As many owners, board members, and property managers know, obtaining federal disaster relief monies in the wake of recent natural disasters has been an uphill battle. After Hurricane Sandy, many were shocked to find out that federal disaster assistance is given only to single-family homeowners. Some first floor condominium owners were able to obtain monies for sheetrock, walls and flooring damaged by flood waters, but little if any money was available towards the major repairs needed after this devastating storm. The FEMA regulations regarding multi-family construction left tens of thousands of condominium owners and cooperative shareholders with small business loans as their only option. Under FEMA policy, co-ops, as well as condominium and other homeowners’ associations, are considered business entities not eligible for assistance.

Because of this policy, many buildings have not been able to obtain sufficient funding to repair roofs, lobbies, facades, mechanical equipment and parking garages. With insurance companies denying many claims, and paying out less than 100% on others, the shortfall will have to be supplemented by special assessments, which could push more owners into delinquency, bankruptcy and foreclosure, and loans which could cost associations tens of thousands of dollars in interest.

Fortunately, a bipartisan bill introduced in congress will attempt to cure this inequity. The proposed bill would make condos and residential cooperatives eligible for FEMA assistance. The bill would remove the $30,000 cap in aid in place for single-family homes, and introduce a new, higher, limit for co-op and condo associations given that the damage to a large multi-family building is likely to be significantly more than the traditional single-family home. Passage of the law would greatly help associations in the future, but is unlikely to assist those already damaged, although a retroactive application of the law is possible.