The loss assessment letter was sent on September 29th, 2023, and we have received many questions regarding the letter. We have put together the following information and answers to questions that have been asked by the membership.

After the hailstorm on May 10th, 2023, the Cherry Glen Townhomes Board of Directors conducted interviews with multiple reconstruction contractors in the Denver Metro area. The contractors the Board interviewed are local contractors that have been in the Metro area for a number of years and specialize in Multi-Family HOA insurance loss reconstruction. In the process the Board reviewed each company’s background, leadership, project history for similar reconstruction processes, deductible funding options, schedules, resources, and other factors. The extent of damage in the community is wide spanning and several building components such as roofing, siding, windows, gutters, paint, etc. are affected by the damage. Due to the amount of damage, varying types of damage, complexity of scheduling, material procurement, and construction sequencing needed, the Board elected to hire a general contractor to complete the reconstruction in the community.

The Board awarded the insurance loss restoration contract to Property Solutions Team (PST). The insurance loss contract process was conducted with the HOA’s legal counsel and supplemental insurance counsel for the project.

One of the benefits PST provided to the Cherry Glen community was the ability to defer collecting the deductible on the insurance claim for a 12-month period which allows community members to make payments on the assessment if they need to. There were no other contractors the Board interviewed who would allow deferring the deductible payment, meaning the project would not start until the HOA collected the entire deductible from the membership. PST offered the option to defer the collection of the deductible and will start the project without that deductible payment up front.

As this is a LOSS ASSESSMENT, which is different than a special assessment (see below in FAQ’s), the $7,420.68 is each individual unit owner’s portion of the deductible towards the hail claim. This loss assessment covers the deductible for the HOA claim, it is NOT the full cost to make repairs in the community related to the hail damage. The HOA’s commercial insurance policy does NOT insure your unit individually, therefore the cost of repairs is NOT broken down by unit as the HOA insures common elements. The HOA will not provide a cost per unit for repairs as the HOA’s policy is not written on a per unit basis. Asking the HOA, “what repairs will be done on my unit,” will not produce an answer as the repairs are completed by structure. (i.e., by building, carport, kiosks, etc.).

We have scheduled a virtual meeting on October 25, 2023, at 6:30 p.m. to review questions regarding the community claim. The meeting notice is being sent out via email and postal mail to all owners in the community. Please reach out with questions via email or phone and we look forward to seeing you at the meeting on October 25th.

The HOA’s commercial property insurance policy has a wind/hail deductible that is 5% of ALL the community building’s values. All the buildings in the community have a combined value of $22,411,416.00 as determined by the insurance carrier and the deductible for the claim is 5% of the building’s value. The property value is NOT based on the size or location of each unit, it is the combined value of all the structures on the property including buildings, carports/kiosks to be rebuilt in today’s market. It does not have anything to do with re-sale value.

Wind and hail deductibles for commercial and residential property policies have migrated to percentage rates vs flat rate deductibles. Over the last 5 years, in the Colorado region, insurance carriers have moved to percentage deductibles based on value of property versus a flat rate deductible of $1000, $2000, $5000.00 etc. When individual owners shop for homeowner’s insurance the deductible you choose may decrease your premiums over the policy period. Commercial insurance wind/hail deductibles are always a percentage deductible without option.

The deductible amount is NOT based on the value of the repairs that will be put in place in the community to repair the hail damage. The repair value has no correlation to the deductible amount for the policy.

Individual condominium homeowner policies (HO-6) can have additional coverages for loss assessment deductibles. The HOA notifies owners for the need to add loss assessment coverage to your homeowner’s insurance policy due to claims like this. Check with your insurance agent for the loss assessment coverages you have on your unit. The loss assessment letter you received has a claim information form to submit to your insurance carrier for notice of claim on an HO-6 policy. When you submit the claim information form, you will likely need to provide a copy of the association’s governing documents (declaration and bylaws) to the carrier as part of the claim. Those can be found for your convenience in the homeowner portal on the PST site, noted on the last page of the FAQ’s.

HO-6 policy coverages vary in coverage amounts for the loss assessment and will require verification from the management company or the contractor for payment on the claim. There is often a deductible associated with HO-6 policy coverage and should be verified with your insurance agent. Your policy coverage for the loss assessment had to be in place on the date of the loss, May 10th, 2023.

