Condominium Associations

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I was selected by the judge overseeing the Champlain Towers collapse in Surfside, Florida, to be the insurance coverage counsel for the class of victims. There were numerous lessons that all condominium boards, their lawyers, and property managers should learn from studying that tragedy. One of those is the role of inspections to critical areas of the structural integrity of the condominium.
Continue Reading Condominiums That Were In The Path of Hurricane Ian Need Structural Engineering Assessments

Great American Insurance Company attorney Bill Wilson of the Mound Cotton law firm announced at a hearing in the Champlain Towers South Case that the insurer would tender its full policy limits and pay additional coverages totaling more than 30 million dollars. The catastrophe was on June 24 and the claims decision was announced only 22 days after the occurrence. While I have often criticized insurance claims executives for taking too long to investigate and come to a claims determination, Great American deserves a Bravo and resounding accolades for putting this claims determination to rest.
Continue Reading Great American Agrees to Pay Champlain Towers South Property Insurance Claim and More to Be Discussed on Tuesday @2 with Chip Merlin

Insurance company law firm Matthiessen, Wickert & Lehrer have updated a thorough discussion of the adjustment issue of matching in an article, ”Matching Regulations” And Laws Affecting Homeowners’ Property Claims In All 50 States. From their view, they noted the current state of affairs regarding matching:

It remains one of the most difficult issues to deal with in the world of property insurance. Homeowners’ insurance policies usually contain a provision obligating the carrier to repair or replace an insured’s damaged property with ‘material of like kind and quality’ or with ‘similar material.’ They cover property damage resulting from ‘sudden and accidental’ losses. When damage caused by fire, smoke, water, hail, or other causes results in a small portion of a home or building being damaged (e.g., shingles, siding, carpet, cabinets, etc.), whether and when a carrier must replace non-damaged portions of a building in order for there to be a perfect match remains a point of contention. It is a matter of great importance to insurance companies because ‘matching’ problems with a slightly damaged section of roof or flooring can lead to a domino effect of tear out and replacement costs of many items which are not damaged. The problem of partial replacement is especially troubling where the damaged siding or shingles have been discontinued, making it virtually impossible to properly match. To replace only the damaged portion would result in an obvious aesthetic deficit due to a clear difference in the appearance of the replaced portion of the building from the portion that remains undamaged.

Would the entire structure need to be re-sided or the entire roof re-shingled? Or is it sufficient to replace just one wall of siding or just a few shingles? Whether or not the insurance company must pay to replace entire sections of the structure in order to bring the property back to its previous uniformity and aesthetics can bring various state insurance laws and regulations into play. On the one hand, many pundits claim that the terms of the insurance policy require the carrier to pay the cost to ‘repair or replace with similar construction for the same use on the premises.’ They argue that ‘similar’ doesn’t mean matching exactly. Others argue that coverage for ‘matching’ and ‘uniformity’ under a homeowner’s policy doesn’t exist without a specific endorsement. The truth lies somewhere in between and can vary greatly from state to state.
Continue Reading Matching Issues and New Endorsements Creating an Insurance Coverage Gap

Fees may not be recoverable under a condominium association policy to an insured condominium association or its property management company after a loss. The Board should carefully consider fee percentages agreed upon in a management agreement to assist the association through a property insurance claim.
Continue Reading Are Property Management Fees Recoverable Following a Loss?

Many state statutes and condominium bylaws require the purchase of reasonably available property insurance which covers all direct physical risks of loss on an extended and replacement cost basis. One issue I have heard associations and their insurance agents ask: “Is flood insurance reasonably available” so that it has to be insured.
Continue Reading Condominium Associations Must Purchase Flood Insurance

Once Hurricane Irma passes and recovery efforts begin, the many volunteers who agreed to serve on boards of community associations will have daunting challenges. Buildings will need to be secured from further water intrusion, and units that are water-soaked will need to be dried out. The storm debris ranging from damaged landscaping to destroyed roofing and other building materials will need to be removed. Many of these items will be critical path tasks to return properties to safe, habitable condition. Failure to effectively and quickly cope with dangerous conditions on the property may mean the difference to residents of whether the local building officials or fire marshal condemn the property and prohibit occupancy pending extensive repairs.
Continue Reading Emergency Powers Exists to Enable Hurricane Recovery for Florida Community Associations

Homeowners living in planned communities usually have governing documents that mandate the individual home or condominium unit owners carry their own insurance in the event of a property loss. While unitholders in these communities pay monthly or yearly dues so the main association (HOA) can take care of the common areas, part of those mandated payments usually go to the HOA for the purchase of a master insurance policy which ideally should insure everything maintained by the HOA. Rarely do individual unitholders in an association ask to see the master policy of their HOA. Nor do the individual unitholders ask their governing board to audit the master insurance policy to make sure it covers enough of the HOA’s potential responsibilities and liabilities. If the policy does not contain the proper coverage for the HOA, the HOA subjects its unitholders to a special assessment if a disaster occurs and major rebuilds that are costly. Planned communities risk inadequate insurance coverage if it purchases a master policy without understanding the needs to the community and discloses these needs to its broker or agent when purchasing its policy.…

Continue Reading Homeowner’s Associations- Does Your HOA Have the Right Coverage?

Last week, I wrote about how California courts are interpreting Additional Living Expenses provisions. In the instance of ALE, courts have held that policies should be interpreted according to a layperson’s reasonable understanding. California courts are taking the same approach in applying property policy exclusions.…

Continue Reading California Insurance Policies Must be Interpreted as to a Layperson’s Reasonable Understanding

On October 14, 2011, Corey Harris explained Florida’s standard of director’s liability in his blog post, Am I Personally Liable Simply For Being A Director? As he noted, “[t]he longstanding precedent discussed in Munder v. Circle One Condominium, Inc., 596 So.2d 144 (Fla. 4th DCA 1992), provides that directors are immune from individual liability unless a crime or fraud has been committed or there has been self-dealing or unjust enrichment. As a result, negligent actions are not individually actionable, even if such actions are clearly wrong.”
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Continue Reading It’s Important for Associations to Maintain Liability Coverage for Board Members

The Merlin Law Group has started a legal blog about the insurance issues that arise with Condominiums. Condominium law is an area where a little experience leads to the conclusion that there is a lot more to learn. Condominiums have unique insurance issues which we felt could better be addressed in a separate blog.…

Continue Reading Merlin Law Group Publishes Condominium Insurance Law Blog