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Second Appeal Summary
PA ID# 037-90038; M.G.'s Academy
DSR ID# 85576 ; Building Repair/Legal Responsibility
Citation: Appeal Brief; Second Appeal; M.G.'s Academy; FEMA-1008-DR-CA; PA #037-90038
Cross-Reference: DSR 85576; Building Repair; Legal Responsibility
Summary: On January 17, 1994, M.G.'s Academy (Academy) suffered damage as a result of the Northridge earthquake. The Academy is a private non-profit corporation that operates a day care center in a leased facility. FEMA prepared DSR 85576 for reimbursement of costs associated with replacement of supplies and inventory. Due to the lack of documentation detailing the losses, the DSR was prepared for $0. On October 28, 1996, the State forwarded the Academy's first appeal. The Academy did not dispute the denial of assistance for supplies and inventory. With advice of legal counsel the Academy disagreed with the determination that it was ineligible for assistance to repair the building damage, and appealed DSR 85576. The Academy supplied deeds and the lease to establish that it was responsible for repairs. The Disaster Recovery Manager denied the appeal because as a tenant the Academy's lease did not provide sufficient documentation to establish its legal responsibility to effect repairs to earthquake damage. Paragraph 6 of the lease limits the tenant's responsibility to maintaining the premises in good repair. This is interpreted to include minor interior repairs. The lease fails to include a provision specifically covering major damage, structural repairs or an act of God. The State forwarded the second appeal on May 15, 1997. The issues of this appeal are that as a tenant the Academy had made major repairs and renovations prior to the earthquake (as historically documented by repair invoices); that it was the mutual intent of the tenant and the property owner that the tenant would assume responsibility for major repairs; and that the Academy would assume the cost of repairs directly related to the earthquake (unaware that it may be eligible for FEMA funding).
Issue: Is the applicant legally responsible to make disaster-related repairs?
Finding: No. The lease agreement does not assign that responsibility to the tenant and, thus, the responsibility remains with the owner of the building.
Rationale: 44 CFR 206.223 states that to be eligible for financial assistance an item of work must be the legal responsibility of an eligible applicant.