concerning issue with current HOA roof situation and insurance coverage

[simple girl]

What happened to the roofs that were damaged and repaired? I would think that the individual policies would have covered those and if there were a problem it would have surfaced then... did nobody make a claim? Did all claims get paid? This should answer one of the questions that you have.

From my understanding, those temporary repairs that were needed after the hurricane have been paid by the HOA. I have not heard of anyone making a claim on their individual insurance (although of course I do not know all of the owners). Our covenants state the Association shall perform:

"Repair and replacement of the roofs (including only shingles, underlayment, roof decking, and fascia) of dwellings and garages".

 

[pb4uski]

Have to say I am starting to feel the same way, in light of these issues. It's such a shame because otherwise we absolutely love living here.

If I'm understanding our covenants correctly (that's a big IF - the language is confusing), it looks like we need 50% of owners to approve a special assessment. That sure does sound like a tough hurdle to get over.

I have been contemplating getting on the board since we have such huge issues going on and it would allow me to have improved understanding and control (maybe! ugh!)...but...I've read various experiences here, and it doesn't sound like something I want to sign up for. Plus, I have to say that beyond the workload and stress of it, I'm concerned about the liability - especially in light of our roof issue and the HOA not carrying the proper insurance.

On the first part, in my experience the Board would be the one to levy a special assessment. The Board is required to provide notice to owners of the meeting at which the plan to consider levying a special assessment, usually by US mail, a certain number of days before the meeting is held.

On the second part, it's a tough call but IME directors and officers errors and commissions insurance is the first bill to get paid.

 

[pb4uski]

From my understanding, those temporary repairs that were needed after the hurricane have been paid by the HOA. I have not heard of anyone making a claim on their individual insurance (although of course I do not know all of the owners). Our covenants state the Association shall perform:

"Repair and replacement of the roofs (including only shingles, underlayment, roof decking, and fascia) of dwellings and garages".

So given that, how in the world could the insurance agent provide coverage that didn't cover roofs?

 

[MarieIG]

Wow... screwed up for sure...

I agree with the posts that as of now it really does not matter where the roof insurance is located as there has been no event for insurance to pay...

BUT, if it were me and the roof is in bad shape and needs replacing I would get it done NOW... you could then determine who really should be insuring it and make policy decisions correctly...

IMO this also helps with the claim from the shingle company... it was so bad that we could not wait for a determination and we limited our damages by replacing it right away... and now our damages are crystal clear as we have paid them...

This is very dicey. A Condo owner cannot necessarily make repairs on their own initiative - in particular with regard to areas specifically allocated to the Association. Even certain internal repairs may require prior notice, review by the board, vendor approval, additional insurance requirements, and board approval, etc. Moreover, it is imperative to thoroughly review all documents including the declaration, by-laws, rules and regulations, amendments, insurance requirements, before broaching any repairs. Moreover, making a repair and then making a claim without advising the shingle company and allowing them / their carrier the right to inspect prior to making the repair (barring an emergency situation) may allow the shingle company a potential spoliation defense. (Prior to proceeding, a consultation with a local attorney knowledgeable in RE and Condo issues might well be warranted.)

. . .

On the second part, it's a tough call but IME directors and officers errors and commissions insurance is the first bill to get paid.

I can see why.

So given that, how in the world could the insurance agent provide coverage that didn't cover roofs?

One could be forgiven for assuming that neither the board nor the agent reviewed the condo documents before procuring the policy and/or neither the board or the agent reviewed the actual policy.

 

[Kings over Queens]

Plus, I have to say that beyond the workload and stress of it, I'm concerned about the liability - especially in light of our roof issue and the HOA not carrying the proper insurance.

HOA boards are a thankless job. In terms of liability, your personal assets are exposed to litigation when you sit on a non-profit board, so it's imperative that your board carry Directors and Officers coverage. It's typically included in a Condo or similar planned community type of policy, however, given the confusion you are experiencing, I'd want to read the policy myself before volunteering or running for election.

 

[Texas Proud]

From my understanding, those temporary repairs that were needed after the hurricane have been paid by the HOA. I have not heard of anyone making a claim on their individual insurance (although of course I do not know all of the owners). Our covenants state the Association shall perform:

"Repair and replacement of the roofs (including only shingles, underlayment, roof decking, and fascia) of dwellings and garages".

