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The Cove is still working on our insurance issue. Theres

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The Cove is still working on our insurance issue. There's no question that 100% owner's coverage is more cost-effective in the event of a major incident. An owner's committee was formed and we've done our homework. So here's our questions:

(1) Our by-laws allow for 100% owner coverage but our CCRs do not. Which prevails in this situation. The CCRs or can we proceed with our by-law statements?

(2) How does Oregon statue 94.680 impact our decision to ask owners to obtain 100% insurance coverage for their town home?

(3) Assuming we can get through items 1 and 2, is there a law or a insurance solution that could help the Board rebuild the second half of a town home building when an owner decides to walk away?
Hello again...you asked:


(1) Our by-laws allow for 100% owner coverage but our CCRs do not. Which prevails in this situation. The CCRs or can we proceed with our by-law statements?

A: CC&Rs control, absolutely.

(2) How does Oregon statue 94.680 impact our decision to ask owners to obtain 100% insurance coverage for their town home?

A: It doesn't affect the members as individuals. It requires that the association obtain blanket coverage. In effect, the individual units would have "double indemnity." Which is a waste of money. Of course, your insurer won't care if you reduce the blanket policy. But, if any member decides to not self-insure, and there is a loss to that member's property, then the member would have an action for damages against the association. So, the only way to resolve this issue is to amend the CC&Rs so that the association does not have to provide blanket coverage.

(3) Assuming we can get through items 1 and 2, is there a law or a insurance solution that could help the Board rebuild the second half of a town home building when an owner decides to walk away?

A: If you mean that you want to try to insure against a peril that has already occurred, then that's impossible -- because no insurer is going to pay for a 100% risk. If you mean that an owner caused damage to association property and then abandoned the premises, then the association, and the adjoining townhome owner could sue. But, whether or not you could collect would depend on whether or not the owner who walked, damaged the property willfully -- because if he/she did not, then that owner could have the debt discharged in bankruptcy.

Association fees, or fines/penalties, if provided for in the CC&Rs, cannot be discharged in bankruptcy. But, that probably won't cover the cost of rebuilding an entire townhome unit.

Please let me know if my answer is helpful. And, thanks for using justanswer.com!
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Customer: replied 3 years ago.

(1) ok. CCRs rule. Is it possible for you to revise our CCRs pertaining to 94.680?

 

(2) agree. We need to go 100% Master Policy or 100% owner coverage. Challenge is our community has 32 town homes (2 per building) and the Master Policy does not cover road or our 13-acre landscape repairs/replacements. If we elect to be 100% owner coverage, personal loss assessment would cover roads and landscaping at least via our personal policy Agent. Also, our annual fees for the Master Policy is now over $22K per year. 100% owner coverage has broader coverage at a significantly lower cost and deductible.

 

What's your opinion on some of us carrying 100% owner coverage in addition to paying our share of the Master Policy cost?

 

New question: If the town home is abandon who owns the town home? Is it possible via owner assessments that we rebuild the town home exterior, become owners and then resell the town home?

 

 

 

(1) ok. CCRs rule. Is it possible for you to revise our CCRs pertaining to 94.680?

 

A: I can give you some possible text, but you'll be the one making the revisions. In order for me to actually provide a final draft of the instrument, I would have to "take your case," and that would be flatly illegal in this forum. It would also cost you $10,000.
That's probably not on your menu.

(2) agree. We need to go 100% Master Policy or 100% owner coverage. Challenge is our community has 32 town homes (2 per building) and the Master Policy does not cover road or our 13-acre landscape repairs/replacements. If we elect to be 100% owner coverage, personal loss assessment would cover roads and landscaping at least via our personal policy Agent. Also, our annual fees for the Master Policy is now over $22K per year. 100% owner coverage has broader coverage at a significantly lower cost and deductible.

 

What's your opinion on some of us carrying 100% owner coverage in addition to paying our share of the Master Policy cost?

 

A: I think we may have a miscommunication. Owners cannot cover common element/area property. So, there's no absolutely 100% owner coverage. There will always be some level of association coverage. But, that's something that you will have to work out with your insurer. And, you may want to try to figure this out, before you actually amend your CC&Rs. That way, you'll be sure you haven't "stepped in it" -- to quote a old rancher friend from Yamhill.

