Every week it seems we have a condominium client, a property manager or an APM News reader who has a problem where there is a water leak from a unit above or from an adjoining unit. When this occurs, due to the nature of the leak, the circumstances, the source and finally whether there are insurance companies involved, we get different answers and conflicting information with each leak.
This event is frustrating to everyone involved, especially to Board members who are trying to explain why or why not something is not being done or repaired to a fellow resident. This event/problem is too complex to be tackled in one simple article, therefore I will discuss in detail the various aspects of water leaks in a series of articles that will hopefully explain who may have liability, who pays for the repairs, who repairs, and finally what insurance coverage is required by each party and how this all fits into these situations.
There are several different components to consider when discussing and assessing liability of water leaks in a condominium. There are leaks that were caused by someone’s negligence which will have ramifications and remedies by itself, and there are leaks that are caused without negligence, which is pretty straightforward and covered by Florida Statute 718. Despite any liability, caused by negligence by any party, the following is an outline, by Florida Statute 718, detailing who is responsible for what portion of the overall structure of the condominium.
Chapter 718.111(11)(f) states that every policy issued or renewed after January 1, 2009, shall provide primary coverage for: 1) All portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications; 2) All alterations or additions made to the condominium property or association property pursuant to s.718.113(2); and 3) The coverage shall exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing.
What does this mean? In sub-sections (f), 1 and 2, it details exactly what the association’s responsibility to provide insurance coverage for, and what the association should maintain, repair and replace those items/components that were originally built, and in addition, any improvement(s) that were added or altered after the original installation. It further goes on to state in sub-section (f) 3 what the association is not responsible for and what the unit owner will be responsible for (whether they have insurance or not).
Sub-section (j) states exactly why the association is responsible: “(j) Any portion of the condominium property required to be insured by the association against casualty loss pursuant to paragraph (f) which is damaged by casualty shall be reconstructed, repaired, or replaced as necessary by the association as a common expense. “ One must read the association’s documents as they may define common and limited common elements differently and the owner/association may be different than stated above.
This sub-section also requires that the association cover the deductible amount, when it states that “All hazard insurance deductibles, uninsured losses, and other damages in excess of hazard insurance coverage under the hazard insurance policies maintained by the association are a common expense of the condominium.”
Let’s review and summarize who is responsible for what when a casualty loss occurs:
1. The association will be responsible for the structure, any alterations and improvements, as defined above.
2. The association will also be responsible (as a common expense) for any insurance deductibles.
3. The unit owner will be responsible for anything within their unit, as defined above.
We often hear when a casualty loss occurs that “the association is not involved, it is between the two owners” or “we don’t have to pay, as the deductible is too high”, and finally, “that (component) only serves the unit owner, therefore, we do not have to pay for it”. As you can see from above, those statements are probably false and cannot be dismissed so easily.
There are a lot of misconceptions about insurance coverage, association/unit owner liability and responsibility for deductible amounts. The statutes on these matters seem to keep changing (and we have a Governor who vetoes necessary amendments to the law) and the association’s documents are often in conflict with the statutes. No wonder there is confusion on this subject.
Subsequent articles will discuss different aspects of this complex subject. In all cases, consult your association’s attorney and your insurance agent prior to making any definitive statement or judgment in a casualty loss.
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