I am with others... how would anybody consider it was the individual units requirement to cover a roof?

Marie, I was not suggesting that the OP make a repair, but the condo association make the repair.. with the above language it seems clear to me that it is their responsibility to do so...

IMO the good news is that any damage so far was not enough to make a claim either way so nobody is hurt... well, except the individual who carried insurance they did not need... but not hurt by having a claim that was not covered...

 

[pb4uski]

... One could be forgiven for assuming that neither the board nor the agent reviewed the condo documents before procuring the policy and/or neither the board or the agent reviewed the actual policy.

That's negligence or malpractice or stupidity. Someone on the Board should have covered this and if they didn't then the agent/broker definitely should have.

 

[Texas Proud]

That's negligence or malpractice or stupidity. Someone on the Board should have covered this and if they didn't then the agent/broker definitely should have.

Agree with this stmt... if the agent did not review the ownership docs to determine what insurance the Board needed that agent should be fired immediately...

I do not know if condo boards have an attorney regularly look at things but I would think that if so they should have been looking out for the board...

 

[COcheesehead]

While I loved the lock and leave/no maintenance aspect of our Florida condo, I don't miss the politics of a bunch of cheap and short sided owners who made a lot of noise when stuff like this came up.

We had one owner loudly state that he objected to being assessed for roof reserves because he would be below the grass by the time the roof needed to be replaced. Too bad. A lot of ignorant owners out there. I was on the Board 2 years and was Treasurer the year we did replace our roofs and did some modest special assessments that we had given them years of warning of. Was glad to be off the Board. Huge time suck.

I served on an HOA board twice. That was three times too many.

 

[simple girl]

On the first part, in my experience the Board would be the one to levy a special assessment. The Board is required to provide notice to owners of the meeting at which the plan to consider levying a special assessment, usually by US mail, a certain number of days before the meeting is held.

On the second part, it's a tough call but IME directors and officers errors and commissions insurance is the first bill to get paid.

Agree, the board has to levy a special assessment, but our covenants state that:

"Except as otherwise specifically provided in this Declaration, any Special Assessment shall require the affirmative vote or written consent of all Members (if a Common Expense) or Owners (if a Service Area Expense) representing more than 50% of the total votes allocated to the Lots which will be subject to such Special Assessment, and the affirmative vote or written consent of Declarant, during the Development and Sale Period."

I certainly am FAR from a lawyer, but that sure does sound to me like 50% of the owners would have to approve a special assessment. I looked for possible exceptions ("except as otherwise specifically provided in this Declaration"), but couldn't find anything that appeared to be an exception in the covenants related to special assessments. However, some of the language in our covenants is clear as mud to me.

They do have directors and officers errors and ommission insurance. I am still nervous that there would be some kind of exception for which the insurance wouldn't cover me if someone sued the board. That's probably me just being paranoid, but geez I'd hate to be wrong. It seems like this situation is ripe for someone to sue the board for not having the proper insurance on the roof.

 

[Aerides]

Agree, the board has to levy a special assessment, but our covenants state that:

"Except as otherwise specifically provided in this Declaration, any Special Assessment shall require the affirmative vote or written consent of all Members (if a Common Expense) or Owners (if a Service Area Expense) representing more than 50% of the total votes allocated to the Lots which will be subject to such Special Assessment, and the affirmative vote or written consent of Declarant, during the Development and Sale Period."

I certainly am FAR from a lawyer, but that sure does sound to me like 50% of the owners would have to approve a special assessment. I looked for possible exceptions ("except as otherwise specifically provided in this Declaration"), but couldn't find anything that appeared to be an exception in the covenants related to special assessments. However, some of the language in our covenants is clear as mud to me.

They do have directors and officers errors and ommission insurance. I am still nervous that there would be some kind of exception for which the insurance wouldn't cover me if someone sued the board. That's probably me just being paranoid, but geez I'd hate to be wrong. It seems like this situation is ripe for someone to sue the board for not having the proper insurance on the roof.

Yes, and it sounds like 50% of the full quorum, so those abstaining would count as No. I'm not sure how many owners you have, but in my neighborhood nothing ever gets approved as the vote turn out is never high enough.

But in many florida covenants, if it's considered maintenance, then a vote is not required. Only if it's new does it require a Special vote.