Yes. There is spanning damage throughout the community due to the hailstorm on May 10th, 2023. Damage may be located in areas you don’t see from the ground such as the roof, gutters, chimneys, etc. Some units have significant damage, and other units may not have as much damage, but there is damage to all structures in the community. The HOA governing documents require the loss assessment deductible total is equally divided by the number of units in the community regardless of unit size, location, or damage sustained.

No. The damage to the common elements of the buildings such as the roofs, siding, etc. as outlined by the HOA governing documents does NOT allow individual owners to repair the damage. The common elements that are damaged are owned by the HOA and individual unit owners are not allowed to repair the damage. Do not attempt to make repairs to your unit as they will NOT be reimbursed and changes to the exterior of your unit without Association approval are a violation of the governing documents.

If you are experiencing water intrusion or issues related to the hail damage, please contact the HOA to report the damage so it can be assessed.

The HOA’s insurance policy is a commercial policy that insures the common elements in the community as defined by the governing documents, not individual units. The scope of repair work from the insurance carrier is NOT broken down by unit, it is listed in units of measurement by building, carport, or kiosk, etc. If you have specific questions about repairs please ask PST, however, we cannot break down the repairs by individual unit. Repairs and schedule information will not be available until the scope of work is determined and approved by the insurance carrier.

Personal property is NOT covered by the HOA insurance policy and should be insured under your homeowner’s or renter’s insurance policy.

The HOA governing documents can be found on the LCM Management website and the PST website portal login for Cherry Glen residents.

LCMPropertyManagement.com > Homeowner Portal

PSTgo.com > Cherry Glen > Password: cherryglen .. Look for Governing Documents / Forms

Large loss/Multi-Family insurance claims with spanning damage throughout are not resolved quickly due to the size and complexity of the claim. The scope of work requires assessment and determination by the insurance carrier in coordination with the contractor and upon agreeance the repair scope will be put in place. Sequencing, material procurement, and permitting will occur upon agreement of the repair scope from the insurance carrier. The HOA and the contractor are diligently working with the insurance carrier to expedite the agreement and start the repair process. We want the contractor to garner as many supplements as possible as it is to the benefit of the community.

The payment plan has been set at 12 months as explained in the information provided in this FAQ sheet. PST has agreed to defer the HOA’s deductible for a period of 12 months to allow the HOA to collect from the membership. The 12-month deferral allows the HOA and the contractor to start the project with the insurance carrier without the HOA having to pay the full amount of the deductible prior to the start of the project. The deductible deferral was not an option with any of the contractors specialized in large loss insurance restoration, other than PST, that the HOA Board interviewed.

Other condominium and townhomes associations may have different financial options for self-funding or extending payment plans to owners if the association’s reserve funding is adequate. Each association is different, Cherry Glen currently does not have reserve funding available to extend payment plans for owners for the loss assessment, so the payment plan has been set at 12 months.

A loss assessment occurs when a claim is opened on the HOA’s insurance policy. A loss assessment is a percentage deductible based on the type of claim. The claim deductible and information can be found on the attached COI (Certificate of Insurance) for the association. The loss assessment pays the deductible for the HOA’s insurance claim. The loss assessment pays the deductible, it does NOT pay for the full cost of repairs in the community. The letter you received is for a loss assessment. If you have an HO-6 insurance policy and loss assessment coverage you need to file a claim with your insurance carrier.

A special assessment is an assessment to fund the cost of a project in the community. A special assessment amount is based on the project scope and cost, that project cost is divided equally between the number of units in the community. A special assessment is intended to pay for the cost of repairs / project in the community in full. The letter you received September 29th, 2023, is NOT a special assessment. Special assessments generally do not qualify for loss assessment coverage under insurance as it requires a claim of loss on the HOA’s policy.

The loss assessment is due and payable as of December 1st, 2023, even if you didn’t own the unit when the loss occurred on May 10th, 2023. You may have a claim against the title company or prior unit owner for failure to disclose the damage as part of the purchase disclosure requirements. Contact your real estate agent regarding the date of loss vs the date of closing on your residence to review disclosures regarding an HOA loss assessment at the time of your purchase.

It is not possible to retroactively insure your unit under and HO-6 policy if you did not own the unit at the date of loss on May 10th, 2023.

Yes. The damage created by the hailstorm on May 10th, 2023, must be repaired. If the damage is not repaired the association will no longer be able to get insurance which is required by the governing documents.

The best place to look for information regarding the project, is in this portal.