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Tags: Board of Directors, Condo and HOA, Management News
With respect to item 7 above, Kaye Bender Rembaum has become aware of at least one service provider that will bring in engineering professionals to make a physical inspection of the entire community to assess the conditions and establish a record for all such conditions prior to any storm. The assessment will also identify conditions that may have resulted from Hurricane Irma from 2017, for which claims were not made or even found and may still be claimed. In many instances, conditions of significant damage may not be readily apparent to the layperson, but to a qualified professional, very obvious. Quite often, such an inspection can result in substantial additional insurance claims for the association to recover. It is not unusual for an insurance carrier to reject initial claims following a major storm, citing to maintenance or pre-existing conditions as the basis for the denial. The team of experts performing the assessment has assisted several communities overcome such rejections and ultimately receive additional settlement proceeds to make further repairs to the premises. While there is no guaranty of such a result, without making such an assessment, the board will never know and certainly have no further recovery. Most importantly, this inspection and assessment is undertaken at no charge to the association by this company, and with no obligation to the association!
Tags: Condo and HOA Law, Members Articles
There is an eerie quietness that can often be felt after a disaster like a hurricane of flash flooding, the time after the rain has stopped but the sun still hasn’t returned. Returning to business as usual after your community has faced a natural disaster can be difficult, the responsibilities can seem endless but there are some steps you can take to ensure that your community is as strong and thriving as before.
2023 has been a challenging year in every regard, not the least of which has been related to the Atlantic Hurricane Season, the most active since 2005. With over 23 named storms, including eight hurricanes and over 24 tropical or subtropical cyclones, it’s easy to see why so many are patiently waiting for the storm season to come to a close. Officially over on November 30th, the damage done to many communities will continue to affect homeowners and HOA board members alike. We’ve previously discussed implementing a disaster plan for your community but what comes after the storm can be just as important.
Failure to immediately mitigate post storm damage can have detrimental consequences for homeowners and the community in general, which is why it’s tantamount that you are prepared to take quick decisive action after a storm and know the steps involved. Please check with your communities insurance agent and your licensed community staff to determine if your state has any specific laws regarding the association and its responsibilities after a natural disaster.
Following a storm, whether it be a hurricane or simple hail damage, communicating with homeowners is by far the most important and often overlooked step that the community association can take. Often an emotional and overwhelming time for any resident, damage to the homes in your community can take many forms and can be addressed in various ways so it’s important for your board to keep an open line of communication with your owners so they are aware what steps are being taken by your association and what they will need to be responsible for in the aftermath.
In some states the board’s first challenge may be to understand whether to look to the communities Declarations and Bylaws or to the State and Local laws to determine who is responsible for what. In Florida for instance, the Florida Condominium Act can assign certain responsibilities to the association that they would not normally be involved with and can be in direct opposition to existing declarations at the community. We highly recommend communicating regularly with members of your licensed local community staff and your insurance providers to ensure that you are doing all of the right things to ensure your communities return to harmony.
You may want to start with the simple process of inspecting your community for damages. Buildings suffering damage should have been secured from further water intrusion, through temporary roofs, boarded windows, and sliding glass doors, which will need to be replaced. Construction debris from the storm should have been be removed or at least contained.
Every unit should have been inspected by the Association, preferably on several occasions, to ensure that there is no moisture to the interior of the units. Moisture detected, on areas such as wet carpets or soggy drywall, should have been removed. The drying process can typically be accomplished through interior climate manipulation through dehumidification, heating and/or air conditioning. The association’s insurance adjuster should be involved throughout the dry-out process. For more complex water intrusion dry out, an outside neutral party should also be involved.
Every association and unit owner should have contacted their insurance carriers to file insurance claims. Associations should ensure that every insurance carrier with potential responsibility has been put on notice. At this point, if the adjuster has not yet visited the premises, this should be immediately addressed with your insurance agent. Your insurance adjuster will attempt to document the site, but the association should document existing conditions by taking pictures and video of the damage.
After all units have been inspected for damage and the appropriate representatives have been notified you can begin the process of finding contractors or storm damage experts to help start the repairs Associations with buildings that have incurred moderate to significant damage should retain an independent consultant such as an architect or engineer, with no financial stake in developing the repair specifications. Often, this will be an architect or structural engineer, and may even be a type of qualified consultant for particular items. Condominium documents often require a reconstruction plan to be prepared by an architect or engineer.
