Summary: The Los Angeles County Internal Services Department (County) leased a distribution center/warehouse from Arthur Gilbert (Lessor). As a result of the January 17, 1994, Northridge Earthquake, interior walls in the facility were cracked. A Damage Survey Report (DSR) was prepared for $8,693 to fund repairs, but obligated for $0 on May 5, 1995, because the County was not legally responsible for the repairs. The County submitted its first appeal on November 18, 1997, claiming that a clause in its lease clearly stated that it was legally responsible for paying for earthquake-related repairs. It agreed, however, that the lease held the Lessor responsible for the performance of the repair work. FEMA denied the appeal on December 15, 1998. It cited 44 CFR 206.223(a)(3), which says that the applicant must be legally responsible for disaster-related repair work. In this case, the lease agreement showed that the Lessor was responsible for repair and restoration work, and the County was responsible for insuring the building, including paying the deductible. The building was insured through the County's Joint Power Authority (JPA) policy. However, the County was not legally responsible for the repair work. In its second appeal, submitted on April 12, 1999, the County argues that "virtually all costs under the lease are the responsibility of the County." It states that the aim of 44 CFR is to reimburse the costs of work, and therefore, FEMA should determine who is legally responsible to pay for the scope of work included in DSR 53934.
Issues: 1) Is the County legally responsible for the work performed? 2) Does a requirement to obtain insurance constitute legal responsibility for repair and restoration work?
Findings: 1) No, the lease clearly states that the Lessor is responsible for earthquake-related repair and restoration. 2) No.