Either way, have you been talking with other owners separate from board meetings? In your shoes I might gather up a couple of friends and find a good lawyer to review all this stuff with?

 

[simple girl]

So given that, how in the world could the insurance agent provide coverage that didn't cover roofs?

Initially, I couldn't understand how in the world the insurance agent could not provide insurance after reading that statement that the Assn shall perform: "Repair and replacement of the roofs (including only shingles, underlayment, roof decking, and fascia) of dwellings and garages".

However, when I read the covenants regarding this, I can see how it could happen. It says in one part:

"The Association, acting through its Board or its duly authorized agent, shall obtain and continue in effect any or all of the following types of insurance, as deemed necessary or advisable in the Board’s business judgment and as may be reasonably available:

• Blanket property insurance covering all insurable improvements within the Common Maintenance Areas to the extent that the Association has responsibility for repair or reconstruction in the event of a casualty or assumes such responsibility pursuant to Section 5.2, regardless of ownership with full replacement value coverage"

Note it also lists commercial general liability, D&O liability, commercial crime insurance, flood insurance, and and any additional insurance the board deems necessary.

So it doesn't specifically state they have to have insurance on the roofs of the lots, it only specifically mentions "Common Maintenance Areas".

To add more confusion, the covenants also state:

"Each Owner shall maintain prop ins providing fire and extended coverage at full replacement cost (less a reasonable deductible) on all insurable improvements on Lot, to the extent that such responsibility is not assigned or assumed by the Association"

Then it goes on to state the Association may "elect to obtain a blanket ins policy providing property insurance for all structures on all Lots within the Community or all Lots within any Service Area"....and later... "in such event, the Owners shall be relieved of their insurance responsibility to the extent such responsibility is assumed by the Association"....and later...."

• "Following such an assumption of insurance responsibility the Association may, at any time, upon not less than 30 days written notice to the Owner, discontinue such blanket insurance coverage and in such event each Owner shall immediately obtain in his or her own name and at his or her own expense the insurance coverage for such Owner’s Lot and structures theron."
• "Regardless of whether the insurance required hereunder is obtained by the Association or the by the Owners, in the event of a casualty loss, the Association shall be entitled to file a claim against such insurance for the cost of any repair or reconstruction to the Lot and improvements thereon which is the Association's responsibility, and the Owner shall pay the amount of any deductible and shall be responsible for any deficiency in the insurance proceeds."

Soooooo....AGAIN...I do NOT have a legal background, but my interpretation as a layman after reading the above was that oh, ok - the HOA is responsible to repair/replace the roof, but they don't actually HAVE to carry insurance on the lots/roofs. And, if they opt not to carry insurance, if a covered claim occurs (fire, hurricane, etc.), they will file a claim against each owner's personal insurance to cover the cost of the roof repairs.

So I thought this was how it would work until the lawyer at the last HOA meeting said after reading our documents, he felt homeowner's insurance companies would deny any claims made for roof damage. He obviously is the expert, not me. All I know is I'm even more confused than ever and just want the HOA to get coverage so that there is no question or dispute in the future, should a claim occurs!

 

[simple girl]

Either way, have you been talking with other owners separate from board meetings? In your shoes I might gather up a couple of friends and find a good lawyer to review all this stuff with?

To some degree, yes, I've been talking with other homeowners, but I only know a handful. This is an excellent idea, though. I will sniff around and see if there is any interest in collectively paying for a legal second opinion...but I don't have high hopes. People like to complain but once they have to open their pocketbook...well...

 

[simple girl]

Wow, I just found this article that is written specific to Florida.

This statement got my attention:

"As a general rule, the party that has the responsibility to maintain, repair or replace a specific portion of the property will also have the responsibility to insure that portion of property."

I can see why our current HOA lawyer said the association should get insurance on the roofs. I could see how individual insurance companies could contest this if claims were made.

The article goes on to say what a nightmare this can be if a claim does occur. Man I hope we do not have a claim before this whole thing gets straightened out! What a mess.

 

[pb4uski]

The 50% vote for special assessments is a concern. A bunch of cheap and short sighted owners could prevent the Board from doing what is prudent in the circumstances. And there are a lot of such owners out there... don't ask me how I know.

