Condo Association Management Blog

To me, inside the wall is common area or the HOA's responsibility and the HOA should pay the deductible. If that's not the case and the pipe that leaked is exclusive to your neighbor's unit, then they should pay the deductible. I think in no way should you have to pay. Lastly, it all comes down to what your governing documents say about the matter.

Yes, you should be expected to pay for your share of the master insurance deductible. I had a similar issue and the master insurance deductible was prorated based on the assessed damages for each apartment. For example, we incurred 55% of the assessed damages when our condo leaked into 4 other condos. So we took responsibility for 55% of the master insurance deductible and the other condo owners took 45% split equally based on their assessed damages. The great thing is that our personal homeowner's insurance covered our portion of the master insurance deductible minus our own deductible, which was only $500. so it worked out very well. :)

Of course you should pay it and with a smile. I am shocked the comdo insurance is paying it at all and that your personal insurance isn't picking up the bill. Maybe you should contact your insurance?????

The terms of the master uinsurance policy should be reviewed to make this determination. As the damaged party you also should contact your personal insurance company and ask for their assistance in resolving this problem.. At worst your home owners insurance should reimburse you for costs of repairs inside your unit and not covered by the master unsurance policy.

I disagree with db and Ruth. If it happens in the wall, it's the HOA/Condo Assoc. responsibility. If it's your neighbors pipe, then they should pay. You shouldn't have to pay a dime. In my 108 unit high-rise condo building, that's how we work it. If the pipe breaks outside the wall in my unit - I am responsible. If other units are damaged, we may use our master policy to get them fixed and paid for but then the unit owner whose pipe it was that broke, would be responsible for the mater policies deductible. This is why we advise all of our unit owners to carry at least 5K H06 as part of their individual insurance policy - to cover our master policy deductible. If the pipe breaks inside the wall, the Assoc. is responsible. But again, read your doc's.

First - insurance for condos is generally covered by State law. Some states only require "bare bones" coverage, while others have more stringent requirements regarding coverage offered through the Master policy.  
 
Mr. Adler's suggestion of seeing assistance through your own insurance company is the best way to go.  
 
Most master policy coverages do not extend to personal property and may not cover upgraded carpet, etc. in an unit. You may also discuss this with the agent writing the insurance for your association.  
Maryland now requires a yearly reminder to owners of the relationship between Master policy coverage and owner obligation. For new loans with FHA backing, the borrower must carry a HO-6 policy for personal, deductible, and housing expense coverage.  
 

Assuming that the leak was coming from a common element - pipe it's HOA's responsibility to pay for repairs. HOA has chosen to claim insurance and collect, that doesn't relieve them from the responsibility to cover the cost, which means they are responsible for a deductible. 
 
If the leak was coming from a pipe owned by your neighbor it's your neighbor's responsibility to repair. In that case you need to look at your governing documents as to who is paying the deductible. Commons sense would tell me that your neighbor is the one responsible.

READ YOUR GOVERNING DOCUMENTS!! WHAT APPLIES TO ONE CONDO IN ONE STATE DOES NOT APPLY TO ALL CONDOS IN THAT STATE OR TO CONDOS IN OTHER STATES. WHAT APPLIES IN ONE STATE DOES NOT APPLY TO ALL STATES.  
 
If your condo operated under the provisions of my condo's governing documents, the Association (through the Association's master insurance policy)would pay for the repair to the pipe and the walls if they are weight bearing interior walls, as well as for damage to any common elements, including exterior common walls. You (or your insurance)would pay for everything else including, repair to non-weight bearing walls, painting the walls, flooring, cabinetry, appliances, and your personal belongings. My Association's governing documents specifically exempt the Association from responsibility for damage to the interior of units because of water intrusion including damage caused by common element pipes. So if you lived in my condo, you (your insurance) would be responsible for all of the above mentioned damages.  
 
If the damage occurred to things in your unit, which are the responsibility of the Association (pipes, weight bearing walls, etc) necessitated that a claim be filed against the Association's master policy, the Association, NOT YOU, would be responsible for paying the deductible. State law allows the deductible be billed back to unit owners (and then billed to the owners policy) if this is allowed by the governing documents of the Association, but in mine it is not allowed, which means that the Association, not you, would pay the deductible. Our governing documents could be amended to allow the Association to bill back the deductible to owners, but it has not done so yet.  
 
THAT IS HOW THINGS ARE IN MY CONDO ACCORDING TO THE ASSOCIATION'S ATTORNEY AND MY ATTORNEY AGREES. BUT YOU DON'T LIVE IN MY CONDO, SO NONE OF THIS MAY APPLY TO YOU. IF YOU WANT TO KNOW WHAT IS SO YOU NEED TO READ YOUR GOVERNING DOCUMENTS AND STATE LAW THAT APPLY TO YOUR CONDO.

