guest blog by Deborah Goonan
When buyers consider a condominium association, they are often sold on a “carefree, maintenance free” lifestyle. There are promises that someone else will take care of the landscape, cleaning the sidewalks and parking lots, and most exterior maintenance. It can be very enticing for busy professionals or retirees who don’t have the time or inclination to do the work themselves.
But the reality is that, when you buy into a Association-Governed Residential Community, you are actually purchasing shares in a corporation. And the truth is, all too often that corporation does not perform optimally. There are no guarantees that the developer or owner controlled Association board will operate with efficiency or fairness. Even with the best of intentions, mistakes happen. And sometimes the Board neglects its duties.
Even with a management company, the landscape maintenance might not be done consistently. Traffic signs might be installed incorrectly. That was the case at Villas on the Green Condominium Association, managed by M.M.I. of Palm Beach, FL.
A preventable accident
In 2011, overgrown hedges and a misplaced stop sign obscured visibility for a resident backing out of her driveway. Unfortunately, she did not see 9-year-old Andrew Connor Curtis riding his bicycle on the sidewalk. The result was the untimely death of young Andrew.
The parents of Andrew sued the driver of the vehicle, Villas on the Green Condo Association, and M.M.I. of Palm Beach (the management company), resulting in a $12 million award, 90% of which is payable by the condo association and the management company. The court ruled, and an appellate court upheld, that, as a result of the Condo Association’s and Management Company’s failure to properly maintain visibility at the end of a driveway and roadway intersection, two parents lost their child.
Added risk for HOA and condo owners
Had this accident occurred outside of an Association-Governed Residential Community, only the driver of the vehicle would have been brought to court. Of course, the owner probably would have kept the hedges trimmed to begin with. The municipality would have properly installed the stop sign.
But because the Condo Association is a corporation, it can sue and be sued for various reasons. Even if the condo association is adequately insured against this kind of loss (not all Associations are), future insurance premiums will significantly increase. Every condo owner will pay for this lawsuit, just as they have paid for inadequate maintenance that led to a tragic accident in the first place.
Owners have very little control over these unpredictable liabilities – which they automatically share – yet another hidden cost of owning property in a homeowners, condominium, or cooperative association.