References both the declaration and bylaws of a condominium association as possible sources of association insurance regulation for the condominiums and require additional insurance to protect unit owners, when necessary.
Impact
The bill's provisions will significantly impact how condominium associations manage insurance and respond to damages. Under the modification, insurance must cover all risks of direct, physical loss, and include liability coverage determined by the executive board, but not less than specified amounts in the declaration. This marks a shift towards ensuring that associations take a proactive stance in safeguarding their properties and the interests of their unit owners against unforeseen incidents. It could lead to better protection and recovery for unit owners in the event of property damage, while also fostering clearer expectations regarding insurance responsibilities.
Summary
House Bill 5587 aims to amend the condominium law in the state of Rhode Island, specifically focusing on the insurance regulations for condominium associations. The bill proposes that associations must maintain comprehensive property and liability insurance coverage to protect both the common elements of the properties as well as the individual unit owners. This legislation underscores the importance of having adequate insurance that is reasonably available, and it lays out specific guidelines regarding the amounts of coverage required and the responsibilities of the association when it comes to repairs and insurance proceeds distribution.
Contention
Notable points of contention surrounding H5587 include concerns regarding the enforceability of the new insurance requirements and the implications for unit owners who may face increased costs associated with higher premiums. Critics may argue that while the bill aims to provide more robust protections, it could also lead to financial strain on unit owners if insurance costs rise. Additionally, the bill allows for associations to vary or waive certain provisions in cases of nonresidential units, potentially leading to disparities in coverage practices across different types of condominiums.
Requires associations to provide unit owners with thirty (30) days notice of any increase in the deductible application to the association’s policy ensuring that unit owners will have coverage relating to their responsibility.
Requires associations to provide unit owners with thirty (30) days notice of any increase in the deductible application to the association's policy ensuring that unit owners will have coverage relating to their responsibility.
Restricts increases in monthly common expenses and limit special assessments to cover unforeseen costs not included in the association’s approved annual budget for common expenses in associations where the minority of the units are deed restricted units.
Provides that the "meetings" requirements from § 34-36.1-3.08 be applicable to condominiums created before July 1, 1982 and would permit remote participation in condominium meetings.
Requires the recording of the bylaws and rules of the association in the land evidence records of the city or town the condominium is located in and require amendments to the original filings to be certified by 2 or more members of the executive board.
Requires the recording of the bylaws and rules of the association in the land evidence records of the city or town the condominium is located in and require amendments to the original filings to be certified by two (2) members of the executive board.
Requesting That The Department Of Commerce And Consumer Affairs Compile Pertinent Data To Determine The Appropriate Scope Of A Study Analyzing Whether Implementation In This State Of Laws Similar To Captive Insurance Laws Of Massachusetts Would Address This State's Residential Condominium Property Insurance Needs.