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#188-O, Emine v. Waters House Condominium Inc. (March 9, 1993) (Panel: Bromberg, Auvil, Blumberg)

The condominium owner (CO) filed this claim to force the condominium association (CA) to pay the insurance deductible of $1000 for the repair of the air conditioning unit serving her home, which unit was destroyed by lightning.

The evidence at the hearing showed that the CO's air conditioning unit was hit by lightning in April, 1992 and that the cost of repair was $1150; the CA's master insurance carrier paid $150 and the deductible of $1000 was passed to the CO.  The cause of the damage was a named peril covered in the policy and not the result of mechanical failure.

The hearing panel noted that under Section 11-114(a) of the Maryland Condominium Act, the CA must have insurance to cover the common elements and the units against certain risks, and that under Section 11-114(g)(2) any covered repair costs in excess of the actual proceeds paid by the insurer was a common expense.  The CA bylaws also provided that if proceeds from insurance were not sufficient to pay for the cost of repair "by fire or other casualty" then the repair shall be performed by the CA as a common expense.  The hearing panel therefore held that the CA must pay the $1000 deductible as a common expense.