Hurricane season begins in June and ends in November each year. As a member of a condominium association with a property near the coast, it is vital to prepare and establish expectations for protocol before the next storm hits. The best way to keep your property and your tenants safe is by understanding your specific responsibilities.
Tenant screening is more than just a process, it is a must for physical and fiscal security of your condo property and every condo management company in Houston should have experience in this area. Screening protects the residents, be they owners or tenants and protects the property in terms of fiscal matters.
Does your condo management company know how to legally screen tenants?
Tenant screening when done properly and by professionals like the staff at RISE, a Houston condo management company, is completely legal and provides the protection and security you deserve. There are five basic areas that good tenant screening covers and you will find this to common across the Houston area when talking with a condo management company.
- Request an application and have an application fee
- Run a credit check
- Run a background check
- Call past rental or mortgage references
- Verify employment
A good condo management company knows that tenant screening when performed in this manner with standards in place that perspective tenants are aware of such as a 600 credit score, or 3x monthly rent in income per month are sound ways to perform tenant screening. Check out this article from the American Apartment Owners Association for best practices https://www.american-apartment-owners-association.org/property-management/tenant-screening/best-practices-use-tenant-criminal-history-to-screen-tenants/
When should my condo management company start the screening?
Most condo management companies, like RISE in Houston will tell you tenant screening really does start with that first contact, be it by phone or in person. Pre-screening questions can be woven into the general conversation and any red flag can be addressed later in the process. You might ask questions like:
- What’s bringing you to make a move?
- How long have you been in your current home?
- What do you like best about where you’re living now?
- Is this closer to your job?
Condo management companies find these little conversational questions can be a real asset in tenant screening. Companies like RISE have professional staff trained in screening potential residents.
How does a condo management company use tenant screening to protect fiscal security?
The condo management company knows that tenant screening doesn’t just provide physical security, it also provides fiscal security. Anyone who has ever owned rental properties can tell you how expensive and time consuming it can be to evict a tenant for non-payment or excessive damage to a property. That same person will also tell you that tenant screening is the key to getting sound tenant who meet their fiscal obligations, yep, they pay their rent!
Want more information on condo management company techniques for tenant screening?
This is just a low level view of tenant screening the advantages, find out more by contacting RISE Management. Give RISE a call and explore what RISE can do for you in providing tenant screening and more. You can visit their website at www.riseamg.com or request a quote by contacting RISE at (713) 936-9200 or [email protected].
Condo insurance is that bet you make with your insurance company that the “oops” will happen. Even if the “oops” doesn’t happen, you need to be prepared. Condo insurance is a little different then insuring a single family home, so let’s see what you need to look at. Don’t understand insurance, contact one of the many fine insurance agents int he Houston area to review what you may need in condo insurance.
What condo insurance does the condominium association carry?
The good thing about condo insurance is that it is normally less expensive due to the cost being spread across multiple owners. Most condo insurance policies carried by the condo association itself cover studs out and common areas, plus liability for the common areas. That essentially means that anything inside your unit is NOT covered. So, if you get a water leak and it damages your carpet or flooring, your condo insurance is responsible for the loss. If you don’t have a copy of the master insurance policy, ask for one from your condo association and review exactly what they are covering. In rare cases, there is an All-In policy that covers the entire property inside and out (remember, even All-In policies do not cover your personal belongings. Also look at the deductible on the master policy and encourage your condo association to keep that deductible in reserves for the condo insurance; again, planning is always your best bet.
What you need to cover
If the condo insurance policy handled by the condo association is a ‘studs out’ policy, then you will need to have a policy that cover:
- Damages within your unit (studs in)
- Your personal belongings in case of loss
- Liability to cover a guest who may be injured inside your unit-(If you are doing short term rentals with your unit as is common in Houston, this one is important).
It may sound like a lot of condo insurance considering you are paying on the master policy through your HOA dues, but consider the consequences of being under-insured. A typical water leak that damages flooring and cabinetry can easily run in excess of $5000 per incident and those incidents never seem to come at a good time financially. Don’t forget flood insurance if you happen to be in a flood plain; this can be purchased through your state and normally will be mandatory at closing.
The best recommendation is to have a professional insurance agent review the master policy for the condo so they can confirm what coverage may be lacking and recommend additional coverage if needed. By doing this, you will be certain that one of those little “oops” won’t wreak havoc on your finances. If you’re looking for an agent or would like more information about what is actually covered with a condo insurance policy you might consider Allstate.
Don’t forget to check out what your lender requires
If you are just now purchasing your condo be sure to find out what if any requirements your lender may have regarding condo insurance. Again, a copy of the master policy and a reputable insurance agent should be able to help you out on the rest so there are no budgetary surprises.
So get on the phone and make the call, first to your condo association for a copy of the master policy and then to your favorite Houston condo insurance agent.
The folks at RISE in Houston will tell you, evacuate when told and be certain your condo insurance is current prior to the Gulf hurricane season. Advice that is important to follow, particularly with condo insurance. You need to know what your HOA provides and what is your responsibility. Houston not so many years back had issues with massive flooding after a hurricane hit the coast; even the large medical centers downtown suffered.
Hurricanes and windstorms are a fact of life if you are going to live in the great state of Texas and have advantage of coastal recreation like Houston. What exactly does condo insurance including wind and hail coverage actually pay for and where do you get it? For starters, we suggest you refer to this handy chart from the Texas Department of Insurance.
Buying Windstorm and Hail Condo Insurance
Condo insurance in any one of the 14 coastal counties and certain parts of Harris County on Galveston Bay can require the purchase of windstorm and hail insurance through the Texas Windstorm Insurance Association (TWIA). Policyholders in the balance of the state have the option to purchase wind and hail coverage in their normal condo insurance policies. So if you live anywhere but the above, contact your insurance agent and they can guide you through the process; for all others, contact TDI at 1-800-252-3439 or www.tdi.texas.gov
What does condo insurance cover?
