Category Archives: master insurance

Amending the Governing Documents for your Association 

If you live in a community association, whether it is a condominium, townhome, or apartment complex, you know that you live by certain rules usually determined by the governing documents of your homeowners association (HOA). Some of them may be in regard to financials, while others may help keep the peace and general running of the property with specific rules for unit owners. Every once in a while, those documents will need to be amended. Here is a quick guide on that process. 

What are the Governing Documents? 

If you are new to living in an HOA, you may not be aware that there are three main documents that help your community function. The basic HOA legal documents that may need amending are the Articles of Incorporation, Bylaws, and the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). You should have been given digital access to these or a printed version upon signing your lease/mortgage with the community governing board. If you do not know what these are or can not find these documents, ask a member of your HOA board and they will help get you acclimated to the paperwork. Your property management company should also have an idea where you can gain access to this information. 

Why Amend Governing Documents? 

The reasons for a change or amendment to a governing document can be varied. For example, some communities find that there are inconsistencies in documents that help manage the community. Others find that local, state, or federal statutes or laws have changed that make it necessary that the community makes changes to its governing laws as well. The list for why a document needs to be amended is long, but the process does not need to be equally painful. 

Here are just a few possibilities as suggested by Echo Educational Community for HOA on why amendments sometimes need to occur. 

  • To eliminate obsolete provisions.
  • To eliminate provisions no longer observed or enforced.
  • To eliminate provisions that conflict with current laws.
  • To eliminate provisions required by the Department of Real Estate in a start-up project that are no longer needed.
  • To eliminate developer privileges no longer being used, such as two-class voting or exemption from use restrictions.
  • To improve poorly drafted documents by clarifying ambiguous provisions.
  • To tailor documents to fit the living experience of owners/members.
  • To provide for changes in technology (satellite dishes, home office use, etc.).
  • To make documents more “user-friendly” – better organization, add a table of contents and descriptive paragraph headings, etc.
  • To eliminate or correct mistakes and errors.

How Often Should Amendments Occur? 

Optimally, governing boards of HOAs should try to review the documents every few years but, occasionally, events or issues arise where the documents need to be evaluated in a limited time period. Usually, it is recommended that the community’s attorney amend the documents with input for the board and community members. Someone with knowledge of the community and how it is run would be a best-case scenario. 

Does your HOA need help with updating or amending their governing documents? Visit our website and contact our professionals who can help get you started. 

Importance of Year-Round Property Maintenance

One of the biggest perks of living in an association is not having to deal with the general property maintenance that individual homeowners deal with. Think about all that time that has been freed up since you don’t need to think about all that upkeep and regular care. As a part of a community, the HOA (and your monthly dues) usually takes care of each season’s specific tasks. It is important to have the regular care of a property maintenance crew to handle what Mother Nature hands us each season here in New England. 

Top-notch, maintenance can help create a positive first impression, keep the area clean and tidy, allows for the safety of residents, and allows for unit owner’s satisfaction that they are living in a well-cared-for area. 

Every season brings with it new areas and equipment that should be inspected, cleaned, repaired, or replaced. Here is a guide to what your property maintenance team may look out for the association in your community. 

Fall and Winter 

The fall season is one of the busiest times of year when it comes to maintenance needs. In order to prepare for the winter season, much of the building and grounds must be surveyed for possible hazards. For example, all gutters and overhanging branches should be cleaned out and trimmed back respectively. Outdoor pools should be closed and locked down for the season. Outdoor patio equipment should be cleaned and stored until spring. Final plans for snow removal should be completed at this time, whether it is hiring an independent contractor or using the maintenance crew at the association. Make sure you have all those ducks in a row. 

During the winter, the pipes should be examined in common areas to be sure there is no possibility that they will freeze as the temperatures dip even further. One of the main jobs of maintenance during the winter months is watching the weather carefully to be sure that all walkways, driveways, and roads within the community are cleared and safe for residents to use. 

Spring and Summer 

And just like that, winter disappears and maintenance crews are no longer worrying about road salt and shoveling, but rather about planting and landscaping the community so that it has a first-class curb appeal. 

Spring and summer is the time to take inventory of repairs that need to be done after the winter ravaged roofs and other areas of the community. Pavement may need repairing after the salts and plows created cracks or holes. In addition, summer is the time to tackle major renovation projects that will need nice weather and time to complete. 

Maintenance is a year-round job that allows for the smooth running of any association and community. Learn more from HOA Leader online about the maintenance you hope to support in your community. 

 

HOA Insurance Issues

Knowing what to expect from your HOA master insurance policy and what you need to insure on your own is important to sort out before you purchase your condo. It’s also critical to know if your HOA carries enough information to handle a catastrophe in your unit or a unit next door. Being underinsured can spell trouble, especially if your individual insurance has any missing gaps with the master insurance. 

Homeowner insurances for town homes, condos, or duplexes that are part of the master insurance of an HOA usually cover all the public, common areas of a development. This includes areas where there are amenities, elevators, and all outside features such as the roof and exterior siding. Individual homeowners need to insure only their own units, including their own personal items and appliances. In addition to insuring “things,” these two parts of any HOA insurance should also cover liabilities for injuries. 

Let’s face it, most people don’t put too much thought into insurance until the unthinkable happens. Whether it is a fire, flood, tree damage, smoke damage, or an accident, not having insurance or being underinsured can create a huge headache, not to mention a financial disaster of its own making. 

