We recommend that you complete a House Inventory Checklist and review it once a year. For more information about the property coverage, please click here.

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Use the Chapter House Self-Inspection checklist to review your property and life-safety risk management.

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According to a report completed by the Chapter Advisor, there were three chapter members conversing about the fire escape outside the window of the second floor.  One member, who admitted she had previously been out on the escape, showed the other two new members that it was possible to go out onto the fire escape from the window of the room.  The older member successfully got out on the escape.  One of the freshman women attempted to do the same and slipped and fell one story to the ground.  The women fractured her jaw in 8 places requiring surgery, lost 7-8 teeth and received various soft tissue injuries related to the fall from 15 feet.


Parents of member have retained an attorney and a reserve of $350,000 has been placed on the claim by the insurance company.

Liability Concerns

The fire escapes were used by the house residents as “balconies.”

  • Risk Management solution:  Written rules, by laws, contracts, handbooks or other correspondence methods should address inappropriate use of roofs, bodies of water, fire escapes, basements, attics, etc.

The prior House Director knew that the residents were using the fire escape as balconies.

  • Risk Management solution:  A specific person or persons should be responsible for making sure that rules are adhered to.  This person or persons must have authority and make sure all persons conform to these rules.  Persons living in the house must be held accountable to these rules.

The access ways to the fire escape had no signs posted.

  • Risk Management solution:  Signage is very important for instructions and awareness purposes.  Post signs in access ways that clearly indicate that the fire escape is to only be used for emergency purposes.

A light which was affixed to the wall just above the fire escape was not working.

  • Risk Management solution: The appropriate employee should be conducting comprehensive house inspections and giving the property manager written items that need correction.  This should also include a follow-up procedure to make sure that corrections are made in a timely fashion.

The witnesses all stated that they have never been advised of any prohibitions against using the fire escape.

  • Risk Management solution:  House Corporation should have a meeting with the Chapter members once every semester to educate the members on the House Rules and the minutes of the meeting should reflect said instructions.  Signs should be posted near the escapes that state “for emergency use only.”

A chair was present on the third-floor fire escape which had been present for three years according to one witness.

  • Risk Management solution:  An assumption could be made that the members were using the chair to sit in while using the fire escape in an improper manner.  Clearly communicate to employees the procedures for reporting to the House Corporation any House Rule violations.

One witness stated that the house members regularly used the fire escapes as balconies and were never told not to.

  • Risk Management solution:  House Corporation should have a meeting with the Chapter members once every semester to educate the members on the House Rules.

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A sprinkler head in a closet on the second floor went off resulting in water damage to the first and second floor, as well as the basement. The exact cause of the sprinkler head going off is not able to be determined. It is believed that the heat in the closet may have been a factor.  The expert hired to determine the cause noted that the sprinkler heads in the house were approximately 30 years-old and were either corroded or leaking.


The final cost of this claim was $498,444. There is no subrogation potential against the manufacturer of the sprinkler system or the company who installed it as the House Corporation did not maintain any records regarding when the system was installed or when it was inspected.

Issues to discuss

  1. Is your sprinkler system inspected on a regular basis? How do you ensure that the sprinkler system is inspected annually?
  2. Do you maintain all of the records from the inspections?
  3. Does your house have an alarm when the sprinkler system is activated?

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A member was using a deep fryer in the kitchen to heat oil. The member walked away to another room, and the fryer caught the cabinet and microwave on fire. The fire damage was contained to the kitchen. However, there was smoke damage throughout the house.


A total of $47,972.09 was paid out for the claim.

