Governor Vetoes SB 714; Unit Owner Insurance Coverage & Board Obligations

SB 714 Designed to Clarify Insurance Requirements & Provide Relief to Homeowners by Delaying Fire Sprinkler Retrofit.

Condominium Unit Owners Required to Maintain Insurance Coverage.

Governor Charlie Crist vetoed SB 714.  Too bad – SB 714 would have relieved Condominium Unit Owners from maintaining individual property insurance and likewise relieved Associations from the burden of requesting insurance certificates.

Governor Crist expressed his concerns regarding the fire sprinkler retrofitting extension in his veto letter, citing safety risks. This means that condominium associations throughout Florida will have to retrofit their buildings, or  partially retrofit (if authorized by membership vote as set forth in Section 718.112(2)(l), Florida Statutes) by December 31, 2014, something that struggling condominium associations cannot afford at this time.

Read Governor Crist’s veto letter (click here).

Gary A. Poliakoff explained the negative impact of the veto in correspondence to the Governor (click here to read that letter) highlighting how significantly condominium and community associations have been hurt by the mortgage foreclosure crisis.

Consequently, the following insurance requirements, largely resulting from 2008 legislation, are still in effect:

1. Unit Owner coverage is still mandatory.
2. Unit Owner insurance coverage must contain $2,000 “special assessment” coverage.  SB 714 would have corrected the language to “loss assessment” coverage.
3. The Association is still required to be named an additional insured and loss payee on insurance policies issued to Unit Owners.
4. Association boards must set the master policy insurance deductible at an open board meeting – the notice of the meeting must contain the amount of the proposed deductible, available funds and cite the assessment authority as well as estimate potential assessments against each unit for possible casualty costs that are not funded by insurance coverage.
5. Unit Owners are still required to insure “improvements and additions” that benefit fewer than all the owners.  This is problematic from a number of perspectives, especially in light of the fact that the term “improvements and additions” is not defined.  This provision in Section 718.111(11)(g)(1), Florida Statutes may be interpreted to mean that Unit Owners bear responsibility for portions of the property traditionally insured by the master policy, such as balconies, vehicle enclosures such as carports (if the coverage is available), storage spaces and the like.

A press conference is being held today, June 4, at the South County Civic Center located at 16700 Carter Road, Delray Beach, Florida at 1 P.M.  Senator Deutch and Representative Kelly Skidmore will address legislative issues, foreclosures and ways to confront association financial losses.  CALL urged Senator Deutch to ask the Speaker of the House and the President of the Senate to call a special session to address these important problems.

Community leaders are encouraged to contact their elected representatives and express their concerns.

 

 

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