We often get asked whether community associations can or do qualify as 501(c) organizations under the Internal Revenue Code. Sometimes the question arises because the association derives too much income from sources other than assessments to file IRS Form 1120-H, and it is looking at way to...
Water heater damage is a common condo issue
Q: Our HOA’s insurance is not being renewed due to our loss experience, which is mainly due to water heater failures and the resulting damage to one or more units.
Can we amend our governing documents to require that the homeowner’s personal insurance will be the primary insurance and the condo association’s insurance will be secondary? Could we amend our Declaration to provide that damage to units due to leaking water heaters more than eight years of age, for example, will be the responsibility of the unit owner?
Damage due to aging water heaters is a very common and serious problem for condominiums, since the leaking appliance often will flood not only the owner’s unit, but also those adjacent to or beneath his unit. The water can also cause significant damage to common elements.