A.W. from Ohio writes:
Dear Mister Condo,
I need help with a looming situation regarding a design change due to code on some windows that must be replaced due to a large fire in a large 2-level building. As you have mentioned, declarations & by laws require architectural conformity. Hard to understand but code does not require all these type windows to have design change & yet code requires all smoke detectors be wired in entire building. I can’t fight the county but I would like for insurance to understand our plight and cover ALL WINDOWS so at least that building will have same window design. If that doesn’t happen, might be hard to have others comply with by laws in future. We shall have to live with fact that one building will be different but this is still of great importance in the future for other owners in other buildings to comply with original design. Can you help us with thoughts to encourage insurance to pay? Six units will have design change in 2 windows each. We are asking for the remaining 6 units to also be covered for their 2 windows in each unit. The balance of windows will remain same as original design.
Mister Condo replies:
A.W., I am sorry for your community’s fire-related loss and I feel your frustration with your county’s building codes and policy coverage from your insurance company. It would seem to me that your association has a few options available given the facts as you have presented them to me. Please keep in mind that I am not an attorney so this advice should be considered friendly and not legal. If you need legal advice, please seek the aid of a qualified attorney.
For starters, your declaration and by-laws were most likely created by the original developer and adopted and ratified by the first seated Board. Depending on the age of your community, it is quite possible that none of those original adopters are even still unit owners. However, the current Board of Directors and unit owners are bound by those documents unless new by-laws are adopted. Therefore, it would follow that the community would abide by the by-laws and replace the damaged windows with windows that are in conformity with the architectural compliance rules, regardless of the dollar amount covered by the association’s insurance. Of course, building code supersedes architectural conformity so the association needs to purchase windows that are both architecturally compliant and up to code. That may be expensive but I am reasonably certain it is possible.
In other words, if the windows that best replace the damaged windows cost $50,000 and the insurance will only cover $25,000, the association should still replace the windows with the architecturally compliant and local building code-approved windows and pay the difference from association funds. This may lead to a special assessment or community association loan if the funds aren’t readily available for the job. Otherwise, the association is in violation of its own by-laws which creates a potential lawsuit from any unit owner who chooses to pursue the Board for not complying with the by-laws which is part and parcel of what every unit owner purchased when they bought into the association.
As for forcing your insurance company to cover the expense of the proper windows, all you need do is review the existing policy and consult with an attorney to see if you should be covered. My guess is that you are covered for the original windows only. Any upgraded windows the community needs to install will likely be at the community’s expense. Most policies would simply cover the cost or “like kind” of replacement, meaning if the windows were insured for replacement and the replacement cost is $25,000, that would be the limit of the coverage. Of course, there are going to be deductibles and other items that may come into play (cause of fire, age of windows, etc.). Trust me, if you pursue the insurance company to make a payment above and beyond what the policy likely covers, you will have to hire an attorney as the insurance company will most definitely fight to protect themselves.
The only other solution I can think of involves changing your association’s by-laws which may require a special vote of all homeowners. Again, you will need to consult your documents to determine what kind of vote (Board, majority of homeowners, super majority of homeowners, no descending votes from homeowners) is necessary to make such a change. Also, again, you may wish to consult with an attorney specializing in community association law to guide you with that process.
Either way, I encourage you to take proper action to maintain and protect your community. As you have noted, whatever action you take can implications for all unit owners for years to come. I wish you good luck in your endeavor.