It has been said that insurance is the only product that both the seller and buyer hope is never used. That certainly rings true when it comes to community Associations’ insurance policies, but it does not diminish the need for Associations to protect themselves and their unit owners from an ever-widening array of damages they could suffer. Wis. Stat. § 703.17 requires Condominium Associations to obtain insurance against potential hazards, but only discusses scope by saying that the Association must acquire insurance “for not less than full replacement value of the property insured against.” Continue Reading It’s Never Too Late to Ensure Your Association is Properly Insured
In Wisconsin condominium associations are required to insure all of the property (other than the personal property) of the unit owners. (See, Sections 703.17(1) and 703.02(14) Wis. Stat). Many unit owners worry (needlessly I would contend) that their neighbors have improved their unit more than they have and then argue that they don’t want to pay the insurance for those improvements. Ignoring for the moment that those improvements also likely increase the value of their neighbors unit and therefore increase the value of their unit, which they are more than happy to accept, this argument simply misses how insurance companies actually insure condominiums in Wisconsin. The law requires all of the property to be insured. The law requires that the insurance be paid as a common expense. (Section 703.17(1) Wis. Stat). Accordingly, arguing over who has to insure what, considering the clear language of the statute, wastes both the time and resources of an association. However, there is something a board of directors can do to increase the insurance it provides unit owners without any material cost to the association. To adequately explain where these savings can be obtained, I first need to explain how insurance companies currently charge premiums and pay condominium claims in Wisconsin. Continue Reading Free Money from your Association Insurer
I have written before on the subject of associations’ continuing struggle to convince enough unit owners to attend owner meetings in order to meet quorum requirements, and otherwise to simply get business done. Recognizing that not every condominium association may be ready to take the step to convert to “E-voting,” another way to ease the burden of low-owner attendance at meetings is the proper use of directed proxies or absentee ballots. While similar in concept, the two are legally distinct and it is important for associations to understand the differences to determine which process they can use. Continue Reading Directed Proxies vs. Absentee Ballots: What is the Difference and Can Our Association Use Them?
If your condominium association documents include restrictions on occupancy (how many people can reside in a unit), be aware of what the federal law states on the issue to avoid potentially costly lawsuits brought by disgruntled unit owners.
While it is legal for a condominium association to adopt and enforce occupancy policies, those rules (and enforcement of the rules) must be reasonable and in compliance with state laws and local ordinances. If they are not, the rules run the risk of being found discriminatory based on familial status under the federal Fair Housing Act. The act prohibits discrimination on the basis of (among other things) familial status, which means the presence of children in the family. Continue Reading Enforcing Occupancy Requirements in Your Condominium
First mortgage holders continue to be the largest impediment to Association collections, once unit owners fail to pay. This arises because the bank’s lien is superior to the association’s and therefore most associations decide not to proceed with a foreclosure if the bank has begun its foreclosure. This is true even though banks frequently file foreclosures and then don’t proceed to the sheriff sale, adjourn the case indefinitely or very SLOWLY, or never seek to confirm the sale. Accordingly, Associations must have a strategy to combat these issues. Continue Reading Combating First Mortgages
It has long been recognized that liens are statutorily created rights and consequently are strictly construed. What this means in English is that you can’t simply substantially comply with the lien filing laws. If you want your lien to be valid it must meet all of the statutory requirements and be filed timely. The Florida Court of Appeals reaffirmed this long standing view when it held that substantial compliance with the Florida HOA Act was deficient. (See, Dwork v. Executive Estates of Boynton Beach Homeowners Association, Inc., No. 4D16-1698 (Fla. Dist. Ct. App. May 24, 2017). Continue Reading Everything is “Fine,” So Long as You Strictly Follow Your Documents