Virgin Islands Law Blog

Virgin Islands Law Blog

U.S. Virgin Islands law & politics

The Role of a Public Adjuster Versus a Private Adjuster

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Those who have suffered considerable damage to their property (residential or commercial) and wish to file an insurance claim must first identify the correct way to move ahead. The first step of the claims process is to find an adjuster to assist with your claim. The big question is: do you go with an independent private adjuster or a public adjuster?

People who are unfamiliar with the insurance claims process may be understandably confused by this decision, but it is important to understand the different roles these two types of adjusters play, as they are quite different from one another.

Let’s take a closer look at the roles and responsibilities of each.

Private adjuster

Also referred to as an “independent” adjuster, a private adjuster is one who works for an insurance company rather than a public entity. This is important to remember, as the adjuster is primarily concerned with the rights of their employer. This person does not work on behalf of the individual policyholder.

Insurance companies have adjusters on their payroll to adjust claims on their behalf. These adjusters have a license that only permits them to work for insurers—not the people who hold the insurance policies. These adjusters are either on staff with the insurance provider or contracted to the insurance provider via a third party.

Public adjuster

A public adjuster has a much different purpose than a private adjuster. Public adjusters represent policyholders, as they are paid directly by policyholders to act on their behalf. A person with an insurance policy obtains the services of a public adjuster in a way similar to how one retains the services of an attorney.

Public adjusters engage in negotiations with the private adjuster assigned by the insurance company to a specific claim. Public adjusters either work on their own or as part of a firm, and are usually paid based on an established commission rate (for example, 5% of the final settlement figure on residential claims).

The nature of a public adjuster’s job requires these professionals to market and sell their services in a way private adjusters never have to. All public adjusters must pass strict background checks, post a bond and complete apprenticeships.

To learn more about your options when filing an insurance claim for property damage in the U.S. Virgin Islands, speak with a knowledgeable attorney.

Tom Bolt is Managing Attorney of BoltNagi, a full service business law firm located on St. Thomas, VI.

Legal Safeguards in Hiring Contractors for Hurricane Repairs, Reconstruction

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In the weeks and months after a natural disaster, contractors tend to flood the affected area with tantalizing offers of rock-bottom rates for repairs and reconstruction services. This is prime season for scammers, who tend to cut corners, use low-grade materials or skip out on the job entirely after receiving payment.

Thus, when you hire a contractor to rebuild your home or property, it’s important to do some due diligence in selecting the contractor, both to ensure you are choosing a high-quality professional and to protect yourself in the event you end up filing a lawsuit against the contractor for a failure to complete the job as outlined in the contract.

The following are some steps you should take to protect yourself when hiring a contractor for hurricane repairs and reconstruction:

  • Take your time: While some issues cannot wait (such as water damage, mold or anything else that could be especially dangerous), you can take the time you need to carefully research contractors before making a hire. This is an important decision you do not want to rush.
  • Get as many references as possible: There are plenty of resources you can use to find high-quality contractors, including friends and family, previous customers and online reviews. In addition, you can check with the Virgin Islands Department of Licensing and Consumer Affairs http://www.dlca.vi.gov to determine if any complaints had been filed regarding their services.
  • Review qualifications: Make sure the contractor is licensed, bonded and insured in accordance with all the ordinances in your city or jurisdiction. You can ask the contractor for copies of its liability insurance declarations page and its bond. Ask about warranties offered by the contractor, and get any offered warranties in writing.
  • Get bids in writing: You are likely going to investigate several different contractors, so when you ask for bids on the job, get those bids in writing. You should also get a repair timeline in writing.
  • Get the proper permits: Make sure your contractor obtains a building permit, if required for the work being done. Ask for a copy of that permit if the city requires one for the project in question.

What happens if the contractor takes advantage of me?

If it is too late for you to use these tips because the contractor has already taken advantage of you, there are still some things you can do to protect yourself. These include the following steps:

  • Immediately retain an attorney: If you do not know any attorneys, contact the Virgin Islands Bar Association http://www.vibar.org or another referral service. If you are unable to afford an attorney, contact the closest legal aid office.
  • File a report: Submit a report about the contractor’s wrongdoing with your local law enforcement agency. If that agency cannot help you, contact the district attorney’s office in your area.
  • Reviews: Leave honest, negative reviews with a thorough list of the contractor’s misdeeds on as many review sites as possible.
  • Don’t pay: Do not give any more money to the contractor, and do not wait to take the above actions.

