This Is our Village

Friday, May 27, 2011

Toni's Insurance Column

I believe that Toni made a mistake in her column saying that the securing of the central air conditioners is an Association expense. She says that the responsibility for air conditioners falls to the Association FOR A COVERED LOSS. Securing the air conditioners is NOT A COVERED LOSS. It is maintenance. A covered loss would be in the case of a hurricane should the A/C be damaged the Association would pay to repair it. This was all discussed at the Delegates meeting this past month and was agreed by all that it was an owner expense unless the Association decided to pay for it. I don't know why Toni wrote her column in the manner she did. I think she goofed.


  1. From what I heard at the May 6 delegates meeting, I agree that this was misleading. After some discussion at the meeting, there seemed to be general agreement that securing of a condenser to the concrete pad underneath came under normal maintenance and was therefore the responsibility of the owner. However, it also seemed agreed upon that to go after every owner and wait for him to have his condenser secured was not only impractical, but would jeopardize our American Coastal insurance rate, through which associations like ours were saving $10,000 a year.

    I believe it was left that associations should pay to have the work done and have it done promptly, and that associations would then make their own decision about whether to bill owners whose condensers needed securing. (There would be NO charge by any of the three listed companies doing the inspection and securing if they found no problem.)

    For what it is worth, this is what our association is doing. First, we have signed up with Toni to have our condensers inspected/repaired by the company offering the $45 per-unit charge for repairs. I understand that they will come by in due time, and American Coastal will know, even it runs past their June 1 deadline, that serious efforts are being made to remedy the situation.

    Second, our board had decided previously to refund to owners half of the $10,000 savings we incurred by the switch of insurance carriers, thanks to Toni and the Insurance Committee. Rather than have our monthly coupons changed, which might confuse our owners, we decided to refund $100 to all owners in July and another $100 next January. (In other words, after six months of insurance savings has accumulated, we will refund it.) This will be sent with letters I would probably be sending owners anyway to update tham on things.

    We will simply deduct $45 from the $100 being sent in July to those owners whose condensers needed securing, and of course explain the reason for this.

  2. Hi Lanny
    I guess that you didn't know that the only time monies may be returned to unit owners, is when there are excess funds left over from a project which required a special assessment... the Board may determine that it wishes to return the money by check, or deduct the funds from the next year's budget. Savings on a budgeted expense like insurance is always considered a surplus, and it is not lawful for such funds to be returned by check to unit owners in a Florida not-for-profit corporation. Also, what happens if American Coastal raises their rates during the course of the policy period due to excess claims from the tornados, the funds you are returning will be needed to cover the shortfall.

  3. Actually, Grace, your right Toni did goof but not in the way you supposed.
    As everyone 'should' now know all copy destined for the Reporter has to be in by the sixth of the month.
    Considering the alleged importance of this insurance issue Toni was called, regarding her lack of copy, by the newspaper staff on May 11. They were told, by the UCO office that she was too busy. With this in mind and the obvious urgency of delivering this information to Associations and residents the insurance notice, published on the blog was used. I agree that this was as ambiguous as the Delegate Assembly Debate that followed but did warn residents that their association's largest expense – insurance needed their immediate attention.
    Despite instructions to the contrary the Reporters new page setter used Toni's name and head shot in what was perceived to be her column - eventually submitted too late for inclusion.
    May I just remind everyone that we at the Reporter are also volunteers with busy schedules. With only a small staff operating on limited resources it is imperative that our deadlines are respected.
    Judging by the comments we have received from those who really count - our readers , the changes made to the Reporter, including the publication of much more information, has been warmly welcomed and we look forward, with UCO's co-operation to expanding sections by our elected representatives.

  4. Thanks for the explanation Sue. Yes, the paper is grandly improved and I thank you all for your hard work. I really found it hard to believe that Toni made a mistake in her column as she is very knowledgeable.
    We had the work done in our Association right away. The Association paid and the owners, mostly have paid the Association back.

  5. Hi Randall,

    No, I didn't know monies could not be legally returned as we planned. I guess what we will have to do is wait till we have end-of-the-year figures, and if we have a surplus (are under budget), then we can distribute the surplus, or some of it, to owners. Will that pass muster? As I recall from when we were with Seacrest, the association was always given that option at the end of the year if there was a surplus. The only difference then would be in not making a mid-year refund.

    Thank you for catching this.

  6. Hi Lanny,
    I'm afraid it will not pass muster. Since the association has been organized as a corporation not-for-profit and the common surplus does not result from excess funds from a special assessment, IT CANNOT BE RETURNED DIRECTLY TO THE UNIT OWNERS and an alternative disposition must be used as per 617.01401(5) and 617.0505(1)F.S. The excess funds may be credited toward the next year's budget for the benefit of the unit owners in the same percentage as their ownership in the common elements,as per 718.115(3)F.S., or the surplus can be allocated to the reserve accounts of the association. The decision is within the exclusive discretion of the board. Lanny, I hope this further clarification,
    is sufficient.

  7. Thank you, Randall, for sticking with me on this. Ed Black said the same thing to me last night (he had read our blog exchanges): that returning the money at the end of the year was not legal, despite Seacrest's having given it as an option to us in the past. We'll take your advice and do exactly as you say: return the money in the form of a reduced budget for 2012 or add it to the Reserves. (I think our board will do the former, but we'll see in the fall at budget-making time.)

    Keep up the good work!


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