The primary goal of any earthquake retrofit is to increase safety and decrease property damage that can occur in the case of an earthquake. However, for many owners and managers of apartment buildings, that may make an earthquake retrofit feel rather like a gamble. An earthquake may or may not strike–why spend money on something that may not happen at all while you own the building?
Here’s a look at some instant benefits that can come from an apartment building retrofit, whether or not an earthquake occurs in the near future.
Lowering Insurance Premiums
When an insurance company looks at a building, they put into consideration what the probable maximum loss calculation would be.
If you have an apartment (with a soft story condition) building that does not have a retrofit, they will consider this a higher PML and will give you higher insurance premiums. But, if you decide to do a retrofit the insurance company will offer a lower premium because your “risk” is lower.
Liability for Injury, Death, or Loss of Income
California Law states that an individual who owns a commercial building is responsible for any structural issues with the building — even if they don’t know about those issues. This means that if you decide not to get a retrofit, and residents in the building are hurt, or killed as a result of preventable earthquake damage, you can very well be held responsible.
Make More Money on the Building
It doesn’t matter if it’s an apartment building people are living in now or you plan to sell it; exercising your right to an apartment building retrofit would allow you to potentially make more money by offering higher rental fees or a higher sale price.
When a person owns a commercial building, the information and details on the building, including if it has a retrofit or not, are available for anyone to see in the City’s Public Inventory of Soft Story Buildings (in some cities). If you decide to do a retrofit and sell the building, you can sell it for a higher resale price than if you did not.
Many cities in California either have existing, or in-process legislation dictating that any high-risk buildings must have an earthquake retrofit in order to be in compliance with building and safety codes. If you don’t, you could have a severe fine coming your way. If your building’s city hasn’t yet rolled out legislation requiring an earthquake retrofit, it should be noted that sooner or later, it will be required. You can expect better rates if you anticipate this development, and get it taken care of before the rates go up due to demand.
If you need a retrofit for your building or you want to know more about how it works, contact Saunders Seismic today.