Insurance on a Fee Simple Townhouse Complex
I live in a fee simple townhouse. The Board of Directors 10 years ago thought it made sense to get a master insurance policy for the buildings and units and have each individual unit owner purchase a H06 to cover their personal belongings. The unit owners are responsible for all the maintenance and upkeep of their individual unit, inside and out. I thought the HOA needed an insurable interest in the buildings and units to insure them? Since the HOA doesn't own any part of the buildings or units and doesn't maintain or do repairs for them, how is this "interest" created? I know if we were a condominium type of ownership instead of our fee simple ownership things would work differently.
This is another one of those legal quagmires. I would have to assume that the board of directors had some legal advice at the time they made the decision, but that doesn't mean that the decision they made is still valid. If you have any concerns, I'd consult a real estate lawyer who has a thorough knowledge of fee simple complexes. Then I'd take a half-hour of free advice on what the ramifications of this approach to insurance could mean for you.