Court asked to reconsider liability for condo owners’ outside property

Jul 24, 2008

When balcony and patio items are destroyed, who pays?

South Florida Sun-Sentinel–July 24, 2008

A controversy that has divided South Florida condo boards, unit owners, insurance companies and the state since the hurricanes of 2004 and 2005 may be decided by the Florida Supreme Court.

At issue is the hot tub, barbecue, lounge chair, screen enclosure or trellis you put on your balcony or patio for private use. If a hurricane destroys the item, who pays to repair or replace it?

Two years ago the state Department of Business & Professional Regulation ruled that your condo association must pay for your property if it is outside your unit. The department’s rulings are effective statewide.

On July 2, the 3rd District Court of Appeal, whose rulings are effective only in Miami-Dade and Monroe counties, called the department’s decision “utterly unfair.” The court said everyone shouldn’t be responsible for one owner’s property.

On June 30, Gov. Charlie Crist signed into law a measure (CS, SB 601) that appears to agree with the court’s decision. But some experts say the new law isn’t clear and it is too soon to tell whether it is enforceable.

Department spokesman Sam Farkas said this week it will ask the court to rehear the case, a sign that the department thinks the new law fails to resolve the issue. Such a request is typically the next step in the appeal process. If appealed, it could go to the state Supreme Court.

The original lawsuit was filed because the condo association at the 768-unit Costa Del Sol in Doral didn’t want its insurance to pay for individual property damaged or destroyed by hurricanes Katrina and Rita.

“After the hurricanes, the association was getting information from its insurance company that owners were responsible, and owners were getting information that the association was responsible,” said attorney Laura Manning-Hudson of West Palm Beach, who represented the association.

Not wanting to pay an extra $1.5 million a year to insure everything, the association asked the department to interpret state law on the matter. The department ruled against the association, which appealed.

The Miami-based court ruled the department was wrong to say items “usable only by individual unit owners are nevertheless condominium property.”

It said the decision was “utterly unfair” because it makes “members of the association responsible for insuring property which they do not and cannot use, and from which they derive no benefit.”

On June 30, Crist signed into law condo insurance reform that touches on the same issue as the rulings.

“The new law doesn’t conflict with the court decision,” said Fort Lauderdale attorney John Bibish, spokesman for the Community Advocacy Network, an organization that lobbies for associations.

But there isn’t widespread agreement on that.

A key issue may center on whether the developer installed the damaged property. At the Costa Del Sol, the developer built Jacuzzis into the ground.