The Council’s Master Insurance Policy Must Insure Both the Common Elements and the Units

The law governing condominium insurance requirements, which changed in 2008 as a result of a court decision, has changed again as result of amendments to the Maryland Condominium Act effective June 1, 2009.  During the last legislative session, the Maryland General Assembly took action on the issue in direct response to a 2008 Court of Appeals decision concerning the allocation of responsibilities for property damage between a condominium council and the individual unit owners.  The new law establishes that the condominium master insurance policy must cover all of the building elements, including the units, except for improvements installed in the unit by the owners after construction.  However, where the damage originates in a unit, that unit owner is responsible for any insurance deductible under the council’s policy, up to a maximum of $5,000. 

Section 11-114 of the Maryland Condominium Act has long imposed a specific duty on a council of unit owners to maintain “[p]roperty insurance on the common elements and units, exclusive of improvements and betterments installed in the units by unit owners,” along with general liability insurance.  In response to this requirement, it was common practice for councils of unit owners to obtain insurance coverage for all elements of the condominium as originally constructed by the developer, including the units, with individual unit owners insuring improvements to the unit not provided by the developer, along with insuring personal property in the unit.

Section 11-114 also provided that any deductible applicable under the property insurance policy was a common expense of the condominium, regardless of whether the cause of the damage originated in the common elements or an individual unit.  However, it authorized that the condominium’s bylaws could provide for a unit owner to be responsible for the deductible, if the cause of the damage originated in their unit, but only up to a maximum, initially of $1,000, and then increased to$5,000 by a 2008 amendment.

Then along came the Court of Appeals decision in Anderson v. Council of Unit Owners of the Gables in Tuckerman Condominium, 404 Md. 560 (2008)..  The Court granted certiorari to consider two consolidated cases, one arising at The Gables on Tuckerman Condominium in Rockville, and the other at the Bridgeport Condominium in Laurel.  In the Rockville case, a leaking water heater within a unit had caused damage to the unit, without damage to any other unit or the common elements.  In the Laurel case, a kitchen grease fire caused the sprinkler system to activate, damaging the unit, but, again, causing no damage to other units or the structure.  In both cases, the unit owners sued the condominium council to recover the costs of repair.

Interpreting Section 11-114, the Court of Appeals noted that Section 11-108.1 of the Condominium Act provides that, unless otherwise specified in the declaration or bylaws, “the council of unit owners is responsible for maintenance, repair, and replacement of the common elements, and each unit owner is responsible for maintenance, repair, and replacement of his unit.”  It ruled that the council’s insurance requirements under Section 11-114 applied “only to damage sustained to the common elements or the structure of the condominium.”  Specifically, it found that, while Section 11-114 provided that each unit owner was an insured person under the council’s policy, each owner is “insured under the master policy only as to his or her collective undivided interest in the entire condominium property,” and it is “not meant to insure each owner’s property or individual unit.”

Accordingly, the Court held that the council of unit owners was not required to repair or replace property of an individual owner after any casualty loss. The significant impact of the decision was that it meant that Section 11-114 applied only to “damaged property owned by the owners collectively,” and the council was not responsible for insuring or repairing any portion of an individual unit, regardless of the origin of the cause of the property damage; that is, regardless of whether the cause originated in the common elements or the unit.  Damage to an individual unit would then become the sole responsibility of that unit owner in all circumstances, and they would be compelled to obtain their own insurance to protect against loss.

This turned what had been customary practice on its head, and prompted the legislature to intervene.  The new law amends Section 108.1 to make it specifically subject to the provisions of Section 11-114.  It then amends Section 11-114 to make clear that the council of unit owners is required to maintain insurance “[f]or property and casualty losses to the common elements and the units, exclusive of improvements and betterments installed in the units by the unit owners other than the developer.” The new law also imposes the deductible requirement on any individual owner in whose unit the damage originates, regardless of whether the bylaws so provide, up to a maximum of $5,000.  Otherwise, the deductible remains a common expense.

