Flooded with questions over the recent floods in Colorado? Hopefully the answers to these frequently asked questions will help you keep your head above water:
1. Our community was hit with the flood. Does the association have any responsibility for repairs to the owner’s unit?
It depends. In the absence of insurance coverage (discussed below), look to who your declaration states is responsible for the maintenance and repair of the damaged components. This is document specific so consult your attorney, but generally the following applies:
- For single family homes communities, most declarations will require all damage to the lots, including interior damage to the residence, to be repaired by the owner.
- For townhome communities, it varies; some declarations will require the association to maintain not only the common area, but also the exterior of the townhome residence and the landscaping and other improvements on the lot.
- For condominium communities, most declarations will require the association to maintain the common elements and the owners to maintain the unit and any improvements in the unit. Some declarations will also require the owner to maintain certain limited common elements. Identifying the boundaries of the unit is often where the confusion lies, so be sure to contact your attorney if you are unsure.
2. Is the damage to the unit covered under the owner’s insurance policy?
Probably not. Most standard HO-6 policies do not cover flood damage. Although they may cover water damage from other sources, floods and ground water usually are specifically excluded.
3. What if I live in a condominium or townhome? Is the association required to carry insurance over the owner’s unit?
It depends. Again, look to your declaration regarding responsibility for insurance coverage over the unit. And, depending on whether your association was formed before July 1, 1992 (pre-CCIOA), or on or after July 1, 1992 (post-CCIOA), the Colorado Common Interest Ownership Act (“CCIOA”) may provide additional guidance on insurance responsibilities.
- Pre-CCIOA: If your association is a pre-CCIOA association, the insurance provisions of CCIOA do not apply. So look to your declaration only for whether the association must insure the unit.
- Post-CCIOA: If your association is a post-CCIOA association and has “horizontal boundaries described in the declaration”, the association must maintain broad form property insurance over the units, but does not need to cover the finished interior surfaces of the walls, floors, and ceilings of the units, or any owner-installed improvements and betterments.
That being said, even if the association is required to insure the unit, doesn’t mean a flood claim is covered. As with HO-6 policies, most association property insurance policies exclude flood or ground water damage. So, unless the association carries flood insurance, there is probably no coverage for the recent flood. You should consult your attorney and your insurance carrier with questions.
4. Is the association required to carry flood insurance?
It depends. CCIOA does not require flood insurance, but your declaration might require the association to carry flood insurance if it is located in a flood zone.
5. Is there federal disaster assistance for flood damage, whether to the unit or to the common elements?
Homeowners may be eligible for benefits under the FEMA program, if the affected area is declared a disaster by the Federal Government. And, the homeowner must first file a claim under the homeowner’s insurance policy. Additional information is available on FEMA’s website.
Under the current FEMA program associations do not qualify for FEMA assistance, for unit or common element repairs. However, as reported by the New York Times in the wake of Hurricane Sandy a bill that would extend FEMA assistance to condo associations and co-ops will soon to be introduced to Congress.
6. Can the association enter into the unit to remove water and mitigate damage, even if it has no underlying maintenance or repair responsibility and no insurance coverage?
It depends. With condo communities and some townhome communities, the declaration may contain language allowing you to enter into the unit for emergency purposes in order to prevent damage from being caused to the common elements or other units. Some associations may want to do this if the unit is empty and the owners cannot be reached. However, before taking this step consult with your attorney to evaluate the scenario and advise of any potential ramifications.
Still confused? Contact any of the HindmanSanchez attorneys at (303) 432-9999 to assist you with your questions.