 

New question: If the town home is abandon who owns the town home?


A: Title to real property does not expire. The owner of record in the county clerk's office is the owner until: (1) a foreclosure occurs; (2) the owner sells to a new buyer; (3) a person and the predecessors in interest of the person have maintained actual, open, notorious, exclusive, hostile and continuous possession of the property for a period of 10 years (ORS 105.620); (4) the government (typically the city or county) seizes the property under the power of eminent domain -- usually because it is a health and safety hazard; (5) the county sells the property at a tax sale for the unpaid property taxes; or (6) the property is sold by the sheriff to pay some other existing lien (federal tax lien, state tax lien, mechanic's lien, utility lien, homeowners association assessment lien, etc.).

 

Is it possible via owner assessments that we rebuild the town home exterior, become owners and then resell the town home?

 

A: I'd have to read your existing CC&Rs. But, yes, it's possible.

 

Hope this helps.

Customer: replied 3 years ago.

Clarification on 100% coverage. I mean 100% personal coverage for our town home. Liberty Mutual has confirmed within our 100% personal coverage our loss Assessments could be used towards an owners contribution to rebuild roads and replant our 13 acres. Are you saying owner insurance funds via a Cove Assessment cannot be used to rebuild/replant roads/landscaping?


 


BotXXXXX XXXXXne if the owner walks it really doesn't matter if we are 100% Master Policy insured or 100% owner insured for our own town home. The current Master Policy has a $60M deductible per building and owners pay their share of the deductible by % of damage of the building that belongs to each owner. Can the Association Assess all owners to pay the deductible for the owner who abandons his property?


 


Do you agree that an Association could purchase this property at a tax sale for the unpaid property taxes? The Association could put a lien on the property for the Master Policy Deductible?


 


CC&Rs would need to be updated to allow owners assessments to rebuild the town home exterior, become owners and then resell the town home.


 


You have been very helpful. It seems to me owners are better protected by having 100% coverage for their own town home. At least we could rebuild our town home. May be the solution is to lower the benefit on the Master Policy so funds are available for common property and for building a shell on the damaged town home. Put a lean on the property and get repaid for building the shell. Or the Association purchases the town home, repairs and sells it. All possible with CC&R changes?


 


 


 


 

Clarification on 100% coverage. I mean 100% personal coverage for our town home. Liberty Mutual has confirmed within our 100% personal coverage our loss Assessments could be used towards an owners contribution to rebuild roads and replant our 13 acres. Are you saying owner insurance funds via a Cove Assessment cannot be used to rebuild/replant roads/landscaping?


A: Insurance covers insured property. I'm not sure how an insurer would cover the entire common area via multiple separate owners policies. But, that's an issue to discuss with the insurer. It's outside my scope of knowledge.


BotXXXXX XXXXXne if the owner walks it really doesn't matter if we are 100% Master Policy insured or 100% owner insured for our own town home. The current Master Policy has a $60M deductible per building and owners pay their share of the deductible by % of damage of the building that belongs to each owner. Can the Association Assess all owners to pay the deductible for the owner who abandons his property?


A: Depends on how the CC&Rs are written.


Do you agree that an Association could purchase this property at a tax sale for the unpaid property taxes? The Association could put a lien on the property for the Master Policy Deductible?


A: Yes, but if you lien the property, no lender will loan, and getting a new purchaser will be impossible, unless you find someone willing ot pay cash.

CC&Rs would need to be updated to allow owners assessments to rebuild the town home exterior, become owners and then resell the town home.


A: Works for me.


You have been very helpful. It seems to me owners are better protected by having 100% coverage for their own town home. At least we could rebuild our town home. May be the solution is to lower the benefit on the Master Policy so funds are available for common property and for building a shell on the damaged town home. Put a lean on the property and get repaid for building the shell. Or the Association purchases the town home, repairs and sells it. All possible with CC&R changes?

 

A: All possible, in my opinion.

 

Hope this helps.

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