HOA master insurance policy does not cover our condo Unit

Previous | Next
 rated by 0 users
Latest post Fri, Dec 23 2016 5:21 PM by Drew. 3 replies.
  • Fri, Dec 23 2016 1:01 PM

    • Condo937
      Consumer
    • Not Ranked
    • Joined on Fri, Dec 23 2016
    • OH
    • Posts 1

    HOA master insurance policy does not cover our condo Unit

     

    We are trying to sell our condo Unit. The buyers bank is asking for the master insurance policy. The owner of the association states he has a master policy on only the 4 out of 6 units he owns (he purchased those and the land at a bank foreclosure auction a few years ago). It does not cover our structure. 

    When my husband purchased the Unit, he got his loan through Fifth Third Bank. At that time, Fifth Third Bank also owned the association and 4 out of 6 units due to foreclosure. They gave him the loan without having a master insurance policy. We feel this was in their personal best interest and should not have been allowed. We would like to know what our legal options are as far as there not being a master policy that covers our Unit and also if Fifth Third Bank can be held responsible for some of this mess. We have tried to sell several times over the past 8 years and this always puts a stop to anyone being able to buy it. 

    Any advice on this would be greatly appreciated. 

  • Fri, Dec 23 2016 4:49 PM In reply to

    Re: HOA master insurance policy does not cover our condo Unit

    Here is a link to Ohio Revised Code Chapter 5311, the chapter on condominiums.  Section 5311.16 says that the board of directors shall provide certain kinds of insurance for all unit owners "unless otherwise provided by the declaration or bylaws."

    So go and read the declaration and bylaws to see what they say about insurance.  If the declaration and bylaws do not exempt your condo association's board of directors (you HAVE a board of directors, right?) from this requirement to buy insurance covering all the owners and has not done so, you can sue them to try to make them do it.

    If the declaration and/or bylaws do exempt the board of directors from having to cover all the unit owners as described in ORC 5311.16, then you could try investigating the history of those documents to see whether the wording that exempts them from this requirement was added at some time using an improper process.

    Meantime, you could also certainly research (1) what insurance lenders might typically require before being willing to fund a mortgage loan on your condo and (2) whether insurers exist who would be willing to let you or your would-be buyers buy the lender-required insurance yourselves.  Research question (1) by asking some of the biggest mortgage lenders in your area, plus also any bank or banks where you are currently a valued customer of one kind or another.  Research (2) by calling insurers who write condo unitowners' policies.

    If all of the above research fails to get you out of this jam, you may be forced to advertise the condo as being available to cash buyers only.  I have seen properties so advertised, so yours would not be the only one.  It would certainly reduce the price you'd be likely to get for it, but you wouldn't waste your time getting into contract repeatedly only to have the deals fall through.

    And no, I don't think you can win a lawsuit against your lender for giving you a loan that other lenders wouldn't have given you!

  • Fri, Dec 23 2016 5:15 PM In reply to

    Re: HOA master insurance policy does not cover our condo Unit

    karen2222:
    Meantime, you could also certainly research (1) what insurance lenders might typically require before being willing to fund a mortgage loan on your condo and (2) whether insurers exist who would be willing to let you or your would-be buyers buy the lender-required insurance yourselves.

    If you find one or two less-strict lenders and/or one or two insurers willing to fill the insurance gap, you could certainly provide the names of those companies to your listing agent so he or she can share that information with prospective buyers.  When we bought an old singlewide mobile home on acreage, the sellers told us where we could go to get a mortgage (only two lenders were willing to fund mortgages on such properties at the time).  It was very helpful that the sellers did that for us and we were grateful.

  • Fri, Dec 23 2016 5:21 PM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on Thu, Mar 30 2000
    • PA
    • Posts 51,403

    Re: HOA master insurance policy does not cover our condo Unit

    DIg thru the CC&Rs with care?

    IF I hold a majority vote I might be able by inaction force your price down to my advantage? 

     



Page 1 of 1 (4 items) | RSS

My Community

Community Membership New Users: Search Community