Condo Media - May 2015 - 30

GETTING ANSWERS

1

Some attorneys
recommend insurance
resolutions or amendments requiring owners
to purchase insurance,
mainly to put them on
notice of the liability they
face without it. But they
advise boards not to
enforce the requirement
to avoid the potential
liability they incur
by accepting that
responsibility.

30

CONDOMEDIA

How do you determine where
the board's responsibility for
maintaining common areas
ends and where the owners' responsibility for maintaining their
individual units begins?
Given the winter from hell that deposited record levels of snow on grounds
and roofs, made ice dams a leading
topic of discussion, and triggered
damage claims still being tabulated,
it's not at all surprising to find this
question and those that follow (about
insurance and insurance deductibles)
topping the list.
The short, though often unsatisfactory, answer is: The condominium's
bylaws or deed of trust should
describe the boundaries between
common areas and individual units
and specify how the resulting maintenance obligations are divided. The
problem, of course, is that the documents are often unclear or silent on
these questions, making it difficult for
boards to calculate how the maintenance and repair obligations and costs
should be allocated.
To provide that clarity, if it is lacking, attorneys recommend that boards
either ask owners to amend the
documents (which can be difficult)
or adopt a maintenance resolution,
which doesn't require owner approval.

2

Who's responsible for paying the deductible when the
master policy covers damage
to owners' units rather than to
common areas?
The owners whose claims are covered
by the master policy are responsible
for paying the deductible or a proportionate share of it, if several units
are involved. To make that obligation
clear, which it isn't always in older
condominium documents, attorneys
suggest either amending the declaration or bylaws or adopting a board
resolution specifying that owners are
responsible for the deductible.
That isn't an option in Rhode Island, explains Frank Lombardi, Esq.,
a partner in Goodman, Shapiro &

Lombardi LLC. The state's condominium statute and most condominium
documents make the master policy
deductible a common area expense.
This is particularly problematic
and inequitable when a damage claim
results from the negligence of owners-for example, if an owner fails to
repair or replace an old water heater
that leaks into the unit below. In that
case, the association would have to
cover the deductible, but it could sue
the negligent owner to recover the
cost, he says. However, boards can
shift the deductible obligation to owners in this way only if the documents
specify that boiler maintenance is the
owner's responsibility. If owners don't
have a maintenance obligation, they
can't be deemed negligent for failing
to fulfill it.

3

Can associations require
owners to purchase insurance
to cover their units?
There's no question that owners
should have this insurance (an HO-6
policy) to protect their personal belongings, which aren't covered by the
master policy, to eliminate coverage
gaps if the master policy falls short,
and to cover their share of soaring
master policy deductibles. But opinions vary on whether associations
should: a) require owners to obtain
this coverage and b) enforce that
requirement.
Some attorneys recommend insurance resolutions or amendments
requiring owners to purchase insurance, mainly to put them on notice of
the liability they face without it. But
they advise boards not to enforce the
requirement to avoid the potential
liability they incur by accepting that
responsibility.
Lombardi disagrees. He advises
boards to secure owner approval of a
bylaw amendment requiring owners
to obtain insurance and to submit
evidence annually that they have
a policy in place. He also suggests
including language authorizing the
board to "force place" the insurance
Condo Media - May 2015

Table of Contents for the Digital Edition of Condo Media - May 2015
