Underinsured

I have 2 investment units in a condo of a total of 22 units. Since March 2008 we have being encountering problems with the insurance coverage, The association gave a check with NSF that return to the insurance agent, leaving us uninsured for 3 months. Now we are underinsured and no flood insurance on the policy, Lenders are forceplacing insurance on our properties and the association is not responding. The developer still owns 16 units so there is no board,and he dosent answer our calls??????????????????

Hi Angela,

Sounds like you have an ugly situation there that is unfortunately becoming more common in new developments. You have a developer who still owns almost 75% of the units and is probably close to being broke. They probably have violated their loan agreement by not having insuarnce coverage for three months, so it's obvious that they are in bad shape.

There's not too much that you can do as an individual owner except try to keep the heat on the developer to keep paying the insurance.

It may sound counter intuitive, but the best thing might be if the developer goes bankrupt and hands the property back to the lender. Since it's the lenders money that built the project, they'd be more likely to keep paying the insurance on it. Unforutanely, if the lender takes the property back, they will probably drop the prices a lot to get the remaining units sold.

Angela,

Just curious to know how you found out about the NSF check since the developer is still in control and there is no board made up of the members.