The result is that condominium master policies must cover property damage to all of the condominium structure, including both the common elements and units as originally constructed and finished by the developer, with the unit owners providing individual insurance for their improvements and personal contents.  If damage originates in the unit, the owner is responsible for the insurance deductible up to a maximum of $5,000.  The new law also requires that condominium annually notify each unit owner of the deductible responsibility and the amount of the deductible, and further requires that public offering statements notify potential buyers of the unit owner’s responsibility for the insurance deductible.

It should be remembered, however, that, because the council is responsible for maintenance and condition of the common elements, where a common element defect, such as a water leak, is the source of damage to an individual unit and property, the council is responsible for the consequential damages to the unit and its contents.

57 Comments


  1. Where does a homeowner go to get relief from an out of contraol haraqssing, threatening crazy condo assoc president? Aside from a total disregard for the condo law in which he follows nothing, he stalks harasses and threatens my mother. He dunns her for money for fixing the outside of the home when others he agrees to pay for. This was verified by the property manager. He hires unlicensed contractors and we have sustained damages he wont pay for. His latest antic is when we bought this property in 2003 there was a fence and perm.installed hot tub in rebard and concrect recessed into the deck. He sent us a letter stating (from an attorney) he intends on taking our personal property, attached property in which the original owner gave us the receipts and the hoa approval to install. He held a special mtg last week and again totally not in line with the condo law of MD and again he stated he is taking the fence and hot tub. Can he steak these items? Isnt that theft? He intends on taking 2 other peopls fences as well.

    Who can help us? No one wants to get involved except the building inspector who came took picture because everything the previous owner did was fully legal permits, approvals etc. Isnt there laws to protect people in America..honestly where do we go for help?


    1. One of the most critical aspects of condominium living is the need for a capable board of directors, which, in most instances,is vested with the governing authority for day-to-day operations. That authority is subject to abuse, particularly where the membership is, for the most part, inactive and uninvolved. Each condominium is unique in terms of the provisions of its governing documents, which need to be reviewed to determine how best the unit owners can review and control the actions of the directors. Generally, however, there are usually specific methods that give the unit owners a say in the community’s governance.

      The most significant means of controlling director misconduct is through the election process. Owners need to protect their interests by exercising their say in who among them is placed in charge.

      Another means of oversight is the monthly meeting which all owners are entitled to attend and where issues can be aired on the record.

      It should also be remembered that every unit owner is entitled to have access to all of the books and records of the condominium. Availing oneself of that privilege provides a means of oversight with respect to all condominium expenditures. Similarly, the operations all condominiums are subject to a periodic audit by an independent auditor.

      It is highly advisable to have the advice of counsel with regard to understanding the condominium’s governing documents and the rights of unit owners.

      The matter of “taking” property is a function of law, the circumstances by which the property did or did not become attached to the real estate, and the terms of the condominium documents. The specifics of any such situation need to be reviewed by a competent attorney to ensure that nothing improper occurs.

      [INFORMATION OFFERED HEREIN IS NOT LEGAL ADVICE, AND NO ATTORNEY-CLIENT RELATIONSHIP EXISTS OR IS INTENDED BY VIRTUE OF THE EXCHANGE OF INFORMATION HEREIN]


  2. My condo unit flooded over a year ago before the association adopted the $5000 deductible policy. As a result, the condo association agreed to pay for the base-line repair to the flooring that was damaged and our individual policy paid for the betterment or upgrade to that standard.

    The water came from rain water overhwhelming an exterior patio drain (we’re a terrace level), into the unit, filled the patio well and spilled into the interior unit. The patio was enclosed by the previous owner and I know that has other implications.

    Since the repairs were completed, the condo company adopted the $5000 max deductible and water still comes up the drain, but has not spilled into the unit. We continue to contact condo staff and the board about this issue, but no preventative solution has been found. The exterior landscape has been regraded and the gutters have been replaced, but the drain still is overwhelmed. Water still comes up the drain, even though they installed a drain stopper.

    Even though we’re diligent about reporting these issues, we can’t get to a solution and we’re afraid that the water is going to spill into the interior unit again. If this occurs, we’ll likely be dropped by our insurance and have to go through the timely issues with having the floors redone again.

    What else can I do to get this issue resolved?


