Sinkhole Swallows Tampa Car

Reported widely in the news, including the New York Times and Huffington Post, Tampa experienced another "cover collapse sinkhole," which is impacting a multi-unit condo building. Sinkholes and the damage they cause to condos, apartments, and other multi-unit properties create a lot of conflict between the owners, their condo associations, and the various insurance companies involved.

This is due in large part to the fact that condo owners do not own, per se, the unit in which they reside.  Instead, the condo owner is a member or owner of the association, which provides them access to a particular unit.  This impacts insurance coverage, because the unit owner cannot sue the insurance company who insures the building, because they are likely not to be an insured under the policy.  They are, however, able to make a claim on their own policy for the internal damage to their unit.  Apartment sinkholes are less complicated but can impact a large number of people, given that the apartment complex oftentimes has to make special lease arrangements for its leasees, as it seeks to repair the damages to the units.  Many insurance companies do not provide coverage for these kinds of "loss of use damages," or at least make coverage for these items difficult. In our practice, we tend to take a "multidisciplinary" approach, with us working on the insurance and litigation piece, while we engage separate condo counsel to analyze the relationship between the condo owner and their association.  In cases like the Tampa sinkhole, information is key given the enormous costs associated with repairing sinkholes in this context.  If you are a unit owner, you should protect not only the interests of your associations against the acts of the insurance company, but also protect your interests in your relationship with the association.  If you are representing the association, working with your board to maximize your claim will be key.  We recently concluded a large loss associated with more than 90 units, where we succeeded by working with each of the parties and their insurance company. If you are an apartment dweller, there are rights you have as a tenant, even if they are not specifically stated in your lease.  If you are the owner of an apartment, you will need to communicate your intentions to your tenants.  For more sinkhole information about condo, apartment, or other multi-unit losses, you can contact Ted Corless at Corless Zinober, (813) 258-4998.