FEMA Refusing Condo Owners Funding : Quake: As repairs begin, money is lacking for temporary quarters.

By JULIO MORAN

March 4, 1995 12 AM PT

TIMES STAFF WRITER

SHERMAN OAKS — Condominium owners now starting to repair buildings damaged in the Northridge earthquake should brace themselves for an unexpected aftershock: They probably aren’t eligible for federal disaster aid to pay for temporary housing while their homes are being fixed.

Officials of the Federal Emergency Management Agency, which has already paid quake victims nearly $1.2 billion for temporary housing and repairs, have decided that condominium owners who have been living in their units during the past year cannot collect federal housing assistance because their homes--while in need of repair--are “not uninhabitable.”

“What we provide is emergency housing assistance for damage to living quarters,” said Len DeCarlo, a FEMA spokesman. “We do not provide assistance for repairs to common areas or for upgrading areas.”

That decision could prompt thousands of condominium owners--some already deeply in debt--to abandon their properties rather than try to pay rent for as long as a year. They are among a large group of property owners who have postponed work on quake-damaged homes while waiting for insurance claims to be paid and loans to be approved.

As many as 75% of the condominium associations in the San Fernando Valley have yet to begin large-scale repairs, according to Gordon Scott of the Greenspan Co., which represents about 150 condominium associations engaged in negotiations with insurance companies.

And after a year of wrangling over such claims, the latest news from FEMA seems to many like the last straw.

“I’m scared and stressed out,” said Lillia Callen, 37, who lives in a three-bedroom condominium in Sherman Oaks with her 78-year-old mother and 7-year-old son. “I feel like FEMA is being totally unresponsive.”

FEMA officials are referring owners such as Callen to its Earthquake Service Centers, but warn that most will probably have to pay their own temporary housing bills.

Adrienne Krikorian, an attorney who has had to rent an apartment while her Sherman Oaks condo is being repaired, represents three condominium associations trying to persuade federal officials to change the FEMA policy.

Condo owners will meet today with Rep. Anthony C. Beilenson (D-Woodland Hills), who is holding one of his regularly scheduled community forums at Encino Elementary School.

Kaye Edwards Davis, a spokeswoman for Beilenson, said the congressman earlier this week sent a letter to FEMA officials asking them to review the policy.

“We want to make sure no one is being denied unjustly,” she said.

Krikorian argues that the policy unfairly penalizes condo owners because repairs to common areas in such complexes typically involve walls that are part of residents’ homes. She said FEMA considers some of the repairs “mitigation or upgrades,” but Krikorian argues the work is required by city officials to make living quarters safe.

“People may have been able to live in their units during the past year, but it will not be safe for them to live in them during construction,” she said. “Walls will be knocked down, insulation will be coming off and there will be no fire protection. It’s not like we’re saying that since we’re making earthquake repairs we might as well upgrade. The city is making us do it.”

Krikorian said residents with earthquake insurance do not have to rely on FEMA to pay for temporary living expenses.

But even those owners have faced troubles, said Scott of the Greenspan Co. Some insurance companies have tried to argue that the 12 months of temporary housing included in policies should be calculated from the date of the disaster, rather than from the day a homeowner moves out, he said.

The prospect of long-term rent payments, in addition to a mortgage, could force some owners without insurance to abandon their properties.

“While repairs are being made, people will still have to pay their mortgages and monthly condo association fees,” Krikorian said. “They will also be assessed additional money to pay off loans and deductibles. Those things, combined with the fact that many people now owe more than their units are worth because of a decrease in property values, could mean hundreds of people could lose their homes.”

She said it is unfair that homeowners able to begin repairs soon after the Jan. 17, 1994, earthquake were eligible for federal emergency housing money, but that others, who had to delay repairs because of disputes with insurance companies, are being denied the help.

“We don’t expect FEMA to give a 100% handout, but they need to be fair,” Krikorian said. “These people are taxpayers and many of them retired people. They are not looking for a handout, they are looking for help.”

Callen, who lives in the same complex as Krikorian, does not have earthquake insurance.

To make matters worse, Callen said, she did not work most of last year because of illness. So she and her mother cannot pay the mortgage, association fees and the additional assessment for repairs and still afford a monthly rent during the estimated six months it will take to finish needed condo repairs.

“I don’t have the strength to fight,” Callen said. “But if we stay, they’re going to turn off the electricity and gas, and a neighbor could sue me if we hold up construction. I don’t know what we’re going to do.”

Linda Libertucci, who owns a condo in a 27-unit North Hollywood complex, said more than half the owners in her building do not have insurance, and some do not have the money to pay for temporary housing while the building is being repaired.

“Not only would that delay construction, but it would mean the rest of us would have to pay more for the repairs,” said Libertucci.