    1. In sounds as though the re-grading and gutter replacement have not fully addressed the excessive water to which your patio is exposed. The association needs to retain consultants to develop a long term solution. This may include the services of a civil engineer to prepare a repair specification to be executed by a capable contractor. If the association will not do this, you may need to retain counsel to convince them that waiting until the next flood is not in anyone’s best interest.

      INFORMATION OFFERED HEREIN IS NOT LEGAL ADVICE, AND NO ATTORNEY-CLIENT RELATIONSHIP EXISTS OR IS INTENDED BY VIRTUE OF THE EXCHANGE OF INFORMATION HEREIN]


  3. I own a condo that was rented out to a tenant. The unit was flooded due to a pipe busting in the ceiling of the unit. This caused extensive damgae to my unit and to the property of my tenant. The problem originated in a common area and an insurance claim has been submitted by the condo association, but I have been told that I am liable for the $5000 deductible. In my mind the condo association should be responsible for ALL fees including the deductible and the replacement of my tenant’s property.

    “If the cause of any damage to or destruction of any portion of the condominium originates from the common elements, the council of unit owners’
    property insurance deductible is a common expense.” …from (Senate Bill 201)

    ” It should be remembered, however, that, because the council is responsible for maintenance and condition of the common elements, where a common element defect, such as a water leak, is the source of damage to an individual unit and property, the council is responsible for the consequential damages to the unit and its contents.”…from The Council’s Master Insurance Policy Must Insure Both the Common Elements and the Units blog: http://condobaker.wpengine.com/uncategorized/the-councils-master-insurance-policy-must-insure-both-the-common-elements-and-the-units/#more-71


    1. Ron,

      Thank you for your note. If the problem originated in a common element, the council of unit owners is responsible. A unit owner is only required to pay the condo’s insurance deductible when the problem orginates in a component of the unit. Your condominium declaration establishes what components are a common element and what are included in the unit.


  4. The condo association has acknowledged responsibility of a leak in a common area that flooded my unit. The leak occured on Dec 13th and while an insurance claim has been submitted and a scope of work has been issued, the repair work has not been started as of jan 10th. The unit is uninhabitable as a result of the flood and I have subsequently lost my tenant becuase she could live there.

    Is there some sort of rule regarding the timeliness that repairs must begin and do you feel that I have a case against them as it pertains to lost revenue and the fact that they still expect condo fees to be paid?


    1. In general, a unit owner is entitled to damages that were proximately caused by water intrusion having a common element source. In addition to the physical damage, that can include economic damages such as loss of a tenant or rental income, as well as expenses related to finding temporary alternative living arrangements. If the unit is, in fact, uninhabitable until the repairs are made, that is clearly an element of damages. The timeliness of repairs is generally subject to a reasonableness standard; that is, what is reasonable under the circumstances.


  5. Does the “units” include limited common areas?
    My porch roof has a hole due to the ice that fell from the roof (common area). Is my HOA responsible for this? They are saying that they are not. The ice also caused a structural shift of my front porch, there are cracks on the door trim and it is hard to open and shut my door.


    1. The responsibility for maintenance and repair of limited common elements is established in the condominium’s governing documents. Usually, the unit owner is responsible for rountine maintenance and cleaning, and the council is responsible for structural repairs. As to damage from a common element, the council is generally responsible for any damage caused by a condition of the common elements. Moreover, the council is required to insure all of the property, including the units, that was part of the original construction.


    2. Your condominium documents govern how limited common elements, such as porches or balconies are treated. In most condominiums, it is usually provided that the unit owner is responsible for cleaning and routine maintenance, and the council is responsible for repairs. The council is responsible for insuring any component that was part of the original construction, including porches. The council should also be responsible for damage caused by a common element.


  6. wow is this website helpful! I am a co-owner, and also a Board member, of a condo here in MD. We bought our unit several months ago, it had a long-term water seepage through the foundation and as a result, the bottom corner of the bedroom closet was always damp. The drywall was moldy, which we removed. It had obviously been like this for a long long time, based on observations and talking with neighbors. We have had several estimates to repair this, but our property manager is delaying. She has also told us that since we bought the condo “as-is”, the association is not required to repair the inside. The wall studs were rotted and need replaced, as well as ruined insulation and drywall. I was under the impression that the association’s responsibility extends to the “inner, unfinished walls” – meaning that they would reconstruct the interior walls but not have to paint or paper them, is ths correct? Keeping in mind that the wall in question is an exterior wall in that it is against the exterior foundation wall. I cannot find info on this, and the mgr is rude to the point of hanging up on me. Help please!