Condo insurance that includes windstorm and hail covers direct physical loss cause by a windstorm or hail. It does not cover physical damage caused by floods, rain or storm surge, whether wind driven or not. There is a little cavort here, if the rain enters through a hole in your dwelling that was a direct result of wind or hail, then you are covered on the rain. Either way, insurance is a must in the Houston area and any other coastal area in Texas.
What’s the payout on condo insurance?
Condo insurance coverage for windstorm and hail can be purchased up to 1.77 million for your dwelling and contents. If you want replacement cost coverage, your TWIA policy limit is based on what it would cost to rebuild your home if completely destroyed by a covered windstorm peril. This amount will obviously differ with each condo insurance policy.
It does not however pay for additional living expenses. You may buy an endorsement TWIA 310 or 320 to add ALE coverage to your policy.
The bottom line on condo insurance, who buys the hurricane and windstorm?
Let’s face it, what you really want to know is who is buying the hurricane and windstorm insurance? Normally this condo insurance is purchased through the HOA as either a part of the master policy or in conjunction with the master policy. Some HOAs will incorporate the expense of this option in your monthly homeowner fees, while others will bill the insurance separately. Either way, the additional condo insurance should provide you, the homeowner additional peace of mind.
To make sure you are covered, contact your HOA or management company and ask for a copy of the windstorm policy today. Purchasing this type of policy during the hurricane season is nearly impossible and rates skyrocket! Don’t get caught off guard; if your HOA does not have this coverage, ask for a vote of the homeowners to get coverage in place. Insure it well, pack your bags and walk away is sound advice.
Let’s start with what HOA insurance may cover and remember this will differ with each HOA and their members. There are two basic types of condominium association insurance for HOAs which cover the physical structures; one covers the property from the studs out or what is referred to as common areas and the other is an All-In type of coverage which covers common areas and your personal unit. Then there are liability policies which cover the association and its members from losses that can relate to physical injuries on property to acts and omissions of the board members. The Texas Uniform Condominium Act “TUCA” can be read here as well as your condominium association insurance declaration will govern what kinds of coverage are required– however, that doesn’t mean that is all you need.
This coverage is for property which you own or are responsible for. For most condo or townhome owners associations this includes, but is not limited to, building structures, roofs, exterior walls, slabs, parking lots, elevators, pool areas, entrance gates or other common elements or limited common elements. Studs out is a type of coverage for that covers the building structure but not the contents or anything considered to be a part of the “unit”. Unit boundaries are usually defined in the declaration but if they are you should refer to TUCA above for definitions. Personal property within a unit is almost always the responsibility of a the individual unit owner.
All-In coverage however covers pretty much everything in terms of physical structure, common areas and your physical unit, but, again, normally does not include coverage for your personal property within the unit. This kind of coverage may be required depending on your declaration or whether or not you have stacked units in your association. Associations with horizontal unit boundaries (meaning it is possible for water from one unit to enter another unit from above) are required to carry all in coverage when it is reasonably available.
Often boards will debate whether to obtain “all in” or “studs out” coverage. The truth is, this is generally going to be determined by what your declaration requires. Most condominium association insurance forms will defer to the declaration’s insurance requirements when determining what should be covered. For more questions on property coverage for your condo or townhome please call us to discuss your coverage needs and getting competitive insurance quotes for your association.
Another important line of insurance coverage that an HOA must have is general liability insurance. This insurance is generally intended to protect the owners and the association from losses related to bodily injury or other person’s property damage, including lawsuits filed by persons injured in the common area of the property but may not cover an injury someone sustains while in your personal unit. You can refer to the actual policy for details of your coverage. Other types of liability coverage that most associations should carry include: directors and officers insurance, crime coverage, hire and non-owned auto coverage.
The upside to condominium association insurance is that the cost is spread across a group of owners versus just a single individual so many times it can be much more cost effective. Your insurance payment is normally included in your homeowners’ fee, but not the deductible should something happen. You may want to encourage your HOA to keep the minimum deductible in the reserve funds to avoid an assessment at the time of an event. According to bankrate.com deductibles in the past ran about $5000, but in todays’ market those deductibles can run as high as $25000 to $50000. That can be a huge hit at a time when you may be experiencing personal unit damage at the same time.
So what do you personally need to purchase and how do you determine that? When purchasing a condo you should always ask about the types of coverage that are included in the HOA master policy and which are your personal responsibility. Prior to purchase, ask for a copy of the HOA master policy to review with your personal insurance agent prior to closing. Doing this can eliminate surprise cost after purchase that can affect your monthly budget.
For your internal coverage if you are not part of an All-In policy, a simple rule of thumb would be to take half of the value of the unit to determine how much coverage you need. This should adequately cover you if you have to replace fixtures, flooring, etc. If you are uncomfortable with that, have your insurance agent take a look and give you a suggestion. Either way, be certain your agent has a copy of the HOA master policy in hand so they can determine the needed coverage.
One final tip is to know if the property you are purchasing is in a flood plain and if so, does the HOA have flood insurance which will cover not only the common areas, but also your unit. This insurance is normally purchased through the state, and certificates for flood insurance are normally required at time of closing for properties which this applies.
So how much coverage do you need? There is no cookie cutter answer for that but we have licensed professional insurance agent who specialize in condominium association insurance on staff to review your coverage and obtain additional competitive quotes to help you make the best coverage decisions possible.
Rise Association Management Group
3200 Wilcrest Dr. Ste 110
Houston, TX 77042