Many communities, especially those with common areas, have experienced damage to their common areas by utility companies. Generally, damage occurs when a utility company or its contractor is burying cable or running wires on the common area. Although utility companies, in most instances, have utility easements across common areas and cannot be prohibited from using the common areas to bury cable or otherwise install utilities, the association should verify that there is, in fact, an easement over the common area. This may be done by reviewing the records such as plat maps and recorded easements at the County Clerk and Recorder’s office. In instances where utility companies or their contractors cause damage to association properties, such companies will be responsible for the repair, or cost of repair, assuming the association has appropriate documentation concerning the damage.
The utility company and contractor may be liable for the damages under the terms of the easement. This is the best position for an association to be in, as there is a contractual obligation to repair the damages. And, a right to collect attorney fees if the damage is not repaired. Even if the easement does not address the obligation to repair damages, the utility company or contractor has an obligation under the common law negligence claim. This requires that the association prove that the utility company or contractor breached its duty to perform the work in a workmanlike manner and this breach caused damages. A fairly easy standard to prove. However, associations should be aware that there is no right to recover attorney fees in this type of claim. Therefore, resolving the matter without attorney involvement is preferred.
Utility companies generally have insurance coverage for claims of negligent damage to private properties, and are usually willing to submit such claims to their insurance carrier. However, utility companies will not submit claims to their insurance carrier if the damage resulted from work of a subcontractor. In those instances, the association will normally be referred to the subcontractor’s insurance carrier. Insurance companies, as well as utility companies, require the association to provide them with certain information prior to processing any claim. This information typically includes:
- Exact address and location of property where damage was incurred;
- Description of damage;
- Date damage was incurred;
- Name of contractor or subcontractor, if any, that was working on the property at that time and name of foreperson, if possible;
- Copies of invoices paid by the association, if damage has been repaired; and
- Photographs of damage, if any.
This is a list of the most frequently required information by utility companies, and is not an exclusive list. Accordingly, if you have any information or documentation in addition to what is suggested, you should retain this information for claim submission.
Based on the foregoing, associations should take certain steps when they become aware, or get notice, that a utility company will be working on common areas in the community. Specifically, the association should have at least one volunteer (whether a board member, committee member, manager or owner) present and observing the work as it is performed on the common areas. Ideally, this volunteer should be present throughout the entire job. However, if this is not possible, the volunteer should, at a minimum, be present at the beginning and conclusion of the job. Additionally, this person should take notes, including the contractor’s name that is performing the work, the date of the work and exact location. If this person notices the contractor has damaged any portion of the common area, this person should take photographs of the damage. If an association does have advance notice of work to be performed in the community, it should attempt to obtain information from the utility company before commencement.
After the association becomes aware of the damage, it should immediately contact the utility company and report the claim. If the damage is severe and must be repaired immediately, such as a ruptured waterline, the association should keep copies of all invoices and cancelled checks to evidence the damage and funds expended by the association to repair the damage.
Sometimes, an association may be able to file a claim even if it does not have all the suggested information. Many utility companies keep detailed databases which contain dates, addresses and names of subcontractors that work at specific properties. For example, if an association does not have the name of the contractor but can provide the utility company with a date, the utility company may be able to track down the identity of the contractor that was on the property doing work, and subsequently determine who damaged the property.
But, don’t assume a utility company will be able to track down the contractor who performed work in your community or provide you with other information. Protect the association by taking appropriate steps as outlined in this article, and the association will have a better chance of holding the utility company accountable.