Know the Difference

From an insurance point of view, it is worth learning where the HOA insurance stops and your individual unit’s insurance should begin, so as to make sure no gaps exist that could leave you without coverage after damage occurs. You should know what the different items are that are covered by each type of insurance. Some homeowners find it helpful to use the same insurance carrier or have both carriers connect to be sure that gaps do not exist. 

 

Know the Limits 

It is also recommended that unit owners understand that there are limits to the HOA insurance. Your condo association’s master policy will cover property damage to the building and common areas, but only up to its limits. Depending on what those financial limits are, there’s always a chance that a severe incident could exceed them. If that happens, it might fall on the condo owners to make up the difference and help repair the damage.

Know the Liability Requirements

Most HOAs require that individual unit holders have some liability insurance in case a visitor gets injured in a unit. The master insurance should have liability insurance to cover common area accidents but your unit also needs to be covered. Talk to your insurance agent about how much is reasonable and if your HOA has any requirements of level of coverage.

When it comes to insurance, it is essential to know the types, limits, and requirements for your individual insurance and what is covered in the master insurance policy. If you have questions, request a copy of your HOA insurance policy and discuss what gaps need to be filled with your individual agent. 

 

Protecting Association Data from Cyber Crimes

In our last blog we examined the physical security needs of homeowners associations and how screening, communication, surveillance, and access limitations can bring peace of mind to homeowners. This week, we are looking at some of the steps an HOA and Condo associations can protect their communities from cyber crimes.

Think about all the information that a condo association has at its fingertips. The data kept for Board of Director purposes and billing purposes may include each homeowner’s name, address, phone number, email, bank check routing number, tax information, credit card number, and probably social security number.

Given the scope and depth of the data that a homeowners association has, it would stand to reason that there would be many layers of security to protect that data. Unfortunately, many HOAs do not have the resources to protect sensitive data as they should.

Knowing that defenses may be down in a small business like an HOA, hackers have been known to attack in some common ways. Here are a few questions to consider when arranging your HOA cybersecurity measures.

Who should have access to the data?

Cyber experts believe that HOA boards should determine exactly who can gain access to sensitive data and who will not be given access. Keep the list of people who will have access to only those who will need it to deal with finances and condo owner issues. In addition, HOAs should limit where the data can be accessed. Unfortunately, an association’s odds of falling victim to a successful data breach increase every time someone downloads association information and stores it on their personal computer.

 

Is there an IT consultant who can help?

Every HOA should have an expert they can call upon when there are questions about things like firewalls, dual authentication, passwords, backups, and how to maintain security for the HOA server. An HOA can hire IT experts on a full-time basis, or as contractors. This person can train personnel as to what to look for in suspect or malicious emails, viruses, and security breaches.

 

What type of cyber insurance does your HOA have?

Board members for your HOA should routinely check with their condo insurance broker about the community’s potential cyber risks and what type of cyber insurance coverage may be appropriate for your association. Known also as cyber liability, cyber risk, or data breach insurance, this type of liability insurance protects the HOA in the event of data breaches, viruses, network attacks, computer theft, and other losses or compromises of the HOA’s computers, network, or websites.

Cybercriminals only need to see a small vulnerability to make their way into your HOA data. Do you have a strong security protocol for your association? For more information contact Thayer & Associates, Inc., AMO at 617.354.6480 or visit our website.

 

HOA and Individual Insurance

No one ever thinks about insurance policies until an accident or injury happens. Then recovery and rebuilding rely upon the coverage you have. Living in a community means there are two types of insurance that homeowners should worry about: association insurance and individual insurance on the unit. Let’s take a closer look at “who covers what” when it comes to insurance coverage within an association.

What is a Master Policy?

Living in an apartment complex, condominium unit, or townhouse potentially means that you are part of an association otherwise known as a homeowners association or HOA. Many HOAs carry what’s known as a “master policy.” Generally, the Master Policy has “walls-out” coverage for all units in the building.

What is Covered Under a Walls-Out Master Policy?

This type of policy typically provides coverage for both physical damage and personal injuries. Items that are usually covered in an insurance policy of this kind may include damage to the parts of the property shared by all owners, such as roofs, common walls, lobbies or atriums, stairways, elevators, basements, fitness centers and pools, ponds or lakes, playgrounds, and clubhouses. The damage could be caused by Mother Nature, vandals, theft, or even homeowners who have experienced an accident. The governing documents of your specific HOA should state exactly which areas the HOA master policy insures.

Personal injuries that occur in the common areas and amenity areas are also usually covered under the master policy. For example, if someone slips and falls in the pool area or is injured in an elevator, those injuries would be most likely covered under the HOA master policy.

What Should Individuals Insure for their Units?

Individual homeowners need to insure only their own unit. While the master insurance covers the basic building(s) such as walls, roof, floors, and elevators, it leaves to the unit owner the responsibility of insurance appliances, carpeting, cabinets, wall coverings, and other items in the unit. Individual insurance should also cover personal property including clothing, jewelry, electronics, and upgrades you’ve made to your unit.

Using the same company that insures the master policy for your HOA as your individual insurance for your unit may have some advantages in that the company will easily be able to spot gaps in insurance. If you are not using the same company, you and your insurance specialist will want to take 

a close look and consider what is left out or what not to buy duplicate coverage for.

Do you have questions about what is covered and by whom? Call Thayer Associates at 617.354.6480 or visit our website.