Insurance Requirements for Florida Subdivision

Started by ShanuR • 14 replies • 635 views

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ShanuR (Florida)
Posts: 6

Posted:

Hi everyone,

I am writing HOA governing documents for a subdivision community, although this is all fairly new to me. I'm having a hard time tracking down what insurance requirements the HOA is responsible for based on legal statutes. Florida Statutes 720 (Homeowner's Associations) only mentions insurance to cover people with access to association funds. Statutes 718 (Condominiums) spell out more requirements-- general liability and hazard insurance for common areas, etc.

But the community is a subdivision, not condos. Florida has more than 20 chapters specifically for insurance, so I am hoping someone can narrow it down for me where I can find the requirements specific to this community. Specifically, what is needed for the common areas, and do homeowners have to have their own property insurance for their homes, or could the association invest in a bulk package for all the homes in the community? Statutes stating the requirements are a must.

Any help is greatly appreciated!

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Shaun

In an association of private homes the association maintains a Directors and Officers (D&O) policy on the BOD Members and liability and damage insurance (not sure of proper names) on Common Property. Homeowners maintain their own insurance.

In our case, private homes such as yours, we also require the homeowner to name the association as a co-payee. This is to prevent one from running away with the insurance money and leaving the association with a burned out/damaged home. Also to insure any rebuilding meets our Architectural Standards. We have had insurance agents balk on this but a letter from our attorney ends the balking.

ShanuR (Florida)
Posts: 6

Posted:

Quote:

Posted By JohnC46 on 04/01/2020 9:15 AM
Shaun

In an association of private homes the association maintains a Directors and Officers (D&O) policy on the BOD Members and liability and damage insurance (not sure of proper names) on Common Property. Homeowners maintain their own insurance.

In our case, private homes such as yours, we also require the homeowner to name the association as a co-payee. This is to prevent one from running away with the insurance money and leaving the association with a burned out/damaged home. Also to insure any rebuilding meets our Architectural Standards. We have had insurance agents balk on this but a letter from our attorney ends the balking.

Thank you! What you're saying definitely makes sense. Do you know which statutes control this? Even if you are not in Florida, a statute from another state could help me locate the corresponding one for us. Also, we would like to explore the association insuring the homes at a discounted bulk rate as a savings incentive for potential buyers.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By ShanuR on 04/01/2020 8:43 AM
I am writing HOA governing documents for a subdivision community

I suggest starting by googling for Florida HOA Declarations and using them to draft the language for your governing documents. Then have an attorney review this. Here are some examples I found by googling {florida homeowners association declaration type:pdf} :

https://nabrnetwork.com/site/954/files/954/dyn2545/SRH%20-%20Sullivan%20Ranch%20Declaration.pdf (see pdf page 25)

https://www.ghohomes.com/userfiles/file/Declaration%20of%20Covenants%20Conditions%20&%20Restrictions.pdf (see pdf page 24)

https://homesofhernando.com/wp-content/uploads/2015/09/SevenHillsHOADocs.pdf (see pdf page 38, though all it says is the board shall, "Procure and maintain adequate liability and hazard insurance on property owned by the Association;"

http://www.meahoa.com/willows3/documents/governing-docs/DECLARATION_ARTICLES_BY-LAWS-rev.pdf (do a keyword search for "insur")

ShanuR (Florida)
Posts: 6

Posted:

Quote:

Posted By AugustinD on 04/01/2020 9:38 AM

Posted By ShanuR on 04/01/2020 8:43 AM
I am writing HOA governing documents for a subdivision community

Thank you, I have looked at many examples of governing documents and studied the Florida Statute for HOAs carefully. We would like to avoid hiring an attorney, although I understand it might be a lot easier. I'm about 99% done with all documents, but because Florida Statute 720 doesn't cover insurance, I am stuck until I can reach the text of the laws that govern this so that we can fully understand our options.

AugustinD
Posts: 5,144

Posted:

I looked at the laws that cover this in Florida. What you already turned up by googling is all you are going to find. I think you can study this for the next year or so and maybe then have some mastery of them. Maybe not. Toss in that the statutory requirements still give a lot of leeway, and, bottom line, you will still have to weigh what insurance you want the HOA to require, among the insurance cafeteria menu of items.

MarkW18
Posts: 1,290

Posted:

Quote:

Posted By ShanuR on 04/01/2020 8:43 AM
Hi everyone,

I am writing HOA governing documents for a subdivision community, although this is all fairly new to me. I'm having a hard time tracking down what insurance requirements the HOA is responsible for based on legal statutes. Florida Statutes 720 (Homeowner's Associations) only mentions insurance to cover people with access to association funds. Statutes 718 (Condominiums) spell out more requirements-- general liability and hazard insurance for common areas, etc.

But the community is a subdivision, not condos. Florida has more than 20 chapters specifically for insurance, so I am hoping someone can narrow it down for me where I can find the requirements specific to this community. Specifically, what is needed for the common areas, and do homeowners have to have their own property insurance for their homes, or could the association invest in a bulk package for all the homes in the community? Statutes stating the requirements are a must.

Any help is greatly appreciated!

