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Community Living: Paying dues on condo unit destroyed by fire

Paying dues on destroyed unit

Q: In January one building in our condominium was destroyed by fire. I owned one of the apartments in the building and cannot occupy my unit. Our board has received money from the insurance company and is in the process of getting bids to rebuild the building. This could take two or more years. The owners have been informed we must continue paying the monthly dues even though there is no building. This seems unreasonable. We will be paying thousands of dollars on units that cannot be lived in or rented. In addition the association is saving money on upkeep and insurance for the building that has been destroyed. Can we be exempt from paying dues until the building is rebuilt?

A: Unfortunately, I believe you must continue to pay your fees. Talk to your insurance agent; maybe your personal policy has a section that will pay your fees and other living expenses. Ask him about "loss-assessment" coverage. As a reminder to other owners, this is one example of why you should support the installation of sprinklers if they are ordered for your building.

HOAs may need reserve funds

Q: I live in a homeowners association. Are we required to have a reserve fund? For years we put money in a fund for emergencies but our current board has not budgeted for reserves or the special emergency fund. What is your opinion of this action?

A: The HOA act does not require reserves as the condominium act does. However, your documents may require reserves, and if they do, the board should establish a budget reserve account. It is good management for the board to examine the common facilities to determine if there will be repairs or replacements in the future. If an HOA has a clubhouse, swimming pool, roads or other amenities, it is wise to plan for future expenses. If the board does establish reserves, I suggest that the condominium model be followed.

Contractors and workers' comp

Q: Is a condominium association required to hire only contractors who carry workers' compensation? If the association hires a self-employed contractor without workers' comp insurance, can it be liable if the worker is injured while working at the association? We are a multi-association community and one manager requires the insurance, another does not. How do we resolve the hiring of contractors?

A: While workers' compensation insurance is not required, you need to understand that if a contractor or any of his employees or subcontractors has an accident, they will look to the association for compensation and medical expenses. Here is the problem: Your insurance will not pay for this event or accident. The cost to a contractor for workers' comp insurance will increase his/her bids compared with a contractor that does not provide insurance, so remember that when choosing a contractor. I advise you never to hire a contractor that does not have proper insurance and make sure that the contractor names the association as an additional insured. More advice can be obtained from your attorney and your insurance agent.

Reimbursing directors' expenses

Q: Are directors allowed to be paid for the use of their cars? Our board approves payment for gas and other expenses at each board meeting. They pay themselves for expenses they create. I thought board members could not be paid.

A: While directors cannot be paid a salary and must serve without compensation, they can be reimbursed for expenses. I suggest that the director complete an expense log and it be verified by other directors.

Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115. Please include your name and city.


Community Living: Paying dues on condo unit destroyed by fire 06/04/10 [Last modified: Friday, June 4, 2010 4:30am]
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