Issues to discuss

  1. Are residents allowed use of the commercial kitchen equipment? If so, what are the regulations regarding the use of the commercial kitchen equipment? See below for our risk management response to this practice.
  2. Discuss safe alternatives to the members using the commercial kitchen equipment
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A fire broke out in the attic of the chapter house from what they believe was some insulation that fell between the wall and flooring landing on some wires and ignited. The attic was not sprinklered and sustained all of the damage below. However, as the claims progress in the cleaning up and repairing of the attic space, the state building code regulations had to be addressed. The wing where the fire originated was built in the early 1900s, and they could not let the members back into that area until some of the original construction items were upgraded even though they were not affected by the fire (e.g. some of the members had to be moved to other facilities, the insured had to pay for additional meals as the kitchen could not be used).


The code compliance issues drove the cost of claim over $1,000,000.

Issues to discuss

  1. What policies do you have in place in the event of a severe and lengthy property claim? (i.e. where will you house displaced chapter members? How can you minimize extra expenses associated with the claim?)
  2. Do you regularly inspect your attic space? Is your attic sprinklered?
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Subrogation – the legal process by which an insurance company, after paying a loss, seeks to recover the amount of the loss from another party who is legally liable for it.


An extensive fire occurred on the top floor and roof of the chapter facility resulting in a total claim amount of $1,379,877.  Due to the size of the loss, the file was referred to the Subrogation Department immediately. Subrogation Counsel was assigned, as well as a Cause and Origin expert. After the expert’s inspection, the subrogation attorney assigned an electrical engineer to inspect the evidence. The experts were able to identify that an electrician working in the building knocked wiring loose, which resulted in the fire. Upon conclusion of the loss adjustment, a demand package was sent to the electrician’s insurance carrier.  Mediation between the electrician’s insurance carrier and the organization’s insurance company took place. The case did not settle during mediation, but did settle shortly after. The two parties negotiated a settlement and avoided litigation and incurring further litigation costs.  


The insurance carrier was successful in recovering $700,000 on behalf of the organization.


If you have a loss, please do not throw anything away without speaking to an adjuster first. If you have to begin mitigation due to water damage, please take photographs before moving or tearing anything out. Subrogation could be compromised by discarding parts or failing to take photographs to document the damage.

Issues to discuss

  1. What procedures do you have in place to properly document claims when they occur?
  2. What procedures do you have in place to address issues after a large property claim (e.g. alternate housing for the chapter members, building/code requirement changes, loss of income expenses, etc.)?

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At a fraternity chapter house that was hosting a party, Jane Doe, chapter member, went out a second-floor door to a fire escape platform and fell through the hole, which provided a ladder access to the ground.

There had been a previous fall from this fire escape at the chapter house in question, and the chapter leadership posted a hand-made warning sign at the exit to the fire escape as a warning.


Jane Doe suffered serious injuries and sued the Fraternity and House Corporation. The national Fraternity was dismissed from the lawsuit; however, the House Corporation was found 56 percent at fault with nearly $120,000 in damages.

Issues to address:

  • The fire escape had already caused problems at this chapter, and the House Corporation did not address those concerns properly. Once a dangerous condition at the property is revealed, it must be appropriately addressed.
  • How should the concerns about the fire escape have been addressed after the first incident?
  • What risk management policies does your Chapter/House Corporation have in place regarding fire escapes?
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This guide from Travelers, the insurance company for MJ Sorority clients, provides information on incorporating best practices and a prevention plan to help reduce the risks of slips, trips and falls at your business and on your premises.

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This guide from Travelers, the insurance company for MJ Sorority clients, provides information for property owners on liability regarding sidewalks.

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We have created this document in partnership with Heather Moore and Mark Sausser of Faegre Drinker Biddle & Reath LLP in an effort to help our clients address the components of an acceptable Housing Agreement.

Because laws vary widely from municipality to municipality, we recommend that you seek local legal counsel to develop your specific Housing Agreement; however, we hope that you will use the attached resource to avoid common potential pitfalls for Greek facility housing agreements. In addition to the attached checklist, your Housing Agreement should include an addendum listing the rules and requirements expected in a community living environment, as well as a description of how the House Corporation expects that the property be used.

