Tag Archives: Insurance

Condo Insurance Check Issued to Unit Owner for Building Damage

S.F. from Fairfield County writes:

Dear Mister Condo,

Insurance check for house damage was made payable to a condo owner, who is the brother of the president of the condo association. Why did the insurance company allow this? Check amount was substantial, for several thousand dollars.

Mister Condo replies:

S.F., there are a few reasons that the condo owner was reimbursed directly for an insurance claim. For starters, the policy holder typically designates the payee. Was this entirely association-owned insurance or was it homeowner’s insurance as well? Typically, the homeowner gets paid for claims made against their own policy. If the damage had already been repaired by the homeowner, the check may have been for reimbursement. A typical association claim for exterior building damage would go to the association, who would then hire the contractor to repair the exterior building damage. It the damage were internal (water damage for instance) and the association’s insurance were covering that damage, it would not be uncommon for the payment to go directly to the homeowner.

Keep in mind that insurance claims are also records of the association. As such, you have the right to inspect the claim. If you think foul play is afoot, I would suggest you review the paperwork to determine why the payment went to the owner and not the association. Good luck!

Condo Roof Leak Causes $75K in Damage; No Insurance Claim Made

J.T. from Middlesex County writes:

Dear Mister Condo,

Condo roof leak caused mold and extensive repairs paid by unit owner. The association refuses to pay the bill. $75,000.00 and never contacted master insurance but stated in emails that they did during initial assessments by environmental specialists provided by association who stated the need for immediate repairs. What is my next step?

Mister Condo replies:

J.T., you have a few different issues here. If it were me, my next step would be to contact an attorney to find out who I should sue for the $75,000 repair. That is a lot of money to be out of pocket for a roof leak and mold remediation. Of course, there is a procedure and protocol to follow here so don’t expect this to be a necessarily easy battle. Let’s start with the roof leak. Did the association fix the roof leak? That is their duty, regardless of whether insurance covers it or not. The association should have had insurance to fix the roof and made a claim to cover the cost or repair and any damage to any common elements. The association should have hired the contractor to make the repair. Is that what happened? You didn’t pay for the roof repair, did you?

Damage to your unit’s interior should have been covered by your own policy. If you didn’t have a homeowner’s policy in place, you should have and you should definitely have one in place moving forward. If the repairs were made in timely fashion, the mold issue may have been averted as most clean-up efforts would have included a dry-out of the damages area. However, as is often the case with mold, it doesn’t appear until months later. Regardless of how it got there, mold remediation is necessary because it can be toxic and, at the very least, a health hazard. If the mold can be determined to have been caused by the roof leak, the association may be on the hook for that as well. You should talk to an attorney about the mold issue to see who is responsible.

Again, I am not sure as to how you amassed a $75,000 bill for this problem, J.T.. If it was a lack of insurance on your part, this is going to be an expensive lesson on why you should always carry homeowner’s insurance. If it was simple mishandling of the claim by the association, an attorney can best advise you of your next steps. I hope you get the mold remediation taken care of immediately. All the best!

Condo Association-Hired Contractor Damages Unit Owner Ceilings

D.R. from Hartford County writes:

Dear Mister Condo,

A unit owner notified the condo association of a roof leak. A contractor, called by the association to inspect and give an estimate, caused several cracks in the ceiling while up in the attic inspecting, even though he was told the attic had no floor. Who is responsible for the repair, the contractor and his insurance or the Condo association insurance. The condo insurance company said they are not involved.

Mister Condo replies:

D.R., what an unfortunate situation. I am actually surprised that this contractor didn’t fall through the ceiling, which would have caused an even bigger problem for the association and perhaps even caused injury. The association hired the contractor to handle the inspection. Regardless of what the contractor was told, his actions caused the damage as reported by you. Typically, the association should go after the contractor for the damage he caused. Typically, that would have the contractor calling his insurance company to file a claim. It sounds to me like that didn’t happen. Instead, someone initiated a claim with the condo insurance who has subsequently denied the claim as it wouldn’t typically be covered by the type of insurance most associations have for their buildings. In fact, you have stated that the damage was caused by the contractor.

Without knowing all of the details, I would suggest the association needs to go after the contractor they hired and have the contractor make good on the damage he caused. If his insurance will cover it that should be a fairly simple process. If his insurance will not cover it, he should pay out of pocket for the damage. If he won’t do that, the association should sue him for the damage and make good on the repairs for unit owners. If all else fails, unit owners may have to sue the association for hiring the contractor that caused the damage. Sounds like everyone has to do what’s best for them in this situation although the legal fees could quickly outweigh the actual cost of repair. Good luck!

Florida Condo Homeowners Insurance Requirement

V.B. from Florida writes:

Dear Mister Condo,

I’ve lived at my condo in Orlando since 2009, when it was vetoed that unit owners are required to have insurance for condo. Are unit owners required to have condo insurance?

