1. A list of every policy of insurance including:
   1. policy number,
   2. term (beginning and end date),
   3. policy limits (including any special limits such as windstorm or mold caps),
   4. whether the policy is a ‘claim made’ or ‘occurrence’ policy
   5. deductibles,
   6. premium,
   7. supplements or riders, and
   8. general description of the scope of policy (ie: flood insurance, director and officer liability.); and
2. Recommendations of the agent as to any changes such as:
   1. changing the policy limits to match replacement costs anticipated in the event of a casualty,
   2. changing underwriters to save on premium, or because of exclusions or limitations in the current policies that are not included in the policies issued by competing insurance companies, and
   3. additional insurance policies, or supplements to existing policies to cover risks of the association not properly covered under the existing insurance policies.

To assure that the insurance agent is properly evaluating the insurance coverage, when making the request for an annual survey include a summary of the association’s assets and common areas.  For example, I know of several associations that had pools and hot tubs in their common areas that were not properly covered by insurance because these items were overlooked or were acquired after the original insurance policy was issued.  I recommend that the insurance agent personally attend a meeting of the board of directors to discuss his or her recommendations.  This assures that insurance coverage issues will receive proper attention rather than simply presenting the premium cost to the board as part of the budgeting process.

In addition, the association’s manager should keep on file a full copy of each insurance policy.  It is not sufficient to keep only the declaration page.  It is also important that the association keep a running insurance matrix of both current policies and policies for prior periods.  Many policies are ‘occurrence’ polices which provide coverage for events occurring during the policy term even if a claim against the association does not arise until years after the policy has expired.  Maintaining a complete matrix of policies, agents, and addresses helps the association quickly file a claim for coverage if the association is ever sued.   The time to hunt for policies is not after a lawsuit is filed and a response is due, because until a claim is filed with the insurance company all of the defense costs will be an expense of the association even if an insurer ultimately accepts the claim and hires a lawyer to defend the association.

In addition to the above practices, the association should have each new policy, and any changes to a policy reviewed by their attorney.   There is no shortcut to reading the full policy and determining if it fully covers all appropriate risks.  Recent court decisions make this critical to the financial health of an association.

In the recent case Citizens Property Insurance Corporation v. River Manor Condominium a Florida appellate court was asked to decide a dispute between the condominium association and the hazard insurance company over the scope of coverage.  The lawsuit arose after the condominium suffered from approximately six million dollars in damages caused by Hurricane Wilma.  The terms of the insurance policy included exclusions which significantly reduced the amount of the claim Citizens was willing to pay.  Although not stated in the opinion, the logical assumption is that the condominium board of directors never reviewed the policy language itself and was unaware of the problem until devastated by the hurricane.

In the Citizens case, the insurance policy included this common provision: “Any terms of this policy which are in conflict with statutes of [Florida] are amended to conform to such statutes.”  Florida Statute 718.111 requires the association to purchase insurance for the “full insurable value” of the common elements and other property owned by the association based on the replacement cost.  The replacement cost must be determined no less than every 3 years.  The River Manor condominium association argued to the court that since they were required to carry this insurance the policy should be interpreted to provide the minimum coverage specified under s. 718.111.  The appellate court rejected this argument, and while recognizing that the association’s failed in its duty to appropriately insure its property, found the policy exclusions to be valid leaving the association short of the funds needed to repair the damage caused by the hurricane.

The lesson from the Citizens case is know thy policy terms.  Never assume that a policy will fully cover your association without a legal review of the terms and exclusions.  Even if the maximum policy limit is sufficient, the boilerplate may exclude the very items that require insurance.  For example, I have seen liability insurance policies covering plumbers that excluded any claim for water damage!

Click here to download and read: Citizens v River Manor 4D12-901 op 130410  [135kb pdf]

Proposed Opinion on Practices Allowed by Community Association Managers.  A copy of the proposed opinion can be downloaded for viewing at this link:

Proposed Opinion on Practices Allowed by Community Association Managers

(PDF 3.5 mb).

