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It's renter beware in storm plan

Sandy changes strategies of apartment management

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Barbara Schoor at a Lacey rental community. Sandy changed planning for landlords, she says.
Barbara Schoor at a Lacey rental community. Sandy changed planning for landlords, she says. - (AARON HOUSTON)

The dispute stemmed from less than $900 in unpaid rent.
So when an Essex County judge ruled a landlord wasn't liable for a two-week power outage caused by Hurricane Sandy — and that the tenant had to pay the rent he had withheld — the owner of the Gardens at Maplewood apartment complex earned only a small financial victory.

But the true value came in the form of clarity — namely, about its obligations during future storms and, legally speaking, what was within its control.

The decision in mid-April addressed one of many issues that apartment owners and managers faced in Sandy's wake, such as questions about their own responsibilities and trying to help tenants who were underprepared.

Landlords and advocates are now trying to prevent those issues from future natural disasters, largely through measures such as lease provisions, updating disaster plans, and educating staff and tenants.

"Sandy really put people in a position that they never expected to be in," said Barbara Schoor, vice president of Community Investment Strategies, a Lawrenceville-based multifamily developer. Most of the company's properties were only affected by extended power outages, but "the events related to the storm have really opened our eyes to make sure that we have the proper resiliency planning in place."

West Orange attorney Tracey Goldstein, who is working with clients on storm preparation, said "some have re-evaluated their leases" to include language that says they're not liable for service interruptions that are out of their control, such as for repairs or an unanticipated event like Sandy.

"For those individuals who have approached me about rethinking their lease, I make sure that clause is in there," said Goldstein, whose firm — Feinstein, Raiss, Kelin & Booker LLC — represented Gardens at Maplewood in the lawsuit. Landlords also should suggest their tenants get renters insurance, while ensuring they're up to speed on laws governing security deposits in the case of evacuation orders, she said.

Community Investment Strategies found many tenants "really don't prepare themselves in the same way that a homeowner might," so reliance on the landlord increased when Sandy knocked out the lights, Schoor said. To address that, it's moving to form relationships with emergency service organizations like the Red Cross "so that they're prepared to assist the residents, as opposed to the landlord," with needs like food.

But rental operators also are weighing how to use backup generators to help tenants in future storms, and that means planning for fuel and equipment needs. Andy Abramson said his firm, Clifton-based Value Cos., scrambled to buy dozens of generators to "hotwire" the furnaces across its portfolio of garden-style apartments.

Since then, the company has "made our boiler rooms basically plug-and-play," said Abramson, its president, after retrofitting at least 50 rooms with cutoff switches and the ability to quickly hook up the generators. The project cost more than $100,000, he said, and Value is installing a similar system in a new construction project.

Meanwhile, Community Investment Strategies in June joined a three-year collaborative aimed at establishing best practices for disaster response and fortifying the region's stock of affordable housing. The group is being led by the Enterprise Community Partners, a national organization that helped rebuild nearly 10,000 homes after Katrina.

Operators around the Gulf Coast started to think about this in 2005, after Katrina left at least 16,000 apartment units uninhabitable, according to the Apartment Association of Greater New Orleans & Louisiana.

Tammy Esponge, the group's executive director, said many property managers were caught without updated cell phone numbers or e-mail addresses for tenants, "and they struggled to reach anybody" after they had evacuated.

Many managers are now updating their records every six months, and the association has prepared a guidebook to prepare tenants and employees, she said.

Unlike in Louisiana, most landlords had some kind of disaster plan in place before October, said Jean Maddalon, executive director of the New Jersey Apartment Association. Instead, she said, her members found more operators needed to rethink their plans for their business offices, where two-week power outages around the storm prevented them from billing and collecting rent.

But even the most careful members "learned from Sandy that they needed to be even more prepared," Maddalon said. The association has kept the issue in the spotlight, in part through panel discussions at its events this summer and encouraging operators to stay sharp. "Luckily, you don't have to do it too often," she said.

E-mail to: joshb@njbiz.com
On Twitter: @joshburdnj

Correction: Attorney Tracey Goldstein tells landlords it's important to discuss renters insurance with their tenants. An earlier version of this story mentioned a different type of insurance.

Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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