 

[simple girl]

check your policy for special assessment coverage. i have an HO6 policy with special assessment coverage of $20,000.

I contacted our agent regarding our H03 policy loss assessment coverage, asking if we could increase it (current is $1K). He said we can increase the limit to the maximum amount of $10,000. This would increase the rate by $28 annually. There is a flat $250 deductible for loss assessment claims (our regular deductible is much higher).

I think it makes sense to increase the loss assessment coverage for this minimal cost. This would provide some peace of mind should there be damage to the roof and/or exterior due to fire/hurricane/other peril (before our association is able to get roof insurance). If our H03 policy denies roof coverage after reading the covenants, and the HOA then levies a special assessment to repair the roof, then this loss assessment coverage should apply from our insurance. Does it seem like I'm thinking this through correctly?

 

[mn54]

I contacted our agent regarding our H03 policy loss assessment coverage, asking if we could increase it (current is $1K). He said we can increase the limit to the maximum amount of $10,000. This would increase the rate by $28 annually. There is a flat $250 deductible for loss assessment claims (our regular deductible is much higher).

I think it makes sense to increase the loss assessment coverage for this minimal cost. This would provide some peace of mind should there be damage to the roof and/or exterior due to fire/hurricane/other peril (before our association is able to get roof insurance). If our H03 policy denies roof coverage after reading the covenants, and the HOA then levies a special assessment to repair the roof, then this loss assessment coverage should apply from our insurance. Does it seem like I'm thinking this through correctly?

I would check with your insurance agent. It is my understanding that loss assessment is for unexpected damage such as a fire or tornado, etc. special assessment is a broader range of expenses that exceed the HOA's budget. unless the roof needed repair due to an unexpected event, the loss assessment coverage may not apply.

 

[simple girl]

I would check with your insurance agent. It is my understanding that loss assessment is for unexpected damage such as a fire or tornado, etc. special assessment is a broader range of expenses that exceed the HOA's budget. unless the roof needed repair due to an unexpected event, the loss assessment coverage may not apply.

Oh yes I agree with you. It's only effective for a covered peril like fire or hurricane. That's what I want. Right now we are in a risky position with possibly no insurance coverage for incidents like that, due to the prior reasons I explained. This gives us partial coverage, at least.

I know loss assessment will not cover a special assessment for this this warranty issue - we are fully on the hook for that if Tamko refuses to honor the warranty.

 

[cmc333]

I worked for a large S/F agency for years in S. FL. Even if your HOA had the best possible coverage for your roof, there is no coverage at all for the shingles. Insurance specifically excludes material degradation - it is considered "maintenance". So if the roof wasn't damaged by the named perils (fire, hail, wind, tree falling on it, airplane crashing, etc.), there's no way to get your roof covered under insurance even if the HOA had it. But now that you know, the owners need to gather and get the HOA to get a blanket policy covering the roof. You might check with your insurance agent and see if he/she will write you a letter specifically saying your HO3 policy does NOT cover your roof. Maybe if enough owners see it in writing, they will believe that the HOA needs to cover the roof for damages (named perils like I mentioned above). Also, if you've been paying for a HO3 policy instead of a HO6 policy, you've been overpaying for years. Your policy should be a condo policy that only covers the inside walls and personal property with a very small percentage for the walls themselves. Make sure you have a large amount for your liability portion and as large as an assessment coverage you can get. Sounds like you are pretty much screwed as far as this roof problem is concerned.

 

[pb4uski]

....But now that you know, the owners need to gather and get the HOA to get a blanket policy covering the roof. ...

I agree with the idea but as a practical reality if the roof is questionable because of the problems with the shingles I suspect the Association will have a hard time getting a blanket policy covering the roof until the roof is replaced. So they are back to square one.

 

[cmc333]

Oh yes, no one will write the policy till there's a new roof and proof of the new roof. Just personally, I would think the best solution would be a special assessment to get the roof fixed ASAP, then new insurance with the roof (and all the unit owners getting the correct insurance )and during it all, keep proceeding with the claim against the shingle manufacturer.

 

[Stormy Kromer]

Wow, simple girl has an exceedingly complex problem.

I think that you are probably right. Because the association can't get insurance because of the roofs that if the roofs need to be replaced then the association would have to do a special assessment and continue to pursue a claim with the shingle manfacturer.

