Monday, August 24, 2015

Does your community's relationship with your insurance agent qualify as a "special relationship"?


Does your board consider itself  "special" in the eyes of your insurance agent? Do you believe your agent has a duty to advise you whether or not the coverage you are purchasing and the limits you are seeking are sufficient?

You might be under the illusion that your agent owes you a greater duty than he or she really does unless your relationship meets a certain standard.

Your board may believe that your insurance agent has a duty to advise you, among other things, about the type of coverage you need and the amount of limits you should carry. However, in the absence of a "special relationship" and certain circumstances, you may be sorely disappointed to learn that your relationship with your insurance agent is merely "ordinary".

In an "ordinary" client-agent relationship, the agent typically has the following duties to his or her client:
  • to procure the insurance coverage requested by your board using a level of skill, care and diligence which is standard in the industry;
  • to inform your board if he or she cannot procure the coverage you have requested; and
  • to not mislead or misinform your board about your coverage.


    Courts are more likely to hold an insurance agent to a higher standard of care with special relationship clients, so it makes sense for your community to become one of those "special relationship" clients. So how do you do it?

-Seek out an agent who is recognized as an expert in the industry.

-Insist on a relationship with your agent that consists of more than just the purchase of a policy or policies. 

-Ask your insurance agent to serve as a professional adviser in terms of the coverage you are seeking and get him or her to confirm that role in writing. This role should also be filled by your association attorney. If you do not understand your insurance purchase, ask your agent to explain it to you, in writing.

-Demand extra time and resources from your agent particularly if you are paying him or her any compensation in addition to his or her commission.

-Have a long-term relationship with your agent.

If you would like more out of your relationship with your insurance agent than simply a sales transaction, you will need to demand it. By doing so, you may also be able to hold him or her responsible for any negligence in the unfortunate event you do not receive the proper advice.




Friday, August 7, 2015

Florida's Community Association Arbitrators seek Salary Review


Florida's Department of Business and Professional Regulation pays six full-time "Senior Attorneys" to act as arbitrators in the Arbitration Section of the Division of Condominiums, Timeshares and Mobile Homes approximately $52,000 per year to handle numerous disputes throughout the State. The alternative dispute resolution provisions found in Section 718.1255 of the Florida Statutes were designed to prevent Florida court dockets from being clogged with certain types of disputes which routinely arise in the condominium and cooperative setting as well as to provide a more cost-effective option to court litigation for owners.

Florida's condominium arbitrators feel that they are grossly underpaid in comparison with other hearing officers employed by the Sunshine State and, it turns out, they are probably right.  In a May, 2015 "desk audit, Florida's DBPR arbitrators asked the state to reconsider their salaries. In their request, the arbitrators state that the work they perform is analogous to that performed by the attorneys employed as Public Employee Relations Commission (PERC) Hearing Officers who preside over disputes of limited jurisdiction. For comparison's sake, PERC hearing Officers earn $90,047 annually. Another comparable position is the Reemployment Assistance (RA) Appeals Manager for the Department of Economic Opportunity. RA Appeals Managers earn an annual salary of $84,999.96.

There are only six Division arbitrators (plus the chief) for the entire state. The DBPR collects millions in fees each year from condominium and cooperative owners. Sadly, those funds are usually diverted to the general operating budget each year. Regardless of how you feel about the Arbitration Program, its effectiveness or attorneys in general, having experienced attorney arbitrators to resolve association disputes is a good thing. Underpaying people is a surefire way to have them look elsewhere for a job.

Is the message here that the resolution of association disputes just aren't as important or valuable as other types of disputes being handled by State Agencies? If the reasons articulated in Section 718.1255(3), F.S. for the creation of an alternative dispute resolution system remain true, why is the State balking at properly funding that system?

If you agree that Florida's Community Association Arbitrators should be paid commensurate with arbitrators for other state agencies, you can contact Ken Lawson ken.lawson@myfloridalicense.com and Kevin Stanfield at Kevin.Stanfield@myfloridalicense.com and let them know you want them to approve the arbitrators' request for salary review.