The 2021 hurricane season began June 1, but water pipes can burst year-round. If an insurable event occurs in a condo, however, is it a unit owner’s job to pay or the association’s? It’s a simple question with a sometimes complicated answer.
Condos: Who Insures What? Who Pays for Damages?
By Rob Samouce
The 2021 hurricane season began June 1, but water pipes can burst year-round. If an insurable event occurs in a condo, however, is it a unit owner’s job to pay or the association’s? It’s a simple question with a sometimes complicated answer.
NAPLES, Fla. – Questions often arise when there is an insurable event (such as when a water or sewer pipe bursts), who pays for the damage? The condominium association or the unit owner? The answer will depend upon what the damaged items are. Section 718.111(11)(f), Florida Statutes, provides that: “(f) Every (Condominium Association) property insurance policy issued or renewed on or after January 1, 2009, for the purpose of protecting the condominium must provide primary coverage for:
- All portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications.
- All alterations or additions made to the condominium property or association property pursuant to s. 718.113(2).
- The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.”
So, the association’s insurance policy covers the structures of the building(s) as originally installed or replaced, plus all approved alterations or additions to the building(s). The association policy also covers the unit A/C equipment (this was a change to the statute after Hurricane Irma to insure that all the air conditioning is repaired and turned on as quick as possible after a hurricane to prevent mold growth). The unit owners’ policies, if obtained, cover their personal property and some fixtures within the unit and floor, wall and ceiling coverings. The drywall in the units and the stuff behind the drywalls is the association, wherein the paint or wall paper on the drywall is insured by the unit owner. While the association is required to carry insurance on the structures, the statute does not require unit owners to carry a unit policy, and many unit owners decide to self-insure their unit and not carry unit insurance unless their Declaration of Condominium requires them to do so (most do not). Many owners who do not have a mortgage decide to take the risk of self-insuring their condominium unit. Another question that often arises is who pays for the dry-out of the unit (fans etc.) from a pipe burst, as the statute is silent on this. As both the association benefits from the dry-out (less chance of mold behind the walls) as well as the unit owner (property saved from turning moldy green or black), the dry out cost should be shared proportionally between the association and the unit owner depending upon how much they benefit. If it cannot be determined a proportional share, the dry out cost is usually shared equally – 50/50. Who pays the association deductible for an internal unit drywall repair (unit perimeter drywall is Association responsibility) can be a complicated answer and depends upon whether there was ever a deductible opt-out vote of the members or not. If that question arises, you should check with your association’s legal counsel. For non-insurable event damage (such as mold growth from a slow water leak over an extended period of time), you will need to look at your governing documents maintenance, repair and replacement responsibilities usually contained in your Declaration of Condominium to determine whether the association or the owner must pay for the repair. Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners’ associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. © 2021 Journal Media Group
Is a Seller’s Disclosure Required?
By Joel Maxson
A buyer insists on seeing the Seller’s Property Disclosure. Equally adamant, the seller refuses to fill one out. What happens next? The buyer’s Realtor calls Florida Realtors Legal Hotline to find out what they can – and cannot – demand.
ORLANDO, Fla. – Based on what we hear on Florida Realtors Legal Hotline, most residential sellers are content to complete the Florida Realtors Seller’s Property Disclosure – Residential form (SPDR), or its condominium counterpart, when they enter into a listing agreement. However, every now and then a seller balks at the idea of completing this form, prompting a member to ask what Florida law requires regarding disclosures. Although sellers are not required to complete this specific SPDR disclosure form, a residential seller does have to comply with the rule established in Johnson v. Davis. In that case, the Florida Supreme Court held that “where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer.” These material facts are sometimes referred to as latent defects. This disclosure can be made in writing or verbally, although Florida Realtors’ attorneys recommend it be made in writing. If you’re on the listing side of the conversation, can you force your seller to complete a seller’s disclosure, SPDR or otherwise? No, not unless you add that requirement to your specific listing agreement. That said, the Florida Realtors Exclusive Right of Sale listing agreement places three significant obligations on the seller. The first is that seller must “Make all legally required disclosures.” This is a sweeping obligation that includes complying with any federal, local, or contractual disclosure requirements, in addition to the general rule from Johnson v. Davis. The listing agreement also obligates sellers to certify and represent that they have written in the listing agreement all “material facts (local government building code violations, unobservable defects, etc.).” The final obligation is to “immediately inform Broker of any material facts that arise after signing this Agreement.” The SPDR form contains safeguards to ensure the seller completes the form, not the associate or broker. As a reminder to all parties, the first line of the SPDR provides “Notice to Licensee and Seller: Only the Seller should fill out this form.” As a related issue, some brokerage companies may require that certain documents (like a seller’s property disclosure) be maintained in a file, so associates should always ensure they understand and comply with any specific requirements their company may have. Can a buyer’s representative force the seller or listing agent to provide a seller’s disclosure? No. They are welcome to ask but will occasionally encounter a seller who is unwilling to complete one. From a buyer’s perspective, it’s always a good idea to conduct thorough due diligence. Without the aid of a seller’s disclosure, a buyer may want to investigate the property more thoroughly during the inspection period. Joel Maxson is Associate General Counsel for Florida Realtors Note: Advice deemed accurate on date of publication © 2021 Florida Realtors®
Risk Rating 2.0 Changes to Flood Insurance
BIG changes are coming to the National Flood Insurance Program and this will have a HUGE affect on Florida Real Estate and in particular along the coast. I recently attended a seminar on this new system intended for insurance agents and here are some of my “take aways”
There will no longer be a “Preferred Risk” policy. This is the $500/yr policy for those NOT required to have a policy by their lender. All policies will be individually rated for risk and the cost associated with that risk.
