Commuity Association Declaration

SB 154 Glitch Bill to the Rescue!

Posted on by Gerstin

On June 9, 2023, Governor DeSantis signed the “glitch” bill to purportedly fix some issues with the recent “Surfside” related inspection law.  The full text of the law is available here, and a .pdf of this article is available here. Unless otherwise indicated, this legislation takes effect immediately.

As with many legislative efforts, determining the effectiveness of the legislation and the discovery of unintended consequences takes time.  At the very least, the changes to the Structural Integrity Reserve Study law (SB 154) listed below are a good start:

Reserve Funding:

  • Multi-condominium associations operating at least 25 condominiums can use a line of credit as an alternate funding source for reserve funding.
  • Reserve funding must be based on the association’s most recent Structural Integrity Reserve Study.
  • The requirements to waive reserves or use reserves for an alternate purpose (allowable only until 2025) has changed to a majority of the total membership from a majority of those present at a meeting in which quorum was attained.
  • Inflation can be considered by an association when determining reserve funding.
  • Depending on specific requirements, a 40 or 50-year certification may be used instead of the visual survey portion of a SIRS.
  • The unduly harsh strict liability standard to find a director liable for a breach of fiduciary duty for not complying with the new reserve requirements has been changed.  The new standard is now the more reasonable “willful and knowing.”
  • Reserves are only required for components an association is responsible for according to its Declaration.  Reserves are not needed for items whose useful life exceeds 25 years.  However, deferred maintenance reserves for these items are still required.
  • Along with architects and engineers, a reserve specialist can now perform the visual inspection portion of a SIRS.
  • Exterior doors are now reserve components, and the floor and foundation are not unless the floor and foundation are part of the building’s “structure,” which, of course, they are.

Inspections:

  • Insurance premiums are excluded from the 115% calculation that allows members to challenge a budget.
  • The Florida Building Code is designated as authoritative to determine the height of a building.
  • An association has a year or less (depending on local ordinances) to repair damage identified in an inspection.
  • Fourteen days’ notice to members is required upon an association’s receipt from a local governing authority, a milestone inspection is required.  The notice must also include the date the milestone inspection must be completed.
  • An architect and an engineer acting as a licensed design professional may conduct a milestone inspection.
  • The definition of “substantial structural deterioration” was broadened to include “substantial structural weakness.”
  • A local governing authority has the discretion to extend an inspection deadline for “good cause,” which at the least requires the association to have entered into a contract for a milestone inspection that cannot be completed by the deadline.
  • No more than 45 days after receiving the inspection report from the architect or engineer, the association must post a summary on its website, mail it to the members, and make the summary or report available to renters.
  • Community association managers no longer have to comply with the structural inspection laws solely because they manage a property  “that has a building” on it.
  • Local authorities can set a 25-year inspection requirement based on environmental conditions, such as proximity to a shoreline.
  • Condominium units in which personal property is covered under a flood master policy or located above specific floors may not be required to have flood insurance.
  • As of July 1, 2027, mediation is available to members for certain structural and life-safety disputes.
  • Developers must provide prospective buyers with statements regarding milestone inspections, SIRS, and reserve studies, if applicable.  The law introduces additional presale notice requirements in contracts to ensure buyer awareness.

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2019 Florida Community Association Case Law Year in Review.

Posted on by Gerstin

Based on a seemingly low media profile many people wrongfully assumed Florida’s court system had little or no impact on their community association in 2019.  Although lacking in “name plate” cases the following case law decided in 2019  will have a meaningful impact on Florida’s condominium and homeowner associations (click here for .pdf of this article):

2019 Case Law Decisions

 

•  Condominium Board Member Term Limits.

  • Is the 8 year directorship limit retroactive?
  • Only one arbitration case so far on this issue involving a community association.  In the arbitration case, the association’s governing documents did not contain the “Kaufmann Language”.
  • According to the arbitration case of Glantz v. Hidden Lake, Case No.: 2019-01-5048, without Kaufmann Language the term limits count starts from the date the legislation passed forward.
  • With Kaufmann Language, one can assume the opposite result.

•  Former Owner Awarded Attorneys’ Fees Against Community Association.

