Well….. after eleven years, our luck ran out.  We finally rolled a seven.  We had a great run though.  Unfortunately, it’s now time to deal with the disaster and clean up the mess.  I can tell you one thing for sure and for certain.  Those associations that put away money for a rainy day will recover a lot quicker than those who thought their association was invisible and will somehow get by without putting money away for a rainy and windy day.  Here are the type of phone calls and e-mails I expect to start receiving today and for the next week or two:


I had no idea the association’s deductible was so high:  THIS HAPPENS ALL THE TIME.  Associations know that their windstorm deductibles normally are about 5%.  However, they have no clue what that 5% figure actually means.  It does not mean that if the association suffers a $100,000.00 loss that the insurance carrier does not have to pay the first $5,000.00 and the association gets a check for $95,000.00.  The deductible is based upon the insured value of the entire property.  So….let’s say the entire property is worth ten million dollars.  The deductible is five percent of ten million or $500,000.00.  This is often times shocking when an association learns this.  There are policies out there that actually allow you to further buy down that deductible and you may want to talk to your agent about that.


We have no reserve funds and no money for emergency repairs.  What do we do?  Praying doesn’t hurt.  Other than that….it’s not rocket science.  You gambled on not funding a reserve account and you lost the bet.  Eventually, the house always wins. Time to pass an emergency special assessment.


We hired the services of some construction company that approached us — we gave them a deposit — and they just disappeared on us.  After a storm, scammers, con men, gangsters, thieves and other creatures descend on community associations who suffer damages to their property.  They know that the quality companies are now tied up doing a million jobs so they tell you that they will get to your job right away.  In desperation, the association hires these people without verifying licenses, insurance, references or even checking if they are listed as a valid Florida corporation or other business entity.  The association loses the deposit and the association has little to no recourse whatsoever.


We signed contracts for repairs without approving them at a properly noticed board meeting or having our lawyer review them and  we just passed a special assessment without any advanced notice.  Believe it or not……this is allowable, but only if a “state of emergency” is declared pursuant to Florida Statute 252.36 by Florida’s Governor.

            Don’t make rash decisions on behalf of your associations that may ultimately increase the financial burdens to your community.  Great leaders emerge when disaster strikes and great leaders usually wind up having other qualified people help them along the way.  So before signing that contract, borrowing those funds, passing that assessment or altering your common elements, you may want to ask your lawyer what he or she thinks.  Stay safe.

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