For more information regarding the steps you should take to protect yourself legally while seeking contractor assistance for hurricane reconstruction, consult a skilled civil litigation attorney in the U.S. Virgin Islands.

Tom Bolt is Managing Attorney of BoltNagi, a full service business law firm located on St. Thomas, VI.

Businesses Should Have Disaster Preparedness, Contingency Plans

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One of the many lessons businesses across the U.S. Virgin Islands and the rest of the Caribbean have learned in the wake of Hurricane Maria is that it is absolutely imperative to have disaster preparedness and contingency plans. The unfortunate reality is that all it takes is one large storm to come through and wipe out businesses and power grids. Organizations of all sizes must have established plans to ensure an unexpected natural disaster does not put them out of business for good.

The following is a simple process you can use to develop disaster preparedness and contingency plans for your business.

Identify the risks you face

Figure out which areas of your business would be the most at risk in a disaster situation. The best way to do this is to analyze all areas of your operations and identify everything that could go wrong.

For example, what if a massive power outage causes you to lose access to your data, including important customer information? What if flooding causes considerable damage to your property and storage space?

It can be helpful to have an outside party come in and conduct a disaster audit to pinpoint these potentially vulnerable areas.

Prioritize those risks

Which risks are the ones most likely to be catastrophic—or at least, majorly interrupting—for your business? A good strategy to use in risk prioritization is to create two lists: a probability ranking and an impact ranking. On a scale of one to 10, rank the probability and expected impact of each potential risk and determine which areas you need to address first.

Develop your contingency plan

Have a contingency plan for each of the scenarios most likely to have an impact on your operations. Some elements to include in your contingency plan include the following:

  • Timelines: Identify what you need to do within the first few hours or days after a data loss to mitigate the potential damage that could be done to your business and get back online more quickly.
  • Communication: Determine who in your company is in charge of communication for each scenario. If you run a small business, it is probably best for you to take on this responsibility.
  • Risk reduction: Take whatever steps you need to ahead of time to reduce the risk you face. Have insurance coverage for floods and building damage. Sign up for alerts for security or weather risks. Get educated about the steps you need to take after a disaster to restore your business.

Keep the plan updated

Even if you do not encounter any disaster situations, it is important to revisit your plan periodically to make sure it is up to date and that you are familiar with the steps you need to take in a worst-case scenario. Keep everyone in your company on the same page with regard to disaster response, as well, to ensure your contingency plan goes as smoothly as possible if you ever need to implement it.

For more information and guidance on establishing sound contingency plans, work with a dedicated U.S. Virgin Islands corporate law attorney.

Tom Bolt is Managing Attorney of BoltNagi, a respected and well-established business law firm serving clients throughout the U.S. Virgin Islands.

Common Examples of Wage and Hour Issues That Go to Court

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The U.S. Department of Labor (DOL) collects about $250 million per year in back wages for American workers. These judgments come in a variety of different categories.

If you own or operate a business, it’s important to be aware of these issues and how they can affect employers. Below are some of the most common examples of wage and hour issues that go to court:

Incorrect payment of overtime wages

About 76 percent of employees who work more than 40 hours in a week either are not paid overtime or are paid overtime at an incorrect rate. In addition, according to information from the DOL, while overtime violations are only slightly more often reported than minimum wage violations, the former are much costlier. In 2014, nearly 80 percent of the back wages the DOL collected were for overtime wage violations.

Under the Fair Labor Standards Act, most employees must earn “time-and-a-half” pay if they work more than 40 hours in a week. This overtime pay may also take into consideration bonuses and commissions.

Minimum wage violations

Right there with overtime wage violations among the most common wage and hour issues are minimum wage violations.

Approximately 26 percent of workers polled in a study indicated they were being paid less than minimum wage. This is rather shocking, as this is the most basic worker’s right offered in America. Federal law requires most workers to be paid at least $7.25 an hour.