  • After an association filed a lawsuit against the two title owners of a unit to recover unpaid assessments, the unit owners denied the allegations and asserted their right to recover attorneys’ fees and costs.
  • The two unit owners sold the unit to a third party.
  • Over a year passed without any activity in the case.  This typically happens with an inattentive attorney or unengaged board of directors.
  • Judge dismisses the association lawsuit for “lack of prosecution”. One of the former unit owners then filed a motion for prevailing party attorneys’ fees pursuant to the Declaration of Condominium and Florida Statute §718.106 and won.
  • Don’t ignore old case you might consider moot, close out the cases properly or face the possible expensive consequences. Tison v. Clairmont Condo. F Ass’n, No. 4D19-117, 2019 Fla. App. LEXIS 16769 (4th DCA Nov. 6, 2019).

• Developer allowed to use working fund contributions for operating expenses.

  • Working fund contributions used to be considered as benefiting the association, not its a developer. That sentiment recently changed in a recent case decided by Florida’s Fourth District Court of Appeal involving Valencia Reserve, a residential community of single-family homes in Palm Beach County.
  • While still in control of the association, the developer used Working Fund Contributions collected at each closing to satisfy the Association’s operating deficit.
  • After turnover, the HOA sued the developer claiming the HOA Act prohibited the developer’s use of working fund contributions to satisfy the deficit.
  • Florida’s Fourth District Court of Appeals affirmed the lower court’s ruling finding that the developer’s use of the working fund contributions was permitted by both the Declaration and the HOA since they were not budgeted for designated “capital contributions”.
  • Valencia Reserve Homeowners Ass’n v. Boynton Beach Assocs., XIX, LLLP, 44 Fla. L. Weekly D2208 (Fla. 4th DCA August 28, 2019).

•  Associations Must Comply with the ADA and Florida’s Accessibility Code.

  • An elderly patient visiting a medical facility in a strip mall fell near a curb in the parking lot and sued the medical facility, the manager of the mall and the owner of the mall based on a premises liability negligence claim. In support of his claim, the injured patient relied up a provision in the Florida Accessibility Code of Building Construction requiring the shortest accessible route between the handicapped parking space where he parked and the entrance to the medical facility. This requirement is not in the ADA.
  • Florida’s Second Court of Appeals held the jury should hear both codes and determine the appropriate level of care.
  • All common areas should be surveyed by a profession in the ADA and Florida’s accessibility code.
  • Personal liability for directors and possibly no insurance coverage for any such lawsuits.
  • Krueger v. Quest Diagnostics, Inc., MPN, Ltd. Liab. Co., 44 Fla. L. Weekly D2318 (Fla. 2d DCA September 13, 2019) .

• Associations Beware of Mandatory Arbitration Provisions in Governing Documents.

  • The Declaration of Covenants, Conditions and Restrictions for the Ellingsworth Community contain a mandatory arbitration provision which requires that disputes be subject to negotiation in good faith, mediation, and a demand for arbitration within thirty days after termination of the mediation proceeding. If this procedure is not followed, the dispute is waived.
  • When a homeowner modified the landscaping surrounding her home without authorization, the homeowners association demanded restoration to its previous condition.  The homeowner refused, and she and the association proceeded to negotiation and mediation. The mediation resulted in an impasse. Rather than initiating arbitration, the homeowners association filed suit in state circuit court where it argued that despite the clear terms of the governing Declaration, Florida Statute § 720.311 allowed for a legal filing, rather than arbitration.
  • The Court found that the Declaration and § 720.311  both provided for arbitration, but that the Statute did not supersede the Declaration’s mandatory arbitration provision and allow for filing of a lawsuit.  Since the Association failed to submit the dispute to arbitration within thirty days of the mediation impasse, it waived its claim against the homeowner.  The Association’s claim was dismissed with prejudice and judgment entered in favor of the homeowner.
  • The Court found the Statute did not supersede the Declaration’s mandatory arbitration provision and allow for filing of a lawsuit.  Since the Association failed to submit the dispute to arbitration within thirty days of the mediation impasse, it waived its claim against the homeowner.  The Association’s claim was dismissed with prejudice and judgment entered in favor of the homeowner.
  • Have an attorney review your governing documents and propose amendments to remove antiquated and expensive provisions.
  • Guan v. Ellingsworth Residential Cmty. Ass’n, No. 5D18-3633, 2019 Fla. App. LEXIS 12940, at *1 (5th DCA Aug. 23, 2019).

• Unit Owners’ Defamation Lawsuit, Board Members Beware.

