Insurance Deductable

Recently in my community, two condo units were seriously damaged by a fire that was caused by oil heating on a stove top. The homeowner had forgotten he was cooking something, until he was alerted by the smoke alarm. It was clearly an accident, but one where the homeowner was clearly negligent.

The Association insurance paid for the repairs to the building, which totaled over $50,000 dollars, but the issue is with the Associations $5,000 deductible. Because the homeowner was negligent the Board feels he should be held responsible to pay the $5,000 deductible. However, our attorney has stated we cannot go after him unless it specifically states in our CC+R’s that homeowners are responsible in cases of negligence. But it doesn’t mention that they are not responsible either.

However, the subject is clearly outlined in our house rule book;
“In the event of a loss resulting from the negligent act or omission of any owner, the owner shall be responsible for any deductible amount of such loss charged to the Association.”

When I brought this to the attention of our attorney, he said it was not enforceable unless in was in our CC+R’s.

Common sense tells me “You broke it, you pay for it”, but as we all know living in HOA’s common sense doesn’t always work. Does anyone have any advice as to what my Board should do?

And in case you’re wondering about the homeowner own insurance, apparently he doesn’t have any.

Thanks,
HOA Prez

I'm surprised the bank (the owner gave a mortgage to) doesn't require a minimum insurance on the condo.

If it were me, I'd vote to have the HOA pay the deductible.

Upon reflection, it is a little strange to have the homeowner pay the deductible. Suppose that the HOA had a $100 deductible rather than a $5,000 deductible. The homeowner would pay far less but, somehow, that would be equivalently "fair". In other words, what does the deductible amount have to do with fairness? Nothing, really.

So, I would have the HOA pay the deductible. Then, if appropriate, I would vote to have the HOA file a claim with the homeowner's umbrella insurance (if any) or sue for some amount of appropriate compensation separately (which might be $0). It seems to me that compensation to the HOA from the homeowner should be unrelated/unlinked from the HOA's insurance.

Richard, not "renters insurance" but HO6 Condominium Owners insurance.

To stop all the arguments about who pays what in insurance, Maryland passed a law last year saying the deductible is the responsibility of the condominium unit owner where the damage originated, whether negligent or not. See www.marylandhomeownersassociation.info for the actual bill.
Jeanne

I'm sure he would take the case. I've never seen an attorney refuse a paying client, no matter what the reason. They will do anything you ask them to do.

He may know he will loose, but he wont tell you that. Your paying him to win.