We also recommend that you consider a similar document for non-resident members to follow (often referred to as a membership or parlor agreement) that describes the rights and expectations for non-resident members when they visit the chapter house. As always, should you have any questions or concerns, please do not hesitate to contact your Client Executive.

2020 Addendum: We review and publish the Important Terms for Housing Agreements each year in February for the MJ Housing Forum. Each year, we update the document based on trends and questions that Mark Sausser and Heather Moore from Faegre Drinker see, as well as any trends that MJ Sorority is seeing from our part in your contract reviews. We are all learning from the current experience of broad closings due to the COVID-19 global pandemic and took the opportunity to work with Mark and Heather to provide new language that we suggest that you add to future agreements to clarify closures caused by public health emergencies. The language Mark suggested is below:

Unexpected House Closure. In addition to the other termination rights granted to House Corporation in this Agreement, House Corporation may close the Chapter House and require the members to vacate the same in the event such action is required or encouraged by the University, or if the University has or will cancel or suspend in-person classes, whether due to public health emergencies, pandemics, communicable disease outbreaks or any other reason. In such case, the determination of whether payments made by or due from Member will be credited against future payments (or, with regard to seniors, refunded) will be made on a case by case basis, considering all factors, including the length of time the Chapter House is closed and the fixed expenses incurred by the House Corporation.

DISCLAIMER: This document does not constitute legal advice; it is merely a guide to key components for a housing agreement. The laws relating to the possession of property vary from state to state. Please consult experienced legal counsel when you are preparing housing agreements.

Not a lease. Call your document a housing agreement; do not use landlord/tenant/rent/lease language because those who reside in a fraternity or sorority (hereafter, “fraternity”) house do not have exclusive possession rights as tenants in an apartment complex do. In legal terms, your agreement is therefore not a lease but a license, although you need not use the term “license.” You can add language stating “this is not a lease.”
Payment terms. Each year strive to move closer to the university model: require payment in advance of moving in, either prior to the school year or at least prior to each semester. Consider requiring a direct draw from a credit card or bank account. If possible, the agreement should provide the university “checklist” or other enforcement actions which are available for use following a default by a member.

House Corporation Obligations and Student Rights. Under the housing agreement, obligations of the house corporation and rights of the student are expressly conditioned upon execution of the agreement by parents as parties to the agreement and not merely as guarantors. Parents are directly and fully liable for all obligations of the student under the housing agreement and are jointly and severally liable with student hereunder. Parents shall have no occupancy rights at the house as a result of the housing agreement. Parents acknowledge that they are directly and indirectly benefitted from having the student live in the house and that adequate consideration for entering into the housing agreement has been received.

Fraternity discipline and violation of University Rules or any laws. Provide that a member who is suspended or terminated from membership, is expelled or suspended from the university, or who violates the law is automatically in breach of her agreement and must move out of the premises immediately. A violation of university, fraternity or chapter rules should also be a breach. The agreement should allow the house corporation, at its discretion, to continue the house agreements in place if the chapter as a whole is put on probation, whether by the fraternity or by the university, or is forced to close operations. If the chapter is shut down due to disciplinary matters, it is likely that the owner will want the members out of the house. But if the chapter is closed simply because of a lack of numbers or due to university actions involving Greek organizations generally (e.g., campus-wide suspensions of Greek organizations), the owner may want to reduce its losses by having the members stay until the end of the current academic year.

Knowledge of discipline rules. In the agreement, members acknowledge that they have received, read, understood and agreed to follow all fraternity and university disciplinary rules.

Non-waiver. Provide that the house corporation’s failure to enforce provisions or protections in one instance do not constitute a waiver of its ability to enforce those provisions in future instances.

Who may reside. Provide that only full-time registered students who are members of the fraternity at the college or university may live in the chapter house. The members should agree that rooms may be assigned and reassigned at any time and that the owner need not resolve disputes among members or be responsible for actions of any other members. The agreement must expressly say that it is not assignable by the member.

