How to bounce back when the worst happens
In June this year, a fire scorched through a five storey apartment building, owned approximately 80 per cent by investors. It left 55 units uninhabitable. For many investors this is an absolute disaster, however there are steps you can take after the event to ensure you're in the best possible situation for recovery.
Cathedral Place, in Brisbane’s CBD, suffered from a blaze on June 9 from an accident in one of the units. Archers Body Corporate were body corporate managers for the building, and their senior manager Grant Mifsud, told Smart Property Investmentthat they immediately went on site to see the damage.
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While Block G saw a power outage due to the damage, it was Block H, where the fire sprang from, that suffered from the most disruption.
The 55 units in Block H were uninhabitable due to fire damage on the top floor, and water damage below, and saw tenants and owners quickly needing relocating.
“The whole top floor was really the only part that was burnt out, but because of the amount of water put through the building it saturated the four floors below – five floors in total. There were 100 litres per minute over three hours pumped into it,” Mr Mifsud explains. As the roof has been destroyed, the entire building will now be unlivable for the next six months of reconstruction.
Investors quickly needed to terminate their leases with tenants (who were offered short-term accommodation by the insurers), something that was possible due to the state of the property.
He explained there are six steps for investors and owners should they ever suffer in a similar situation:
• Contact your body corporate – they will be on site after the event and have a full understanding of the damage and what next steps need to be taken.
• Ensure your details are up-to-date with your body corporate – the Cathedral Place fire occurred on a long weekend when many owners were away. It’s important that your body corporate can contact you at any time.
• Act quickly – contact your insurance company and repairers without delay to get repairs underway as soon as possible.
• If the building is evacuated, determine an effective means to remain in contact with owners and occupiers. In the case of Cathedral Place the caretaker’s website was updated constantly.
• Communicate with owners and occupiers in the complex, clarify the extent of the damage and what actions are underway, provide updates regularly and encourage owners to seek guidance and advice from the body corporate.
The rebuild is set to cost $8.8 million and Mr Mifsud said he is as yet unsure about whether insurance premiums will increase – a factor they will not know until renewal – but expressed his concerns that they more than likely would.
“We were on site as soon as it was safe to acquire the information needed to keep occupants up to date, we then ensured consistent and clear communications with unit owners in the days following,” Mr Mifsud notes of the role the body corporate played in