If you own a condominium unit, you’re engaged in a type of shared ownership when it comes to the rest of the building. By definition, the owner or owners of a condominium unit have a shared, undivided interest in the common areas of the building. In other words, your ownership interest in your unit is complete, but your ownership interest in the rest of the building and land is shared with the owners of the other units.
Generally, you operate your own unit, taking care of all physical and legal responsibilities. A condominium association represents your ownership interest, along with the interests of the other owners. Your annual dues are put toward maintaining the overall property, but not the units. You may be assessed additional fees if the cost of maintenance exceeds the dues collected, or if there is a special situation, such as an unexpected loss.
Suppose a hurricane came through and damaged the building. The condominium association, acting on the owners’ behalf, is responsible for fixing the damage. This may be done with the assistance of an insurance claim. The owners of the units maintain their own insurance for the individual units and their contents. They are generally responsible for damage that applies to only one unit.
What if the condominium building damages my unit?
The strange split in ownership can create some potentially confusing issues about who is responsible for what. This is particularly true when a unit owner’s actions damage the complex, or vice-versa.
Suppose that a pipe burst in a common area and the water damaged your unit and several others. Would the condominium association’s insurance cover the loss? Or would you need to apply to your own insurance for coverage?
As is the case with many legal questions, the answer is “it depends.” In certain cases, state law may determine liability. An experienced real estate attorney can tell you if that is the case.
In most situations, however, you will need to consider three different documents before you can determine whether the association’s policy or your own will cover the loss:
- Your insurance policy
- The association’s policy
- The association’s bylaws and foundational documents
The association’s documents may or may not contain detailed information about who is responsible for what damage. If it does, you should still consider having an attorney look them over because they may or may not be in compliance with Florida law.
In an ideal world, your own insurance policy would clearly spell out the limits of its coverage and those limits would precisely dovetail with the limits of the association’s policy. In other words, if your unit were damaged, it would ideally be perfectly clear which insurance company would pay for the loss. This is most likely to be the case if the two policies are issued by the same carrier.
Unfortunately, it’s not always the case that the insurance policies dovetail perfectly, much less agree with the association’s documents. There may be differing interpretations that seem equally valid.
This is why it can be so helpful to get a legal opinion about liability and coverage. It may even be worth the expense to get such an opinion before you buy your unit policy. Understanding the exact limits of the association’s policy will make it easier to shop for an individual policy that dovetails as much as possible with that of the association.
If you have questions about condominiums or liability, contact an experienced real estate attorney for answers.