What Transparency Requirements Mean for Claims Involving Condo Associations

Condominium associations have unique obligations and operate with motivations that are often in conflict. Members of the association want to protect their own investments and further their personal management goals, yet they are also charged with acting in the best interests of all owners. There is pressure to keep costs down, and yet associations are required to maintain safe premises. This often leads to additional conflicts. When a condo association hires a professional property manager, the potential for conflict increases still further.

Associations have increasingly been subjected to regulatory requirements designed to enhance safety and protect the interests of individual owners. Many of these require transparency so that the association’s actions can be understood and assessed by unit owners. This year, additional requirements took effect, mandating the posting of safety and inspection reports. Condo associations need to understand how to comply with these requirements and the effects they can have on insurance claims.

Changes in the Law

Laws enacted in 2024 significantly changed certain aspects of condo association operation. Some of these changes have been in effect for a while, but others did not become effective until January of 2026. The regulatory changes are designed to make condominium management more transparent, including making records and information about operations more accessible. Associations are expected to be more accountable as a result.

The new requirements introduced detailed recordkeeping requirements. Many of these requirements initially applied only to condominiums with 150 or more units. However, starting January 1, the requirements apply to condos with 25 or more units. Condo associations must ensure they maintain a website that provides access to all building permits issued for planned or ongoing construction projects.

In addition to posting information online for access, condo associations with 10 or more units must meet at least 4 times per year, with meetings held at least once every quarter. The agenda must include an opportunity to ask questions, including questions about repair work and construction projects.

The transparency requirements relate directly to concerns about structural integrity in older buildings. While the requirements were likely designed to protect unit owners, they also create a record trail that can affect insurance claims for condo associations. Insurers can examine records to reach their own conclusions about whether damage related to a claim is pre-existing or new damage that is claimable.

Structural Integrity Reserve Studies

Reserve studies are planning tools that use an analysis of the condominium common areas to develop estimates of future repairs and replacements. Not long ago, reserve studies for condominiums in Florida were optional and limited in scope. They also did not require input from professionals.

After lawmakers responded to the Surfside condominium collapse, condos with three or more habitable stories were required to conduct a new, more rigorous study known as a structural integrity reserve study. These studies must be completed every ten years and must include an assessment of the safety and integrity of each building:

• Roof
• Structural members
• Fire protection and fireproofing
• Plumbing system
• Electrical system
• Waterproofing and exterior painting
• Exterior doors and windows
• Other items with a cost in excess of $25,000

The study must be performed by a licensed engineer. These studies and proof of funding are now often considered by insurance companies when evaluating policy renewals or premium adjustments.

Transparency: How it Affects Litigation and Recovery

Transparency requirements make it difficult for condominium associations to hide mistakes or negligence in many cases. While that might seem to put the association at a disadvantage, a skilled attorney can use it to the association’s benefit. It can be argued that the fulfillment of regulatory obligations demonstrates that the condo association has also fulfilled its contractual obligations. This can shift the burden to the insurance company to either honor obligations and demonstrate conclusively where the condo association has erred.

Additionally, disclosure requirements that are part of transparency obligations can make it difficult for insurers to defend on the grounds that hazards were not disclosed or that the association failed to provide proper notification.

Insurance Companies Have Transparency Obligations as Well

Condo associations can benefit from transparency requirements imposed on insurance companies. Among those requirements is an obligation to ensure that policy terms and exclusions are clearly explained in the association’s policy. If key terms are hidden, made unnecessarily complex, or omitted, the insurer may be liable for bad faith or other wrongful practices. There is also an obligation to communicate policy changes clearly.

With respect to the claims process, insurance companies are required to provide information on the status of a claim and the reasons for any processing delays. When the insurer has an adjuster estimate the amount of a loss, the insurer must send a detailed copy of the estimate within 7 days.  

When Condo Associations Have Concerns Over Insurance Claims or Coverage, Legal Advice and Representation are Crucial

Condominium associations deal with issues far more complex than most residential property owners could ever imagine. As regulatory pressure on associations increases, the complexity of insurance issues also increases. It is vitally important for condo association leaders to understand the scope and limitations of their insurance coverage, their transparency obligations, and the most effective ways to resolve disputes when it becomes necessary to file an insurance claim.

At Ver Ploeg & Marino, we focus our practice on helping policyholders engaged in complex insurance disputes, and we work with condominium associations regularly. We know that insurance companies will often try a variety of tactics to discourage, delay, or deny claims, and we work effectively to resolve disputes. While our goal is to obtain results through negotiation, we are always prepared to take matters to court and have extensive experience achieving success in litigation.

To schedule a confidential consultation to discuss insurance matters of concern, call us at 305-577-3996 or contact us online.

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