Why is my HOA policy primary when a unit owner didn't repair his washing machine and it spilled a few gallons on is floor?:
The unit in question had the washing machine throw about one load's worth of water on his laundry room floor, which leaked into his baseboards a bit and some went down to my garage. The water dmg people were called in same day and plugged a few tubes/dryers into my drywall and dried it in a few days, no further dmg outside his own unit.
In his unit, they pulled the linoleum, a couple baseboards, a few inches off the bottom of the drywall, etc.
My agent says our HOA policy MUST cover this as primary because of "the Law". Something to do with old condo law vs. new condo law? He has individual coverage which was filed against at first, then my agent for the HOA called me a week later telling me this.
Our HOA rates will go up for one owner's negligence? Can we choose not to use it?
Charles’s answer:
Specifics about how the costs of repairs are handled vary with the specifics of each condominium Declaration and the insurance policies involved.
I believe that the legislature made the association's policy primary to ensure that when the condominium is damaged, it is repaired. Typically association policies are prohibited from denying coverage due to negligence, mistake, and even intentional acts. To allow that could mean that there would be no insurance money to rebuild after a catastrophe.
Imagine if the condo burned down due to a careless smoker, and the insurer could deny coverage based on the owner's negligence. The statute requires that the association policy is primary to make sure that other owners are protected in such situations.
Some condo Declarations do shift the association's deductible or other uninsured damage costs to owners who have done something wrong, or owners who own the appliance that leaked, or owners who own the damaged property (three different cost sharing schemes).
Without reviewing your specific documents, it is not possible to know whether or not the cost of repair should be borne by the association's policy or by the unit owner's policy. The decision to file a claim is one that the board makes, but if the repair is one that would be insured by the association, it would likely need to pay for the repair itself (regardless of whether it decided to file a claim).
The relationship between the unit owners' policies, the association policy, and the language of the Declaration is often complex, and sometimes requires intervention of attorneys to get straightened out. An association can amend its documents to change the insurance requirements and what is covered by each party's insurance, but that would require a vote of the owners, and would only affect how the next claim is handled.
Can a condo association tell me i can't have a pet? especially a cat, who's not bothering anybody...: the declaration of my condo association say's "no pets allowed". i'm wondering if legally they can create such a rule. i own my place. i'd like to have a cat. the whole thing seems silly to me.
Charles’s answer:
Prohibitions on owning a pet are generally considered a valid restriction on the use of your condominium, but must be in your condominium declaration (rather than the rules and regulations or bylaws) in order to be valid and enforceable. If, as you indicate, the "no pets" restriction is in your association's declaration, it is likely a valid and enforceable rule.
Exceptions must be made for service animals and sometimes "companion" animals recommended by health care professionals.
The owners can also change the restriction in the declaration by amending it through a process that would be described in the declaration.
Can a HOA incorporate as a Non-Profit to avoid paying Real Estate Taxes on Common Areas?:
I live in a community, which has a Beach Club. They are a non-profit corporation.
In 2007, they declared themselves and HOA, and own a $2,000,000 piece of land which they don't pay taxes on. The HOA Act of WA State suggests "real property tax" paid by its members for land not under their ownership as a part of being an HOA.
If this organization is LEGALLY an HOA, can they keep non-profit status and forgo property tax?
Charles’s answer:
Most HOAs are already incorporated as non-profit corporations. The status of the entity (profit/non-profit/corporation or unincorporated association) will likely have no bearing on the real estate tax obligations of entity. Sometimes the purpose of the organization can affect the obligation to pay real estate taxes. This is typically an issue governed by state law.
When people talk about “non-profits” they are sometimes talking about income tax ramifications at the personal level (can I deduct this payment from my income for federal taxes?), sometimes talking about tax ramifications at the entity level (does this organization taxes on its income?), and sometimes talking about state law which governs the formation and activities of the organization.
The issue of how federal and state laws and regulations will affect a particular HOA are incredibly situation specific, and would require review of the facts involved and the jurisdiction it is located in. Many associations do not have any taxable real estate, because the common areas are all owned jointly by the members of the community.