A real estate licensee is helping a client purchase a condominium in a 40-year-old building in Fort Lauderdale. The building has not completed the required structural integrity reserve study. What should the licensee advise the client regarding insurance implications?
Correct Answer
C) There may be significant special assessments that could affect insurability and costs
Buildings over 30 years old in Florida must complete structural integrity reserve studies, and failure to do so may indicate potential structural problems that could lead to large special assessments. These assessments can affect the property's insurability and the buyer's financial obligations. Option A (individual unit insurance covers structural) is incorrect as unit policies typically don't cover building structure. Option B (master policy handles all) is incorrect as policies may exclude pre-existing conditions or require deductibles/assessments. Option D (developer warranty) is incorrect as warranties don't typically extend 40 years.
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