In June, we reported on the consensus of several local experts that “Y2K” will not be an international disaster, but rather should be prepared for as you would for any other emergency - there will be some disruptions and inconveniences, but with prudent preparation, “inconveniences” will be the key word. The questions we left were:
• What are your responsibilities and potential liabilities to your tenants?
• What if the power fails?
• If building systems fail, must you give your tenants a rent reduction?
• What should you do to avoid a lawsuit or arbitration from your tenants?
As a bare minimum, you should send your tenants a friendly letter around
the middle of November, reminding them of possible disruptions on or after
January 1, 2000, as a consequence of the Y2K bug and encouraging them to
make some basic plans in case something beyond your control (such as a
power
outage) occurs.
In that letter reassure your tenants that you have taken all reasonable steps to ensure the building’s systems (e.g. elevators) will work normally on or after January 1, 2000. If you can’t provide that assurance, say so and offer advice for alternative action, (e.g. use the stairs until we are sure the elevator is working normally).
“Check with your insurance company and learn exactly what losses or claims will or will not be covered.”
As mentioned previously, ask your critical suppliers to prove to your satisfaction that their systems are Y2K compliant. Keep records of the assurances you receive from your suppliers - preferably their response in writing - in the event a tenant later alleges you have some responsibility.
Check with your insurance company and learn exactly what losses claims will or will not be covered. If a power failure caused by the Y2K bug leads to a burst water pipe, will the resultant damage be covered? If the burst water pipe results in no hot water for 3 days, will a tenant’s claim for rent reduction be covered?
Finally, send your tenants another letter in late December, updating
your first letter with any new
information you have. Suggest that we are all in this together; that
you have taken all reasonable precautions and you hope they have also.
Politely point out that you can not be held responsible for any disruptions
which result from factors beyond your direct control. In both letters,
you want to avoid being alarmist, yet you want to get the message across
that you are doing everything
reasonably possible to protect your tenant’s homes, just as you do
in all other circumstances.
The key to this whole issue is your ability to prove after the fact that you exercised due diligence in determining what building systems might be affected by the Y2K bug, that you took reasonable steps to prevent or reduce disruptions and that you informed your tenants accordingly.
Al Kemp is the Chief Executive Officer of the Apartment
Owners’ and Property Managers’ Association of
Vancouver Island. This article originally appeared
in the August/September issue of “Top Storey” and is reprinted with permission.