Insurance Coverage for Your Unit

It appears to me that there is a lot of confusion over what Market Street at Town Center Condominium Unit Owners Association property insurance is supposed to cover versus what an insurance policy a unit owner might purchase for his or her particular unit should cover.

In summary, the Association master policy is supposed to cover casualty losses to your unit (real property and appliances and fixtures installed by the Declarant) from fire, water sprinkler leakage (and probably other water damage as well), etc., and your unit owner policy would cover casualty losses to the personal property you moved into your unit after you purchased it. In essence, the Association master or blanket policy is supposed to cover casualty losses to your unit as it existed before the first owner after the Declarant moved anything into the unit; your unit owner policy is supposed cover all the personal (non-real) property you brought into the unit after you bought it.

Article VII of our Bylaws regarding “INSURANCE” and Article VIII regarding “REPAIR AND RECONSTRUCTION AFTER FIRE OR OTHER CASUALTY” are relevant. What follows the below link is excerpts from those two Articles. I am skipping most of the content of those two Articles, but the excerpts I am quoting remain in the sequence in which they appear in the full text. You can read the full text of those two Articles beginning at page 37 at this link:

http://www.marketstreetattowncenter.com/docs/BylawsV4.PDF



ARTICLE VII

INSURANCE

Section 1. Authority to Purchase.

(a) Except as otherwise provided in Section 5 of this Article VII,
all insurance policies relating to the property shall be purchased by the Board of Directors….

(e) Such policies shall also provide, to the extent available:

(i) The insurer of the Master policy shall issue to each Unit Owner or their Mortgagee a certificate or subpolicy specifying the portion of the Master Policy allocated to each Unit Owner's Unit and his undivided interest in the Common Elements….

(iv) That the Master Insurance policy shall contain a standard mortgage clause in favor of each Mortgagee of a Unit to the extent of the portion of the coverage of the Master policy allocated to such Unit, which shall provide that the loss, if any, thereunder shall be payable to such Mortgagee and the Unit Owner as their interests may appear…

Section 2. Physical Damage Insurance.

(a) The Board of Directors shall obtain and maintain a "master" or "blanket" "All Risk" policy of property insurance equal to full replacement value (i.e., 100% of current "replacement cost," with a reasonable deductible amount, exclusive of land, foundation, excavation and other items normally excluded from coverage) with an Agreed Amount Endorsement to the Condominium project, including all building service equipment, air conditioning equipment and the like, and any fixtures or equipment within the Condominium Unit including all of the kitchen and bathroom fixtures initially installed therein by the Declarant and the replacements thereto installed by the Declarant, but not including furniture, wall coverings, furnishings or other personal property supplied or installed by Unit Owners….

The Master Insurance Policy must afford protection against at least the following:

(i) loss or damage by fire and other hazards covered by the standard extended coverage endorsement and by sprinkler leakage, debris removal, cost of demolition, vandalism, malicious mischief, windstorm and to the extent determined by the discretion of the Board of Directors, water damage…

(iii) A "no other insurance" clause expressly excluding individual Unit Owners' policies from its operation so that the physical damage policy purchased by the Board of Directors shall be deemed primary coverage and any individual Unit Owners' policies shall be deemed excess coverage and in no event shall the insurance coverage obtained and maintained by the Board of Directors hereunder provide for or be brought into contribution with insurance purchased by individual Unit Owners or their Mortgagees unless required by law….

Such insurance shall be issued on a comprehensive liability basis and shall contain:

…

(v) a "severability of interest" endorsement which shall preclude the insurer from denying liability to a Unit Owner because of negligent acts of
the Unit Owners Association or of another Unit Owner.


Section 4. Other Insurance. The Board of Directors shall obtain and maintain:

…

(b) If required by any governmental or quasi governmental agency including without limitation the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation, flood insurance in accordance with the then applicable regulations of such agency;

…

(e) Such other insurance as the Board of Directors may determine or as may be requested from time to time by a Majority Vote of the Unit Owners.