  • A condominium association’s attorneys sent a cease and desist letter to a unit owner and provided a copy of the letter to the condominium association client. The unit owner who was the target of the cease and desist letter then sued the association’s attorneys in state circuit court for defamation.
  • The court dismissed the defamation case because providing  a copy of the cease and desist letter to its client did not amount to the publication required under the law of defamation. The court viewed the letter as a statement made by the attorneys to their client as part of the attorney-client relationship and analogous to the situations where there was no publication to a third party because the communication was tantamount to the principal talking to itself.
  • It is important that community association directors and managers keep in mind their communications with association counsel are protected by the attorney-client privilege, are confidential, and should not be disclosed to third parties, including non-director unit owners.  Disclosing such privileged communications to third parties may result in the waiver of the privilege.  In addition, it is also important to take precautions to avoid potential defamation suits whenever possible as these are one of the most filed actions in the community association setting. Hoch v. Loren, 44 Fla. L. Weekly D1494 (Fla. 4th DCA June 12, 2019) .

2019 Florida Condominium & Homeowner Association Legislative Update

Posted on by Gerstin

 

2019 Florida Condominium & Homeowner Association Legislative Update

Click here for .pdf version of this article

Based on the seemingly low media profile of recently passed legislation pertaining to community associations, many people wrongfully assume the latest session of Florida’s legislature will have little or no impact on their community association.  To the contrary, although lacking in “name plate” legislation, the following recently passed legislation goes into effect on July 1, 2019 (unless otherwise noted) and will have a meaningful impact on Florida’s condominium and homeowner associations:

HB 829 – Attorney Fees in Challenges to Local Ordinances.  Thanks to HB 829 it is now easier for your community association to “fight city hall”.  Attorneys’ fees awards are available to prevailing parties in lawsuit brought against a local ordinance that allegedly violates state or Federal preemptions.  Click here for a copy of the new law.

HB 1159 – Tree Trimming.   Other than mangrove trees, local governments cannot require a permit for pruning, trimming and removal of vegetation and trees, if the tree or vegetation is certified as presenting a danger by the International Society of Arboriculture.  Local governments are also forbidden from requiring the removed trees or vegetation to be replanted.  A property owner year-round can request an electric utility maintain vegetation on property adjacent to the electric utility’s right-of-way without notice or permission from the local government. This would only apply to situations when it is necessary for power restoration or when the vegetation is threatening to cause a power outage.  Click here for a copy of the new law.

SB 82 – Vegetable Garden Preemption.  Local governments are prohibited from regulating vegetable gardens on residential property. This prohibition does not apply to general regulations that are not specific to vegetable gardens, such as ordinances regulating fertilizer, water use and invasive species.  Click here for a copy of the new law.

SB-1666 – Anchoring & Mooring.  The legislation directs the Florida Fish & Wildlife Commission to study impacts of long term storage of vessels anchored and moored outside of mooring fields; create “no-discharge zones” for sewage dumping near certain waterbodies near rural areas; require boater safety identification cards for boats 10 horsepower and above; and designate a portion of registration fees collected by counties for the Marine Resources Conservation Trust Fund.  Click here for a copy of the new law.

HB 7103 – Sprinkler Retrofitting. Allows condominium associations to continue to vote to waive fire sprinkler system retrofitting requirements until January 1, 2024, at which time local authorities may require a condominium association to retrofit fire sprinkler systems or install an engineered life safety system.  Click here for a copy of the new law.

HB 369 – Sober Homes.  The bill continues to tighten up sober home standards and address unintended consequences of previously passed legislation. The bill exempts “Oxford Homes” from certification requirements, strengthens patient brokering and deceptive practices statutes, provides for certification and background checks of peer specialists, expands background check requirements for recovery residence administrative personnel and expands violations eligible for exemption, and covers residences that have day/night treatment centers. Click here for a copy of the new law.

SB- 182 Medical Marijuana.   If it’s for medical purposes, does it fall under the ADA? If so, does your community association have to allow marijuana smoking where cigarette smoking is permitted?  The legislation permits the use of smokable medical marijuana. The bill allows minors to smoke medical marijuana if they are terminally ill and smoking marijuana is approved by a second physician. Patients are limited to 2.5 ounces every 35 days, unless the Department of Health approves an increase at a patient’s request.  Click here for a copy of the new law.

