Vermont HOA and condo insurance, governed by the Common Interest Ownership Act and a cold-climate loss profile. The Title 27A 80 percent actual-cash-value floor still sits below the lender standard

Vermont Title 27A, Section 3-113 requires the association to maintain property insurance on the common elements, and on the units in a condominium to the extent the statute describes, against risks of direct physical loss, in a total amount of not less than 80 percent of the actual cash value of the insured property at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations, and other normally excluded items. Section 3-113 also requires commercial general liability insurance and fidelity insurance covering the persons who control or disburse association funds.

That 80 percent actual-cash-value floor is the key practitioner point. It sits below the 100 percent replacement-cost standard the Fannie Mae Selling Guide (section B7-3) requires for a conventional loan to be warrantable. A Vermont association can satisfy Section 3-113 and still fail a lender insurance review, so size the property program to replacement cost and the lender bar rather than to the statutory minimum, and confirm the coverage is written on replacement cost rather than actual cash value.

One Vermont-specific wrinkle: Title 27A took effect on January 1, 1999, and Section 3-113 is not among the sections that Section 1-204 applies to communities created before that date. Older Vermont associations are therefore governed by their own declarations and bylaws and by lender requirements rather than by the statutory insurance floor, which makes the governing documents the controlling text for that segment.