Section 5. Separate Insurance. Each Unit Owner or any tenant of such Unit Owner should, at his own expense, obtain additional insurance for his own Unit and for his own benefit and to obtain insurance coverage upon his personal property, for any "betterments and improvements" made to the Unit and for his personal liability, provided that no Unit Owner or tenant shall acquire or maintain such additional insurance coverage so as to decrease the amount which the Board of Directors, on behalf of all Unit Owners, may realize under any insurance policy which it may have in force on the property at any particular time or to cause any insurance coverage maintained by the Board of Directors to be brought into contribution with such additional insurance coverage obtained by the Unit Owner. All such additional policies shall contain waivers of subrogation. No Unit Owner or tenant shall obtain separate insurance policies, except as provided in this Section 5. Any Unit Owner who obtains individual insurance policies covering any portion of the property other than personal property belonging to such Unit Owner, shall be required to file a copy of such individual policy or policies with the Board of Directors within thirty (30) days after the purchase of such insurance. Such Unit Owner shall also promptly notify, in writing, the Board of Directors in the event of cancellation.



ARTICLE VIII

REPAIR AND RECONSTRUCTION AFTER FIRE OR OTHER CASUALTY

Section 1. When Repair and Reconstruction are Required. Except as otherwise provided in Section 4 of this Article, in the event of damage to or destruction of all or any of the buildings as a result of fire or other casualty, the Board of Directors, or the Insurance Trustee, if any, shall arrange for and supervise the prompt repair and restoration of the Condominium (including any damaged Units, and the floor coverings, kitchen or bathroom fixtures, and appliances initially installed therein by the Declarant, and replacements thereof installed by the Declarant, but not including any furniture, furnishings, fixtures, equipment or other personal property supplied or installed by the Unit Owners in the Units). Notwithstanding the foregoing, each Unit Owner shall have the right to supervise the redecorating of his own Unit.

Section 2. Procedure for Reconstruction and Repair:

(a) Cost Estimates. Immediately after a fire or other casualty causing damage to a building, the Board of Directors shall obtain reliable and detailed estimates of the cost of repairing and restoring the building, including any damaged Unit, but not including any other furniture, furnishings, fixtures or equipment installed by the Unit Owners in the Unit to a condition as good as that existing before such casualty….

(b) Assessments. If the proceeds of insurance are not sufficient to defray the said estimated costs of reconstruction and repair as determined by the Board of Directors, or if at any time during reconstruction and repair, or upon completion of reconstruction and repair, the funds for the payment of the costs thereof are insufficient, assessments necessary to cover such insufficiency shall be made against all the Condominium Units according to the respective Common Element Interests as set forth in the Declaration of the Condominium, as the same may be amended from time to time. Notwithstanding anything to the contrary herein contained, the Unit Owners Association shall not be responsible for any items of repair, replacement, or maintenance or consequential damage to any Unit, for which it would not otherwise be responsible under the provisions of these Bylaws unless the loss or consequential damage caused to said Unit and requiring repair, replacement or maintenance, was occasioned through the fault of the Unit Owners Association. This provision shall be deemed to include the payment by the Unit Owner or Owners of any deductible amount under any Association insurance policy....

Section 3. Disbursements of Construction Funds.

…

(d) Common Elements. When the damage is to both Common Elements and Units, the insurance proceeds shall be applied first to the cost of repairing the Common Elements and the balance to the cost of repairing the Units.


If you wish to comment regarding this insurance issue, please do so on my forum at this link:

http://mstcuoa.proboards59.com/index.cgi?board=general&action=display&thread=9&page=1#1235801888

Or, if you prefer, email your comment to me at this email address:

rasmussen305@gmail.com

Monthly Unit Assessment Amount Correct?

When I received my bank statement yesterday, I found that our Market Street at Town Center Condominium Unit Owners Association had received four cents too much from my checking account for the January 2009 assessment.

Approximately two months ago, I received the Associa Community Management Corporation letter of 3 Dec 08 that informed me of my “New Monthly Assessment” amount. Based on the 2009 budget and the par values of our units, I independently calculated all of the new monthly assessment amounts, and found amounts stated in the letter all to be correct within one cent of what I computed. At the beginning of January, I made an entry in my check register based on that letter (plus the $13 for my parking space). Now I find out that a different--apparently incorrect--amount was deducted. The person I talked with this morning at Associa Community Management Corporation said the 3 Dec 08 letter stated the wrong amount, and that the amount actually deducted from my checking account was the correct amount.

I am curious if other of our unit owners have also noticed discrepancies between the amount stated in the 3 Dec 08 letter and the actual amount assessed against your unit for January. In my case, the discrepancy is small, but I don’t see a reason for it, and I wonder what other possible assessment errors it might suggest.

If you have a comment on this matter (or any Unit Owner Association matter) that you would like other unit owners to be able to see, please post it on my forum at http://mstcuoa.proboards.com/   Or, if you email your comment to me at rasmussen305@gmail.com I will either post it for you, or keep it for my own information, according to whichever preference you express.