The Flood Insurance Rate Maps (FIRM’s) will ONLY be used to determine IF your lender will require you to have a flood policy.
The whole notion of a Base Flood Elevation (BFE) is going away. This is crazy. Your policy risk and premium will no longer be determined based upon open and available information being the BFE is 9′ and my first floor is 10′ so I’m good. Or my first floor is 12′ so I’m great. Elevations will be considered for ALL properties. From October onward, “Standardized rating tables will no longer be used, rates will be calculated using an algorithm.” Just exactly what that algorithm is, no one will tell you. Seriously. What they say will affect the pricing of new policies includes:
If the agent for the Buyer or Seller states that their party agrees then is that a valid Contract in Florida?
First, le me say that I’m NOT a lawyer. If it really matters then ask one.
OK, so this is happening all the time now. Let’s just say that the Buyer submits an offer on a property through their agent (Transactional or Single agency) and that offer is kicked back and forth “verbally” but in writing via email or text message until finally one party says “I agree to your terms”. Does this email accepting those final terms constitute a valid and executed real estate contract? IMHO, NO IT DOES NOT.
There’s a few things here. As all real estate 101’s know the Florida Statute of Fraud requires real estate sales contracts to be in writing…
“725.01?Promise to pay another’s debt, etc.—No action shall be brought whereby to charge any executor or administrator upon any special promise to answer or pay any debt or damages out of her or his own estate, or whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person or to charge any person upon any agreement made upon consideration of marriage, or upon any contract for the sale of lands, tenements or hereditaments, or of any uncertain interest in or concerning them, or for any lease thereof for a period longer than 1 year, or upon any agreement that is not to be performed within the space of 1 year from the making thereof, or whereby to charge any health care provider upon any guarantee, warranty, or assurance as to the results of any medical, surgical, or diagnostic procedure performed by any physician licensed under chapter 458, osteopathic physician licensed under chapter 459, chiropractic physician licensed under chapter 460, podiatric physician licensed under chapter 461, or dentist licensed under chapter 466, unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or by some other person by her or him thereunto lawfully authorized.“
The FAR BAR AS-IS Contract does allow for notification from one party to another to be binding when when made to the agent (attorney/broker) for that party…
“Notice and delivery given by or to the attorney or broker (including such broker’s real estate licensee) representing any party shall be as effective as if given by or to that party. All notices must be in writing and may be made by mail, personal delivery or electronic (including “pdf”) media. A facsimile or electronic (including “pdf”) copy of this Contract and any signatures hereon shall be considered for all purposes as an original. This Contract may be executed by use of electronic signatures, as determined by Florida’s Electronic Signature Act and other applicable laws.”
But this would NOT be a notification, this would be an execution of a Contract so unless the Buyer and Seller are negotiating directly (as with a FSBO with no agent involved) then the indication of one party (or their agent) to the other agent of agreed upon terms would not constitute a binding Contract for real estate.
Back up Addendum to Far Bar As-Is Florida Contract
Today I had to educate an agent from another major company in the Jupiter area about how to use a Back Up Addendum. There’s not much to write here but I’ll do it anyway.
First, if the base Contract is a Far Bar then use the addendums intended for that Contract such as the Back up Addendum. Be sure to check the back-Up Contract box on the base Contract for this to be included as a rider. There’s only 1 blank to fill in on that Addendum and it’s a date that the back up Contract is good through. So let’s by example that the back up offer is willing to wait until say the end of the inspection period for the cash offer, then this would be the following day inserted as definate date like 15 Jan 2023.
What the agent in I mention above did is add verbiage to paragraph 20 ADDITIONAL TERMS that re-stated and contradicted the clear time lines in the base Contract. The Loan Approval Period, Inspection Period as well as the initial deposit and secondary deposits are all tied to the “Effective Date” which is defined in the base contract 3(b) but re-defined in the addendum and since the verbiage of an addendum controls over that of the base Contract then it controls and this is it: The “Effective Date” of this back-up contract shall be the date Seller delivers written notice of the termination of the prior executed contract.”