HB-311 Autonomous Vehicles.  Is your community association “drone and autonomous vehicle ready”? Click here to obtain our report on how your community association can maximize the inevitable onslaught of drones and autonomous vehicles.  The new law requires seeks to have Florida lead the country in autonomous vehicle technology by establishing: minimum insurance thresholds, a prohibition on levying of fines or fees by local entities (with the exception of seaports and airports), minimum driving conditions for the use of any automatic driving systems and on-demand autonomous networks. Click here for a copy of the new law.

 

Stay one step ahead of new legislation, recent case law and new developments that impact your community association.

}   Name:                                                                                          

}   Mailing address:                                                                         

}   E-mail address:                                                                           

}   Community name:                                                                         

}   Position on board, if any:                                                              

 

}    Fax this completed page to (561) 750-8185 or email the above information to joshua@gerstin.com.

2018 Florida Community Association Legislative Update

Posted on by Gerstin

Click here for .pdf version

The following will become law on July 1, 2018.

 

Fines and Suspensions – Condominiums § 718.303
Now mirrors Florida HOA law- A condominium association’s committee of unit owners who determine whether to confirm or reject a fine or suspension levied by the board must be made up of at least three members who are appointed by the board, and are not officers, directors, or employees of the association, or a spouse, parent, child, brother, or sister of an officer, director, or employee of the association. §718.303(3)(b). Fla. Stat.

Now mirrors Florida HOA law – A condominium association’s committee of unit owners who determine whether to confirm or reject a fine or suspension levied by the board must approve the fine or suspension by majority vote, otherwise the association may not impose the fine or suspension. §718.303(3)(b). Fla. Stat.

Now mirrors Florida HOA law- The condominium and cooperative association must provide written notice of any fine or suspension by mail or hand delivery to the unit owner and, if applicable, to any tenant, licensee, or invitee of the unit owner. §718.303(3)(b) Fla. Stat.

A fine approved by the committee of a condominium association is due 5 days after the date of the committee meeting at which the fine is approved. § 718.303(3)(b).

Fines and Suspensions – HOAs §720.305(2)(b), Fla. Stat.
A fine approved by the committee of an HOA, condominium, or cooperative association is due 5 days after the date of the committee meeting at which the fine is approved. § 718.303(3)(b). HOA Elections – § 720.306

If an election is not required because there are fewer or an equal number of candidates than vacancies, and nominations from the floor are not required, then write-in nominations are not permitted and the candidates will commence service on the board of directors, regardless of whether a quorum is attained at the annual meeting.

Payment of HOA Assessments – § 720.3085
The application of payments in HOA law (first to the interest accrued, then to any administrative late fee, then to any costs and reasonable attorney fees, and then to the delinquent assessment) applies notwithstanding the Uniform Commercial Code’s regulations on restrictive notations placed on or accompanying a payment. 720.3085(3)(b), Fla. Stat. This is intended to clarify existing law.

HOA Amendments to Governing Documents – § 720.306
A proposal to amend the governing documents of an HOA must contain the full text of the provision to be amended, with underlining of proposed new language and striking of proposed deleted language, unless the proposed change is so extensive and then a notation must be inserted indicating that the proposed amendment has substantial rewording. This is similar to condominium association law.

An amendment is effective when recorded in the public records of the county in which the community is located.
An immaterial error or omission in the amendment process does not invalidate an otherwise properly adopted amendment.

Required notices for amendments to the governing documents must be mailed or delivered to the parcel owner’s mailing address on the property appraiser’s website, or electronically transmitted if the parcel owner has consented in writing to receive notice by electronic transmission. 720.306(1)(g), Fla. Stat.

Communication by HOA Board Members –§ 720.303(2)(a).
Members of an HOA’s board of directors are allowed to use e-mail as a means of communication. However, a board member may not cast a vote on an association matter via e-mail. This mirrors condominium association law.

Notice of Board Meetings – Condominiums §718.112, Fla. Stat.
Condominium associations are allowed to adopt rules for noticing all board and unit owner meetings and meeting agendas on a website if the time requirements for physically posting the board meetings are met. Any rule adopted for website notice must include a requirement the association send an electronic notice in the same manner as a notice for a meeting of the members, which must include a hyperlink to the website where the notice is posted, to all unit owners whose e-mail addresses are part of the official records. Notice by website must be in addition to the other notice requirements. §718.112(2)(c)1, §718.112(2)(d)3. Fla. Stat.
A condominium unit owner who consents to receiving notice by electronic transmission is responsible for removing or bypassing any filters that block receipt of mass e-mails sent to members on behalf of the association for the purpose of giving notice. §718.112(2)(d)6. Fla. Stat.