Slightly more common is the issue of tipped employees being paid lower than the minimum wage. About 30 percent of tipped workers were not paid the tipped minimum wage, according to a study by the National Employment Law Project. The tipped minimum wage is different than the standard minimum wage (often $2.13 per hour), and many states have implemented their own maximum “tip credits.” This represents the most an employer can deduct from the worker’s wages.

Failure to pay for work outside of hours

About 70 percent of employees do not get paid for the work they perform off the clock. If an employer allows an employee to work off the clock, these hours must be counted toward wages and overtime.

Illegal paycheck deductions

Roughly 41 percent of workers in the NELP study had illegal deductions withdrawn from their paychecks. Some employers, for example, deducted uniforms, tools or other work supplies. This is illegal if the deductions lead to the wages being lower than the minimum wage.

Stealing tips

About 12 percent of workers surveyed had tips stolen by their employers. Workers have a right to keep their full tip money except in tip pooling scenarios, in which tips are divided equally among employees. Even in these scenarios, employers may not take money from the pool.

To make sure your business is in complete compliance with all federal and local wage and overtime regulations, consult a trusted employment law attorney in the U.S. Virgin Islands.

Ravinder S. Nagi is Assistant Managing Attorney and Chair of the Labor & Employment Practice Group at BoltNagi, an employment and labor law firm serving businesses and organizations throughout the U.S. Virgin Islands.

Proposed Law Would Address Digital Assets

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(Attorney Tom Bolt (Photo from the BoltNagi PC website.)

A bill under consideration by the Senate Rules and Judiciary Committee would make such things as emails, passwords to bank accounts and online trading accounts covered by V.I. laws about how to handle property when someone dies or is incapacitated.

The changes are necessary because “the law has not kept up with technological advances in the internet age,” attorney Tom Bolt of the V.I. Uniform Law Commission told the committee Thursday before it voted to send the bill on to the full Senate.

V.I. law, like most jurisdictions, has long had provisions for how to handle traditional forms of property – cars, homes or checkbooks, for instance. But with more and more people doing more and more of their financial activity online, questions of how to deal with passwords or digital assets like Bitcoin, a digital currency, are becoming legal matters.

Bolt gave several examples to illustrate the problem, such as if there was a person who receive their bills and bank statements by email who passed away recently, and a relative or representative of the estate had to review a list of email correspondents just to even locate assets and figure out what, if anything, they owe on loans or credit cards.

And if someone dies, how can their next of kin stop automatically recurring payments? Or if someone is incapacitated and cannot use their password, how can it be changed?

Or if someone owned website domain names, a for-profit blog or Bitcoins, “the personal representative needs authority over digital property to ensure that its value is not lost to the … heirs,” Bolt said.

Bolt said the bill mirrored uniform legislation being approved in many jurisdictions. It authorizes access to digital assets by four common types of fiduciaries: personal representatives, court appointed conservators, agents under power of attorney, and trustees.

Corinne Plaskett, state president of AARP, also testified in support of the measure, for similar reasons.

She said it “gives internet users the power to plan for the management and disposition of their digital assets in the same way they can make plans for their tangible property.”

She also aid it balances the user’s privacy interest and the fiduciary’s need for access by making distinctions between the content of electronic communications, the catalogue of electronic communications, and other types of digital assets.

Novelle Francis (D-STX) sponsored the bill. Voting to send the measure on to the Senate floor for a final vote were: Francis, Jean Forde (D-STT), Myron Jackson (D-STT), Positive Nelson (ICM-STX) and Janelle Sarauw (I-STT). Sens. Janette Millin Young (D-STT) and Sammuel Sanes (D-STX) were absent.

U.S. Virgin Islands Still in Need of Federal Relief after Hurricane Maria

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It has been weeks since Hurricane Maria swept through the U.S. Virgin Islands, causing catastrophic damage to the Territory’s buildings and infrastructure. However, the Territory still finds itself in great need of federal assistance.

In mid-October, a group of Democratic lawmakers sought tax relief for both Puerto Rico and the U.S. Virgin Islands, which were hit extremely hard by the hurricanes of September. The crux behind the lawmakers’ plea was that people and businesses in the two territories do not enjoy the same benefits as those on the mainland. Thus, assistance for them is harder to get than their fellow citizens in Florida and Houston.