You are writing governing documents and don't know what you're doing? That should be a comfort to those that have to somehow live with your masterpiece.

ShanuR (Florida)
Posts: 6

Posted:

Quote:

Posted By AugustinD on 04/01/2020 10:06 AM
I looked at the laws that cover this in Florida. What you already turned up by googling is all you are going to find. I think you can study this for the next year or so and maybe then have some mastery of them. Maybe not. Toss in that the statutory requirements still give a lot of leeway, and, bottom line, you will still have to weigh what insurance you want the HOA to require, among the insurance cafeteria menu of items.

Understood. We will talk to some insurance companies about it.

ShanuR (Florida)
Posts: 6

Posted:

Quote:

Posted By MarkW18 on 04/01/2020 11:30 AM

You are writing governing documents and don't know what you're doing? That should be a comfort to those that have to somehow live with your masterpiece.

If you'd read my original post and the thread you'd see that I'm dedicated to creating an impeccable HOA. Sorry you must have a history with people who don't know or care what they're doing. I can relate.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By ShanuR on 04/01/2020 9:53 AM
Thank you, I have looked at many examples of governing documents and studied the Florida Statute for HOAs carefully. We would like to avoid hiring an attorney, although I understand it might be a lot easier. I'm about 99% done with all documents, but because Florida Statute 720 doesn't cover insurance, I am stuck until I can reach the text of the laws that govern this so that we can fully understand our options.

Florida's insurance industry is constantly changing how it does business. The only significant amendment my HOA has ever passed was in 2011 and it completely replaced the "Insurance" section of our CC&Rs. Florida insurance regulations are also notoriously difficult to understand. FS 720 does not say much about insurance. That means you're left with the requirements of whatever regulations apply to commercial insurance coverage in the state.

I suggest you find an insurance professional to help guide you through what your association needs. Perhaps talk to an insurance agent and ask if he or she could recommend anyone who might be willing to consult with you for a fee. And I would definitely hire an attorney afterwards to give his seal of approval to whatever language you finally do come up with.

I have also reviewed many dozen CCRs for Florida HOAs and there is no real boilerplate insurance language that I've seen. Most CCRs are written by Developers to protect themselves.

Good luck.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Shan

What qualifies you to be writing the documents?

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Shaun,

Help us with some answers, please.

1. Are you a Board member or member of the committee tasked with doing this?
2. Are you writing Bylaws?
3. Are you writing Rules and Regulations?
4. Are you writing Architectural Standards?
5. Are you writing Conditions, Covenants and Restrictions?
6. Does you community already have some/any of these docs?
7. Have you asked other Boards in your area?
8. How many properties?
9. Is this a new community?
10. Are dues already mandatory? This obviously goes to whatever docs must currently exist?
11. Is the community already a corporation?
12. OK - and, I guess the biggie - given the community must exist, you are a property owner, was it a development without a developer? Or, did a bunch of property owners get together and decide they want to be part of an HOA - which, would presumably mean their deeds already note this ...

??

ShanuR (Florida)
Posts: 6

Posted:

Thank you again for your responses. I really appreciate the time you took to find example documents and share your search method.

CathyA3 (Ohio)
Posts: 6,299

Posted:

This has come up in some other discussions:

At what point does the OP cross the line into "practicing law" in his state, and what are the penalties for same?

Given the fact that improperly-worded CC&Rs set the stage for future litigation - to put it bluntly - I wouldn't want to buy property in any community whose CC&Rs were essentially written by amateurs.

These things are written in legalese for a reason, and we non-lawyers don't speak the lingo no matter how knowledgeable we may be about HOS issues.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By CathyA3 on 04/02/2020 6:50 AM
At what point does the OP cross the line into "practicing law" in his state, and what are the penalties for same?

If the OP is not being paid for this work, there are zero penalties. Everyone and her sister can give "legal advice" and face no penalties, as long as they are not paid for same and are not attorneys. (If they are attorneys, certain demanding requirements must be met.)

Quote:

Posted By CathyA3 on 04/02/2020 6:50 AM
At what point does the OP cross the line into "practicing law" in his state, and what are the penalties for same?

Given the fact that improperly-worded CC&Rs set the stage for future litigation - to put it bluntly - I wouldn't want to buy property in any community whose CC&Rs were essentially written by amateurs.

FWIW I generally agree. However of note is that even paying an attorney a fortune to write covenants will not yield covenants that are bulletproof.

Quote:

Posted By CathyA3 on 04/02/2020 6:50 AM
At what point does the OP cross the line into "practicing law" in his state, and what are the penalties for same?

These things are written in legalese for a reason, and we non-lawyers don't speak the lingo no matter how knowledgeable we may be about HO[A] issues.

I know many attorneys who do not speak the lingo no matter how knowledgeable they say they may be about HOA issues.

I think the internet has changed things. To me, it's no longer, "The person who represents himself/herself in court has a fool for an attorney. Instead, I think it's "The person who does not do her or his homework on the internet on a legal issue, prior to seeing an attorney, is a fool."

I encourage people to start their homework here and at other web sites.

Have a Quarantini tonight. Donate blood. Thank god (or the goodness in all people) you are not staffing a New York City area Emergency Room today.

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