Homeowner Association didn't have quake insurance, residents of condemned Eagle River condos say

Published: Dec. 10, 2018 at 1:37 PM AKST
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An Eagle River homeowner association was not carrying earthquake insurance when the 7.0 magnitude temblor struck on Nov 30., despite that insurance being a requirement of the homeowners’ agreement, residents say. The damage caused by the earthquake will potentially cost tens of thousands of dollars for each of the 42 condominium owners.

River’s Edge Condos sits right on the northern bank of Eagle River. At least eight of the units that back onto a hill on the northern side of the property have been red-tagged as “unsafe to occupy” by the Municipality of Anchorage.

Another four condos on the northern side of the property have been yellow-tagged as “restricted to use.” As of Dec.9, the remaining condos have not been inspected yet by MOA.

Heath Kahlstrom, a structural engineer for the Municipality of Anchorage who conducted inspections of the site on Dec. 6, said the northern slope failed due to the earthquake and there was soil liquefaction.

The result of the slide is that the north foundation wall on each of the red-tagged properties has fractured. The first and second floors, and the weight of the roofs, is entirely unsupported by the northern wall in each of those condos.

“This building could collapse during further seismic event,” read the warnings written on each of the red-tagged condos by Kahlstrom.

The MOA advised that people could come in quickly to grab their possessions but they could not stay in their homes.

said the homeowner association had not been carrying earthquake insurance at the time of the quake. Two other condo owners supported this claim.

The property owners say they were responsible for insuring from “the drywall in” while the homeowner association was responsible for insuring “from the studs out.”

Valentine’s father, Ed McClure, was carrying earthquake insurance for the interior of his home, having survived the ‘64 quake. His insurance would not be able to help until the structure’s problems were fixed, Valentine said.

To make matters more complicated, McClure has multiple sclerosis (MS) and bought the duplex in River’s Edge Condos because it was advertised as disabled-accessible; counters were low, there was a chairlift installed and doors were wider for a wheelchair. Valentine said it would not be easy to duplicate those amenities at her own house if her parents had to stay with her long-term.

No timeline has been provided for when repairs could take place and Valentine did not know if the condo could ever be made livable again.

River’s Edge Condos has a homeowner association Board of Directors with four members who are advised by Snow’s Management, a property management company that operates in Anchorage, Eagle River and Big Lake.

“The River’s Edge Board of Directors is meeting with experts to address earthquake damage and minimize impact to its owners,” read an email sent to Channel 2 by Snow’s Management. “At this time, the association has not authorized any further comment to the news media.”

The property management company did not reply to a request for comment as to why the association was not carrying earthquake insurance when it was part of the homeowners’ agreement.

Ryan Steelman, a condo owner, and former board member, said that Snow’s Management has a lawyer on retainer who advises the members.

Steelman said decisions, such as whether to carry earthquake insurance, would be advised by Snow’s Management, as the board would not be adequately skilled to make that decision alone.

Multiple residents said the association has not said anything to homeowners since the earthquake about who would pay for the damage. If the cost to each of the condos was expected in a lump payment, Valentine said it would ruin her parents.

Steve Lufkin, a civilian employee with the U.S. Air Force, was loading up a moving truck Saturday afternoon, preparing to move onto Joint Base Elmendorf-Richardson with his wife Donna, an employee at Veterans’ Affairs.

The Lufkin condo backs onto the northern hill and had been red-tagged. The couple felt forced to move out. “I want to get out of here as quickly as possible, before anyone gets hurt,” Lufkin said. He felt thankful that he was renting, while feeling sorry for anyone who owned a condo.

“No one here can afford two mortgages,” said Steelman, whose property had been yellow-tagged but escaped the worst of the damage caused by the quake. “We’re all just average working people, it’s not like anyone here is earning half a million dollars a year.”

Problems with the property and codes

This past summer, some septic tanks needed to be replaced with the cost shared among the homeowners. Steelman said that many of the tanks were simply old.

On Dec. 6, the homeowner association sent an email out to residents saying that their dues would rise an extra $119 a month starting Jan. 1 to pay for the new tanks.

Steelman said it was “terrible timing” to raise dues right after the earthquake and advised the association to wait until the damage was evaluated and potential payments from the state or FEMA were calculated.

Water had been a long-running issue for the property.

Many of the condos had sump pumps running continuously to take groundwater away from their crawlspaces. When the earthquake struck, property owners said they didn’t have water for three days, which comes from an on-site well.

A water main had also broken, spilling water throughout the property. To make matters worse, the property's builders had mysteriously covered up the water shut-offs and holes needed to be dug in each of the condos’ front yards to stop the flooding, said Steelman.

The hill and the underground landslide that caused the damage to the northern condos appeared to the area of greatest concern. Large crevasses and fissures were spotted on the top of the hill impacting another group of houses, said Kahlstrom.

The structural engineer explained that Eagle River and Chugiak do not require inspections from city engineers before a property is built, despite being in the Municipality of Anchorage.

Other parts of the city require surveys long before a house is erected and engineers would have looked closely at that hill, said Kalhstrom. Engineers may have advised building a retaining wall or gabion basket to prevent the hill from sliding.

The result of those relatively lax regulations in the Eagle River-area is that some “cowboy contractors” may cut corners, said Kahlstrom, before adding, “be code compliant, this is why.”