Contractors should be appropriately licensed in your state for the type of work they will be performing, carry adequate insurance, and so forth. Although time is of the essence in moving forward with hurricane damage repair projects, a great deal of money is involved and the association can best protect itself by ensuring that there is appropriate legal review of any contracts or other documents. General contractors and many specialty contractors must be registered with the state. Licenses and complaints against such entities can often be checked online or can be requested from your community management company if they are providing the contractors.
In the event that homeowners have damages that pose additional risk or could lead to additional losses, it’s important to make some emergency repairs. Again knowing that communication and documentation are vital, try to document all of the necessary repairs and the steps taken to make those repairs, using photographs and dated records can help in the event that there is any dispute on the timeline or the necessity of the repair with insurance later.
In many cases the emergency repairs can be temporary and may require additional maintenance when the insurance company has settled on a permanent solution. These temporary repairs can include things like using a tarp on a leaking roof or adding plywood to broken doors and windows, and the cost may initially come out of the owners pockets but can be reimbursed at a later date by the insurance company.
Throughout this article and the process of rebuilding one thing remains constant, the need to be continually consulting with your insurance company and the experts they employee. Dealing with damage to your home is never pleasant and it can become almost impossible when the board needs to deal with their own home damage plus the overall community health and rebuilding. It is important to determine who insures which portion of the condominium property because the statute provides that the person or entity that insures the property is also the person or entity who repairs that portion of the property. Generally, any portion of the condominium property that must be insured by the association and which is damaged by a casualty or insurable event, will be repaired by the condominium association and the costs of such repair will be assessed as a common expense against all unit owners. Unit owners are responsible for repairing any portions of the condominium property that it is required to insure and the cost of such repairs to be paid by the owner of the unit that suffered the damage.
In conclusion, if your condominium suffers damage due to a hurricane or another storm event, the association will need to consult with its insurance agent and its legal counsel to determine if the damage suffered was due to a casualty, or insurable event, and thereafter decide who will need to repair the damage and pay for the costs of such repair. Prompt action must be taken to protect the condominium property and the association. If your association needs further guidance on this issue, it should consult with its attorney or the knowledgeable management staff.
Insurers often engage in strategies meant to challenge the patience of the policyholder and thereby force the policyholder to accept a lower payout, or to simply resign themselves to no payout. For example, an insurer may excessively delay the processing of the claim, arguing that the delays are due to ongoing investigation of the damage. By doing so, they hope that you — under pressure to fix the roof and no doubt overwhelmed by the proceedings— will simply move forward without waiting for the insurer and potentially give up on dealing with the hassle they created.
Partial payouts — in which the policyholder is offered an inadequate sum, but a sum nonetheless — are another way in which insurers try to goad policyholders into accepting less than what they’re owed under the policy at issue.
It’s worth noting that Florida law may entitle policyholders to bring an independent “bad faith” action against the insurer (which could even lead to punitive damages) if the insurer failed to investigate and pay the claim in a timely manner, or failed to evaluate the claim fairly under the circumstances. Simply put, if there was no valid justification for the denial, then our Fort Lauderdale roof damage attorneys may be able to sue and recover damages pursuant to a bad faith claim.
In homeowner’s insurance policies, payouts for roof damage may be limited due to coverage exclusions.
For example, a roof damage claim may be covered if it is caused by a thunderstorm, but not if it is caused by a hurricane.
Such strict categorization for roof damage coverage often leads to a dispute, particularly if the event leading up to the roof damage at-issue is somewhat muddled — if your roof is damaged in a hurricane (which is covered by the policy), the insurer might claim that it was not actually the wind force of the hurricane itself, but a falling tree that caused the roof damage. You can successfully counter this argument by showing how the hurricane directly caused the tree to fall on your roof.
Here at Maus Law Firm, our South Florida property damage attorneys have decades of experience representing the interests of policyholders whose real estate property has been harmed, whether due to a storm, fire, or some other unexpected event — including those which cause damage to the roof structure.
We understand the unique challenges that are faced by policyholders who are attempting to secure an adequate payout through submitting a roof damage claim, and are standing by to assist such policyholders in pursuing litigation against their insurers.
Ready to speak to a property damage lawyer at our firm? Call us at 1-855-999-5297 or complete an intake form through our website to schedule a free and confidential consultation today.
SFPMA & Members are ready to Handle Storm Damage & Claims for Condo and HOA Properties!
SFPMA has a team of Legal Experts, adjusters, estimators and claim specialists for the benefit of the Condo and HOA’s who sustained damage from the storms and fire, water or mold.
With the know-how and experience to analyze, evaluate, and negotiate the best settlement for your Insurance Claim!