Notice of Board Meetings – Homeowner Associations §718.112.
An HOA is allowed to give notice by electronic transmission to any parcel owner who provided written consent and a fax number or e-mail address to the HOA for such purpose. 720.303(2)(c)1., Fla. Stat.

Official Records of Condominiums § 718.111.
The deadline for condominium associations to make records available to unit owners is extended from 5 working days to 10 working days. §718.111(12)(b), Fla. Stat.
Electronic records relating to voting is included in the list of official records that must be kept by condominium and cooperative associations. §718.111(12)(a)12, Fla. Stat.
A condominium association must permanently maintain the following documents from the inception of the association (instead of just for at least 7 years):
A copy of the articles of incorporation, declaration, bylaws and rules of the association;
Meeting minutes; and A copy of the plans, permits, warranties, and other items provided by the developer at turnover. 718.111(12), Fla. Stat.

Condominium Board Members – § 718.112.
The provision that condominium association board members may not serve more than four consecutive 2-year terms is repealed. Condominium association board members may not serve more than 8 consecutive years, unless approved by an affirmative vote of unit owners representing two-thirds of all votes cast in the election or unless there are not enough eligible candidates to fill the vacancies. Board member terms are 1 year unless a longer term is permitted by the bylaws or articles of incorporation. 718.112(2)(d)2., Fla. Stat.

A cooperative director or officer is deemed to have abandoned their office if the officer or director is more than 90 days delinquent in the payment of any monetary obligation to the association. 719.106(1)(m), Fla. Stat. This mirrors condominium association law.

In residential cooperatives of more than 10 units, co-owners of a unit may not serve as members on the board at the same time unless the co-owners own more than one unit or there are not enough eligible candidates to fill vacancies on the board. 719.106(1)(a)1., Fla. Stat. This mirrors condominium association law.

Condominium Board Member Recall – § 718.112.
A board must hold a meeting within 5 business days of the unit owners’ vote or receiving a written agreement, in order to determine if the vote or written agreement is facially valid. If the board determines the vote or written agreement is facially valid, the recall becomes effective upon the conclusion of the board meeting. 718.112(2)(j), Fla. Stat.

If the board determines that the recall is not facially valid, the unit owner representative may file a petition for arbitration with the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation (the “Division”), challenging the board’s determination on facial validity. 718.112(2)(j)4.

A recalled board member may challenge the facial validity of the written agreement to recall, the ballots filed, or the substantial compliance with the procedural requirements for the recall, by filing a petition with the Division. 718.112(2)(j)6.

If an arbitrator determines a board member’s recall is invalid, the recall is null and void and the board member must be immediately reinstated. A board member who successfully challenges a recall is entitled to reasonable costs and attorney fees from the respondents. An arbitrator may award reasonable costs and attorney fees to the respondents if the arbitrator determines a recalled board member’s request for arbitration is frivolous. 718.112(2)(j)6., Fla. Stat.

Condominium Websites – § 718.111.
The deadline for condominium associations to post certain documents to its website is extended from July 1, 2018 to January 1, 2019.

A condominium association’s failure to post required documents does not invalidate any action or decision of the board or its committees. 718.111(12)(g)4.

After bidding for materials, equipment, or services has closed, a condominium association must post on its website a list of bids received within the past year.

Summaries of bids for materials, equipment, or services must be posted on the website only if they exceed $500. A condominium association may post the complete copies of the bids in lieu of summaries of the bids.

Instead of posting on its website proposed financial reports to be considered at a meeting, the association must post any monthly income or expense statement to be considered at a meeting.

A condominium association or its agent is not liable for disclosing protected or restricted information unless the disclosure was made with a knowing or intentional disregard of the protected or restricted nature of the information.

Condominium Financial Reporting – § 718.111.
If a condominium association fails to comply with a request from the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation (the “Division”) to provide, within five business days, a copy of the association’s financial report to the Division and to a unit owner who reports the association’s failure to provide a copy of such report within the required time, the association may not waive the annual financial reporting requirements for the fiscal year in which the unit owner’s request was made and the following fiscal year.