    1. I specific answer to your question requires a review of the condominium’s governing documents to ascertain what components are part of the common elements and the units, as well as the defined responsibilites as between the association and the unit owners. In general, however, water intrusion comes through the exterior envelope, for which the association is usually responsible. That you bought the unit “as is” relates only to the responsibilites between you and the seller. The association remains responsible for damage caused to a unit by exterior water intrusion. If the water was from a defect in the common elements, the association is responsible for all consequential damages, including damage to interior components and finishes, paint and paper included.


  7. I have been attempting to acquire a copy of the most recent Maryland
    Condo Law manual. I called the attorney general’s office on several occasions, left a voice mail with telephone number, but to no avail. Is there any othercontact source?


    1. There is no condo law manual. If you are referring to the Maryland Condominium Act, it is available online at michie.lexisnexis.com/maryland. Look under Marland Code – Real Property – Title 11. It is also available as a link on my blog. Look under “Resources” for “Marylad Condo Laws.”


  8. I live in a condominium association (townhouse condominiums) that has never covered the individual units in their master insurance policy. There have been questions as to whether or not the association is required to follow the new condominum law requiring the master insurance policy covering the units. For 20+ years the homeowners have all gotten their own insurance policies. It is my understanding that the association must follow the Maryland Condominium Law.


    1. The condominium is required to provide insurance for the common elements and the units as originally finished by the developer. The unit owner insures changes made to the unit since construction, and the contents.

      [INFORMATION OFFERED HEREIN IS NOT LEGAL ADVICE, AND NO ATTORNEY-CLIENT RELATIONSHIP EXISTS OR IS INTENDED BY VIRTUE OF THE EXCHANGE OF THIS INFORMATION]


  9. I bought a condo in Maryland about ten years ago. Beginning in the fall of 2007, the condo above me started leaking and water intruded into my condo causing damage. I complained to the condo association but ended up covering the repairs on my own. Water again came back in the spring of 2008 and fall of 2008 due to the condo above, causing more damage to my condo. I demanded the condo association cover these costs through the master insurance policy and again they have denied any assistance. The damage is so extensive this time that I do not have enough money to renovate. I have been fighting with the condo association ever since. If these damages occurred prior to the amendments in the Maryland Condominium Act of 2009, can I take advantage of the new law on insurance coverage or am I stuck with the pre-2009 statute?


    1. The 2009 law that you refer to was intended to clarify the practice that should have existed. Nevertheless, you can only obtain coverage under the master policy to the extent that the policy in effect at the time of the loss provided coverage. If the assiciation did not have coverage for the entire condominium building, insurance will not be available. Regardless of whether there is insurance or not, however, a leak from outside of you unit is either the responsibility of the association, if the source of the leak is a common element, or the responsibility of the unit owner above, if the source of the leak is a component of an adjacent unit. So someone other than you is responsible for the damages to your unit. Since you have had no success with the association, I suggest you retain an attorney to assist you.


  10. A Maryland condo Board is stating that those who want parking permits must have MD drivers license with association address and MD tags. Does this overstep their rights? What about military and short term rentals? They conducted a survey and only got ~25% response. Of those 80% said there was no parking problem. Furthermore, this is going to increase condo fees and decrease property value. There is no parking problem, just few want to have reserved spot in front of their home. Can the Board members be named in a law suit and hold them responsible for their idiotic measures?


    1. The authority of the Board to impose such a measure depends on what is provided in the declaration and bylaws, along with any rules and regulations that have been adopted. An attorney would have to review those documents to provide a specific answer to your questions. As to suing the Board, they are responsible for their negligence, and have directors liability insurance for that purpose.


