This year has seen a lot of activity in the insurance markets as well as a new round of updates from Fannie Mae that have been mostly positive for insurance coverage on condominium associations and large HOAs. One topic that has come up across the country is on valuation of an association’s property and how do you know if the the current valuation is correct. The article in the link below comes from Brigs LLC ( brigsllc.com ) a management company from the NE CAI Chapter located in MA and NH that wrote this article, which was reposted by CAI’s very own Attorney Stephen Marcus of Marcus Condo Law. This is a great read for any Board member, community association manager, or insurance broker want to understand why one should have a third-party building appraisal performed on your association buildings and related structures as well as what an appraisal ultimately can do for your association’s overall property valuation. HERE is a link to the full article and a snippet from one section of this article:
The Risk of Being Underinsured
If a property is undervalued, the consequences can be severe.
Potential issues include:
- Inadequate insurance proceeds after a major loss
- Coinsurance penalties
- Special assessments
- Delays in reconstruction
- Increased financial exposure for the association
Unfortunately, many boards only discover a valuation problem after a claim occurs.
