Villas Insurance – The Facts!

It appears the Villas HOA, its property manager and particularly the association President, Tyler Gilmer, continue to confuse and harass members regarding insurance coverage.

On June 1, 2020, Tyler sent out a note reminding all members of the requirement to maintain property insurance in accordance with the CC&R’s. However, Tyler went on to recite the bogus requirement that the HOA be “named as a co-insured” under the policy and it is on this subject that ignorance is bliss, or not, as will be explained.

First and foremost, the HOA has no ownership interest in our individual properties. Therefore, the HOA cannot (and should never) be listed as an Additional Insured on a homeowner’s policy. It is though permissible for a member to seek an endorsement of the insurance policy to list the HOA as an Additional Interest.

So, what is the difference between an Additional Insured and an Additional Interest? While it may appear the terms are interchangeable or similar they have very different meanings and consequences. An Additional Interest is a party who is interested that a property is insured, but does not have any ownership in the property and, therefore, cannot and should not be listed as an Additional Insured.

To be clear, having a policy endorsed to list the HOA as an Additional Interest does not provide any coverage to the HOA (nor should it) because the HOA does not own the unit; the HOA just has an interest in the owner having insurance.

In conclusion, the sole purpose of the HOA being listed as an Additional Interest on the homeowner’s insurance policy is to ensure compliance by members. Let’s say a member provides proof of their property insurance to the HOA but a week later decides to save a few bucks and cancels the policy; now the HOA would be notified if the policy cancels.

Compliance is the responsibility of each individual member but when a policy is up for renewal might be the time to ask the insurance carrier to make an endorsement listing the HOA as an Additional Interest.

Villas Board Meeting 3-1-2019

For about 15 brief seconds, there was the chance that board member and association president, John Day, was actually going to announce something meaningful in the midst of all the confusion and misinformation relating to our self-inflicted roof fiasco. But alas, what transpired was another huge misstep and disservice to our community.

Apparently, the board had contacted three engineering organizations to commission a report about the state of repair and condition of the roofs but then determined it was “too expensive.” Instead, their trusty and free roofing contractor would be much preferred for the job. If anything can be fudged then this board never fails to disappoint!

It is beyond any reasonable doubt that we need a comprehensive report on the state of the roofs and a reserve study to determine how the HOA will meet its repair and replacement obligations for this community. True to form, the board would rather not have any such report as it would reaffirm, as if further proof were needed at this point, that they have failed miserably to manage and implement a sound financial plan for funding the roof reserve.

Later in the meeting John Day announced that he wanted a letter sent out to homeowners ordering that there be no “half-roof replacements” and further commented that after the roof inspections it was “up to the owners if he/she wants a new roof or not.” So, John, if you can’t replace half a roof then how can it be optional?

Of lesser importance but of some interest nevertheless, Walt Buchner resigned for reasons of being, in his own words, “old and crotchety” which nobody present at the meeting disagreed with. However, it should be noted that Walt has been a board member on and off from for many years and has his fingerprints all over the sad state of affairs that is the roof reserve or rather, lack thereof.

Is it more than just a coincidence that Walt, a self-proclaimed expert on many subjects, apart from roof reserve funding it appears, should be abandoning ship right now as the proverbial crap is about to hit the fan? Thanks Walt!

Villas – A case study in failure!

There is no justifiable reason under the sun, nor any excuse worth a damn for the Villas’ roof reserve to be underfunded. Until this ridiculousness has been called out for what it really is then this problem will never be resolved.

It is shameful that a minority of members of this community have played fast and loose with the financial integrity of this HOA. Is there any doubt that various board members over the years have conspired and colluded, under the pretense of serving this community, to lead us to this point?

The facts are irrefutable. The villas were constructed between 17-19 years ago (between 2000-2002) and the useful life of the our roof structures is reasonably estimated at 25-30 years from new. After 19 years of so-called funding, the roof reserve has a grand total of just $210,000 set aside. However, the replacement cost for roofing underlayment, flashing and new tiles is in the order of $60,000 – $80,000 per structure or pair of villas.

Therefore, with 28 structures comprising 56 individual homes, and at today’s prices, the target roof reserve is estimated at $1,680,000 – $2,240,000. So how then (it is reasonable to ask) is the potential shortfall of $1,470,000 – $2,030,000 going to be made up in the next 6 to 10 years?

