As sales of co-ops and condos continue to slow, developers, property managers and building boards are looking for any possible incentive to attract buyers. Any realtor will tell you that location is the first and primary consideration when buying a property. Once a general area is selected the amenities that enhance the property choice will strongly come into play. What amenities are available can often be a deal maker or deal breaker for a prospective buyer. And one size will not fit all in the search for any of the extras that put the “sweet” into home sweet home!
Co-op boards, condo associations and property management firms are well aware of buyers’ preferences and often strive to upgrade or add amenities to a property in order to be able to compete in today’s market. Typically referred to as a “common element” in condominium bylaws, pools, exercise rooms, meeting space, and recreational facilities are examples of what is considered an amenity. In a co-op property, the shareholders would probably list the same enhancements as “amenities.” Whatever those nice lifestyle additions are called, they add value to any building community.
Luxury or Liability?
A good rule of thumb is if an amenity is fixed, real property, or part of that property, it must be insured under property insurance. If there is an increased danger of an accident or injury associated with that amenity, then the liability insurance will come under consideration. Whether amenities are in place or added, until they are fully and properly insured they can just as easily be an expensive liability.
Amenities will require both property and liability insurance coverage. Property insurance protects the equipment owned by the association and will cover replacement cost due to covered perils. Liability insurance will cover bodily injury, or property damage claims brought by a third party due to use of the amenities. A slip and fall on the pool deck, an injury using gym equipment, or even a fall entering the newly remodeled lobby may have legal ramifications.
When seeking insurance for an amenity, one requirement is to adequately identify the amenity from an insurance and exposure perspective to arrive at the total insurable value (TIA). Existing policies should be reviewed on a regular basis and always before, during, and after adding an amenity or upgrade.