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5 Liabilities Your Condo Association Should Look For

December 15, 2017

Condo associations play an essential role in maintaining condo properties. According to the Community Associations Institute (CAI), roughly 21% percent of the U.S. population live in a condo or a similar community with a condo or homeowner's association.

Condos account for up to 45% of Americans living in a property with a community association, which accounts for a significant portion of the population. When we have such large numbers living in condo associations, responsible parties should be aware of the most common liabilities they face.

What you will learn:

1. Property Damage in the Condo.

If a visitor or condo owner drops his/her phone in a common area, then the association is not liable. Realistically speaking, only damage caused "by the condo" due to a loose tile or poor lighting may cause liability concerns. Look for potential risks that may cause injuries or property damage to limit liability risks.

Condo associations play a key role in risk management when a condo owner moves into the space. The challenge is clarifying the specific risks to the condo owners and the association when a problem occurs that may result in a lawsuit or a liability concern. By recognizing the common liability risks and taking measures to prevent accidents, injuries and property damage, the association limits the financial risks to condo owners.

2. Lawsuits from Employees or a Third Party.

Lawsuits are a complicated liability concern because it may relate to a variety of factors. A lawsuit from filed by an employee may cause concerns about the costs associated with the situation. A third party lawsuit depends on the reasons for the court case, so liability may fall to the association or a specific condo owner.

Always evaluate the specific situation before determining the liability risks to the condo owner and the association.

3. Accidents in Common Areas.

Accidents in the common areas of a condominium are a common liability concern. When condo visitors are injured in these places, the association or condo owners may be held responsible for the accident.

The liability risk varies based on the severity of the accident and the situation. By taking measures to limit the risk of accidents with proper protocols for different situations and proper maintenance on the space, the association reduces the potential for a liability risk.

4. Maintenance Liabilities. 

Maintenance in the common areas of the condo is the responsibility of the association. Fees collected by condo owners pays for the upkeep of the property and limit the possibility of a liability risk.

However, when the common areas are maintained in good condition, chances for injured passersby increase. Ideally, the association will ensure proper measures are taken to keep the common spaces in good condition.

For example, make sure that your condominium has good lighting in hallways or a lobby. It should also have up-to-date alarms with working batteries. Specific maintenance depends on the needs of the building.

5. Security Risks.

A condo owner association (COA) should always be mindful of the potential for security risks or threats. When the association takes proper measures to evaluate the risks and then takes action to prevent a security threat, they reduce the number of potential liabilities. Security plays an essential role in the safety of condo owners and residents, so the association must evaluate the risks to prevent liability concerns.

Condo Association Insurance.

For help with identifying and mitigating risk to keep your condo association insurance premiums low, connect with one of our Condo and HOA advisers and learn about how CUSP can help make life easy.



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