Hurricanes notwithstanding, each individual homeowner might be facing a special assessment of $26,250 – $36,250 in order for the HOA to meet its obligations to repair and replace our roof structures.

It is simply unarguable at this point. The manner in which the roof reserve has been mishandled is an affront to common sense and every homeowner in the Villas needs to prepare to pay the price for years of reckless underfunding.

Mike Norton responds to Villa Board’s Notice to Owners

To: John Day, President, Villas HOA & Rob Ritchie, CAM Property Manager
Date: February 10, 2019

John & Rob:

I am responding to Rob’s recent “Notice to Owners” in advance of the Annual Meeting on 2/12/19. I am not able to attend so I am requesting you assure me that this email is made available to attendees and is entered on the minutes of the meeting.

It is not my intent to disparage anyone on this Board. I know how difficult doing this work can be. However, I am very upset and concerned about recent events relating to roofs in our Community, the turmoil related to these issues, and Rob’s Notice compounded  my concerns. Let me respond to the matters you raise:

Casualty Insurance. I fully agree owners need to comply with the insurance requirements of section 8.1 of the Bylaws. The Board should go further and set a reasonable date in the near  future for all Owners to submit a copy of their policy to Rob pursuant to section 8.3 of the bylaws. The Board should authorize Rob, if necessary, to engage the services of a qualified insurance  expert to analyze each policy for compliance. Owners who fail to comply should be subject to the enforcement powers available under section 8.3.

Roofs. I am glad the Board is raising the issue of the roofs. However, the Notice presents this inspection scheme as a done deal. I haven’t received ANY prior notice of this topic being placed on a published agenda of the Board. If I missed such, please provide me with the relevant information.

In the interim, at what properly called and noticed meeting was this decision made? I am very concerned that the Board may be seen as  not following Florida Sunshine laws, and related HOA laws. This topic is of such importance, that it goes way beyond your general discretion to implement prior publicly approved matters. In any event,  I expect the Board will fully explain how it arrived at its decision at the upcoming meeting.

Roof Reserves/Roof Inspection. I believe the Board members are well-intentioned people who want to do a good job for the Owners. Normally, the issues of roof reserves and the recent spate of Irma insurance claims would not seem to be linked,since Owners are responsible for hurricane damage and the Board is responsible for funding roof replacement when the useful life of each roof is reached.

I want to believe that this Board has the best interests of the Owners in mind as it makes decisions on our behalf. I am sorry, but  the persistent underfunding of the roof reserve and the historically vigorous support for such underfunding calls into question the judgement of the various iterations of the Boards over the years and this Board, which have led us to the mess we are experiencing now. As a result of recent activity on the insurance claim front,  I am sorry to report that  there is much speculation,  rumor and innuendo flying around which unfortunately links the roof reserve issue with the roof inspection issue, which I feel this Board needs to address.

The speculation, rumor  and innuendo is to the effect some board members had filed or were in the process of filing insurance claims, or may have had their claim approved, while still aggressively recommending that the  already woefully underfunded roof reserves continue to be funded at only 75%. If any of the foregoing is true, then some Board members knew or should have known that the reserves being underfunded were grossly  inadequate to fund future roof replacement.  I hope this is not the case, but the Board needs to lay this issue to rest.

I am informed that some of these claims have been approved, I assume legitimately and coincidentally  for some Board members, but some claims by other Owners have been denied. This situation  raises  significant issues for the rest of the Owners as to how to proceed now with respect to making an insurance  claim, as well as the long term availability of the roof reserve to replace roofs at the end of their useful life. I want to assume that the Notice is intended in part to address any Owner anxiety about insurance issues, but the Notice didn’t provide any rationale to support this assumption.
I understand anecdotally that complete roof replacement (both sides) ranging from approximately $60,000 to $80,000 has been approved by insurance  companies in December and January. I am told that the current reserve is based on anticipated replacement  costs in 2032 of approximately $20,000-25,000, per unit, clearly a number from La la land based on current experience.

Further, while it may be  reasonably debatable whether a 75% or a 100% funded reserve makes the most sense, the underlying replacement cost has to be reliable. In light of current facts, it should be clear to everyone that our current reserve structure bears no relationship to reality. This opens Owners needing a roof in 2032, if indeed THAT date is a realistic statement of the actual useful life of our roofs, to a huge shortfall in the reserve and/or a likely huge special assessment for ALL Owners to fix the shortfall.