Damage to House. It is helpful to provide that if the house is damaged and the responsible party is not identified, each of the members will be responsible for an equal share of the cost of repairing that damage and each of their housing deposits can be used to cover the cost of the damage.

Unexpected House Closure. In addition to the other termination rights granted to House Corporation in this Agreement, House Corporation may close the Chapter House and require the members to vacate the same in the event such action is required or encouraged by the University, or if the University has or will cancel or suspend in-person classes, whether due to public health emergencies, pandemics, communicable disease outbreaks or any other reason. In such case, the determination of whether payments made by or due from Member will be credited against future payments (or, with regard to seniors, refunded) will be made on a case by case basis, considering all factors, including the length of time the Chapter House is closed and the fixed expenses incurred by the House Corporation.

Deposits. To the extent permitted by local law, define deposits as “housing deposits” that can be used to remedy failure to pay house bills or to repair damage rather than “security deposits” as to which the law sometimes imposes more limits.

Absence/off campus study. Generally, members should agree to pay the housing fee whether they live in the house or not. It is advisable to have a specific provision about how to handle study abroad, internship and student teaching students, which may range from requiring full payment unless a substitute resident is found, to releasing students from further payments so long as timely notice is provided. (We have attached sample language for this purpose.) It also helps to have the agreements signed at a time when members are most likely to know whether they have been accepted for off campus study. The agreement should also address other hardship causes of absence that may arise (e.g., illness, death in the family, etc.), and provide that the house corporation has no obligation to release students from the agreement, but the house corporation in its sole discretion may decide to release students in certain extenuating circumstances.

Voluntary Move-Outs. The agreement is a binding contract and if a member “changes her mind” and wants to live out after she has signed an agreement, she would be in default. The agreement should be clear that in the event a member defaults by not moving into the house or by vacating the house early, the owner’s remedies would include a continuing obligation by the defaulting member to pay all amounts due under the agreement. Rarely is it possible for a replacement resident to be found after housing agreements have been signed and it is even harder mid-year so any “breakage fee” less than the whole amount due might not fully protect the owner. Because enforcing these provisions can be difficult, some organizations have elected to require a lump sum payment as a move out fee. These are generally enforceable, but as noted the likely result is that the owner will suffer economic loss.

Chapter house uninhabitable. Provide that if the chapter house becomes uninhabitable, the house corporation may use university housing or off-site housing as alternative housing; also, provide that the agreement may be terminated by the house corporation.

Member personal property (including cars). Put members on notice in the agreement itself that the house corporation does not (and cannot) insure members’ personal property on the premises (including cars in the parking lot), and that members must have their own coverage for such items. The agreement should also expressly release the chapter, the fraternity, and the local housing corporation from all liability for damage to the student’s property whatever the cause, including the negligence or the chapter, the fraternity, and the local housing corporation.

Breaks. Establish procedures for occupancy, or prohibiting occupancy, of the house for winter, spring and summer breaks.
Member release and indemnification of the house corporation. Because members are also currently insured under your policy, the release and indemnification from members need only extend to claims involving member personal property and claims not covered by your insurance.
Service Animals. Your agreement should permit their presence if both medically necessary and approved by the housing corporation. As a private club, you are not subject to the ADA legislation for the disabled, however, there may be state or local laws which apply allowing the animal. Animals that meet this area of law are dogs and miniature horses only.

Emotional Support Animals. Sometimes also referred to as therapy or assistance animals are a part of the Federal Housing Act (FHA) and can be any type of animal. Although there remains debate as to whether private clubs like a sorority chapter or local house corporation are subject to this legislation, there are stringent requirements of a landlord and this must be carefully considered.

