Whether you’re one of the mortgage brokers in Tampa, or a Realtor anywhere, you’re probably complaining about something. The world in which we live is in constant flux and the thing that you didn’t need yesterday to get the deal done, you sure as heck need today. Navigating clients from offer to closing has never been trickier.
The condo market is starting to see some action again and carries what appears to be a little known fact about the insurance governing condos and townhomes (even though this HO-6 condo policy has been in effect since December of 2009).
Basically, it calls for mandatory “walls in” coverage for condos and townhomes. In anticipation by the lender that they may one day wind up in possession of a unit and may have to file a claim on interior issues brought on by possible future abandonment, it is a condition of financing.
Typically, the community’s Master Policy must cover the entire subdivision: common elements, fixtures, buildings, and equipment belonging to the Home Owner’s Association. The interior of the unit is sometimes covered under the Master Policy, but oftentimes it is not.
Previously, the condo/townhome buyer could opt to roll the dice and not take out an individual policy for their unit’s interior, but the HO-6 policy mandates it if the Master Policy does not cover everything inside.
This is just another thing that you’ll want to confirm with the HOA and if needed, get insurance quotes before moving too far into the transaction.
At the end of the day, well…who knows what changes can pop up at the end of any day in our industry lately! Best advice is to stick close to your mortgage broker and Realtor and be prepared to comply with the law de jour.