Additionally, there is another rumor to the effect that Owners who have successfully filed claims could have all or a portion of their deductibles paid out of the roof reserve!!  While I am not a FL lawyer, I can’t believe our documents and FL law would permit that action. The Board needs to be clear about whether this is a serious discussion item, and if so, the legal authority to pursue it.

As a result, I believe the ‘optics’ relating to Board decision making on the reserve issue and the inspection issue are terrible, and are damaging the credibility of the good people on this Board.  I urge all Board members who have filed claims or are considering filing a claim, to be transparent and disclose the timeline when each learned there was an issue with their roof disclosed by an inspection, when each filed their claim, the date the claim was approved and/or the date the member knew the claim was going to be approved. This information can then be compared  with reference to the December 18, 2018 budget meeting where the reserve funding was approved by the Owners upon the very strong recommendation of this Board. Owners can then come to their own conclusions. In addition, the Board needs to address any other harmful rumors floating around to restore Board credibility.

Roof Inspection. There is no information in the Notice concerning the purpose of the inspection, what the Board would do with the information, the process of inspecting roofs, nor  the skills, knowledge and ability of the person or entity who will perform the inspections. If I missed the meeting at which  this information was made available, please provide me with same.

Again under the rubric of rumor and innuendo, it has been stated that the proposed ‘inspector’ is one of the roofers currently seeking to do business in our neighborhood. I hope this is not true.  A number of analogies  come to mind, one being the old aphorism about the “fox guarding the chicken coop”. What possible benefit to the Owners  is provided by an obviously interested roofing company conducting gratuitous roof replacement inspections, not directed by an Owner or an Owner’s insurance company?  
Moreover, I have heard this roofer has already recommended one or more roof replacements which were denied by the respective Owner’s insurance company!!!! What is this Board’s end game in considering this option???? I don’t want to add to the current speculation, but one can lay out any number of scenarios with additional negative consequences to the Owners if this plan moves forward. This Board can certainly  recommend that Owners consider having their roof inspected, but  a Board plan to engage an obviously interested and conflicted vendor to do the inspections, and with no rational stated purpose for such inspection, has no merit.

Mandatory Inspection. The Notice states that the Owners must permit this inspection based on Sections 7.2 and 7.4 of the Bylaws. I am deeply troubled by the mandatory nature of the inspection. My reading of these sections discloses that the Association can enter onto private property as permitted by section 7.4 of the Bylaws under ONLY two circumstances applicable to this discussion: to accomplish its required duties; or when there is a failure of an Owner to accomplish the referenced owner maintenance requirements under sections 7.2 – 7.5.

So where are the facts? Does the Board assume every villa roof needs replacement? Has every owner violated the covenants in sections 7.2-7.5, justifying the community wide inspection? Are there Owners whose maintenance failures have caused specific damage to adjoining property? This Board is really overstepping on this one unless there are facts supported by the applicable Bylaws authority Rob provided.

For my part,  I am not aware of any such failure to meet my maintenance duties.   I assume you will be providing a factual basis for this inspection as to me, and to all Owners at the meeting or in the near future. Absent the development of such supporting facts, I will expect a written opinion from the Association lawyer stating how the Board can enforce this inspection scheme without any facts required by sections 7.2-7.5 of the Bylaws. Absent  Board compliance with the referenced sections, I do not grant the Board or its interested vendor permission  to trespass onto my roof.

Reserve Study. I want to assume this Board is seriously interested in addressing the roof issues, including the now obvious reserve underfunding issue. If so, then the prudent decision is for this Board to fulfill its obligations by immediately hiring a qualified, disinterested expert to conduct  a reserve study to: 

  • assess the condition of each roof; 
  • determine its remaining useful life; 
  • develop a reasonable schedule for possible replacement; and 
  • develop a financial model to support a viable reserve replacement program. 

This course of action is consistent with the Board’s duties, is acceptable to me and I would hope to most Owners. Otherwise, again, I expect you to provide a written legal opinion as to how and why the Owners need to permit the course of action you have laid out in the Notice.

Villas – Roof Reserve Fiasco!


How could this have happened, you say? How about incompetence, dereliction of duty by the Boards, past and present, and large helpings of obfuscation so the underfunded liability for the homeowner’s association is not understood.

But don’t worry folks, apparently the Board and property manager now have the answer for all 56 homeowners.  We are encouraged to rejoice in Hurricane Irma as an absolute godsend for this community and the Villas’ roof reserve!

It’s an insurance bonanza everyone!