This is part 2 of 2.
“This means the statute of limitations for original designers and contractors is long gone,” he said. “As a result, the last recourse for hotel ownership seeking recovery of funds ends up being the hotel management firm and their liability insurance – even if the root problem actually originated with a fundamental design or construction flaw. Ultimately, hotel management firms will be held responsible if they haven’t taken steps to protect themselves.”
There are ways for hotel management firms to manage their risk and limit exposure of existing problems to hotel ownership groups, DuBose stated.
For example, Liberty recently assisted in the sale of a 3-star hotel in which the buyer was seeking a 7-figure discount because of mold and moisture issues that had been uncovered – but were clearly a long- term problem in the hotel. Liberty’s assessment showed that the discount should instead be in the low 6-figure range. Ultimately, the lender and the original ownership group both took discounts in order for the sale to be completed.
Additionally, Liberty provided an assessment and remediation plan for a 4-star hotel so that an interested buyer could go through with the prospective sale, confident that the mold and moisture problem had been resolved.
If you suspect your hotel may have an underlying mold or moisture-related problem and if you anticipate a transition in management or sale of ownership in the near future, it’s in your best interest to contact a building forensics firm like Liberty to have them provide an assessment or remediation plan that helps minimize your risk and exposure.