The Eleventh Circuit Court of Appeals, the Federal appellate court with jurisdiction over Southeastern states including Florida, issued a ruling finding that property managers collecting debts incidental to their management services, are not considered debt collectors under Federal law.  In their ruling, the court found that the Fair Debt Collection Practices Act did not apply to the activities of the community association management firm.

Although this case involved a Georgia community, the same reasoning should apply in Florida.  For more information regarding collections or the Fair Debt Collection Practices Act, please give us a call.  904.737.4600

To read the opinion click here: Property manager not covered by Fair Debt Act

Learn more at: http://www.floridabar.org/thevotesinyourcourt

Merit selection is a way of choosing judges through appointment, using a nonpartisan nine-member commission of lawyers and non-lawyers to locate, recruit, investigate and evaluate applicants for judicial office. These judicial nominating commissions (JNCs) then submit three to six names of the most highly qualified applicants to the governor, who must make a final selection from the list.

Florida’s appellate judges, after initial service of at least one year, are then considered for continuation in office “on merit” by citizen vote in uncontested elections. If kept in office by a majority of favorable merit retention votes, the judge is automatically re-evaluated in the same manner at the end of each six-year term thereafter.

Efforts to implement the merit selection/merit retention process within Florida’s various courts go back as far as the 1940s. As enthusiasm for the concept continued into the 1950s, a form of merit selection that utilized “judicial screening” programs was tested in the late 1960s. In 1971 an executive order by Gov. Reubin Askew became the basis for Florida’s current judicial nominating commission system of merit selection, made applicable to appointments and vacancies at all levels of the state judiciary by 1972 constitutional amendment.

The companion process of merit retention for appellate judges was added to the constitution in 1976, when Florida voters overwhelmingly approved an amendment requiring merit retention voting for all Supreme Court justices and District Court of Appeal judges. Those appellate judges now automatically face a retention vote after an initial term of at least one year and thereafter every six years — not against any opposing candidates — but by citizen approval of their performance in office through a simple “Yes” or “No” vote.

Proponents of merit selection/retention say that elective politics and campaigning for the bench invite conflicts of interest between judges and their financial supporters. Proponents also stress that incumbent trial judges often draw no opposition in the elective system, and therefore escape any regular citizen review whatsoever.

Critics of judicial elections claim that a popular vote allows important judicial positions to be won by those who are often less qualified than other aspirants produced through a merit-focused appointive process. Those on the other side argue that allowing appointed groups to select candidates for gubernatorial appointment divests the people of their vote in a democratic government.

In the 2000 general election, voters had the chance to extend the current system of merit selection and retention in place for appeals court judges and Supreme Court justices to trial judges in their local circuit and county courts but the measure was defeated everywhere in the state.

Whether a Florida buyer of a new home in a shared community has the right to sue a developer for faulty roads and sidewalks is the issue of a new bill — and battle between Florida courts and lawmakers.

Caught in the middle of the political and judicial crossfire: Homeowners.

The latest salvo in this brewing conflict is House Bill 1013, which states individual homeowners cannot hold builders liable for cracked sidewalks, leaking drainage ponds, or large potholes in the road caused by defective materials or workmanship.

2012 Florida Legislative Tracking Chart (Microsoft Word Document)

(Story as it appears in Realty/Builder Connection)

The National Association of Realtors’ “Home Ownership Matters” bus tour made a stop in Jacksonville last month and was parked outside the Jacksonville Marriott for the NEFAR meeting. The bus tour started in March and will run through November. It’s stopping at association meetings and consumer shows, and a team from NAR is available to talk about the value of home ownership.

Click to view chart

SOUTH BAY LAKES HOMEOWNERS ASSOCIATION, INC., v. WELLS FARGO BANK [PDF File]

2011 Legislative Tracking Chart