The team’s decades of combined legal experience provide the Katzman Chandler family of clients with cutting edge solutions to routine issues, as well as novel and/or complex legal matters faced by our Community Association clients and their voluntary Boards of Directors.
Our Transactional Attorneys are often relied upon by the media, as well as public policy makers, to sort out issues relating to the Community Association lifestyle. Each member of the Transactional Team brings a unique skill set and perspective to this diverse practice and understands how best to assist Boards in functioning in an age of ever growing state regulation and changing legal requirements.
Our Transactional Legal Services for Associations involve a combination of several specialty areas including, but not limited to, Real Property Law, Corporate Law, Litigation, Contract Law, and Insurance Law. Whether we are reviewing your contracts, amending your documents, rendering a bank loan opinion or enforcing your Community’s covenants against violators; our ultimate goal remains the same – to deliver information, counsel and answers in an easy to understand format with personalized service and attention to detail that you can rely on time and again.
By Eric Glazer, Esq.
Board members I’m telling you now……..be careful. I’m seeing it already. Unit owners are starting to freak out over the passage of huge assessments to cover the costs of mandatory inspections, mandatory repairs and massive increases in insurance rates.
As we know, we’re not talking about pesky increases to the monthly cost of living in your home. We are talking about increases that will cause many to no longer be able to afford to live in their home at all. We are talking about increases that will force people to sell and no longer live in the condominium that they have lived in for perhaps decades.
Notwithstanding the fact that none of these increases are the result of anything the Board members did or didn’t do, board members know who is likely to be blamed for this financial disaster many unit owners find themselves in ——the Board members. So what else is new?
Board members are used to being blamed when things go wrong even though it’s not their fault. That comes with the territory. They get yelled and screamed at, the meeting ends and then it’s usually over. Maybe there’s some nasty e-mail that float around the community. This time it’s different.
Even if unit owners come to the realization and accept that they can’t afford to live in the condo any longer, the question is….so where can they go? Every condo seems to be in the same shape. Or if owners choose to move to a place that’s simply newer and not yet required to perform these inspections and repairs, you can bet they cost a lot more money than where they currently live. There’s simply no place to turn to.
When there is desperation and fear, people become irrational and often times violent and that is why I honestly fear for the safety of condominium board members throughout the state. This is not a knock on the millions of law abiding condominium owners throughout the state. They were thrown into this position because The Florida Legislature failed all of you. Instead of always requiring condominium owners to put away money for a rainy day, The Florida Legislature cow-towed to the whims of developers, law firms and other special interest groups who always lobbied against mandatory reserves. The only reason why mandatory reserves are now required is because 98 innocent men, women and children died at The Champlain Towers in Surfside as a result of not having nearly enough money on hand to make obviously needed structural repairs in their condominium.
So Board members……….you didn’t volunteer in your community to get punched out or worse at your board meetings. My advice is….when you know you’re about to pass a special assessment at a meeting, and at that meeting people are going to be going crazy……protect yourselves. Make sure there are police or at least security at the meeting. Better be safe than sorry.
WE WILL TAKE YOUR CALLS AND ANSWER YOUR CONDO AND HOA QUESTIONS THROUGHOUT THE HOUR. CALL US AT 877-850-8585 DURING THE SHOW.
Tags: Board of Directors, Condo and HOA, Management NewsMake primary, SFPMA Members News
Last week was a primer on how foreclosures generally work and how banks get off the hook when they get back a unit when they foreclose on an owner’s unit or home. We learned that the banks are protected by the law because they only owe a few bucks to the association when they get title to the unit or home despite the fact that the owner owes a fortune to the association. That’s called a “safe harbor” and it’s provided to the banks because the banks claim that if you make them responsible for paying unpaid assessments, they simply won’t loan money to buy a condo or a home in an HOA.
But there is some good news……….suppose the bank does not buy the unit at their foreclosure sale and a third party winds up becoming the successful bidder and the owner? What does that new owner owe the association if that unit owes thousands to the association in unpaid assessments? And the answer under the law is EVERYTHING! They owe it all. Florida Statute 718.116 states:
Additionally, a unit owner is jointly and severally liable with the previous owner for all unpaid assessments that came due up to the time of transfer of title.
So, when a bank forecloses on a unit, or when the association forecloses on a unit, the association hopes and prays that a third party purchases the property at foreclosure sale because that guy owes everything to the association. UNLESS………………….