  11. I experienced water leakage in one of my bathroom,It was unknowing to me that there was a leak in the bathroom due to the fact it was behind the walls. It was not until the ceiling pf the bathroom begin to swell and dried brown stains in the bath tub. my first thought was the leakage was due to a busted water pipe behind the wall. It was discovered that the water came from the shower from the unit above mine. My contracter took pictures that showed poor maintance of the bathroom in the unit above mine; cracked sealant around the tile. Water seeked between the tiles. Utilimately the water damaged my walls and mode begin to grow around the toilet area. My unit was to be rented out but was unable to rent my unit due to the mode growth and the damaged walls. The owner above waited four months to make repairs to her bathroom therefore I was unable to make repairs to mine. I subsequently lost 4-months of rent. The owner above mines insurance has denied claims for the repairs of my unit stating the tenant was not negligent due to her not knowing the water was seeping behind her walls. I feel the tenant was negligent due to lack of care to her unit. This is not the only insident since the bathroom situation the owner above radiator leaked into one of my bedrooms and damaged the wall. The owner has not responded to my messages about repairing those damages. Is the owner responsible for my lost rent and repairs to both the bathroom and bedroom?


    1. In Maryland, the condominium’s master insurance policy is responsible for damage to your unit and consequential damages due to lost income. The unit owner in whose unit the problem originated is responsible to the Council of Unit Owners for the policy deductible, up to the statutory maximum of $5,000. The owner could be directly liable to you to the extent that insurance does not cover your losses.


  12. Hello,

    I received a report of a leak from a tenant and wet carpet in the condominium that I rent out. I hired a plumber who came and said that the leak was not in the unit and most likely was in a condensate line or was a washer/dryer overflow from the unit above. The occupants of the unit above would not allow the HOA access so tomorrow the HOA will enter with a locksmith. Likely the reluctance to allow entry signifies some sort of problem. Is the HOA responsible for paying the cost of my plumber’s assessment since I paid the service fee myself?

    Additionally the HOA now claims that the tenant fabricated the story of the leak and wet carpet in order to have the carpet cleaned. The HOA had sent someone into my unit to dry the carpet which that vendor did. Prior to my e-mailing a copy of my initial’s plumber’s assessment, the HOA indicated that because it turned out that they believed that the tenant fabricated the story and the carpet was never actually wet, they plan to send me the bill for the carpet drying expense.

    I would imagine that if the HOA decides to make a repair – necessary or not – then that repair is their financial responsibility and can not be billed back to the homeowners. is this accurrate?

    Thank you.


    1. In order to specifically address your questions, I would need to review the governing docuemnts for your condominium. In general, however, if the leak orginated from the unit above, the damage to your unit is the responsibility of the council of the above unit owner depending on the source of the leak.

      Since your plumbers assessment establishes that the leak story was not fabricated, there should be no charges to you.

      The HOA can charge back repair costs if the leak orginated in a component of an individual unit as opposed to a common element, but only up to the insurance deductible.


  13. Hello,

    Who is responsible for damages under $5k? Is it still the unit owner where the damage originated responsible? My unit had a leaky ice maker line that damaged the ceiling of the unit below. My insurance company says the condo association is responsible and the association says they are not responsible for any damages below $5k.

    Thanks


    1. It depends on the amount of policy deductible. The unit owner in whose unit the problem originated is responsible for the policy deductible, up to a cap of $5,000.


  14. If a pipe in the common wall bursts due to faulty installation from the time the buildig was constructed, is that generally considered a common pipe covered in full by HOA insurance?


    1. It does not matter if the problem arises from original construction. The pipe burst should be covered under the policy. The insurance company is entitled to subrogation if the condominium makes a claim against the builder.


  15. My neighbor’s garbage disposal in the condo above me broke, causing water to leak into my unit, resulting in about $1,000 worth of drywall damage. My neighbor refuses to pay for the damage. My HOA basically said that they would facilitate the repair, but only once my neighbor agreed to recompense the HOA for the cost.
    Should my HOA fix the damage then pursue my neighbor for the $1,000, or am I obligated to pursue my neighbor myself?


    1. It is impossible to answer such questions definitively without reviewing your community’s declaration and bylaws. Generally, however, the damage should be covered under the association’s insurance policy, and your neighbor would be responsible for the deductible up to the statutory maximum of $5,000.


    2. You should not be held hostage by the association. You are entitled to have your unit repaired, and it is for the association to collect from your neighbor.


