SAMPLE LETTER TO CONDOMINIUM ASSOCIATIONS

(Agency Letterhead)

May 2008

Dear Valued Insured:

We wanted to make you aware of a recent change in Maryland law that may cause the limits that you requested our agency attain on your behalf to be inadequate.  The Maryland Court of Appeals, on April 15, 2008, upheld the lower Court’s decisions, holding that the Maryland Condominium Act does not require a condominium association to repair or replace property of a unit-owners condominium after a loss.*   This decision could change the manner that you provide coverage for each individual unit. 

Due to this decision, it is imperative that you contact your Condominium Association Unit-Owners to inform them of the following:

• The manner in which the Condominium Association policy provides coverage for individual units, whether it be ‘single entity’, ‘bare walls’ or ‘all inclusive’. 
• Insurance Requirements that the unit-owner must obtain to be compliant with Condominium Association By-Laws
• And, any recommendations for increasing deductible/assessment coverage on their individual policies

It is also important that you provide this information upon the renewal of your Master Policy, especially if the manner in which the Condominium Association is covered, changes.

It is important that this information be shared with the individual unit owners to assure that their property is adequately protected and that they understand the implications and potential consequences of this court interpretation and ruling.

If you have any questions, do not hesitate to contact us.

Sincerely, 

(Agent’s signature)

 *Note:  Court Cases-Dianne Anderson vs. Council of Unit Owners of the Gables on Tuckerman Condominium (Circuit Court of Montgomery County #271904) and Erie Insurance Exchange vs. The Council of Unit Owners of Bridgeport Condominium (Circuit Court for Prince George’s County #03724).