Article Courtesy of TCPALM.com

By Nadia Gergis

Posted July 4, 2005

Marjory Perlmutter will have to come up with an additional $15,000 to continue living at her beachside condominium.

"I am very angry, very frustrated, but what can I do?" said Perlmutter, who has lived at the Sandpebble condominiums on Hutchinson Island in Stuart for the past 13-years. "I thought these fees would be covered by my insurance, but I had to learn the hard way."

Perlmutter is one of dozens of residents at the Sandpebble condominiums who have the financial burden of paying special assessment fees to their condominium association because of exterior damage caused by the 2004 hurricanes. Residents are required to pay the special fees in addition to their usual monthly or quarterly condominium dues because these fees are not covered by their own insurance policies.

Perlmutter and her neighbors aren't the only Treasure Coast residents having to shell out extra cash for unexpected special assessment fees at their condominiums.

Vero Beach resident Charles Curran must pay a special assessment fee of $3,720 by July 15 to his community association at the Vista Royale condominiums. Curran, 91, is on a fixed income and doesn't understand why he has to pay the fee when his unit only suffered minimal damage after hurricanes Jeanne and Frances.

"If I don't pay by July 15, they are going to charge me an additional 6 percent in interest," said Curran, who has lived in his 2-bedroom unit since 1979. "You bet your life I am angry, and I am confused too."

Frank Bilotta, president of the condominium association at Vista Royale, said he sympathizes with Curran — but added that the fees were needed to repair the exterior areas at the 1513 unit complex.

"The fees are for asbestos abatement," Bilotta said. "We have a lot of elderly people here on a fixed income so I know it's been difficult for them. They understand why we have a special assessment but accepting it is a completely different thing."

Karen Merrill, vice-president of Elliott Merrill Community Management, which manages the Vista Royale association and 80 other condominium associations on the Treasure Coast, said special assessments are levied because of two reasons.

"Landscape and debris removal is not covered by the master policy for the association," Merrill said. "Associations also have to meet a deductible to collect on their policies and that isn't covered by insurance."

Joseph Sussillo, president of the Sandpebble condominiums association, said depending on the policy and insurance company, some residents were able to recoup the special assessment fees from their insurers. Others weren't so lucky.

"Some of us got all the money we requested and some literally got six cents or 10 cents," Sussillo said. "These policies are so tricky. Some won't cover water damage, some won't cover wind damage. You have to really understand your policy, but sometimes it's so confusing."

Perlmutter finds herself among the unlucky ones.

"The fee varies, but for me it's $1,255 a quarter for the next three years," said Perlmutter, a retiree. "It basically covers any exterior damage that wasn't covered by the association's insurance, it's causing a lot of hardships for people here."

Mike Bottcher, president of the Gold Coast Chapter of the Community Associations Institute, a trade organization for condominium associations that stretches from Boca Raton to Indian River County, said condominium residents must scrutinize the fine print of the master policy purchased by the board of directors of the condominium associations.

"When you live in a condominium, you live on common property and when that's damaged, everyone that lives there is responsible during a catastrophe," Bottcher said. "When there is a deductible, the people who live on that property have to pay it, unless the association has a very large reserve."

Floyd Nichols, vice president of the Insurance Office of America in Jupiter, a nationwide multi-line insurance broker agreed with that assessment.

"These types of assessments kick in when the peril is not covered by the master policy," Nichols said. "I really don't have an answer on how we can fix this. There really isn't any answer because the laws are so unclear. Unless the legislators get involved, I don't know how it will get fixed."

Frank Rathbun, a spokesman for the Washington D.C.-based Community Associations Institute, said residents on the Treasure Coast should talk to insurance brokers about their master and individual policies if they do not fully understand their coverage.

"It's a really tough spot to be in but if you don't get it, don't be afraid to ask your broker questions," Rathbun said. "This is especially important for those on a fixed income. Spending a little more time on it now, could save you a lot of time and money later."