This column was written by Allen Norwood, a columnist with the Charlotte Observer. It was published in the Observer’s “Home|Design” section on March 19, 2019, and is re-printed here with permission.
As parts of the Southeast struggle in the wake of powerful storms, consider: Who would be responsible for repairing damage if a tree fell on your condo or townhouse? Who would pay? The answers can be complicated. But they’re important, and you don’t want to wait for that hypothetical tree to come crashing down before you understand them.
“There are always two questions when it comes to maintenance and repair in associations,” said HOA attorney Jim Slaughter. “Who’s going to fix it? And who’s going to pay for it?”
The answer, he said, is “It depends.” It depends on the type of property (single family, townhome, condo), state statute, the association’s governing documents, and whether there is insurance coverage. “When insurance is involved, normal rules can get flipped on their head.
The topic is far too complex for a single column. The important message, though, is that if you live in a condo or townhouse, you need to understand the complexities of your situation. For instance, condo and townhouse associations sometimes send letters to owners explaining the association’s insurance coverage. You should run the association’s governing documents and any letter by your own insurance agent to ensure appropriate personal coverage. (Before that tree tumbles.)
Slaughter, whose firm Black, Slaughter & Black has offices in Charlotte, Greensboro, Wilmington, and the Triangle, will be among the presenters at an upcoming Law Day in Charlotte hosted by the state chapter of the Community Associations Institute. Slaughter is past president of the Chapter. The sessions — there was one in Raleigh last fall — are primarily for association board members, he said, but they’re open to anybody. The first topic on the agenda caught my eye: “Who’s going to fix my property?”
Law Day will cover topics for all associations, including single-family neighborhoods, but condos and townhouses present all sorts of potentially befuddling twists and turns.
Basically, if you live in a condo, you own your unit. If you live in a townhouse, you own the land the unit is sitting on and the entire structure, including the roof. But – and this is a big but — the governing documents typically say that the townhouse association is responsible for maintaining that roof to some degree. “Documents in townhouse communities almost always make the association responsible for repairing and maintaining certain parts of the exterior, including the roof.” But a casualty loss can change the normal rules.
“If a tree falls on a townhouse,” Slaughter said, “we’re going to ask, ‘Who has the insurance? It might be the association. It might be the owner.”
Condos in North Carolina built since October 1986 are covered by state condominium insurance statutes. Newer multistory “stacked” condos have to maintain insurance on the entire building, inside and out. Owners should also have their own insurance, commonly called “unit insurance” or an “HO-6” policy.
The association will almost certainly have a deductible, Slaughter said, and it might be huge. In an area prone to expensive claims from storm damage, where premiums are high, the deductible might hit $100,000. “Most often the documents will say that unit owners who are getting their condos repaired are responsible for the deductible,” he said. “The right unit insurance should help cover that.”