The House of Representatives did pass a $36.5 billion disaster aid package for Puerto Rico and the U.S. Virgin Islands, but experts and lawmakers characterized that amount as “paltry” for the people of the territories. Residents still do not have access to many of the tax benefits typically provided by the federal government in disaster scenarios.

The requests for aid have been somewhat overshadowed by Congress’s push to pass a $6 trillion tax overhaul plan that has long been championed by President Donald Trump and other conservative leaders. But the requests for aid continue to come in.

Democrats also asked a federal panel—the Ways and Means Committee—to permanently reinstate the tax system for rum, in which excise taxes collected on rum made in the U.S. Virgin Islands and Puerto Rico get paid to the federal government, but are then transferred back into the territories. In addition, lawmakers asked the panel to provide more financing for the New Markets Tax Credit to help businesses lost in Hurricane Maria recover.

Governor presses Trump for help

In addition to the relief requests members of Congress have made, U.S. Virgin Islands Governor Kenneth E. Mapp also met directly with President Trump in October and detailed the dire situation. Mapp told the President that the U.S. Virgin Islands needs up to $750 million to rebuild after the devastation the hurricanes caused. He has subsequently increased his ask to $7.5 billion.

While Mapp expressed gratitude for the funding the Territory has already received, he also specifically pointed out that funding is needed to rebuild schools and hospitals. Four schools were condemned on St. Thomas and St. Croix, and both the Territory’s hospitals need to be rebuilt completely.

The Governor also spoke with the President about redesigning the Territory’s power distribution system so that it would be underground. This would make for more expedient recoveries when future storms hit the region.

The rebuilding process will certainly be long and arduous, but there are lawmakers who continue to seek relief on behalf of the U.S. Virgin Islands. If you have questions about your options as you work to rebuild your business and your life in the Territory, consult a corporate planning attorney.

  1. Nash Davis is an associate in the Corporate, Tax and Estate Planning Practice Group at BoltNagi PC, a full service business law firm on St. Thomas, U.S. Virgin Islands.

 

Senators See Opportunity to Rebuild U.S. Virgin Islands in a Sustainable Manner

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Several senators on the Committee on Energy and Natural Resources, led by Sen. Lisa Murkowski (R-Alaska), have expressed their support when it comes to providing funding for rebuilding the U.S. Virgin Islands infrastructure that would be stormproof.

As the scientific community has agreed that hurricanes will likely be more common in the future due to the effects of climate change, this type of infrastructure would be absolutely necessary to ensure future financial stability and service reliability.

When U.S. Virgin Islands Governor Kenneth E. Mapp met with President Donald Trump in October, he laid out the idea of having a power grid that could withstand the region’s strong storms. Much of the grid would be located underground, making it easier to keep the power running—or get it back up quickly.

Residents of the U.S. Virgin Islands currently pay about 32 cents per kilowatt hour for their electricity, which is three times the national average. The federal government has also spent approximately $250M each time the Territory has been devastated by hurricanes, on five separate occasions, to rebuild the territory’s power grid after storms. Having a stormproof grid in place would prevent the federal government from having to continually shell out massive amounts of money, while also decreasing costs for all residents.

Moving forward with a sustainable vision

Governor Mapp’s most recent testimony on this issue was a part of a larger hearing organized by the Committee on Energy and Natural Resources to collect information to help it determine how much funding the government should provide the territories for the purposes of rebuilding. Lawmakers have been particularly persistent with impressing the importance of a sustainable plan on representatives from these territories.

The U.S. Virgin Islands estimates it needs about $7.5 billion to fully recover, and it’s not clear if it will get this money. However, lawmakers did offer some encouraging signs in particularly important areas, such as getting funding for storm-damaged hospitals and implementing new forms of renewable energy and other solutions like underground power lines. Most of Puerto Rico and the U.S. Virgin Islands are still without power two months after the storms.

Senator Bernie Sanders (D-Vermont) voiced his support for including more renewable energy in the power grid for the U.S. Virgin Islands moving forward. He said he believes it’s important to put the islands on a path toward 100 percent sustainability related to its energy policies and usage.

All senators agreed, however, that the U.S. Virgin Islands cannot and should not be rebuilt in the way it was. Efforts must be made to improve its resilience against storms and to prevent future recovery efforts from being so large and from taking so long.

