Alternative to the Statutory Insurance-Related Repair and Replacement Requirements on Associations Under Section 718.111(11) of Florida Statutes

Since 2008, the boards of many condominium associations have expressed concern, confusion and frustration with the significant changes made to the insurance requirements in Section 718.111(11) of Florida Statutes. Among the most-cited point of dissatisfaction among the boards is the requirement for associations to be responsible for the repair and replacement of all drywall within the condominium unit. Boards have expressed disbelief that their associations are required to undertake repairs and replacement of portions within units that are otherwise the maintenance responsibility of the unit owners under their governing documents. Quite often, leaks from the units above cause damage to the ceilings and drywall in the “below units,” with expenses that are less than the deductible of the association insurance policy. As a result, no insurance proceeds are available, but associations are required to pay for repairs using common funds that may have been budgeted for other purposes.

One available method to address this source of frustration is the authority set forth in Section 718.111(11)(k) F.S., allowing any association to opt out of the insurance requirements of the Statute and apply those which are contained in the declaration of condominium. The vast majority of condominium documents drafted prior to 2008 do not require the association to undertake the extent of repairs and replacements within the condominium units as are now required under the Statute. Upon the affirmative vote of a majority of the total voting interests of the association, the repair and replacement provisions of the governing documents will be applied to future casualties in that condominium. This vote can be undertaken at anytime during the year and, if the requisite authority is contained in the association bylaws, it can be undertaken by written consent in lieu of a meeting.

Section 718.111(11)(m) F.S. provides that if a community votes to opt out of the repair and replacement requirements of the Statute, it must record a notice setting forth the date of the opt-out vote and the page of the official records book within the county records on which the declaration is recorded. The decision to opt out is effective upon the date of recording of the notice in the public records by the association. For any condominium that has opted out of the Statutory provisions, the Statute allows that decision to be reversed by the same requirement of the vote of a majority of the total voting interests of the association. Upon reversing the decision to opt out, the same recorded notice requirements apply as with the opt out vote.

In light of the frequency of relatively minor casualty events in condominiums and the expenses associated with those events, the board of directors may wish to consider proposing th option to its membership to return to the repair and replacement provisions of the governing documents.