  16. Hi Raymond,

    I a first-time condo buyer and am looking to purchase a policy. If I understand the current law correctly, I should only purchase coverage for my belongings (personal property) and whatever additions and modifications have been made to the unit since it was built (building)? The unit does have full granite kitchen and custom cabinets as well as wood floors – all of this was put in by the previous owner. So as long as I cover personal and additions, I should be OK? The policy has an additional clause which will pay the 5K deductible (if loss originated in my unit), if need be.

    Thanks,

    Mike


    1. Mike,

      If your condo is in Maryland, you should review the condo’s policy to be certain that it meets the legal requirement of Section 11-114 of the Maryland Condominium Act and the court decisions discussed in this blog. It is a good idea to contact an insurance broker with experience in condo units, and have them review the condo’ policy as well in connection with developing a policy that is appropriate for you. You are correct that the condo policy should cover the common elements and the components of the unit that were part of the original construction, and that any upgrades or alterations to the unit since the original construction are the responsibility of the unit owner.


  17. My condo became uninhabitable from a fire in May 2011 and it is still not repaired. Under Md. Stat. 11-114(g)(1), the statute states that the counsel of unit owners must repair or replace the damaged property “promptly.” This has not happened. I filed a good faith claim against the condo’s master insurance policy, but the ruling points to the condo board. Do you have any suggestions?

    http://www.mdinsurance.state.md.us/sa/documents/12-00003Decision.pdf


    1. Mr. Placher,

      I am familiar with other cases of this nature, and have represented unit owners in this regard. Without reviewing your condo’s governing documents and insurance policies, I cannot definitively comment. However, in general, between the master policy and your own coverage, you should be compensated for damaged property, as well as the loss of use, including alternative living expenses if you are an owner occupant, or lost rental income if you are a landlord. Moreover, the premises should be restored as required by the statute and, very likely, by your governing documents. You may be at a point that you need to retain counsel to represent your interests vis-à-vis the board.


  18. A pipe in the common element leaked and damaged the carpet in my condominium unit. The master policy has a $5,000 deductible and I have a HO-6 policy. Should I file a claim with my insurance company for the replacement of my carpeting. Or will the condominium association pay for the replacement out of it’s own funds.


    1. Jack,
      If your condo is in Maryland, and the leaking pipe was a common element, all of your damages should be covered by the association, either through insurance or its own funds.


  19. My neighbor’s downspout is located 6 inches from my property line and is clogged with grass from a bird’s nest. The downspout is useless when it rains and the water run down the side of the building and floods both yards. In addition, the exterior walls of both units now have a discolored black area where the water has been hitting.
    My question is whether the downspouts are considered a common element or part of the unit owner’s responsibility. The issue is that the downspout is physically attached to one unit but functions to keep water leaking away from two. Similarly, are the gutters which extend along the perimeter of the building considered a common element, or are the unit owners responsible for the portion of the gutter within their property line?


    1. The answers to your questions require review of your condominium’s governing documents. Whether a particulary building component is part of the common elements is determined by the definition of common elements, limited common elements (if any), and units, which is ususally established in the condominium declaration. The condominium plat may also be relevant.


  20. I read all the prior issues and responses, but I did not see this question.

    A pipe burst in a determined common element and ruined 6 condo units. The insurance sent an adjuster out that walked the units and told us that we needed to take out all building materials that were damaged. After a week into the demo with the contractors, the insurance agent is now telling us it is not covered.

    The agent stated that through our association, we apparently voted to adopt the old insurance ways that were in place prior to 1982, stating that all unit owners had to have their own insurance for each unit. We were grandfathered in since our condo was built in 1974.

    So the first question is, does the Maryland Condo Law section 11-114 supersede what we signed in 2006? And secondly, if the adjuster that came out and walked the premises with the owners and told them that all damaged building materials needed to be removed by licensed professionals would be covered, can they turn around and say ‘nevermind, its not covered’?


