less. Loss-exposure analysis is critical and ongoing, requiring expertise beyond that of most owners and occupants. It is an investment of time that only takes an instant to pay for itself”.

- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com