Remember last week that I said that some of you have language in your governing documents that allows the bank to get off the hook even though they would owe money to the association if they wind up foreclosing and owning the property? Well…..some of you have language in your governing documents that allow third party purchasers off the hook if they buy the property at a foreclosure sale. So…..even though the association gets lucky and a third party purchases the property at foreclosure sale, your own docs kill you and lets the third party purchaser off the hook. They owe nothing. Disaster.
So……over the past two weeks we learned that it is vital for the board to check their governing documents to make sure that neither the bank nor a third party purchaser is let off the hook should they purchase a unit or home in your community. Make sure your docs don’t kill you. If they do, amend them immediately!!!!!!
Interesting research on the community association industry. Especially, given that seventy-eight percent of new homes for sale are located in community associations. There are 358,000 associations across the country, and it’s estimated that 5,000 more will be formed in 2023. Here presented are six trends that CAMs and boards are likely to see, including the absence of new board members. However, I think it is less to do with apathy than before Surfside and more to do with risk associated with a voluntary, unpaid, thankless job.
As part of our cross communications with other groups we are posting this for our industry – SFPMA
Wondering what 2023 holds for the community association management industry?
We were, too. That’s why Buildium asked 240 community association managers and board members about the challenges and opportunities they foresee for the industry this year.
They told us the community association sector is more popular than ever among developers, residents, and management companies—but there are several key challenges that community association managers and leaders need to address head-on, so they continue to thrive.
From shortages of team members, vendors, and volunteers to increasing competition among management firms, here are the six trends community association management companies should be aware of in 2023.
1. Staffing is a top priority as the labor shortage continues to strain teams’ resources.
Smaller community association management companies are competing with larger companies and developers for full-time team members and high-quality contractors, leading to higher staffing costs and smaller teams.
According to Buildium’s research, this is a leading challenge for the 85% of companies that plan to expand their portfolios throughout 2023 and 2024, prompting community association management companies to name staffing as their second-highest priority for the coming year.
2. Efficiency is a primary area of focus as teams search for ways to do more with less.
Technology is the X factor that allows community association management teams to take on more clients, even as their teams remain smaller than in the past. Streamlining processes like payments, communications, and accounting frees up time for the most impactful areas of the business, such as customer service and business development.
More than half of community association management companies told Buildium that leveraging technology to drive efficiency is a key aspect of their revenue generation strategy for 2023.
3. Competition for clients highlights the importance of high-quality customer service.
The Foundation for Community Association Research estimates there are 8,000 to 9,000 community association management companies in the U.S. In certain areas, smaller companies feel they’re being edged out by larger firms that can charge less for their service due to economies of scale.
Association board members told us they can feel the difference between customer service that’s personalized to their needs, and service that’s one-size-fits-all. This is where smaller companies have a competitive edge.
4. New development means new potential clients for community association managers.
Seventy-eight percent of new homes for sale are located in community associations. There are 358,000 associations across the country, and it’s estimated that 5,000 more will be formed in 2023.
This creates new opportunities for 88% of community association management companies that plan to recruit new clients over the next two years, with growth named as companies’ third-highest priority for 2023, according to Buildium’s survey.
5. Profitability is a challenge as companies balance the pressure to increase prices with the need to stay competitive.
Inflation has increased the cost of running associations across the board, from materials and labor (on the management side) to insurance and taxes (on the association side). Association boards are feeling the strain of pulling together sufficient reserves and funding for capital projects without raising dues or requiring special assessments.
Association management companies are under pressure to keep prices low to stay competitive—but 70% of companies feel it’s necessary to raise prices to cover their costs in 2023 and 2024. Our research found 43% of companies plan to expand the services they provide, potentially opening new revenue streams.
6. Community associations are struggling to recruit engaged, knowledgeable board members.
According to Buildium’s research, 38% of association board members said finding the people and resources necessary to keep their community running as a primary source of stress in 2023.
Current board members—80% of whom are 60 and older—feel frustrated with the lack of participation from newer homeowners; and boards that experience frequent turnover struggle to find members who have the knowledge to make important decisions for the community.
Overall, association boards and management companies feel more involvement in the community from homeowners is needed, in addition to greater awareness of their responsibilities as residents of an association.
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These are some of the challenges and opportunities that association managers and leaders will face in 2023. For a deeper dive into 2023 community association management trends, download our 13-page report, which shares additional data and quotes from real community association management professionals and board members. Download your free copy now.
Tags: Management News, Management Tools, SFPMA Articles
SFPMA works throughout the State of Florida, we are a multi-member organization for the Condo, HOA and Property Management industry. Through knowledge based Articles, Events and our Members Directory, Clients find the right information to make an informed decisions for their Florida properties.