Mister Condo replies:

V.B., I am not an expert in Florida community association law so please consider this a friendly answer and not a legal one. You may wish to check with a local attorney for a legal opinion. Generally speaking, unit owners should have a homeowner’s insurance policy at the very minimum, regardless of requirement, to protect themselves from potential losses. Many association governance documents require unit owners to hold such policies but I am not aware of any legislation that requires unit owners to hold policies. In fact, my understanding of the Florida Condominium Act is that it does not require the insurance but it does state that the interior damage is the unit owner’s responsibility. As long as it is unit owner responsibility, the unit owner should want to have that risk insured, regardless of the law. That being said, if your original documents did call for a requirement to carry the insurance and the association voted to discontinue that requirement, there may, in fact, be no requirement for unit owners to do so. However, most mortgage companies would have a requirement for the unit owner to carry homeowner’s insurance and it is certainly a best practice to do so.  All the best!

Condo Maintenance Standards Enforcement

R.P. from Fairfield County writes:

Dear Mister Condo,

How common is it for Condominiums to have and enforce Maintenance Standards, whereby Unit owners are suggested / told how they should maintain their units to avoid issues or problems?

Mister Condo replies:

R.P., since the Common Interest Ownership Act (a/k/a CIOA) was passed in our state in 2011, maintenance standards have become quite common. Without issuing and adhering to maintenance standards, association open themselves and their members to denied insurance claims for items that commonly wear. If these standards are ignored by unit owners, they could find themselves on the hook for any damage that occurs due to a neglected item on the list. Among the more common culprits are water heaters. If a water heater failed outside of its useful life as determined by the maintenance standard and then flooded several units, the unit owner of the neglected water heater could be sued for the full amount of damages. Another common culprit is water supply lines for toilets and washing machines. They need to be replaced within the maintenance standard window or any damage caused if they fail would likely not be covered under the association’s insurance. I hope you don’t have any such failures. Good luck!

Unapproved Remodel to Upstairs Condo Damages Downstairs Unit

L.S. from outside of Connecticut writes:

Dear Mister Condo,

The question I have is this, I live in a condo that has 4 units per bldg. I own mine. These condos were built in the late 50’s maybe early 60’s. Unfortunately, there is an HOA fee of 150 dollars a month and the outside of the buildings look horrible. They really need to be painted and new front and rear doors placed. The front porch is falling apart. The condos were not built like the newer ones are. Someone purchased the upstairs condo and decided that they would remodel the whole condo. There was a wall removed and other major repairs without a permit that has caused damage to my condo. I spoke to a contractor who looked at the damage and informed me that if we were to try to fix it, it would cause more damage. The upstairs condo would receive damage also. I am just wondering who should pay for the damage. The owner knows that there were issues and he wanted his handy man who caused the damage and himself to look at it. I am not sure what good that would do. Should I file a claim with my insurance company and let them fight it out or is there another way to deal with this? Am I going to be stuck with a huge bill?

Mister Condo replies:

L.S., you certainly have a lot going on inside your 4-unit building. Let me address each item separately. First up, the HOA isn’t maintaining the property as they should. There is no reason for painting to go undone other than there is no money in the Reserve Fund for the project. You mention a fee of $150. If that fee isn’t enough to cover operating expenses and set aside money for routine maintenance like painting and door replacement, there will need to be a Special Assessment and/or an increase to common fees. Neither option is popular but that is the only way to get the association back on track so it can fulfill its duty to maintain the building exteriors.

The remodeling project is another issue entirely. It sounds like the upstairs unit owner did some unauthorized and unpermitted work on their unit causing damage to your unit. It’s time to speak with an attorney about suing the unit owner for the damage. You should file a claim with your insurance if you have suffered financial damage worth filing a claim over. However, the fault is clearly with the unit owner who did the unauthorized remodel. You governance documents likely spell out what types of repairs and improvements can be made to unit interiors. If they knocked down a supporting wall, you could be looking at a very expensive repair, not to mention the potential danger you are in. I would want to get this taken care of immediately. If they are amenable to correcting the problem at their expense, you may not need to sue but, in my experience, once the dollars start adding up, a lawsuit is almost inevitable. You should be able to recover your damages though and I am hopeful that your upstairs neighbor will do the right thing. Good luck!

Condo Insurance Payment to Unit Owner or Association?

S.F. from outside of Connecticut writes:

Dear Mister Condo,

Our building’s exterior was damaged by a falling tree. The claim check for six thousand dollars was made out to one of the condo owners. Should it have been made out to the condo association?

