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Staggered Terms Explained

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Q:        The board of my condominium association is elected for “staggered terms” according to our bylaws. What does this mean? (D.L. via e-mail)

A:        The Florida Condominium Act provides that directors’ terms generally expire at the next annual meeting after their election. However, directors may serve two-year “staggered” terms, if provided by the bylaws or the articles of incorporation.

For example, if a board is made up of five directors serving two-year staggered terms, in one year the association would elect two directors for two-year terms, then the next year elect three directors for two-year terms, elect two directors the following year, and so on. The two most common justifications for staggered terms are continuity of service, and the ability to find enough candidates willing to run for the board in a given year.

Q:        The air conditioner serving my condominium unit is located on the roof of our building. It was blown off by Hurricane Irma and needed to be replaced. If the compressor is replaced, the air handler must also be replaced. Is the association responsible for the cost of replacing the air handler, which is inside the unit? (C.C. via email)

A:        Between 1977 and 2008, the allocation of insurance responsibilities was dependent on the date the declaration of condominium was recorded, whether the declaration incorporated future amendments to the statute, and the language of the declaration itself. The responsibility for repair after a casualty, such as a hurricane, was typically governed solely by the language in the declaration.

The 2004-2005 hurricanes which hit Florida caused major damage, including to many condominium communities. Application of the then-existing statutes, and attempting to apply declarations with all types of provisions created much confusion and many disputes, a morass of legal entanglement.

The 2008 changes to the statute did two things. First, the new law created a “one-size-fits-all” approach for an association’s “master” property policy. With the exception of certain “excluded” items (floor coverings and cabinetry, for example), the association was obligated to insure all of the physical improvements of the condominium property as originally installed by the developer, or replacements of like kind and quality.

The 2008 statute exempted air conditioning equipment from the association’s insurance obligation, making it a unit owner responsibility. In 2010, the law was changed, and air conditioning equipment became the association’s insurance responsibility.

The second thing the 2008 law did was to implement the so-called Plaza East Rule, which I have written about a number of times in this column. The Plaza East Rule basically stands for the proposition that “whoever insures it pays to fix it, including shortfalls from the deductible.”

Since air conditioning equipment is now the association’s insurance responsibility, it is likewise, the association’s responsibility to repair after a casualty, referred to in the statute as an “insurable event.” However, based only on my personal home ownership experience, it is not my understanding that internal air handlers need to be changed every time external compressors are replaced. In fact, I would suspect the opposite is true. While vendors will no doubt try to sell you on the value of an “integrated system,” unless you could prove that it is physically impossible to continue with the current air handler, this is probably going to need to be done at your expense. Even if you could show that replacement could not be avoided, it is debatable whether the cost arises from an “insurable event.” One way to review that further is to determine if the Association’s insurance company would pay for the replacement under the policy, assuming the loss exceeded the deductible. Interesting issue, though.

It is also important to remember that regular maintenance, repair and replacement is an entirely different matter. That issue is primarily governed by the declaration of condominium. Most declarations make the individual unit owners responsible for the maintenance, repair and replacement of all equipment (including compressors and air handlers) when they have to be replaced due to malfunction or normal wear and tear.

Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions to Joe Adams by e-mail to jadams@bplegal.com. Past editions may be viewed at floridacondohoalawblog.com

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