Condo & HOA Law, Newspress

NewsPress Q&A | September 26, 2021 | Cancelling a passed Motion

Fort Myers Attorney Richard D. DeBoest, II | Florida Attorneys Goede, DeBoest & Cross

By Attorney Richard D. DeBoest

 

Q. Our Board passed a Motion to do something. The Motion passed and the meeting was adjourned. Now a Board member wants to cancel the action for which the motion was made and passed. How can this be done?

A. Under Roberts Rules of Order, which although not “law”, provides that there are two types of Motions to do this but, in your case, both Motions must be made at another proper Board meeting since the first motion passed and that meeting was adjourned. If the meeting was not adjourned, then the following motions can be made at the same meeting before it adjourns.

“A Motion to Reconsider” which is a two-step process allows the original motion to be voted on again exactly as originally presented at the first meeting. To do this you must do the following:

1. Someone that voted “in Favor” of the original motion must make a “Motion to Reconsider” the first motion. Someone that voted “No” on the first motion cannot make the Motion to Reconsider.
2. The Motion to Reconsider can be seconded by anyone.
3. The Motion to Reconsider must pass by a majority vote.
4. Then the original motion made at the prior meeting that passed is back on the table exactly as it was made the first time. Then it is voted on and can be passed again or voted down by a majority of those at the meeting.

Or

“A Motion to Rescind” the original Motion.

1. Anyone can make a Motion to Rescind the prior motion.
2. The vote on the Motion to Rescind must pass by a 2/3 vote in favor of those at the meeting.

 

Q. A common scenario encountered by Condominium Associations is the water leak into a Unit from the Common Elements outside the Unit and/or from the adjoining Unit above. Can you explain the law on this issue?

A. Herein below are the 5 most common questions involving this common occurrence.

WHO INSURES WHAT?
According to Section 718.111(11) (f) Florida Statutes, the Association’s policy of property insurance covers “all portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications” EXCEPT “all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing.”
This means that the Association insures everything for casualty loss (fire, windstorm, water leak) except those items expressly excluded by the Statute, including but not limited to all drywall and a/c components inside and outside the Units.
Thus, in the typical leak into the Unit scenario the Association’s insurance covers ALL drywall (boundary, ceiling and partition) in the Unit for losses caused by a covered hazard. The Association’s insurance also covers all other damage except that caused to the excluded items listed above.
This portion of the law controls over any contrary or different provision found in the Association’s governing documents. The Association cannot “opt out” of this portion of the law by amending its documents and therefore, despite what the governing documents might provide, must provide insurance for casualty loss for all things except the excluded items listed above. There may be exceptions for limited common elements and owner made improvements, however.
WHO MAKES THE REPAIRS?

According to Section 718.111(11)(j) “any portion of the condominium property required to be insured by the association against property loss pursuant to paragraph (f) which is damaged shall be reconstructed, repaired, or replaced as necessary by the association as a common expense.”

This means that the Association makes all repairs to the items covered by the Association’s insurance, unless the members have voted to “opt out” as described below.

WHO PAYS FOR THE REPAIRS?

According to Section 718.111(11)(j) “any portion of the condominium property required to be insured by the association against property loss pursuant to paragraph (f) which is damaged shall be reconstructed, repaired, or replaced as necessary by the association as a common expense.”

This means that the Association pays for all repairs to the items covered by the Association’s insurance, unless the members have voted to “opt out” as described below.

If however, the cause of the damage can be attributed to the owner’s or another person’s negligence or intentional act the Association may seek to recover the cost of the repair from the guilty party. Further, the Association is not obligated to pay for reconstruction or repairs of casualty losses as a common expense if the casualty losses were known or should have been known to the Unit owner and were not reported to the Association until after the insurance claim of the association for that casualty was settled or resolved with finality, or denied on the basis that it was untimely filed.

WHO PAYS THE ASSOCIATION’S INSURANCE DEDUCTIBLE?

Section 718.111(11) (j) provides that “all property insurance deductibles, uninsured losses, and other damages in excess of property insurance coverage under the property insurance policies maintained by the association are a common expense of the condominium.”

This means that unless the Association has voted to “opt out” as discussed below, the Association pays the deductible.

In the typical “small” isolated water leak situation that only affects one Unit the amount of the damage will almost always be below the Association’s insurance deductible. Therefore, the Association will be obligated to pay for 100% of the repair costs and will not be reimbursed from insurance proceeds. The small water leak situation statistically occurs much more often than a catastrophic water leak event (i.e. hurricane). As such Association’s that have not chosen to “opt out” of this portion of the insurance law should budget for the payments of these types of “under the deductible” claims. Further, unless the Association can prove negligence, which is difficult even in the best cases, it will not be able to recover any money from the perceived “guilty” party that caused the leak.

CAN THE ASSOCIATION “OPT OUT” OF THE INSURANCE LAW?

Section 718.111(11)(k), Florida Statutes, provides that “an association may, upon the approval of a majority of the total voting interests in the association, opt out of the provisions of paragraph (j) for the allocation of repair or reconstruction expenses and allocate repair or reconstruction expenses in the manner provided in the declaration as originally recorded or as amended.”

This means that if a majority of the total Unit owners vote to opt out, the requirements to make the repairs to the Unit, the requirements to pay for the repairs as a common expense and the requirement to pay the deductible as a common expense can be changed. Traditionally, most condominium documents provide that where the damage is caused to only a single Unit, it is the Unit owner’s responsibility to make the repairs, pay for the repairs and to pay the deductible. The owner or his or her own insurance company may then seek reimbursement of the repair costs from the “guilty” party that caused the leak if it can be proven that the party was negligent.

Thus, an Association can “opt out” of part of the insurance law but an Association cannot “opt out” of what it insures. If an Association’s wishes to “opt out” is must record a special type of notice in the public record indicating that it has opted out of paragraph J of the insurance law and will follow its governing documents on those issues.

Whether or not an Association should “opt out” is a decision unique to each community. In making that decision the Association should analyze the financial impact paying the “below the deductible” claims will have on the annual budget and whether or not the “traditional” allocation of costs and repair responsibility under the current governing document has been satisfactory in the past.

order to determine whether you have any recourse against the association or the golf club, I would recommend you engage a licensed Florida attorney to review the applicable covenants.