Tag Archives: common

CONDOMINIUM INSURANCE – WHO COVERS WHAT?

Most condominium association’s “Declaration of the Condominium” (hereinafter referred to as declaration) follow the wording of Chapter 47C of the North Carolina Condominium Act with regard to the definitions of “common elements” and “units”.  The Declaration specifies what insurance is to be provided by the association and what insurance is to be provided by the unit owners.In the statute, 47C-2-102, Unit boundaries it says: “Except as provided by the declaration:

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Copyright Free Newsletter Articles – Volume 30

These articles are written for residents who live in homeowner and condominium associations and are provided to you as a free benefit of our Board Member Resources area. The content is designed to help those responsible for community newsletters, association websites, bulletin boards and other forms of communication for homeowners.

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Understanding Homeowner Association Insurance

MASTER POLICY
State laws pertaining to condominiums and most project legal documents creating condominiums require the association to carry a master insurance policy covering the entire project including the individual units.  This is the only approach to insurance that makes any sense in a high rise project, and in most lateral projects it also makes sense because of the interrelationship of individual condominium units and the project’s common areas.  In planned unit developments, the advisability of having a master policy depends to some extent on the type of construction.  With attached townhouses or row houses, it is possible that a master policy is preferable to individual policies covering each dwelling. 

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Reserve Funds

 

One of the primary business duties of community associations is maintaining and preserving property values of homes and the common property.  To do this properly, associations must develop funding plans for future repair or replacement of major common area components, such as roofs, boilers, elevators, swimming pools, balconies, asphalt surfaces and decks.

An association has several funding options, including periodic assessments over the life of assets, special assessments at the time of replacement, borrowing funds when needed, a combination of the above or the most common method – and in many states the only lawful alternative: setting aside funds in a special category commonly called reserve funds.

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