Tom Bolt is Managing Attorney and Chair of the Government Relations Practice Group at BoltNagi PC, a full service business law firm on St. Thomas, U.S. Virgin Islands.

An Overview of Tax Relief Opportunities for Hurricane Victims

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For those who have lost a significant amount of property due to the destruction caused by Hurricanes Irma and Maria, there is some good news. The Internal Revenue Service (IRS) offers tax relief to victims of these major storms.

The agency recently outlined these relief opportunities, making them available to victims of the hurricanes that have battered the United States. As part of this relief effort, typical tax deadlines are postponed for individuals and businesses until January 31, 2018 to file any returns and pay due taxes.

Eligible individuals and businesses include the following:

  • Individual tax filers whose extension previously ran out on October 16, 2017. Because payments for these 2016 returns were originally due on April 18, 2017, those payments are not eligible for relief.
  • Business filers, including calendar-year partnerships, whose extensions expired on September 15, 2017.
  • Quarterly estimated tax payments that were scheduled to be due on September 15, 2017 and January 16, 2018.
  • Quarterly excise and payroll tax returns due on October 31, 2017.
  • Calendar-year tax-exempt organizations whose 2016 extensions expired on November 15, 2017.

There are a variety of other tax returns, payments and tax-related actions that qualify for extensions as part of these relief opportunities. The IRS’s disaster relief page has more information.

Special assistance for qualified taxpayers

In addition to extensions for filing and paying taxes, the IRS offers other forms of special assistance to taxpayers in disaster areas. This includes the following:

  • Employer-sponsored, leave-based donation programs allow employees to forgo vacation, sick or personal leave in exchange for tax payments made by their employer before January 1, 2019 to various charities providing hurricane relief. Donated leave is not included in an employee’s income, and the donations are tax deductible as a business expense for employers.
  • 401(k)s and other types of employer-sponsored retirement plans can offer loans and hardship distributions to hurricane victims and their families. Victims may take a hardship distribution or borrow up to the statutory limit from the retirement plan. A person who lives outside the disaster area may take out a loan or hardship distribution to be used for a child, parent, grandparent or dependent who was a victim in the disaster area.
  • The IRS is currently waiving late-deposit penalties for payroll and excise taxes that would typically be due within the first 15 days of a disaster period.
  • Individuals and businesses who sustained uninsured or unreimbursed disaster-related losses may claim those losses on either the return of the year the loss occurred or the return of the prior year.
  • The IRS is waiving fees and expediting requests for copies of previously filed returns for disaster-area taxpayers. This is helpful for anyone who has lost their documents or whose documents were damaged in the storms.

To learn more about the various relief opportunities the IRS is providing to taxpayers in the wake of the recent hurricanes, contact an attorney in the U.S. Virgin Islands.

Ravinder S. Nagi is Assistant Managing Attorney and Chair of the Labor & Employment Practice Group at BoltNagi, an employment and labor law firm serving business and organizations throughout the U.S. Virgin Islands.

Lawyers Offer Free Legal Advice to Hurricane Victims

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Imagine standing in line for a few hours to get a bag of ice and returning home to find the  landlord has put your clothes outside your apartment and locked you out. The reason? His home was destroyed by a hurricane and he plans to move into the place he was renting to you.

Attorney Tom Bolt

The exact circumstances are fictional, but the general scenario is all too real.

Such disputes, triggered by Hurricanes Irma and Maria, are “happening daily,” according to Virgin Islands attorney Tom Bolt.

There are cases in which landlords are demanding full rent for badly damaged properties, or insisting that one tenant take on the expense of fueling and maintaining a generator designed to serve multiple units, he said. And it’s not all one-sided. Some tenants are stiffing property owners under the assumption that they don’t have to pay anything because they have been inconvenienced.

There are also employment questions, Bolt said. If a business is forced to close because of a hurricane, what obligation does it have to its former employees? Must a company pay accrued leave to a worker it has to lay off, for example?

Even property title issues can come into play, Bolt said. What happens if “mom and pop” have deeded their home to their children with the understanding that the seniors will spend the rest of their lives there, but then a hurricane damages it and the parents need a disaster loan to make repairs, but one of the children doesn’t want to sign the paperwork for the loan?

