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The Sixth Circuit Court of Appeals ruled that an insurer was not obligated to pay for water damages to a condominium building because the insurance policy specifically excluded coverage for damages caused or resulting from building construction and design defects. TMW Enterprises, Inc. v. Federal Ins. Co., No. 09-1542, (6th Cir. Aug, 25, 2010). Substandard construction on an exterior wall allowed the water intrusion which resulted in damages of $4 million.
After discovering the water damage and defects, the Plaintiff filed a claim with its insurer to cover the costs of repair. The insurer performed an inspection of the building but refused covered based upon this exclusion. Both the lower court and appellate court agreed with the insurer. The appellate court grappled with the interpretation of the policy, but finally determined that any other explanation of the policy language would render it ambiguous.
This site and any information contained herein is intended for informational purposes and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
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This is a very interesting article on the effect of the Interstate Land Sales Full Disclosure Act (Act) on a recent luxury condo purchase. According to the Act, any development with 100 or more units must produce a purchase contract in a form that can be filed in the city registry prior to executing the contract. 15 U.S.C. § 1404(c) provides: “In the case of any contract or agreement for the sale or lease of a lot for which a property report is required by this title and the property report has not been given to the purchaser or lessee in advance of his or her signing such contract or agreement, such contract or agreement may be revoked at the option of the purchaser or lessee within two years from the date of such signing, and such contract or agreement shall clearly provide this right.”
A federal judge in Manhattan determined that because the agent of a luxury condo building did not comply with the Act, the buyers were entitled to rescind their contract and get back their $510,000 deposit with interest. This decision comes as a shock to many developers and agents nationwide.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
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Condominium projects must be certified by the Federal Housing Association (FHA) to be eligible for mortgages backed by the FHA. The FHA is the single largest mortgage insurer in the world; thus, the importance of FHA approval for condo projects cannot be overstated.
Recently, the FHA released new guidance concerning the certification process. Getting a condo project approved is the first step, but maintaining certification is also very important.
FHA certification expires two years after the project has been approved. A condo project is eligible to seek recertification six months before the certification expires. If the project is not recertified six months after the expiration date, it must seek full certification. The determination of a project’s eligibility to complete the recertification process also depends on when the project received its initial approval.
Initial Approval Prior to January 1, 2000
Full certification is required
Initial Approval After January 1, 2000
The project is eligible for the streamlined recertification process, which ensures the condo project maintains compliance with FHA standards. For recertification, the following documents are required:
- Cover letter
- Financial documents (one of the following)
- Budget
- Reserve study
- Fannie Mae Form 1037(a), Analysis of Annual Income and Expenses-Operating budge signed by an authorized individual
- Management agreement (if applicable)
- FEMA flood map
- LOMA, LOMR or an Elevation Certificate (if applicable)
- Evidence of required insurance coverage
For the full FHA recertification packet click here.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
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Pursuant to the South Carolina Nonprofit Corporation Act, members of incorporated community associations are entitled to inspect and copy certain records. The Act distinguishes between automatic access and limited access to records.
Automatic Access
A member is entitled to inspect or copy these documents at a reasonable time and place. The member must provide written notice at least five days prior to the date the member wishes to view the records. The member is not required to make a showing of good faith or proper purpose, although the member must pay reasonable charges incurred. The following records fall under this category:
- Articles of incorporation
- Bylaws Resolutions adopted by the board of directors
- Minutes of all meetings of members and records of all actions approved by the members for the past 3 years
- All written communications to members generally within the past 3 years, including the financial statements furnished for the past 3 years
- A list of the names and business or home address of its current directors and officers
- Most recent reports required by the Secretary of State
Limited Access
A member may inspect limited access documents at a reasonable time and place. The member must provide written notice of a demand to copy and inspect at least five days prior to the date the member wishes to view the records. This demand must be made in good faith and for a proper purpose, which must relate to the requestor’s interest in the corporation based on his or her status as a member. It is also necessary for the member to describe with reasonable particularity the purpose and the records sought so the corporation is generally informed of the
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* These articles and related content on this website are provided without warranty of any kind and in no way consitute or provide legal advice. You are advised to contact an attorney specializing in Association Management for legal advice related to your specific issue and community. Some articles are provided by thrid parties and online services. Display of these articles does in no way endorse the products or services of Community Association Management by the author(s).
