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HURRICANE HEADACHES
By
Eric Glazer, Esq.
Published August 31, 2015
I actually wrote today’s blog on Friday morning
while having coffee at Starbucks. As I write, Erika is
somewhere near the Dominican Republic and that annoying cone of
death which was probably invented by Home Depot is now
completely covering the entire state. The reports keep changing
as to the storm’s intensity, but it seems as if at a minimum,
nearly all of us will at least be dealing with a tropical storm
or maybe even a hurricane. Even if by the time this blog is
published it turns out that Erika completely fizzled out or
missed Florida, it will still be applicable to the next storm
that comes around.
So, I’m contemplating what next week may hold in
store after the storm passes. Here’s some scenarios or phone
calls from association boards that I anticipate, because it
actually happened before:
I had no idea the association’s deductible was so high:
THIS HAPPENS ALL THE TIME. Associations know that their
windstorm deductibles normally are about 5%. However, they have
no clue what that 5% figure actually means. It does not mean
that if the association suffers a $100,000.00 loss that the
insurance carrier does not have to pay the first $5,000.00 and
the association gets a check for $95,000.00. The deductible is
based upon the insured value of the entire property. So….let’s
say the entire property is worth ten million dollars. The
deductible is five percent of ten million or $500,000.00. This
is often times shocking when an association learns this. There
are policies out there that actually allow you to further buy
down that deductible and you may want to talk to your agent
about that.
We have no reserve funds and no money for emergency repairs.
What do we do?
Praying doesn’t hurt. Other than that….it’s not rocket
science. You gambled on not funding a reserve account and you
finally rolled a seven. You had a good run though….ten years
without a storm. But the house always wins. Time to pass an
emergency special assessment.
We hired the services of some construction company that
approached us --- we gave them a deposit --- and they just
disappeared on us.
After a storm, scammers, con men, gangsters, thieves and other
creatures descend on community associations who suffer damages
to their property. They know that the quality companies are now
tied up doing a million jobs so they tell you that they will get
to your job right away. In desperation, the association hires
these people without verifying licenses, insurance, references
or even checking if they are listed as a valid Florida
corporation or other business entity. The association loses the
deposit and the association has little to no recourse
whatsoever.
We signed contracts for repairs without approving them at a
properly noticed board meeting or having our lawyer review them
and we just passed a special assessment without any advanced
notice.
Believe it or not……this is allowable, but only if a “state of
emergency” is declared pursuant to Florida Statute 252.36 by
Florida’s Governor.
Here’s hoping that Erika stays away, but if she gets here and
causes some havoc, don’t make rash decisions on behalf of your
associations that may ultimately increase the financial burdens
to your community. Great leaders emerge when disaster strikes
and great leaders usually wind up having other qualified people
help them along the way. So before signing that contract,
borrowing those funds, passing that assessment or altering your
common elements, ask your lawyer what he or she thinks. Stay
safe.
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About
HOA & Condo Blog
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Eric Glazer graduated from
the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for more than 2
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decades and is the owner of Glazer
and Associates, P.A. a seven attorney law firm with offices in
Fort Lauderdale and Orlando and satellite offices in Naples,
Fort Myers and Tampa.
Since 2009, Eric has been the host
of Condo Craze and HOAs, a weekly one hour radio show that airs
at noon each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
He is the first attorney in the
State of Florida that designed a course that certifies
condominium residents as eligible to serve on a condominium
Board of Directors and has now certified more than 10,000
Floridians all across the state. He is certified as a Circuit
Court Mediator by The Florida Supreme Court and has mediated
dozens of disputes between associations and unit owners. Eric
also devotes significant time to advancing legislation in the
best interest of Florida community association members.
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