after casualty has created more headaches in condominiums in the last
two years than anything else. One of the main reasons: Florida
Statutes FS 718.111(11) is open to all kinds of interpretations.
We have seen cases were four attorneys offered four different opinions
-- leaving board members and owners baffled. Ombudsman
Dr. Virgil Rizzo's letter to condominium boards dated
November1, 2005, explains his reasoning and interpretation of the
DBPR, Division Chief Michael Cochran, issued on January 13, 2006, a Declaratory
Statement (Docket No.2005059934) to the Plaza East Condominium,
explaining rights and obligations of associations under the existing
the headline of Mark Bogen's column says it best:
insurance a source of confusion
Mark Bogen, Special to the Sun-Sentinel
November 20 2005
Our condominium residents have suffered a great deal of damage to
their units [from Hurricane Wilma]. Our insurance agent told one of the
board members that anything on the perimeter of the unit is covered by
the association policy, while any damage to the inside of the unit is
covered by the unit owner. Is this true?
No, it is not true. There has been a great deal of confusion over what
is covered by the association's policy and what is the responsibility of
the unit owner.
hazard insurance policy issued or renewed on or after Jan. 1, 2004, to
protect a condominium shall provide primary coverage for all portions of
the condominium property located outside the units," according to
Chapter 718 of the Florida statutes.
The statute also says the hazard
insurance should cover all condominium property inside the unit that
initially was installed with the original plans and specifications, and
replacements, as long as they are of like kind and quality as the
original. Please ask your insurance carrier or association attorney if
you have questions about that coverage.
covered by the association's policy are personal belongs and furniture,
of course, as well as all floor, wall and ceiling coverings, electrical
fixtures, appliances, air-conditioner or heating equipment, water
heaters, water filters, built-in cabinets and countertops and window
treatments, including curtains, drapes, blinds, hardware and similar
window treatment components.
718.111 (11) INSURANCE.--
(a) A unit-owner controlled association shall use its best efforts
to obtain and maintain adequate insurance to protect the association,
the association property, the common elements, and the condominium
property required to be insured by the association pursuant to paragraph
(b). If the association is developer controlled, the association shall
exercise due diligence to obtain and maintain such insurance. Failure to
obtain and maintain adequate insurance during any period of developer
control shall constitute a breach of fiduciary responsibility by the
developer-appointed members of the board of directors of the
association, unless said members can show that despite such failure,
they have exercised due diligence. An association may also obtain and
maintain liability insurance for directors and officers, insurance for
the benefit of association employees, and flood insurance for common
elements, association property, and units. An association or group of
associations may self-insure against claims against the association, the
association property, and the condominium property required to be
insured by an association, upon compliance with ss. 624.460-624.488. A
copy of each policy of insurance in effect shall be made available for
inspection by unit owners at reasonable times.
(b) Every hazard policy which is issued to protect a condominium
building shall provide that the word "building" wherever used
in the policy include, but not necessarily be limited to, fixtures,
installations, or additions comprising that part of the building within
the unfinished interior surfaces of the perimeter walls, floors, and
ceilings of the individual units initially installed, or replacements
thereof of like kind or quality, in accordance with the original plans
and specifications, or as they existed at the time the unit was
initially conveyed if the original plans and specifications are not
available. However, unless prior to October 1, 1986, the association is
required by the declaration to provide coverage therefor, the word
"building" does not include unit floor coverings, wall
coverings, or ceiling coverings, and, as to contracts entered into after
July 1, 1992, does not include the following equipment if it is located
within a unit and the unit owner is required to repair or replace such
equipment: electrical fixtures, appliances, air conditioner or heating
equipment, water heaters, or built-in cabinets. With respect to the
coverage provided for by this paragraph, the unit owners shall be
considered additional insureds under the policy.
(c) Every insurance policy issued to an individual unit owner
shall provide that the coverage afforded by such policy is excess over
the amount recoverable under any other policy covering the same property
without rights of subrogation against the association.
(d) The association shall obtain and maintain adequate insurance
or fidelity bonding of all persons who control or disburse funds of the
association. The insurance policy or fidelity bond must cover the
maximum funds that will be in the custody of the association or its
management agent at any one time. As used in this paragraph, the term
"persons who control or disburse funds of the association"
includes, but is not limited to, those individuals authorized to sign
checks and the president, secretary, and treasurer of the association.
The association shall bear the cost of bonding.