4A — January 26 - February 8, 2018 — M id A tlantic
Real Estate Journal
www.marejournal.com
M id A tlantic R eal E state J ournal
By Ronald Diskin, Ronald Diskin Associates Corp. Ordinance or Law/Building Ordinance
(A)
the building necessitated by the enforcement of building, zoning or land use ordinance or law. (C) Increased Cost of Con- struction Pays for any increased ex- penses incurred to replace the building with one conforming to building laws or ordinances, or to repair the damaged building so that it meets the specifica- tions of current building laws or ordinances. Operation of Building Laws Most communities have building or zoning laws to regulate the standards for type of construction, fire protection,
electrical wiring, and plumb- ing, and to regulate the type of occupancy allowed in the city and certain other areas. Under “grandfather’’ provisions usually included in these laws, buildings that do not meet the standards generally are permit- ted to remain only because they were erected before the laws in question were passed. Most laws, however, provide that if a nonconforming build- ing is damaged or destroyed, it must be brought up to code before it can be reoccupied. Many laws also provide that if a building is damaged beyond
a certain proportion of its value --50% is a common measure --it may not be repaired, but must be demolished and, if replaced, replaced by a structure that meets the building or zoning requirement. Although there are almost countless situations where the operation of such laws is applicable, some common ex- amples are high-rise buildings that must be equipped with automatic sprinkler systems, buildings with electrical wiring meeting less than minimum code, and frame buildings in congested areas zoned for brick
or fireproof construction. The effect of the operation of build- ing laws is to almost always result in more costly repair than repair without such re- quirements. In virtually all property in- surance policies, a building owner’s exposure to loss result- ing from the enforcement of building or zoning laws is ef- fectively excluded by language identical or nearly identical to that found in the Standard Fire Policy. The Standard Fire Policy specifies that recovery shall be “without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair.” The effect of this exclusion is to leave the following basic exposures uninsured: • The actual expense of tear- ing down the undamaged por- tion of a building if a law or ordinance dictates demolition and disposal of the resulting debris. • The loss of the value of the undamaged portion of a building. • The difference between the value of the building as it stands --the insurable value of the building --and its value if rebuilt to code. Even when in- surance is written on a replace- ment cost basis (i.e., without deduction for depreciation), this exposure exists because the replacement cost referred to in the insurance is that required to restore the original building, not an improved and more ex- pensive version of the original building. • An extended loss of busi- ness income, extra expense, or additional living expense. Ronald Diskin is presi- dent & CEO of Ronald Dis- kin Associates Corp. n NorthMarq hires Abboud as new VP RICHMOND, VA — North- Marq Capital announced that Reina Abboud has joined its Richmond office serving as VP. In her new role, Abboud will be responsible for the origina- tion, underwriting, marketing and closing of commercial real estate loans. These commercial real estate transactions involve both debt and equity solutions for clients, sourced through a variety of lending sources including life insurance com- panies, conduit lenders, agency lenders, commercial banks and credit unions. n
Coverage for Loss to theUndamaged Port ion of the
Bu i l d i n g . Pays for the loss of value of an undam- aged portion of the exist- ing building which must b e d emo l - ished and/or removed to conform with mu- nicipal ordinance, code, etc. (B) Demolition Cost Pays for the cost of demolition of the undamaged portions of Ronald Diskin
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INSURANCE COVERAGE FOR INVESTMENT PROPERTIES RISK IS A GIVEN IN BUSINESS TODAY. HOW MUCH YOU MANAGE RISK IS NOT. You may be insured, but is your insurance really covering your needs? Purchasing insurance is a major business expense and probably one of the most misunderstood products you purchase. If not properly covered, you can suffer severe financial losses. COMPREHENSIVE COVERAGE AGGRESSIVE PRICING
Ronald Diskin Associates Corp. A Division of Insurance Office of America (IOA)
JONATHAN DISKIN (973) 599-9600 X44312 CELL: (201) 919-3839 jonathan.diskin@ioausa.com
RONALD DISKIN (973) 599-9600 X44311 CELL: (201) 213-6590 ron.diskin@ioausa.com
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