The Duty to Maintain the Common Areas

The Duty to Maintain the Common Areas

By Michael J. Gelfand, Esq. / Published February 2024

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xpensive Consequences Beyond Property Lines: Duty to Maintain the Common Area

     Does the duty to maintain a common area end at the boundary of the property? What about protecting adjoining property? Does a Florida community association have to look out for its neighbors? If so, can the association still duck claims by blaming damage to poor home construction before the common area problems occurred?

     Recently a Florida appellate court tackled these issues in a claim that a homeowners’ association’s failure to maintain a common area drainage ditch caused damage to homeowners’ properties. The facts in Cole v. Plantation Palms Homeowners Association, Inc., 48 Fla. L. Weekly D 1911 (Fla. 2nd DCA, September 27, 2023), indicate a history of troubles and an effort to cure the cause. In October 2012 the Southwest Florida Water Management District sent a violation notice to the association stating that a drainage ditch had not been properly maintained.

     The declaration of restrictions governing the community provided that the association was responsible for maintaining the common areas. The common areas included a storm drainage ditch alongside the complaining owners’ properties.

     The association hired a civil engineering firm. That firm confirmed that the drainage ditch was damaged. The association then hired another firm to perform restorative work in and around the drainage ditch.

     Noticing cracks in their foundations, walls, and ceilings, several homeowners whose properties were located alongside the drainage ditch sued the association alleging the association failed to adequately maintain the drainage ditch.

     The homeowners hired an engineer to assess the extent of damage. This report stated that damage to the homes was likely related to long-term erosion of the bank as well as construction defects. The association defended itself in part by relying on the determination that poor construction of the homes was at fault. The trial court found that the owners’ report was speculative and granted summary judgment for the association.

     The Florida appellate court reversed the decision of the trial court, finding that the homeowners did in fact offer evidence that the cause of damage flowed from the association’s lack of maintenance. The court pointed out that the engineering report concluded that one of the causes of the damage to the properties was “very likely” a lack of maintenance to the drainage ditch.

     Even though the report did not claim that the lack of maintenance was the only cause of the damage, the court stated that the report was not required to state that it was the sole cause of the damage. As the court stated, the trial court’s “conclusion that the Saxena Report was based on speculation was, itself, the product of speculation.” Therefore, the case will have to proceed to trial.

     Florida community associations need to be alert to their duty to maintain common property. If the lack of maintenance of a common area relates to damage to adjoining property, especially within the same community, the association may be liable for damage to the adjoining property, even if there are several causes for the damage!

Listen to Chicken Little: Even If the Sky Is Not Actually Falling, Be Prepared for the Ceiling Falling

     Have you heard it before? Of course, preparation is key to successfully surviving a casualty loss! But do your directors, managers, and owners understand that more and more Florida association casualty insurance policies only cover “actual cash value” and do not cover “replacement” except potentially for work after it is completed and paid?

     As we observe storm losses, and surprisingly many occur outside of “normal storm season,” we face skyrocketing premiums yet experience the paradox of drastically reduced coverage. The word from Tallahassee is, do not look for any assistance from Florida’s leaders.

     On our own, the first step seems to be understanding that “actual cash value” for a “used” item is the amount of money you would get for an item if it were sold, for example, at a garage sale. In contrast, “replacement value” is the cost to buy a new item.

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     Why is this distinction important? Florida property owners, including associations, are often faced with property damage caused by hurricanes, other storms, and fires. It may be necessary to perform repairs before insurance proceeds are received to avert further damage. Sometimes you may not have sufficient funds to complete repairs without an injection of money. A recent Florida appellate court decision highlights the importance of understanding these distinctions and proper accounting—literally saving all receipts—to prove that repairs have been made and that you can qualify for an insurance payment.

     Recently a Florida appellate court ruled that a trial court could not rely on an owner’s estimate of loss, which was based on replacement value and did not include proof of actual repair expenses. The facts in Citizens Property Insurance Corporation v. Salazar, 48 Fla. L. Weekly D 1941 (Fla. 3rd DCA, October 4, 2023), indicate that after sustaining water damage the homeowner submitted a claim to the insurer. The policy provided that the insurer was obligated to pay at least the actual cash value of the insured loss and any amounts necessary to perform repairs.

     The insurer paid $4,439.76, its estimate of the actual cash value of the damage. The homeowner allegedly performed repairs in the amount of $3,000 but failed to produce the receipts. The homeowner then hired a public adjuster who estimated the amount of damages at $38,268.87, which represented a replacement cost estimate and included matching costs for various damaged items. The insurer refused to pay the additional claim because the homeowner failed to provide any receipts to show that actual repairs had been performed.

     The homeowner sued the insurer for breach of contract for underpayment of her insurance benefits. The insurer defended, claiming it was only required to pay additional amounts for replacements if the homeowner performed the work and then if those expenses exceeded the amount paid by the insurer. The jury returned a verdict for the homeowner in the amount of $20,000.

     The Florida appellate court reversed, sending the case back for a new trial, agreeing with the insurer and finding that the trial court should never have even considered homeowner’s estimate based on replacement cost rather than actual cash value. Relying on Florida’s statutory chapter on Insurance Rates and Contracts, the court cited Section 627.7011(3)(a), Fla. Stat. (2018), which provides that

     For a dwelling, the insurer must initially pay at least the actual cash value of the insured loss, less any applicable deductible. The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred.

     The homeowner did not produce any admissible evidence that her damages exceeded the initial payment made by the insurer. The homeowner’s estimate was not based on the actual cash value of the loss and improperly included matching replacement costs as evidence of the damages. As the court stated, “there was no way for the jury to parse the estimate to determine the actual cash value figure without improper guessing and speculation.”

     This case reinforces the importance of Florida community associations understanding the difference between actual cash value and replacement value so they can plan accordingly for an insured casualty loss, such as a loss caused by a storm, flood, or fire. Does your association have the funds necessary to proceed with repairs because your policy may not fund repairs, only paying for repairs after completion? Does your bookkeeping system keep proper records of what is paid so that you can seek reimbursement for repairs? Do your owners have proper expectations that insurance proceeds may not, or likely will not, be sufficient to pay for all casualty loss repairs?

Michael J. Gelfand, Esq.

Senior Partner, Gelfand & Arpe, P.A.

     Michael J. Gelfand, Esq., the senior partner of Gelfand & Arpe, P.A., emphasizes a community association law practice, counseling associations and owners how to set legitimate goals and effectively achieve those goals. Gelfand is a dual Florida Bar board-certified lawyer in condominium and planned development law and in real estate law, a certified circuit and county civil court mediator, a homeowners’ association mediator, an arbitrator, and parliamentarian. He is a past chair of the Real Property Division of the Florida Bar’s Real Property, Probate & Trust Law Section, and a Fellow of the American College of Real Estate Lawyers. Contact him at or 561-655-6224.