The bill amends existing laws related to condominium ownership and insurance requirements for condominium associations. It clarifies how condominium insurance deductibles and unpaid losses are divided between associations and unit owners. The bill mandates that associations must obtain property insurance covering common elements and units, including improvements and betterments added by unit owners if required in the declaration or bylaws. It specifies that if the association does not maintain property insurance on the units, unit owners are required to secure their own insurance.

The bill outlines the responsibilities regarding deductibles in the event of a loss, detailing how losses are to be allocated based on the nature of the damage. If the covered loss is solely to the common elements, the amount of the loss up to the association's deductible and any remaining unpaid amounts shall be a common expense. If the loss is solely to one unit, the owner of that unit is responsible for the amount up to the association's deductible. In cases where there are losses to multiple units or both units and common elements, the allocation of deductibles and unpaid amounts is specified.

Additionally, the bill allows the governing board to manage and use insurance proceeds for repairs, stating that the board may carry out repairs or reconstruction of the units instead of distributing insurance proceeds to unit owners. It emphasizes that there shall be no obligation on an association to apply common expenses related to a unit after a unit loss if the unit owner fails to comply with the insurance requirements.

The act will take effect upon passage.

Statutes affected:
2896: 34-36-29
2896  SUB A: 34-36-29