Townhouses, Insurance and Hurricanes: Lessons NOT learned. Guest Blog by YouBetcha'

This past weekend on visits to three different South Dade townhome developments, which are ALL currently developer owned, their association documents did not require that the homeowner associations provide windstorm insurance for each building through a common policy. Why should we care?

Back in 1992, Hurricane Andrew mowed through South Dade. Tragically, it leveled entire sections of South Dade. Hurricane Andrew painfully affected two little communities by the names of Naranja Lakes and Sea Pines. Its mighty power killed residents, changing lives and this community forever.

The residential area called Sea Pines can be viewed on the southwest side of the Turnpike on the way to the Florida Keys. It is now, as it was then prior to Andrew, a community of single story row houses (or attached townhomes).

Following Andrew, as South Dade struggled to come back from its devastation, Sea Pines and Naranja were years behind in the recovery process. After many legal issues, Naranja Lakes was plowed under and finally has risen again as the Mandarin Lakes community.

Sea Pines was not as lucky Naranja Lakes. It has entire sections that are still tainted with the hard times the community has faced over the past 16 years. One of the critical issues faced by the 1992 owners of the row houses were delays in rebuilding caused by owners of individual units. Either they were without hurricane insurance or they took their hurricane insurance money and abandoned their rebuilding effort. This resulted in totally rebuilt units attached to units that were qualified for demolition. The Homeowners Association was dysfunctional and ineffective. The community slid down into poverty, unable to rise above being a sad reminder of unenforced insurance requirements and homeowner association regulations.

South Dade is facing another hurricane season and the lessons learned at Sea Pines has fallen to the wayside. This past weekend on visits to three different South Dade townhome developments, which are ALL currently developer owned, their association documents did not require that the homeowner associations provide windstorm insurance for each building through a common policy. Each sales representative was asked if they had heard of Sea Pines. They had not.

In turn, each representative was asked what would happen if in a four-unit row of homes, unit 3 did not have windstorm or fire insurance and there was a disaster. The answer was that it could not happen; mortgage companies require it. This is not always true in every circumstance as illustrated by Hurricane Andrew and South Dade or by current homeowners sitting without windstorm insurance.

When offered the scenario where the unit 3 owner bought the unit cash, lived out of the area, chose to not repair it and then bailed out on the property -- The sales people were less enthusiastic about answering questions.

At least one sales representative stated she had not considered that issue and it could be a problem for the neighbors and homeowner association. That representative was from a Lennar community in an economically challenged area. When asked why the association documents were written that way, she said it allowed them not factor in the cost of insurance into the monthly association fees. Lennar, by the way, is a company whose housing bubble was partially inflated by the cash money coming into their South Dade market from South American customers. The other two communities were Cali Greens and Santa Barbara Townhomes in Homestead.

Given the magnitude of legal issues at Naranja Lakes that were caused by absentee owners (no one to be found to sign over the abandoned property), and Sea Pines’ downfall resulting from insurance issues and abandoned units, how can the Miami-Dade County Mayor and County Commission allow the very same circumstances to potentially occur year-after-year?

Did we not learn anything from Hurricane Andrew?