Insurance news and information

Suppose your resident is behind in his payments to your condo association. Now suppose he has someone renting his unit. Should you as a condo association approach the renter and attempt to collect the owner’s rent instead of waiting for the delinquent resident to pay up? Can you?

Likely not. Your agreement is not with the person renting the apartment or condo. Your written agreement was signed by the resident in question. The renter has no idea usually that the resident isn’t paying his bills, nor does the renter have control over the resident’s actions. Also, renters pay maintenance fees as part of their rent payment to the owner. It’s the owner’s responsibility to forward those payments to the association, not the renter’s. Neither the association’s agreement with the owner nor the agreement between the renter and owner is set up to force a renter to pay an owner’s expenses, nor should they. Read more…

Too often I’m faced with condo associations that make a critical mistake when insuring their properties – they simply renew without looking. It’s critical because in many cases, policies are renewed year after year without regard to changing property values, changing conditions, aging equipment and facilities, or changing occupancy levels.

And in today’s uncertain real estate market, those criteria could mean you’re either underinsured and assuming more risk than you need to or you’re paying for too much coverage. Let’s look at it from an underinsured perspective. Suppose your association purchased a new policy five years ago. At that time, the property consisted of three buildings, a pool, and six acres with a paved walking trail. The property value then was $1.2 million. Read more…

Tough economic times often force tough economic decisions for apartment and homeowner associations. Board members, eager to trim expenses, will often look to insurance policies for ways to decrease coverage and lower premiums.

Too often associations have claims denied because the coverage they once had was dropped due to budget concerns. Also, many association boards failed to understand critical elements of their policies, leaving them with unnecessary or unknown gaps in coverage. The most common areas that cause trouble for associations include: Read more…

 As an apartment or condo association, your board has to make some tough decisions. One of the toughest – what property management option to choose. And anyone who’s been put through the paces by an incompetent or untrustworthy manager understands the risk the wrong choice can be.

Take the example of Ohio-based condo association Lakewood Condominium Association, which is suing their property management group on allegations of stealing over $830,000 and allowing overdue association bills to go unpaid. The property management group is charged with, among other things, lying about the association having over $217,000 in CDs in the bank. The CDs, according to court documents, were withdrawn in January 2006, and over $378,000 in reserve funds remain missing.

Read more…

It’s no secret that foreclosures are crippling the condominium industry. Record numbers of unit owners are in or dangerously close to foreclosure. Many condo associations are struggling to keep occupancy levels up and wondering how to deal with so many vacant units at once. And amid this foreclosure crisis comes yet another – condo owners are delinquent on their condo fees. In some cases, the delinquencies total in the hundreds of thousands.

 Such is the case for one Florida-based condo association, whose association board announced recently that its residents are delinquent to the tune of $675,000. That figure represents half of the West Palm Beach-based Palm Beach Grande association’s resident population. With 106 of its 304 units facing or in foreclosure, it’s a crisis situation for the condo association. Read more…