    1. Kelly,

      Specific answers to your questions require a more extensive legal review of the circumstances than can be provided in this forum, but, in general, the current insurance requirements of Section 11-114 apply to all condominiums regardless of what insurance they have historically had in place. Section 11-114 of the Condominium Act imposes a specific duty on a council of unit owners to maintain “[p]roperty insurance on the common elements and units, exclusive of improvements and betterments installed in the units by unit owners,” along with general liability insurance. In response to this requirement, it was common practice for councils of unit owners to obtain insurance coverage for all elements of the condominium as originally constructed by the developer, including the units, with individual unit owners insuring improvements to the unit not provided by the developer, along with insuring personal property in the unit. During the 2009 legislative session, the Maryland General Assembly took action on the issue in direct response to two Court of Appeals decision concerning the allocation of responsibilities for property damage between a condominium council and the individual unit owners. The revised law established that the condominium master insurance policy must cover all of the building elements, including the units, except for improvements installed in the unit by the owners after construction. However, where the damage originates in a unit, that unit owner is responsible for any insurance deductible under the council’s policy, up to a maximum of $5,000. The new law amended Section 108.1 to make it specifically subject to the provisions of Section 11-114. It then amended Section 11-114 to make clear that the council of unit owners is required to maintain insurance “[f]or property and casualty losses to the common elements and the units, exclusive of improvements and betterments installed in the units by the unit owners other than the developer.” The amended law also imposes the deductible requirement on any individual owner in whose unit the damage originates, regardless of whether the bylaws so provide, up to a maximum of $5,000. Otherwise, the deductible remains a common expense. The result is that condominium master policies must cover property damage to all of the condominium structure, including both the common elements and units as originally constructed and finished by the developer, with the unit owners providing individual insurance for their improvements and personal contents. If damage originates in the unit, the owner is responsible for the insurance deductible up to a maximum of $5,000.

      Whether the insurance company can be bound by the adjusters statements depends on a number of factors, including the terms of the policy itself. It is my recommendation that you and your fellow owners seek advice from a knowledgeable condo attorney.


  21. After a recent pipe burst and learning about this 2009 law it appears that our condo association has not ever notified any of the owners about this law, nor have they sent an annual notice regarding insurance. What do I need to know. Had I been informed I would not be (possibly)under insured. is my condo association neglect how does this affect the Maryland law and my rights?


    1. Section 11-114(g)(2) requires the council to annually inform each owner in writing (1) the unit owner’s responsiblity for the insurance deductible; and (2) the amount of the deductible.


  22. I own a condo in Ocean City, MD in a 3 story 6 unit building. One of the units has a mortgage and their lender is requiring flood insurance to protect themselves. There is a flood policy on the building based on the Insurance Co’s estimate for replacement cost. This policy does not cover the full amount of the mortgage when replacement is divided by 6.

    How is responsible to provide the shortfall in insurance the HOA or the owner with the mortgage?


    1. Thank you for writing. It is impossible to adequately answer your question without reviewing the condominium governing documents and the applicable policy


  23. I own a condo in Hartford County Md., in Jan.2014
    a sprinkler pipe froze and burst in the ceiling
    and damaged our unit plus two under us. Thank god my husband was home when it happened. As far as I can see from Mr Burkes’ comments we are not responsible for the Sprinkler pipe in the ceiling.
    This is a LIMITED COMMON ELEMENT, we did nothing to cause the pipe to burst. The Condo Assoc. wants us to pay the $5000 deductible, but from what I see we should not, it’s not in our unit and it serves other units. Please Help! we need to get legal advice soon. They are adding fifteen dollars each month we don’t pay. Laurel Woods Condos Abingdon Md.


    1. You should first have an attorney review the condominium governing documents with regard to the responsibilities for limited common elements.


