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HURRICANE HEADACHES
By
Eric Glazer, Esq.
Published October 10, 2016
Well….. after eleven years, our luck ran out.
We finally rolled a seven. We had a great run though.
Unfortunately, it’s now time to deal with the disaster and clean
up the mess. I can tell you one thing for sure and for certain.
Those associations that put away money for a rainy day will
recover a lot quicker than those who thought their association
was invisible and will somehow get by without putting money away
for a rainy and windy day.
Here are the type of phone calls and e-mails
I expect to start receiving today and for the next week or two:
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 lost the
bet. Eventually, 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.
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, you may want to 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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