In Illinois, a Court recently ruled on a Condominium Association’s attempt to charge back an insurance deductible to one of its members (Gelinas v. Barry Quadrangle Condominium Association, 74 N.E.3d 49 (2017)). This particular association had a fire originate in an owner’s unit resulting in damage to not only the specific unit, but the entire building. The Association made a claim with its insurance company and received reimbursement for the necessary repairs to be made. The Association then held a hearing and levied an assessment against the Unit Owner in whose unit the fire originated.
Continue Reading Special Assessing an Insurance Deductible Back to a Unit Owner

Condominium associations and homeowner associations are sued every day. These suits can arise based on construction claims, contract claims, negligence claims and various alleged statutory violations – We all know about the Fair House Act!  Or the Wisconsin (or whatever state you are in) Consumer Act!  Associations seem to attract people who feel that they are entitled to something because they now live in an association.  Of course they are entitled to what the law and documents allow them, but for some that never seems to be enough.  Often these types of owners or residents make up stuff or read the internet until they find some article or statement that supports their point of view and then cite it as fact. Yes, we have all dealt with those people. However, despite the validity (or lack of validity) of any lawsuit, there are some basic steps that every association should follow once served or notified of a suit.
Continue Reading Sued! What Should Our Wisconsin Condominium or Homeowners Association Do NOW?

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

Governing Documents for Condominium and Homeowner Associations don’t age well. They are not like a fine wine.  They are more like cheap cheese.  Remember, they were likely written by a developer who really only cared about them until it had sold all of its units or lots (assume 10 years or less).  So if your documents were written before 2008, it is unlikely that they have anything in them to deal with:

  1. Emotional Support Animals;
  2. Drones;
  3. Short Term Rentals (AirBnB was founded in 2008 in San Francisco);
  4. Medical Marijuana; or
  5. Unit or Lot Owners buying insurance to cover a large insurance deductibles that could be assessed against them if their actions cause an insured loss.


Continue Reading Our Governing Documents Have Aged Nicely

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

My points below exaggerate problems that I commonly see, but the advice is sound:

  1. “Are your three brain cells still talking to each other?” Knowing how to deal with difficult people is a prerequisite to property management. Don’t aggravate a situation by making a challenging person even more difficult to deal with – this won’t solve the problem. Attempt to always maintain a professional, positive attitude. We all fail or become less than we want to be at times. Forgive yourself and others, but even in forgiveness bad actions by unit owners have consequences.
  2. “This is the insurance company/policy you should approve.” Property managers are usually not licensed insurance brokers or agents, and their recommendation may be wrong. Does your association insurance cover you for those types of opinions if they are wrong? Property managers can certainly identify options.  However, the Board, ideally on the advice of an insurance committee, should be deciding on the amount and types of coverage purchased.
    Continue Reading 6 Things Community Property Managers Should Never Say

What happens when a fire caused within a condominium unit destroys that unit, some common area, and damages other units? It becomes an expensive situation for the association.  Even though insurance should pay for all of the damages, the association’s insurance premiums going forward could increase dramatically.  This is exactly what happened to a small condominium association in Wisconsin.
Continue Reading Unit Fire Increases Association Insurance Premiums