Condo owners are responsible for the deductible. Basically they are assessed the loss assessment and your insurance policy would cover it up to the limit stated on your policy. A lot of condo owners are not aware that they have this coverage. the law was passed making it mandatory for insurance companies to offer a minimum of $2,000 loss assessment toward the deductible.

If your HOA dues pay for the insurance policy and the leak is the HOA's responsibility, the HOA is responsible to pay for the deductable. You have already paid for it through your monthly dues. 

Martina, what law are you referring to when you say that it's mandatory for home insurance policies to provide a loss assessment coverage? 
 

Many associations now require owners to pay the association's deductible. If so, this rule will be in your Declaration or governing document, or an amendment to it. Ask the association to show you the rule, which will clarify the issue. Owners paying for the association's deductible is a growing trend. If you have this rule, then your own insurance will often pay for the association's deductible, so get in touch with your insurance company, too. 
 
By the way, in the case of negligence, the negligent party pays everybody for everything. If the other owner or the association knew of the leak and did not deal with it, they may be responsible for everything including the deductible.  
 
Lets assume that the pipe broke without negligence. Some states have a sort of no-fault system where the association and each owner pay for their property, and it doesn't matter where it started. In other states it depends on where the leak started. It sounds like you are in such a state if the owners association is paying, but you still may be responsible for the deductible if the rule is in your governing document. 

I think making owners pay for a deductible is a slippery slope.  
 
Your documents would have to be very careful about wording it. Most documents state that all assessments must be paid by all membership either equally of according to some kind of formula.  
 
In this case it sounds like the association assumed liability and is paying for all the repairs. (A separate conversation can be had if they should've done that).  
 
After making that decision HOA decided to get available funds from insurance. Why would the remaining balance (deductible) be spread between owners in any other way than the rest of assessments. What if the total loss was $1000 and no insurance would be involved. Would HOA pay it or would it ask the affected owner pay for it? 
 
What if there is a crack in concrete in a common area in front of your house? Would you pay for it or would association?

In this situation, it is a common wall with the pipe in question inside the wall. It leaked out into my neighbor's but she didn't notice. It then leaked through the wall into my town-house. This is the second time that my carpet has been soaked from her leaks! The first time was her hot water heater & I used my personal insurance policy to cover the deductible so that I could replace the ruined carpet. This time it's different being it is coming from a common wall. The association is using the master policy to cover the damage but will be expecting each of us to pay the deductible. No,Ruth, I won't be "smiling" if I have to pay for damage which is not my fault!

Pam, 
 
You shouldn't have to pay a cent. It's either the associations responsibility or the other unit owners. If necessary, use your insurance rep to fight with the association or the unit owner of the broken pipes insurance rep. Period. You should not be 'assessed' for any deductible reimbursement.

You should also check your governing documents if your association should be paying for repairs inside your unit. 
 
Our CC&Rs are very clear that the association is only responsible to repair any damage that is community property. Each owner is responsible for the inside. 
 
We have successfully used numerous times to defend ourselves from claims coming from leaking roof and common pipes. 
 
This is exactly what I advise all HOAs I am working with.

Murray is wrong. It depends on the insurance laws in your state and on your governing documents. You may have to pay.

There are four ways to find out if you have to pay the deductible: 
1.) Ask your association to tell you and show you the written basis of their request for you to pay the deductible. This is very reasonable and should not be difficult for them. The rule should be in your governing documents or an amendment or a board resolution. 
2.) Read your governing documents and amendments. The insurance section should clearly specify if you have to pay the deductible. 
3.) Ask your insurance agent, insurance adjuster, or insurance company. Also ask if your own insurance covers you to pay the association's deductible, which is not uncommon. Your insurance is supposed to follow your governing documents, so if the rule is in the governing documents, then your insurance should pay the deductible. 
4.) Ask a lawyer who is familiar with owners associations. 
Please note that the people in this blog can only answer for their own state and experience, which may not be correct for you. By the way, what is your state? Please post whatever you find out, thanks.

In Kentucky, the condo association would not pay at all. It does not matter where the pipe is located. What matters is the owner of the pipe. Any shared utility is the responsibility of the condo association. Once the wire or pipe splits to supply a utility to an individual owner, it becomes the responsibility of that owner. 
 
In the case of this post, the owner of the pipe would be responsible for the entire damages. 
 

My condo has a $5,000 deductible per incident. My corridor door was damaged by vandalism. I had to pay for the replacement because our docs said I owned the door even though the damage occurred in the common area hallway. My private insurance policy does not cover "structure" only "contents" which apparently is standard. Our master policy insurance agent always told us that any damage to structure in our unit - meaning appliances, cupboards, carpeting, flooring, doors, door frames, vanities, bathtubs, or anything else that is attached would be covered. He failed to mention it is subject to the $5,000 deductible.