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The following question(s) have been posted by our members:
Accountants
QUESTION:
Accountants: Our Condo Association board has voted to move all our insurance expenses (hazard, flood, wind, property, d+0) from the operating budget to the reserves budget. Is this compliant with the 718 statutes,FAC,and GAAP accounting and if so, what will be the correct treatment of the prepaid insurance asset?
ANSWER:
Insurance premiums expense is not a reserves category under the Florida Statutes, and so it should be included in the operating budget. What some associations include in reserves though, and it appears to be proper based on the nature of the item, is the insurance deductible. For further information, please contact Candido Fernandez at Kane & Company, P.A., at cfernandez@kanecpas.com or 305-503-1022.
Insurance
QUESTION:
Based upon the recent Legislative changes, can you please provide our Association with a summary of the coverages a unit owner is now required to carry and explain what is our responsibility to notify all unit owners of these changes?
ANSWER:
During the 2008 Legislative session, House Bill 601 was passed. The bill made significant changes to the Statutes dealing with condominium insurance and the new revised Statute now requires that every hazard policy issued or renewed on or after January 1, 2009 to a unit owner must provide the following:
• Coverage of special assessments of no less than $2,000 per occurrence.
• Coverage for Improvements or Additions to the condominium property that benefit fewer than all unit owners.
• The Association must be named as an Additional Named Insured and Loss Payee on the hazard insurance policy.
• The hazard insurance policy must provide that the coverage afforded by such policy is excess coverage over the amount recoverable under any other policy covering the same property.
The Association is required to send out a written notification to each unit owner requesting proof that their hazard and liability insurance complies with the requirements listed above. Currently, there are several third party vendors that have developed "tracking systems" that for a fee, can assist the Association in sending out written notification and tracking the compliance of the unit owner's coverages.
We recommend that all unit owners contact their insurance agent to obtain evidence of their insurance coverage and confirm that their policy complies with the requirements set forth above.
The new Statute also includes a provision that states that the failure of a unit owner to provide a certificate of insurance issued by an insurer approved to write such insurance in the State of Florida within 30 days after the date on which this written request is delivered, may result in the Association purchasing a policy of insurance on behalf of that unit owner. The cost of such policy, may be collected in a manner provided for the collection of assessments in Statute 718.116; namely the lien and foreclosure process.
For more information relating to either Association or Unit Owner compliance with these new legislative changes, please contact Ashiel Ojeda - Sales Executive with USI Insurance Services at 954-607-4012. USI Insurance Services is a Goldman Sachs Capital Partners Company and an industry leader in providing insurance solutions to Florida's Community Associations.
QUESTION:
Insurance: Can a HOA change the terms of the insurance policy after the storm? We have a master insurance policy that covers all 220 townhomes from Citizens. Even though the named insured is the Association, can the board tell the owners that only the damaged homes must pay the full deductible which is $18,000?
ANSWER:
The deductible is not assignable to only the damaged townhomes. The common elements as described in the condominium documents are the responsibility of the association regardless of whether only specific areas of the property were damaged during a named storm or catastrophic event. The association is responsible for paying the $18,000 deductible and all members of the association, should there be an assessment, must participate in the funding of the deductible. For more information, please contact Ashiel Ojeda - Sales Executive with USI Insurance Services at 954-607-4012. USI Insurance Services is a Goldman Sachs Capital Partners Company and an industry leader in providing insurance solutions to Florida's Community Associations.
Telecommunications
QUESTION:
Our Association has a current bulk cable contract that is expiring in the next several months. Our Board of Directors is trying to determine what would be best for our Association (whether it is renewing and continuing service with our current provider or bringing in another company). What are our options?
ANSWER:
There has never been a better time for your board to renegotiate the terms of your contract with your current company or to bring in another service provider. The cable company no longer has a monopoly and there are many other privately funded independent television, broadband, and telephone service providers in South Florida to consider. AT&T will also be launching their UVerse television product within the next year or so to certain areas of South Florida. Your board should immediately begin reviewing your existing cable contract with your attorney to determine when you must give notice to your current provider. Many cable contracts have language buried in the term section of the contract that mandates Associations to give notice to their service provider 90-120 days prior to the official expiration date of the contract. If notice is not given prior to the 90-120 days, the contracts automatically renew for another 2-5 years! The cable companies count on Associations not catching these provisions in the contract. We always advise Associations to give notice well before the notification period. This will give your current company notice that you are very serious about renegotiating your terms and that you are strongly considering another service provider. Once your Association gives notice to your current provider, it should send out at least 3-5 RFPs (request for proposals) to other providers in your area. Your Association should be able to bring in an even better deal than you currently are getting with better customer service!
For more information on any issues affecting technology, communication or media services to multi-housing properties or for a DIRECTV central dish service proposal for your property - contact Corey Hayes with DirectPlus at 877 534 8201.
QUESTION:
Now that the digital switchover was pushed back, how will this affect my TV? What is the reason for the delay?
ANSWER:
According to Nielsen Media Research, more than 6.5 million households are still not ready for the digital switchover. Not to mention that the government sponsored coupon program for converter boxes has run out of funds, still leaving millions of TV viewers on the waiting list. It’s because of these reasons that the several government entities, including the Obama administration, have lobbied for the delay. However, despite the lack of preparedness, there may be several reasons why the pushback will cause additional problems.
Many argue that a delay this close to the deadline is unfair to wireless companies and public safety agencies that have been waiting for the analog airwaves spectrum that will be available after the switch to digital. Postponing the switchover creates additional costs for those TV stations forced to continue broadcasting both analog and digital signals for an extended period. Other also argue that one delay opens the doors for other delays in the future, especially when everyone has known about the switchover deadline for almost two years.
Those most affected by the change are the elderly and lower income households who either can’t afford the converter boxes or can’t figure out how to operate them. Those with paid cable service are not affected.
If you are having trouble determining if your association will be ready for the digital switchover, or if you have questions about the change, contact Leo Delgado of CSI Associates at ldelgado@csiassociates.net.
For more information, please contact Donna Berger at (954) 315-0372 or via email at dberger@canfl.com