Mister Condo replies:

S.F., I am sorry that one of your buildings was damaged. Typically, the check is made out to whoever holds the policy. So, if the association was the policy holder and the damage occurred to association-owned property, the check is cut to the association. If the unit owner held a homeowner’s policy and that policy covered the damage, the check should have been sent to the unit owner. Building exteriors are almost always owned by the association and covered by an association policy, but exceptions do occur and insurance companies can also make payments directly to vendors or third parties at the policy holder’s request. Without knowing all of the circumstances, I cannot offer an opinion on exactly who should have received the check. However, as long as the damage was repaired and the vendors have been paid, there may be “no harm, no foul” to the association or the unit owners. All the best!

Condo Owner’s Insurance Pays for Deductible on Master Policy With No Claim

J.R. from Middlesex County writes:

Dear Mister Condo,

I had water damage in my condo from my washing machine. I called my personal homeowners policy and they inspected and quoted $8000 worth of damage. But because my condos master insurance policy has a deductible of $5000, my personal insurance will not be moving forward and gave me a $5000 check to give to the condo association and have them put through the claim under there master policy. But now the property manager is telling me he doesn’t want to put through a claim and wants to pay for the damages out of pocket. Is this okay? Do I tell him about the $5000 check? Do I give it to him? Do I tell my personal insurance? Am I going to get in legal trouble for not putting the $5000 check towards a deductible? Are the repairs going to be of less quality? Do I have a right to tell the property manager that I don’t agree? Please help. Thank you.

Mister Condo replies:

J.R., I am sorry you had damage inside your condo. I am not quite certain of why the condo’s Master Policy has come into play here. Was there damage to a unit other than your own? Typically, damage inside your unit is covered by your policy. Damage to the common grounds and/or neighboring units may be cause for a Master Policy claim but not necessarily, especially if the association has published maintenance standards for typical wear items such as laundry line supplies that do fail over time. Regardless, unless the association is making a claim on their policy, the repair can be handled however the association sees fit if they are claiming to have responsibility. Depending on the agreement made between you and your insurer, you may be committing fraud by not letting them know how the true cost of the repair. I wouldn’t be as worried about the quality of the repair as I would about what happens if your insurer finds out. In a worst-case scenario, they could drop you and come after you for any monies that were allocated for the $8000 repair. In this case, they have paid a claim for $5000. Their expectation is that the Master Policy will pay the difference between the cost of the repair and the deductible. Whether or not they ever find out about it is largely up to you and the repair company. Let your conscience be your guide. Good luck!

Repeated Leaks from Neglected Condo Caulking Maintenance

S.B. from outside of Connecticut writes:

Dear Mister Condo,

Last year, I had water damage to my floors from the outside balcony. The Property Manager said to call my insurer, which I did at my expense. This year two new leaks from the outside of building front to inside my bedroom, had to put towels and bucket to catch water. Custodian came and said gasket was off and the caulking had not been done in years. I told the manager, her boss, and all of the board members via emails (many emails to plead my valid case, not any answers to date) about problem. Caulking man came took pictures and they now have a price to fix it and still no one has talked to me as to when it will all get fixed?? It’s almost a month now without anyone making plans to fix it. What can I do to get them to fix it now? A small leak unfixed will surely grow into a bigger mess and I cannot keep going back to my insurance company. Please advise ASAP. I am very concerned and thank you in advance.

Mister Condo replies:

S.B., preventable damage like what you have described is always a head-shaker for me. However, you have done what you are supposed to do and now it is up to the Board and the Property Management company to follow through and see that the repairs get done. One of the issues that usually comes into play in situations like this is bureaucracy. The Property Manager can only authorize work that the Board has approved and is willing to pay for. Tight budgets, lack of common fees collection, and more can lead to the Board deciding to delay a repair until there is money to pay for it. Also, if the Board meets infrequently (once per quarter, every other month) many months can go by between a problem being reported and a repair being performed. There isn’t too much you can do about that. Ultimately, the Board is made up of volunteer members from within your association. If you don’t think they are getting the job done, it is time for some new volunteers. Perhaps you would consider running for the Board and volunteering your time to help guide the community? All the best!

Injured at the Condo; Reluctant to Sue Owner

B.C. from outside of Connecticut writes:

Dear Mister Condo,

I fell down the stairs right outside my condo. Everyone is saying to sue, but I rent from a private owner. I am afraid of repercussions. I like where I live but will need surgery and medical bills are piling. I know I have case. Any words of wisdom?

Mister Condo replies:

B.C., I am sorry that you were injured at your condo. Since you wrote to me a while back, I hope that by now you are well on the mend. Regardless of who you are renting from you now have medical bills. It is time to speak to an attorney who will better advise you of your rights and the plausibility of your case. In this litigious world in which we live, lawsuits are quite commonplace. Injury cases, in particular, are heard every day in courtrooms around the country. Many are even settled out of court. However, few are litigated with the proper advice of a qualified local attorney. If your part of the country is like mine, you can see their ads all over town. I am sure there is one ready to assist you. It shouldn’t cost you your rental agreement but if it does, there are other places to live. There may be only one place for you to recover the financial debt this injury has caused you. Get well soon!