The time for the acceptance of the offer is as stated on the base Contract. It does not change. BUT the Closing Date should read, IMHO, something like ’45 days from Effective Date’.
Accessory Dwelling Units in Jupiter Farms
First, this is general information. If you really want to know for certain then call the Palm Beach county Planning & Zoning Department with your parcel ID and speak to the planner on call, then hire and engineer. Use this link to get the zoning information for your property and jot it down or print it out. Tired of dealing with Realtors who don’t know details like this? Call Chris at 561-626-8550.
ALL of Jupiter Farms is a ‘Rural’ Tier, AND outside of the Urban Services or ‘U/S Tier.’ Generally, lots with a house on them in Jupiter Farms are zoned AR. That’s an Agricultural Residential zoning district (which FYI includes it in the use restrictions generally noted as being for a ‘residentially zoned’ districts). The Future Land Use is Rural Residential 10, “RR 10” and note that Jupiter Farms is within the Jupiter Farms Neighborhood Plan.
In 2023 PB County changed the rules for Accessory Dwelling Units (ADU’s). For this discussion though the rules only changed slightly. A “conforming” lot in Jupiter Farms is 300’x300′ and 10 acres. MOST, but not all, lots in Jupiter Farms are still non conforming. What changed is Table 3.D.1.A…
And, the ever important foot notes…
Note that the typical Jupiter Farms lot IS going to be governed by footnote 3, and 2, for set backs as these lots do NOT meet the minimum for an AR zone with RR-10, or even RR-2.5 Future Land Use. They are “existing non-conforming” lots and this is what the information below assumes.
So let’s look at an example. A lot that it 165′ wide X 330′ deep. This is 1.25 Acres and thus an ‘existing non conforming’ lot for the AR (RR-10). The lot is less than even 200′ in width and thus does NOT meet the requirements of an AR (RR 2.5) lot being 300’x300′. Thus we use footnote 3 directs us to use footnote 2 for set backs…
But first we must check that we can do ANYTHING because there are max lot coverage requirements in the code. For our 1.25 acre lot let’s assume it has a descent sized 4,000 sf house on it. This is the total size of the building(s) (ALL BUILDINGS WITH A ROOF ON THEM) but would not include a pool or a screen enclosure, UNLESS it has a solid roof. But if you have other structures on your lot like a barn, pole barn, lien to, or anything with a solid roof then these WOULD BE ADDED to the 4,000 SF house roof number I am using.
Looking at Table 3.D.1.A again and we see that lot coverage must be less than 15%, so 0.15*165*330 = 8,167.5 sf. In this example we could have an accessory building that’s 8,167.5 – 4000 = 4,167.5 SF. A good sized barn but we want to know about ADU’s now that we know we have over 4k SF of have lot coverage to use!
Next. let’s walk through the set backs. Set backs are how far you must be from the respective property lines being front, rear and side. We are interested in “Accessory Quarters”…
So, we go back up to Table 3.D.1.A and footnote 3 again directs us to footnote 2…
BTW, footnote 4 is for buildings in the Urban Services Tier, which Jupiter Farms is NOT. Again, our example lot is 165’x330′. Thus the width is non conforming and so the side yard set back is 0.15*165=24.75′, say 25′. (33′ if there is a street along that side property line.) The depth is 330′ (>300′) and is thus it IS conforming for AR (RR 2.5 as per footnote 3 of Table 3.D.1.A) so the front yard set back is 50′ and the rear is 25′. The structure must ALSO be at least 5′ from any drainage easements. Generally these structures must be behind the front and side street yard set backs BUT there is a method spelled out to locate these CLOSER to those roadways. It’s very possible to put something in your front yard to share the existing driveway BUT…
Table 4.B.1.D shows us that for a Single Family “Primary Use” one MAY have “by right”, Permitted or P, the following: Accessory Quarters, an Estate Kitchen, or a Guest Cottage. Most folks reading this are looking to put in an “Accessory Quarter”, which is defined as:
Accessory Quarters
a. Definition
A complete, separate living facility equipped with a kitchen and provisions for sanitation and sleeping, located on the same lot as the owner-occupied principal dwelling.
b. Building Area
The use shall be subject to the following:
1) On less than one acre: a maximum of 800 square feet.
2) On one acre or more: a maximum of 1,000 square feet.
3) The floor area calculation shall include only the living area of the Accessory Quarters under a solid roof.
4) Additional floor area under a solid roof that is utilized as a porch, patio, porte-cochère, carport, or garage shall not exceed 500 square feet.
So, for our example one may have a 1,000 SF of air conditioned building space plus another 500 SF of non AC space (garage, patio) placed more than 25′ from the both the rear and side property lines.
An “Estate Kitchen” is “A second kitchen located within a principal Single Family, Zero Lot Line, or Farm Residence.”
A “Guest Cottage” is much like an Accessory Quarters BUT it is intended only for sleeping without a kitchen or separate utilities.
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