Yesterday, in Connecticut reported on an unfortunate story of an owner who lost his condominium unit to a fire only to find out the insurance coverage the association was required to have in place had lapsed for lack of payment. While Mr. Jain carried a standard policy to cover the contents of his unit, the policy does not cover the actual structure.

This is a great example of the challenges which face small condominium associations. In some cases, these associations do not have the funds necessary to hire professional management to handle the finances of the association and to ensure that proper insurance coverage is in place. This is unfortunate because these small associations typically have the same responsibilities as their larger counterparts.


If you are on the board of a small condominium association, here are important questions to ask:


  1. What obligations does the association have under the governing documents?
  2. Who is responsible for ensuring the association is meeting these obligations?
  3. Does the budget for the association reflect the actual operating expenses of the community?
  4. Are the assessments set at a sufficient level to cover the operating expenses and to make contributions to reserves? 
  5. Who is receiving notices for things like insurance premiums and vendor invoices?
  6. Who is responsible for making timely payments?
  7. Is the association making contributions to reserves?
  8. Has the association been deferring maintenance to keep costs down?

By asking these questions and ensuring your association is addressing these issues, you will go a long way toward protecting and preserving the community.