Richard White: Individual owners must insure personal property

Q. In Chapter 718.111.11.3b, it indicates items which an association can exclude from insurance coverage. It continues in 3c to state that all real or personal property located within the boundaries of the unit owner’s unit which is excluded from the coverage to be provided by the association as set forth in paragraph (b) shall be insured by the individual unit owner. Does this mean that unit owners must provide insurance to cover these items or is it optional at the unit owner’s discretion? B.B. — Dunedin

A. Your question is a very important question for owners. The question brings up a point that all owners must understand about their responsibility for their property. The association is not responsible for loss of personal property during catastrophic events. This means that in the event of some type of loss or natural event, the loss to personal property is the responsibility of the owner and not the association. If one apartment has discount furniture while another has designer furniture, the association’s insurance will not cover either for losses. That means that an owner must provide his or her own coverage. It may mean that if they do not buy insurance, they are self insuring.

Q. When I bought my condominium, I found out I was in a flood zone and that my lender required me to buy flood insurance. It is my understanding that without the flood insurance FEMA would not help me in case of a hurricane with flood damage. Our condominium association does not carry flood insurance on the building. I am on the second floor and would probably not be flooded but I wonder about our common areas. Would FEMA help us in event of a flood? S.R. — St. Petersburg

A. I do not believe that FEMA has anything to do with losses as you describe. However, with the Hurricane Katrina catastrophe, who knows? Your board needs to review the document to see if the association is required to carry flood insurance. As you found out, any mortgage company will require flood insurance coverage. Just because you are on the second floor or on the top floor, it is possible for the first floor to be flooded and become unstable and unable to support the building and then your second-floor unit becomes uninhabitable. Failure to prepare for hurricanes is a major failure by many. They look to FEMA or the government for compensation for their failure to prepare. The fact is that your board has a fiduciary duty to the members to protect the funds and the assets. The board needs to talk to their attorney and their insurance agent. Insurance is a small loss today to prevent a large and crippling loss in the future. Point blank, if the building is flooded by rising water and suffers structural damage, your insurance will not cover the loss of the building.

Q. Our town home association board is looking into outside management. Our president interprets that the bylaws authorize the board to make and approve this decision, along with increasing the budget to cover the expense. In reviewing the bylaws, this specific scenario is not shown, and is certainly open to interpretation. Is a decision of this magnitude generally a board decision only? A.K. — Laky Lake

A. This is a board’s decision. If you read the articles and/or the bylaws, it should say that the board is responsible to manage the association. While it does not say the board has the authorization to engage management, it should say that they have powers to contract for any service. This is often one of those situations when members say I do not want to serve on the board neither do I want to pay for professional help. Let those that volunteer their time do all the work. Why do we need to pay someone to help the board when they are responsible to spend their time and effort? I do not want to pay for what they are supposed to do. It is the board’s duty to engage professionals to assist in the management of the association. This includes engaging attorneys, CPAs, as well as management. Those associations that have professionals operate more efficiently and are less likely to become involved in liability problems.

Q. To what extent is the condominium association responsible for repairs after a hurricane? What responsibility do they have regarding building repairs? C.C. — Miami

A. There are two parts to the question. The documents, specifically the covenants or declaration, should define the boundaries of the units and the common areas. Private and personal property repairs, the units, are the responsibility of the owners. The common areas become the responsibility of the association or to put it another way, the board of directors. After a major storm or catastrophe, this is more simply said than done. The board members are owners and have personal problems just like other residents. They have also suffered losses like other owners but still have the responsibility to restore the common areas. Vendor services, parts and material will be in short supply. Some repairs may take months to complete. All repairs need funding and cannot begin unless the cash is available. The association should have had adequate insurance and an agent who will assist in rapid funding of losses. There are several steps to restoring the association. The first is the emergency requirements to make the association safe. That would include clearing the streets and walks of trees and debris and restoring power. The second is to start cleanup of the common area by removal of debris and trash. The third would be the bidding and contracting to start repairs. This third step may require weeks and months. Members of the association have some responsibility to assist the board to restore the common areas.

Q. Recently you wrote an article on complaint letters and setting up a file to retain these letters. I wonder if this also applies to e-mails and faxes. Should a file or binder be created to keep e-mails and faxes as well as the letters? T.C. — Naples

A. There are several ways to establish the filing system for the association. In short, all correspondence needs to be retained or some type of record-keeping system. Some associations keep a double file. One copy is filed by date in a file or notebook and the second to retain a copy of the correspondence and placing it in a unit folder, vendor folder, or by subject store all correspondence. This way, a director can go to the dated file and read all the correspondence received for the past few days. If a special situation arises, you can pull the unit folder or vendor file to read the history of any problems.

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Richard White is a licensed community association manager in Florida. Questions should be mailed to him at 6039 Cypress Gardens Blvd. # 201, Winter Haven, Fl. 33884-4415; e-mail To be considered, questions and comments should include the author’s name and city. Questions should be about association operations, not legal matters.

© 2006 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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