...simply offered to the insured with little room for modification. This being so, the general rule is that the benefit of any reasonable interpretation of the intent of the coverage lies with the insured.
Apartment leases will usually have a repair and maintenance provision which, depending on the exact wording, can prove troublesome for the resident. While intended to spell out who—landlord or resident—is responsible for routine repairs and maintenance, painting, minor plumbing repairs, etc., the language is often so broad that it also appears to transfer to the resident the responsibility for repairs following a major loss. This is especially possible if the insurance clause isn’t clearly drawn and sometimes even appears to allow the owner to pocket the insurance money while requiring the resident to pay for the repairs.
In drawing up new leases or condo declarations or, given the opportunity, modifying existing ones, care should be taken especially with the insurance and repair and maintenance clauses.
Significant liability exposures also present a number of problems that apartment managers and residents must address:
1) How much is enough liability insurance? This is one of the most difficult questions to answer. The larger the apartment complex and the closer to other major properties, or the more children present, the greater the liability exposure. In today’s climate of mega-million dollar liability judgments, high liability insurance limits are clearly needed. The problem is made worse by the fact that once the liability limits are exhausted, claim can still be made against the remaining assets.
A common practice is the purchase of several layers of liability insurance; a primary layer above whatever deductible seems feasible, a $1 million to $5 million umbrella layer above that— perhaps broader than the general liability coverage— and, if affordable, one or more...