New Neighborhoods–Long-Term Guests and Mandating Flood Insurance Coverage

New Neighborhoods

By Gary A. Poliakoff and Ryan Poliakoff

Long-Term Guests and Mandating Flood Insurance Coverage

Our condo documents state that guests can visit a resident for up to 30 consecutive days without being considered residents, themselves. People in our building have had guests or caregivers stay with them for 30 consecutive days, then leave for a day and return for another guest pass and another 30 consecutive days. This mostly happens in the winter when an elderly person comes down for a few months with his or her nurse. Our board has been making these guests go thru the owner and resident security check and application process at the cost of $150.00, even though, according to the by-laws, these guests have to be here over 30 consecutive days to be considered a resident. I that feel that this is a dual interpretation of the by-laws. Signed, J.B.

Dear J.B.,

First, you did not indicate whether the rule limiting guests to “30 consecutive days” is a board-made rule, or a restriction contained within your condominium documents. If it is a board made rule, it must be reasonable to be valid, while a rule found in your original documents can be somewhat unreasonable so long as it does not violate a fundamental right.

Second, there is a difference between a “guest” and a “caregiver.” Most authorities agree that a caregiver is not subject to limitations on guest rules, nor are they counted against individuals below the age of 55 in communities for older persons.

Now, that having been said, assuming that the rule is valid and enforceable, then there would be nothing which would preclude someone from leaving for a day and returning for an additional 30 days, as you’ve described. That is why it is critically important that all rules and regulations be written in a clear and concise manner.  Your board probably does not have the power to force these guests to go through the owner/resident application process, even if they are using a loophole to get around the association rules.  The only solution would be to amend the documents and close the loophole.

Dear Poliakoffs,

I read in a recent column that it is up to unit owners to convince their boards to provide flood insurance for their associations, as the Florida statute does not make flood coverage mandatory.  Our board provides 80% coverage, but my mortgage provider requires 100% coverage, and has force-placed a flood policy on my behalf.  If I get a lawyer and pursue the issue for the extra 20%, do I stand a chance of winning?  I’m just asking because I’m already way underwater with my condo, trying to do right by my mortgage commitment as I slowly deplete my retirement savings.  So, I really don’t want to spend the money for a lawyer if I’m going to lose.  However, I would like to take a stance and, maybe if I win, the Florida legislature would amend the statute to require 100% flood insurance coverage in FEMA-specified flood areas.  Signed, J.S.

Dear J.S.,

The question, really, is what would you gain through your lawsuit?  Let’s assume that you are successful in forcing your condominium to secure the extra 20% coverage you require.  The money required for this new insurance policy would be passed directly through to the owners in the form of higher maintenance charges, and it would likely be the exact same amount it would require for you to purchase the policy yourself.  It’s six of one, a half-dozen of another.  Ultimately, you’re going to pay for the flood coverage, whether it’s paid to your mortgage provider or to the association itself.  The issue is with your mortgage provider, and the federal government.

Here’s the breakdown on flood coverage in condominiums.  Nearly all flood insurance is provided through the National Flood Insurance Program, or NFIP.  The NFIP provides either 100% replacement coverage on a unit or $250,000 worth of coverage, whichever is lower.  In your case, it sounds as if your unit is worth less than $250,000, and the association has decided to purchase only 80% coverage per unit (80% coverage is generally the minimum required for other, more complex reasons).  By federal law, any property that is covered by a federally-insured mortgage must be protected by a maximum-value flood policy.  So it’s actually the federal government that is mandating that you buy flood insurance, not Florida.  Now, we agree that it’s absurd for any mortgagee to require a condominium unit owner to buy flood insurance when that is ultimately the obligation of the association, especially if the unit is not on the first floor of the building. But the Florida Legislature cannot resolve this issue. All Florida could do is mandate that condominiums purchase these maximum policies, which would simply result in all unit owners paying higher maintenance fees.  What you really need is for congress to change the federal flood insurance requirements for borrowers and lenders.  Do note, however, that force-placed policies may be more expensive than what you can buy through an insurance broker—you should contact one to get the best price on the extra 20% coverage you need.

Gary A. Poliakoff and Ryan Poliakoff are co-authors of New Neighborhoods—The Consumer’s Guide to Condominium, Co-Op and HOA Living.  Gary Poliakoff is a founding principal of Becker & Poliakoff, P.A., and Ryan Poliakoff is the Vice President of Management at AKAM On-Site.  Email questions to condocolumn@becker-poliakoff.com.  Please be sure to include your hometown.

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