Florida, with its warm winters and sandy beaches, is a refuge from the bitter cold. It is one of our State’s best attributes and is so very welcoming to our Northerly neighbors. But when you combine the heat with levels of high humidity, unwelcome guests arrive in the form of mold – some of it toxic, too! The likelihood of mold is even more so for those units which have been abandoned. With no power being supplied to the unit, the air conditioning cannot run and thus, the overall wetness factor can increase dramatically. In this situation, the condominium association is often left with the burden of remediating and repairing the damages caused by the mold.
Property insurance policies differ in kind and scope from insurer to insurer with regard to whether or not mold damage is a covered peril under the policy. Without a specific mold rider, the chances are slim that mold would be a covered peril. Whether mold contamination is covered under your association’s policy will depend on the specific policy language, the cause or causes of the mold contamination, and the timelines of notification to the insurance company. Today’s mold policies typically require notice within 14 days of the onset of the mold, and not 14 days from when the association discovered the mold. Therefore, it is important that the board of directors carefully read and understand their association’s insurance policy obligations. Generally, most insurers attempt to exclude coverage for mold damage associated with long-term leaks, water intrusion from a construction defect, normal wear and tear, deferred maintenance, or poor repairs. As such, some insurers may deny a claim for mold damage arguing that the damage took place over a long period of time, meaning greater than two weeks, rather than damage from a sudden and accidental water damage event, meaning a leak that happened within two weeks.
This being the case, Floyd Nichols, Vice President at Insurance Office of America, recommends that condominium association boards check each of their condominium units which are abandoned or unoccupied for extended periods of time on a biweekly basis. This is not only so the condominium association can timely remediate any mold damage before the remediation becomes extensive but also in an effort to avoid the association’s insurer’s denial of a mold damage claim.
While mold might begin to grow in the unit, it will quickly spread to the common elements. The duty to repair the condominium’s common elements will fall to the association without regard to the owner who may have caused the problem. This is not to say that the association might not be able to subrogate its claim against the owner, but because the Florida legislature removed the requirement for all unit owners to have force placed insurance, subrogation on claim could prove quite problematic.
Because mold typically develops in areas which are likely the condominium association’s responsibility to maintain, repair, and replace (for example, drywall), the condominium association may use its irrevocable right of access to a unit, found in section 718.111(5)(a), Florida Statutes, to enter the unit during reasonable hours to conduct the necessary repair or replacement. Advance notice should be provided whenever possible.
A condominium association has additional rights regarding access to an abandoned unit under relatively new provisions set out in section 718.111(5)(b), Florida Statutes. Pursuant to this section, a condominium association can enter an abandoned unit to inspect the unit and the adjoining common elements, to make repairs as needed, to turn on the utilities to the unit and to otherwise maintain and protect the unit and adjoining common elements. A unit is considered abandoned under the following circumstances: (i) the unit is under foreclosure and no tenant appears to have lived at the unit for four consecutive weeks without prior written notice to the condominium association, or (ii) no tenant appears to have lived at the unit for two consecutive months without prior written notice to the condominium association and the condominium association is unable to contact the owner or determine the owner’s whereabouts after reasonable efforts. Prior to entering an abandoned unit, the condominium association must send two days’ notice of its intent to enter the unit to the owner at their last known address.
Any expense incurred by the association in inspecting the unit and the adjoining common elements, in making needed repairs, in turning on the utilities to the unit and in otherwise maintaining and protecting the abandoned unit and adjoining common elements are chargeable to the owner of the abandoned unit. These expenses are also assessable against the abandoned unit. What will prove very interesting is what effect the lender’s safe harbor assessment benefits as set out in section 718.116, Florida Statutes, or other legal arguments which limit assessment recovery will have on the condominium association’s ability to recover its expenditures. As a different tact, the condominium association can request that the court appoint a receiver to lease the abandoned unit. The rent collected is credited against the monies due to the association and the receiver.