AND WHILE YOU’RE AT IT...
PLEASE FIX THE INSURANCE STATUTE
Eric Glazer, Esq.
Published August 2, 2021
No doubt some changes are on the way
for condominiums as a result of the Surfside tragedy. The
changes are long overdue. Here’s another long overdue change
that is necessary….the condominium insurance statutes.
Suppose I told you that under Florida
law, there is no absolute requirement that your condominium
association insure the building(s). Sounds crazy right? Yet,
here is what the law actually says:
d) An association controlled by unit owners operating as a
residential condominium shall use its best efforts to
obtain and maintain adequate property insurance to protect the
association, the association property, the common elements, and
the condominium property that must be insured by the association
pursuant to this subsection.
What in the world does “best efforts”
mean? Does it mean that “We made a few calls…..the premiums
were too high…..so we forgot about getting insurance?” Is that
using best efforts? Have you ever read such a contradictory
statute? On the one hand it says the board must use its best
efforts. On the other hand, the same statute says that the
condominium property “must be insured.” Which is it?
Think for a second if Champlain Towers
was not insured? The very thought of it sounds impossible, but
But wait…..it gets worse. Even if the
property is insured the statute says:
The coverage must exclude all personal property within the unit
or limited common elements, and floor, wall, and ceiling
coverings, electrical fixtures, appliances, water heaters, water
filters, built-in cabinets and countertops, and window
treatments, including curtains, drapes, blinds, hardware, and
similar window treatment components, or replacements of any of
the foregoing which are located within the boundaries of the
unit and serve only such unit. Such property and any insurance
thereupon is the responsibility of the unit owner.
So, let’s say your condominium
property is insured, but you did not purchase a separate HO-6
policy for your unit. All you get back is your four walls.
That’s right, basically a shell.
What about flood insurance? Is that
mandatory in Florida for your condominium? No, it isn’t. The
association “may” purchase it.
Just to make things crystal
clear for our esteemed legislators, at the moment there is
absolutely no requirement to fund reserve accounts so that the
money is there should major life threatening repairs become
necessary. And to make matters worse, if a tragedy does befall
the property and the owners, there’s not even a requirement that
the building was to be insured.
This would almost be comical
if it weren’t so sad. We live in a state that:
Every year gets hit with tropical storms and hurricanes;
Suffers sinkhole collapses;
Has thousands of buildings lining our coasts and the
buildings take a beating from the salt water;
Does not require unit owners in a condominium to put away
reserve funds should major repairs be necessary
Does not require associations to purchase insurance, but
only use their “best efforts” which is undefined;
Is home to more senior citizens on fixed incomes than almost
any other state in the country.
You do the math. When the special
assessments start coming as a result of massive repairs that are
required on our aging buildings, associations will look to save
money elsewhere. Yes, many boards believe it or not will take
the position that insurance is not necessary, or that despite
their “best efforts” it is simply unaffordable. I have met
boards like that already.
In the upcoming legislative session,
The Florida Legislature has a real tough job on their
hands. Passing laws that reflect the true cost of actually
living in a condominium, and no longer giving unit owners and
board members enough rope to hang themselves with.
HOA & Condo Blog
Eric Glazer graduated
from the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for three decades and is the owner of
Glazer and Sachs, P.A. a five attorney law firm with
offices in Fort Lauderdale and Orlando.
Eric is Board Certified by The Florida Bar in
Condominium and Planned Development Law.
Since 2009, Eric has been the host of Condo Craze
and HOAs, a weekly one hour radio show that airs at 11:00 a.m.
each Sunday on 850 WFTL.
Eric is the first attorney in the State of
Florida that designed a course that certifies condominium and
HOA residents as eligible to serve on a Board of Directors and
has now certified more than 20,000 Floridians all across the
state. He is certified as a Circuit Court Mediator by The
Florida Supreme Court and has mediated dozens of disputes
between associations and unit owners. Eric also devotes
significant time to advancing legislation in the best interest
of Florida community association members.