Bolt and the lawyers in his office comprise eight of the 12 V.I. attorneys who have volunteered to work with eligible residents who apply for free legal advice through a program managed by the American Bar Association’s Young Lawyers Division. Local attorneys do not take so-called Disaster Legal Assistance calls directly. Residents seeking help must apply through the program’s hotline, 1-800-310-7029 to see if they are eligible.

Typically landlord-tenant disputes are the most common to surface in the first weeks following a disaster, according to Andrew VanSingel, the project manager for the ABA’s program. They will likely be followed by requests for help with applications for federal assistance or filing insurance claims, disputes with contractors, and a host of issues that arise unexpectedly in the wake of a disaster.

The ABA has sponsored a disaster legal assistance program for decades, and for about 10 years has partnered with FEMA to make it readily available in effected zones.

Just since 2007, the program has offered relief in 160 declared disasters in 43 states and territories – including 20 disasters in 2017, according to the ABA website.

In the two and a half years that VanSingel has been involved, he said he’s spearheaded efforts in about 40 different disasters. While the types of problems are much the same in various jurisdictions, there may be some circumstances that are different. Communications problems, for instance, tend to be more of an issue in the territories than in most states.

In fact, because of the problems with phone service in the Virgin Islands, the hotline is operating through the Louisiana Civil Justice Center. Many questions can be handled immediately by legal experts at LCJC, which has considerable experience with the program. Those that require individual assistance are matched with a volunteer attorney in the territory who can give “limited scope representation.”

The program is open to individuals who are hurricane victims and who have insufficient means to hire an attorney, VanSingel said. It is open only to civil matters. Cases that could be fee-generating are not eligible, nor are criminal cases.

Trudy Fenster, president of the V.I. Bar Association, said the hotline “is being used a lot,” though she could not give a definite number of calls.

Bolt estimated his office has received about 50 referrals so far.

People van see if they qualify for the program by calling 1-800-310-7029.

What Rights Do Tenants Have After a Hurricane?

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While much attention has been paid to the losses of homeowners and business owners after Hurricanes Irma and Maria hit the U.S. Virgin Islands (and rightfully so), there are thousands of renters who have suffered considerable losses, as well. There are many ways for property owners to seek various forms of financial assistance, but what rights do tenants have after a natural disaster?

Analyze the lease

To start, renters should be familiar with the terms outlined in their leases, as this is the primary governing document for the relationship between any tenant and landlord. There is no legal obligation for a landlord to help tenants recover from natural disasters, but there can be incentives for them to do so. The lease could include language that specifies what would happen in a post-disaster situation.

Insurance companies often require landlords to ensure that their properties have a certain level of storm protection. The steps landlords take to protect their properties, in turn, can protect their tenants. But if the property becomes uninhabitable due to storm damage, the lease agreement does not end. For the lease to be formally terminated, one of the parties must act to bring it to an end.

Therefore, if your building is uninhabitable after a disaster, the landlord must still provide official notice before terminating the lease agreement.

Steps you can take

You have the right to seek a reduction in rent that is proportional to the amount of damage in your unit. If your property is completely unlivable, you can move out. But in either situation, you must send an official certified letter to your landlord informing them of your actions. This is the only way you can protect yourself from any retaliation for non-payment of rent.

If you had renter’s insurance, get in touch with your insurance company as soon as possible. If your loss is covered under your insurance policy, you may request advance payments to cover your losses, at least in part. If you do not have renter’s insurance, find out if your landlord had insurance that might cover your unit and belongings.

If no insurance policy exists that would cover your losses, you might be able to get relief from The Federal Emergency Management Agency (FEMA) under the Individual and Household Program (IHP). This enables you to replace necessary personal items such as clothing, furnishings, appliances and other household items.

If your property is considered irreparable, your landlord could have the right to terminate your lease. To do so, the landlord must file an eviction action in court and have a judge enter a final eviction judgment. Finally, you are entitled to getting back all or part of your security deposit in accordance with your lease agreement.

For more information on your rights as a tenant while recovering from a hurricane or another natural disaster, meet with a skilled real attorney in the U.S. Virgin Islands.

J. Nash Davis is an associate in the Real Estate and Financial Services and the Corporate, Tax & Estate Planning Practice Groups of BoltNagi PC, a full service business law firm on St. Thomas, U.S. Virgin Islands.