Flood Damage to Medical Clinic Building
|Applicant||People’s Health & Wellness Clinic|
Citation: FEMA-4001-DR-VT, People’s Health & Wellness Clinic, Second Appeal Flood Damage to Medical Clinic Building
Reference: Legal Responsibility
Summary: In a letter dated January 23, 2012, FEMA informed the Applicant that, under the terms of the lease agreement, the Applicant was not legally responsible for repairing disaster damage to the medical clinic building. Section 10.2 of the lease agreement clearly requires the landlord to promptly restore the premises if they are damaged through no fault of the tenant.
In a letter dated April 4, 2012, the Applicant filed a first appeal claiming that it was legally responsible under the terms of the lease, and that the position was borne out by a documented history of making its own repairs to the leased premises, including extensive interior repairs resulting from a major storm and flood in 2007. Furthermore, the Applicant believes it is a misinterpretation of the lease for FEMA to contend that the lease covers catastrophic events or Acts of God.
FEMA Region I denied the Applicant’s first appeal with a letter dated June 26, 2012, pointing out that in order for FEMA to reimburse the cost of repair, the landlord/tenant lease must clearly specify that the tenant, as an eligible applicant, is legally responsible for the repair of disaster damage to the facility. In the absence of such language FEMA must assume that the owner of the facility is responsible for the repairs.
The Applicant filed a second appeal on September 18, 2012, in which it emphasized that there was an established precedent for its taking of responsibility for disaster repairs in the past.
Issues: 1. Does the lease agreement require the owner to restore the leased premises if they are damaged through no fault of the tenant?
2. Is the Applicant legally responsible for repair of the disaster damage to the medical clinic?
Findings: 1. Yes
Rationale: Robert T. Stafford Disaster Relief and Emergency Assistance Act, Section 406 Repair, Restoration, and Replacement of Damaged Facilities; 44 CFR §206.223(a)(3) General Work Eligibility.
January 22, 2013
Vermont Emergency Management Agency
One National Life Drive
Montpelier, Vermont 05633-5001
Re: Second Appeal – People’s Health & Wellness Clinic, PA ID#023-UAOQ-00, Flood Damage to Medical Clinic Building, FEMA 4001-DR-VT
Dear Mr. Flynn:
This is in response to your letter dated September 20, 2012, which transmitted the referenced second appeal on behalf of the People’s Health & Wellness Clinic (Applicant). The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding for the repair of disaster damage to the Applicant’s medical clinic.
On July 8, 2011, the President declared major disaster, FEMA-4001-DR-VT, for the State of Vermont as a result of severe storms and flooding during the period of May 26-27, 2011. The Applicant leases a facility in Barre, Vermont, from Acorn Associates (Landlord). The disaster damaged the Applicant’s leased building resulting primarily in damage to the interior spaces, including medical supplies and equipment. Upon review of the terms of the lease FEMA determined that the Applicant was not legally responsible for the permanent repair of the disaster damage to the building.
The Applicant filed a first appeal to Vermont Emergency Management (Grantee) on April 4, 2012. In its appeal, the Applicant pointed out that the lease agreement does not require that the Applicant maintain insurance for disaster-related repairs to the premises. Nevertheless, the Applicant had paid for repairs in the past, including damage from a major storm and flooding event in 2007, which set a precedent for its responsibility to repair and maintain the interior of the premises. In a letter dated June 26, 2012, the Regional Administrator of FEMA Region I denied the Applicant’s first appeal because the Applicant was not legally responsible for the repair of the disaster damage.
On September 18, 2012, the Applicant submitted a second appeal of its denial of eligibility for disaster grant funding under FEMA’s Public Assistance Program. In its second appeal the Applicant claims that FEMA is not taking into account “…the multitude of supporting documentation…” submitted by the Applicant showing its responsibility for repairing or replacing utilities and other major systems following the 2007 flooding.
The Applicant contends that FEMA is not interpreting the lease in a manner consistent with the actions or interpretation of the parties to the lease. As a federal agency providing grant funding for disaster damage, FEMA must rely on its federal authorities when making judgments about such questions as applicant eligibility, which in this instance are the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406 – Repair, Restoration, and Replacement of Damaged Facilities, and Title 44 of the Code of Federal Regulations (44 CFR) §206.223(a)(3) General Work Eligibility. In order for FEMA to reimburse an eligible applicant for the costs of performing eligible work, the applicant must be legally responsible for completing that work. Section 10.2 of the Applicant’s lease agreement clearly establishes that the landlord and not the Applicant is legally responsible for promptly restoring the premises if they are damaged through no fault of the Applicant.
I have reviewed the information submitted with the appeal and have determined that the Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy. Accordingly, I am denying the second appeal.
Please inform the Applicant of my decision. This determination is the final decision of this matter pursuant to 44 CFR §206.206, Appeals.
cc: Paul S. Ford
Acting Regional Administrator
FEMA Region I