I would also be upset with the association's insurance agent and you might have a claim against their errors and ommissions coverage. Just wondering out loud if the association can get an insurance policy that would exclude and claims relating to roofs until the roofs are replaced. I suspect not but it wouldn't hurt to ask.

I wonder if the association might be able to get a loan for the new roof, build the loan payments into your annual association fees and then if/when they receive money from the shingle manufacturer use that money pay down the loan.

The other thing I wonder is if you could apply a self-adhesive membrane over the entire roof, effectively sealing off the nasty stuff between the new membrane and the old membrane or roof sheathing and then put down new shingles over the new membrane.

I know that is is preferred to remove the old roofing down to the roof sheathing but in these unusual facts and circumtances I wonder if that might be a viable alternative.

I'm not sure if I understand so I have to ask.

The property has faulty shingles. People expect property insurance to cover it? (it shouldn't) and when it doesn't....sue the agent that sold the property policy for the association ? Yea it's the agent's fault that the property put on bad shingles and doesn't know who is responsible for what until there is a problem.

At the end of the day when there is an insurance claim with an HOA association, the insurance company will ask for a copy of the association's by laws and respond accordingly. The association wrote their own rules.



OP I feel your pain. You don't have a covered insurance claim. Don't count on recovery from the shingle company or manufacturer and you certainly don't have an Errors or Ommisions claim on the association's insurance agent.

You need to:

1. Put a new roof on the place. Ir doesn't sound like it was a covered insurance loss. (wind, hail...) Everyone chip in and put on a new roof just like it was your own house. It sure isn't the association's insurance agent that is responsible,

2. Get your HO association to get their insurance obligations figured out. The association should buy a master policiy that covers all exterior. Asking unit owners to insure their exterior with an HO-3 on commo association property is a disaster waiting to happen

3. Have unit owners buy HO-6 policies, that include adequate limits for improvements (not the 10% that is included) plus an adequate limit for association assessments and deductibles. It's readily available.


I was in the insurance business, HOA assocations were the worst. Very few associations know how to set it up right (including lawyers) Unit owners have no idea what their insurance responsibility is til there is a claim. Nobody knows who pays for what til there is a claim. Insurance Companies will pay based on the Association By Laws that the HOA association set up all by themselves.

Have a policy where the association covers everything except unit owner betterments and tell the unit owners to get an HO-6 like mentioned above.

The property insurance industry is in crisis right now. They days of free roofs after a small wind or hailstorm are over. Expect higher deductibles and goodbye to cosmetic damage and replacement cost.

 

[Stormy Kromer]

HOA boards are a thankless job. In terms of liability, your personal assets are exposed to litigation when you sit on a non-profit board, so it's imperative that your board carry Directors and Officers coverage. It's typically included in a Condo or similar planned community type of policy, however, given the confusion you are experiencing, I'd want to read the policy myself before volunteering or running for election.

You are oh so right.

Directors and Officers policies typically have an exclusion for "Failure to provide adequate Insurance"

Bummer.

Personally, I would have my Insurance Company (not agent) read the HOA rules before I bought any unit and insured it.

 

[pb4uski]

Oh yes, no one will write the policy till there's a new roof and proof of the new roof. Just personally, I would think the best solution would be a special assessment to get the roof fixed ASAP, then new insurance with the roof (and all the unit owners getting the correct insurance )and during it all, keep proceeding with the claim against the shingle manufacturer.

I agree. Do you think it would be possible to obtain a blanket policy but with an exclusion for roof claims? That way the Association could be covered for everything other than roofs rather than no insurance at all. Then when the reroofing is done write a new blanket policy and cancel the policy with the roof exclusion.

 

[pb4uski]

I'm not sure if I understand so I have to ask.

The property has faulty shingles. People expect property insurance to cover it? (it shouldn't) and when it doesn't....sue the agent that sold the property policy for the association ? Yea it's the agent's fault that the property put on bad shingles and doesn't know who is responsible for what until there is a problem. ...

You are totally misinterpreting the discussion. No one is expecting insurance to cover faulty shingles nor faulting the agent for the faulty shingles. Not sure why you would think that.

I think people have a legit gripe about the agent selling the association a policy that didn't cover roofs when the Associations declarations indicated that the Association was responsible for roofs.