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Board Barks Up Wrong Tree With Rule Change

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By RICHARD WHITE, Tribune correspondent

Published: September 15, 2007

When we moved into our community several years back, we were allowed to have two dogs. Recently, the board changed the rules to allow only one dog.

Does the board have the right to make changes like this, and can it enforce the rule against us?

F.R.
Winter Haven
When you purchased your home, your deed restrictions were listed in your covenants or declarations. Real estate people would call it a bundle of rights. In those rights, you were allowed to have two dogs.

Unless the members agree to modify the documents, the board should not have the right to take away your bundle of rights to keep two dogs.

As to rules, there are varying degrees of rules. You have documented and recorded rules, board or house rules and daily operational rules.

A judge can determine if a rule can be enforced. The association would have to prove that it followed the proper procedures in creating and enforcing the rule.

I have a five-page document that I wrote on rules. If you would like a copy, send a stamped, self-addressed envelope to the address at the bottom of this column. Mark 'Rules' on the envelope.

Some of us in our condominium association have seen our insurance coverage go up 400 percent in two years and do not believe we have to insure at 100 percent of sales value.

Our board feels that we must insure at this value or the board of directors might be liable for a lawsuit should we have to replace in the event of a total loss.

We believe that about 80 percent is adequate and would like to hear your opinion. We also feel this should be the standard percent figure for the state for all condominiums by insurers and that it shouldn't be left up to each board of directors. Any input would be appreciated.

J.M.

Homosassa

The term is called coinsurance. The statutes and your document requirements should provide the answers as to the amount of insurance required. Keep in mind that you do not insure for 100 percent of sales value because insurance coverage will not include land value, only improvement values.

Say you want to insure for 80 percent value of the improvements. Do not forget that you have a deductible that takes the first dollars of damage. My guess is that it could be 5 percent of the total value.

That means if you insure for 80 percent of improved value, you are insuring for only 75 percent of the loss. If you coinsure, you will have only 80 percent of any loss less the deductible. How many of your residents can come up with 25 percent of the value immediately after a loss? If you fall short on the collections, you will have a problem rebuilding.

Do not forget that immediately after a storm, construction costs and material costs increase. With coinsurance, these increased costs may not be covered.

The best idea would require a strong cash position and formidable reserves. Before you take action, I would suggest that you have your insurance agent and attorney address the members.

Richard White is a licensed community association manager. He does not offer legal opinions; any other questions and comments concerning association operations can be sent to Richard White, 6039 Cypress Gardens Blvd., No. 201, Winter Haven FL 33884-4115;

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