  24. There is a leak in my drain line below my condo’s floor. This drain line connects my bathroom fixtures; toilet, sink, to the common drain line. Based on my homework, II assume this drain line is what is called a limited common area. The Condo Association claims that I am liable for this repair and resulting damages. I’ve read the bylaws and it’s not clear to me whether this is my or the Council’s responsibility. It reads:
    Duty to Maintain. Except for maintenance requirements herein imposed upon the Council, fi any, the Owner of each Unit shall, at his own expense, maintain the interior of his Unit and any and all equipment, appliances or fixtures situated within the Unit and its other appurtenances in good order, condition and repair, in a clean and sanitary condition, and shall do all redecorating, painting and the like which may at any time be necessary to maintain the good appearance of his Unit and such appurtenances. In addition to the foregoing, each Unit Owner shall, at his own expense, maintain, repair and replace those times referenced in Paragraph 15.A of the Declaration; and all Unit Owners shall, at their own expense, maintain, repair and replace any plumbing fixtures; garage space; heating and air conditioning equipment; lighting fixtures; refrigerators; freezers; washing machines; clothes dryers; fans; windows; patio doors; dishwashers; disposals; trash computers; ranges and/or other equipment that may be in , or appurtenant to such Unit. Any Unit Owner may contract for the performance of any maintenance, repair, or replacement of any item listed in this Section which is his responsibility with the Management Agent and the cost of the same shall be assessed as provided in Section 1(j) of this Article.
    So am I responsible for the leaking drain pipe or not?
    Village of Montgomery Run, E.C. MD


    1. You indicate that you assume that this pipe is a limited common element, but the basis for your conclusion is unclear. The focus of your review should be on the Declaration and its definition of what components are included within the unit and what components are defined to be common elements or limited common elements. If the pipe is, in fact, a limited common element, the Declaration should establishe responsibilities for maintenance. Typically, unit owners are responsible for routine maintenance of limited common elements, with the condo being responsible for repair or replacement, but this depends on the provisions contained in your declaration.


  25. I own a condo unit in a 9-builing condo development in Montgomery Village Maryland. On Jan 9, 2015, the sprinkler pipe in the unheated common area about my unit burst. Since 2005, when the development was built, this had happened in two other buildings. In my condo unit, roughly an inch of water covered almost all of the hardwood flooring which now has to be replaced. The hardwood flooring was installed by the builder when the condo was initially sold to the original owner. My question is: Under Section 11-114 (a) (1) of the Condominium Act, is the originally-installed hardwood flooring considered one of the an “improvements or betterments installed in units by unit owners” (which are excluded from coverage by the Condo Associations property insurance. Our condo association does not require unit owners to separately obtain insurance.


    1. Under Section 11-114(a)(1),if a component of the unit was part of the original construction installed by the developer, it must be covered under the Condominium’s policy.


  26. The AC/Heating Unit for the common area of my condo building abuts my kitchen. It has, for the third time, leaked and ruined my kitchen floors and cabinet. After much fighting, the condo association has agreed to repair my home but is refusing to pay for loss of use of the kitchen. We’re expecting a total loss of use for approximately 6-8 weeks. Our food budget is increased exponentially since we’re forced to eat out almost exclusively. Who is responsible for those expenses? My insurance company says the Condo Association is.


    1. The answer to your question would require review of your condominium’s governing documents and insurance policy. In the typical case, loss of use is an element of damages arising from the event.


  27. The unit owner had a leak in a shower due to some of the tiles that damaged his unit and the unit below. His home owner insurance paid $5,000 deductible but condo association does not want to cover the rest saying that the water leak was caused by his neglect as he didn’t properly maintain his shower. As there were no signs of the leakage, he was simply not aware of the problem. Based on the pictures, his bathroom was in a decent condition but, as it turned out, some tiles at the bottom of the shower wall were not properly caulked. Can they deny the coverage to both units based on accusation of this kind of negligence?


  28. We have a large part of the overall condo complex being Limited Common Elements assigned to six units. Should Insurance coverage based on square footage be allocated to General and limited common elements?

    We have 10 units downstairs with 70% of the overall Costs and 6 upstairs units have 30% of the common costs, but looking at the overall space or square footage the upstairs 6 units have about 50% of the complex square footage. Our LCE have the typical description and use the term “replace”, so does this mean the upstairs pay the insurance to “replace” .

    How do we allocate insurance between General and limited Common elements?

    Thank you


    1. A definitive answer to your question would require a review of the condominium’s governing documents and the insurance policy. In general, however, and assuming your condominium is in Maryland, Section 11-114 of the Condominium Act requires every condominium to purchase insurance that covers all of the condominium property, including common elements, limited common elements and units, exclusive of improvements and betterments installed in the units by a unit owner other than the original developer. The cost of insurance is a common expense, which is allocated among the unit owners as any other common expense, unless the governing documents provide for some different allocation, or the condominium adopts a provision for special allocation.

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