04/19/2023
PHASE 2 OWNERS FACE NEW FINANCIAL HITS FROM INSURANCE, ROOF REPLACEMENT, AND BACKFLOW REPAIRS
By ALAN J. WAX
Copyright 2023 Alan J. Wax
Owners in Phase 2 are facing new financial threats.
Wayne Goodman, president of Phase 2, told owners attending an April 17 Zoom agenda meeting that the property insurance premium for the eight-building complex is soaring 79 percent, effective May 1, exceeding the percentage increase for Huntington Pointe’s three other phases and Phase 2’s budgeted figure.
Goodman also told phase owners that the roofs on all of the buildings did not pass a recent inspection and may need to be replaced at a cost estimated at $700,000 to $800,000 per building.
Moreover, the phase president announced that just-completed water backflow testing revealed that repairs will have to be made in seven of the eight buildings at a cost of $4,400.
And there’s more to come in the not-too-distant future as buildings in the phase undergo Florida-mandated structural inspections and a phase financial reserve study, both enacted by the Legislature after the Surfside building collapse in 2022.
As for insurance, the new premium increase is double the 38.5 percent increase that the board budgeted for last November. The new insurance premium is $540,000, up from the $450,000 that had been budgeted as well as the $306,000 paid for 2022-2023. That $234,000 “wasn’t in our budget,” Goodman said. “We need to accommodate that.”
The difference between the rate increase and the budgeted figure is about $120,000, or $375 per unit.
Goodman noted that some other phases increased their maintenance payments to pay for the higher insurance premiums. Phase 3, however, borrowed from its reserve account.
He said Phase 2 is investigating the use of financing to pay the insurance payment over the year since it is due immediately in a lump sum.
Goodman said David Zemlin, of Insurance Office of America in Boca Raton, the phase’s broker, will participate in the phase board meeting scheduled for 10 a.m. on April 20.
With regard to the roofs, Goodman said the proposals for roof repairs were “ridiculously expensive” with initial quotes in the range of $700,000 to $800,00 per roof. But, he noted, “We still have yet to come up with a hard proposal. We have yet to find a roofer who will commit to doing the work.”
He said the consultants advised that coatings applied to the roofs, five in 2017, had reached the end of their lifespans. The water leak problem is with the tile-covered peaked roofs, which cannot be repaired without ripping up the flat parts of the roofs. “The tiles are old, brittle, and falling apart” and until they are replaced leaks will continue.
Moreover, he said, there’s a risk that HP2’s insurer may not renew its policy in view of the deteriorating roofs. “We need a plan for that. We need some work to get them into a condition that the insurer would approve.”
Goodman said he did not know if the roofing issue will require another assessment for phase residents, let alone how much it would be, if there were to be one. “I’m hesitant to say there would be any assessment at this point. We’re probably looking to take a long-term loan. It's premature at this point.
As for the backflow issue, the board has a quote of $4,400 from A1 Certified Backflow Protection Inc. to rectify issues on seven of the Phase’s eight buildings. No repair is required in Building 121.
Water backflow repair is the process of fixing a backflow preventer that is not working properly. Backflow preventers are devices installed in plumbing systems to prevent the backflow of water. This can be a serious problem, as it can contaminate the water supply or cause damage to equipment.
FIRE WATCH’S END
Goodman also announced that while the Palm Beach County mandated 10-month-long fire watch has been lifted, as reported by The Wax Report on Huntington Pointe on April 14, the county has yet to issue permits for the alarm systems for all of the buildings, which will be verified over the next couple of weeks.
So far, the county has issued permits for only Buildings 120 and 121. Building 118 and 123 were inspected by ADT on April 17 and 117 and 122 were inspected in the prior week. Building 124 did not get an upgrade. He said a kitchen renovation in Building 122 has prevented some alarms from working in four apartments. The problem unit is being rewired. He said he hopes the process will end within two to four weeks. The board agreed to consider steps to prevent apartment remodeling that could result in problems
Goodman said the lifting of the fire-safety regimen resulted from talks involving ADT and county fire department officials to prove that the fire alarm panel was communicating with ADT and the Fire Department. “That’s great news,” he said, adding, however, that the county still may require the installation of sprinklers in the elevator pits and that the phase’s sprinkler contractor is working up quotes.
“We are completely fire complaint,” said Phase Vice President Mark Donovan, the phase’s liaison with ADT.