Searches. Your agreement should permit the house corporation to search rooms at any time for any reason without prior notice or consent.
Items not permitted on the property. You should provide that members may not have the following items on the property: firearms; other weapons; illegal drugs/controlled substances; marijuana (listed separately because it is now legal under some state laws); alcohol (again, it should be separately listed because it is legal for some students under state law). Importantly, because marijuana is illegal under federal law, the house corporation may generally prohibit possession of medical marijuana and would not be required to permit its possession or use as a reasonable accommodation for disability.

Rules. A general set of rules, which can be modified from time to time, without the consent of the member or chapter, should be established. Those typically include no smoking, no candles, no roof access and no modifications of rooms.

Enforcement. Regardless of who the owner of the house is, the national fraternity and/or the national housing corporation should have the right to enforce the terms of the housing agreement. This is particularly true if the “owner” signing the agreement is the chapter.

Remedies. The agreement should give the owner, following a default, all rights and remedies at law. The agreement should also expressly say that the owner has the right to remove the student from the house following a default, but such removal does not release the student from her payment obligations. It is also helpful to have a provision which allows the owner to terminate a student’s agreement without a default if the owner determines at its sole discretion that the termination is best for chapter as a whole, but such a provision should also state that no payments should be due for the period after the student has moved out.

Sample Study Abroad/ Internship Provision ** Please note that this is just sample language and it would need to be modified to fit in the context of the applicable housing agreement.

Off campus study. If Resident is accepted into and elected to participate in a study abroad program or internship, she will be charged a $__________empty bed fee (the “Empty Bed Fee”) for the semester she is enrolled in the study abroad program, in lieu of paying the full payments due hereunder, provided that a copy of the acceptance letter related to such program is provided to the Chapter no later than __ months in advance. If Resident is required by the University to student teach, or engage in similar educational opportunities required by the University for her course of study, at a location 50 miles or further from the Chapter House, and provides notice within the time period set forth above, she may, in any such case, petition the Chapter for relief from the Empty Bed Fee. The Chapter House’s decision relating to relief from the Empty Bed Fee shall be at its sole discretion and shall be binding on Resident. As all situations are unique, prior determinations of the Chapter shall in no way bind or affect its determination with regard to Resident’s petition. If Resident is studying abroad or has accepted an internship and has located another member of the Chapter who is not living in the Chapter House and is willing to replace Resident as an occupant of the Chapter House, the Empty Bed Fee will be not be charged. Resident may only receive one exception during her tenure as a member of Chapter.

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Engaging in a building or renovation project is an exciting, albeit stressful, endeavor. In addition to the hundreds of decisions regarding design, budget, decorating, and other items, there are insurance and risk management concerns to consider in order to protect the House Corporation
and the organization from loss.

In an effort to simplify at least the insurance portion of the building process, we have developed a glossary of sorts to help you familiarize yourself with the associated terminology, as well as our recommended limits when applicable.

General Liability

General liability covers physical and bodily damage for which the general contractor and its employees would be held liable as a result of completed operations or product liability. We recommend that any independent contractors carry a minimum of $1M per occurrence in general liability limits.

Workers’ Compensation

Workers’ compensation is insurance paid by companies to provide benefits to employees who become ill or injured on the job. We recommend that independent contractors carry a minimum of $500,000 per accident.

Automobile Liability

Automobile liability insurance protects the insured against financial loss because of legal liability for automobile-related injuries to others or damage to others’ property by an auto. We recommend that independent contractors carry a minimum of $1M per occurrence in automobile liability limits.

Builders’ Risk

A builders’ risk policy is a property insurance policy that is designed to cover property in the course of construction. Coverage typically applies not only to property at the construction site, but also to property in transit or at off-site storage locations. We use the estimated completed value of the project as the builders’ risk limit.

We recommend that you have an MJ Client Executive review contracts associated with any building projects prior to signing them. We also recommend that the Fraternity/Sorority, House Corporation, Chapter, etc. be indemnified in the contract language from any loss or damage caused by the independent contractor/s. Because of the complexity of these types of issues, we recommend that you engage the services of a local attorney familiar with your local laws and statutes in the contract negotiations.

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