Alterations or Additions to Condominium Property – § 718.113.
If a condominium’s declaration does not provide a procedure to approve material alterations or substantial additions to condominium property, then approval by 75 percent of the voting interests must be obtained before the material alterations or substantial additions to the condominium property begin. This applies to condominium associations existing on July 1, 2018. 718.113(2), Fla. Stat.

Condominium Bulk Assignees and Bulk Buyer – § 718.707.
The time limit on acquisition of parcels for classification as a bulk assignee or bulk buyer is removed, extending the applicability of the bulk assignee and bulk buyer provisions indefinitely.

Electric Vehicles in Condominium Associations – § 718.113, § 718.121.
A condominium association may not prohibit a unit owner from installing an electric vehicle charging station within the boundaries of the unit owner’s limited common element parking area. Notwithstanding, the installation of an electric vehicle charging station is subject to a number of restrictions in the statute.
The installation of an electric vehicle charging station may not be the basis for filing a construction lien under Chapter 713, Florida Statutes, against the association, but a construction lien may be filed against the unit owner.

HB 7087

Inter-spousal Transfers: Exempts the transfer of homestead property between spouses from documentary stamp tax charges.

Multi-Parcel Ad Valorem Taxation: Among its provisions is the multi-parcel ad valorem tax initiative permitting the vertical subdivision of real property, and it also includes an abatement of taxes for residential improvements rendered uninhabitable by hurricanes during the 2017 season.

Stay one step ahead of new legislation, recent case law and new developments that impact your community association.

Name: _________________________________________________

Mailing address: ________________________________________

E-mail address: _________________________________________

Community name: ________________________________________

Position on board, if any: __________________________________
Fax this completed page to (561) 750-8185 or email the above information to joshua@gerstin.com.

Defaming Directors, How to Deal With Abusive Members in Your Community Association.

Posted on by Gerstin

 Click here to download the full presentation

Presented at the Delray Beach Alliance on December 5, 2017.

 

An easy to understand primer on the laws of defamation for The State of Florida.

 

Practical methods on how to deal with hostile community association members.

 

How to deal with hostile residents.  How to know if a member has defamed a director of your community association.

 

2017 Florida Condominium and Homeowner Association Legislative Update

Posted on by Gerstin

2017 was a big legislative year for community associations, especially condominium associations.  Following is an overview of the 2017 legislation directly impacting Florida’s condominium and homeowner associations.

Click here for the .pdf version.

Condominium & Homeowner Associations

Financial Reporting Requirements

HB 6027, full text of the law can be found here.  Law goes into effect July 1, 2017.

The exemption for condominium associations with less than 50 units and homeowners associations containing less than 50 parcels from providing yearend financial statements prepared by an independent accountant has been eliminated.

Condominium associations with fewer than 50 units and homeowner associations of less than 50 parcels can no longer opt to prepare a report of cash receipts and expenditures in lieu of financial statements.  These associations must comply with financial reporting requirements based upon the association’s revenues.

The prohibition on condominium associations waiving financial reporting requirements for more than three (3) years was eliminated.

 Estoppel Certificates

SB398, full text of the law can be found here.  Law goes into effect July 1, 2017.

Associations have 10 business days to issue an estoppel certificate after receiving a written or electronic request from an owner, mortgagee or their designee. A fee cannot be charged if the estoppel certificate is not delivered within ten business days.

Estoppel certificates must be returned to the requestor (mailed, email or fax) on the day they are issued.

If an estoppel certificate is hand delivered or sent by electronic mail it has to be valid for 30 days; estoppel certificates sent by regular mail have to be valid for 35 days.

-Only board members, authorized agents or representatives (attorneys, accountants, etc.) of the association or the association’s management company can issue an estoppel letter.

The association’s website must list the designated person or entity, with a street or e-mail address, for the receipt of estoppel requests.

Association’s are permitted to amend their estoppel certificates but they cannot charge for the amended estoppel certificate.

Associations cannot collect any money owed in excess of the amount specified in the estoppel certificate.

The Association’s ability to demand the payment of the estoppel certificate fee prior to the anticipated closing of a real estate transaction remains in effect.

Associations can charge up to $400 for the preparation and delivery of an estoppel certificate if, on the date of issuance, delinquent amounts are owed to the association. Otherwise, the Association cannot charge more than $150.00.  Upon request for an expedited estoppel certificate, an additional $100.00 can be charged if the expedited estoppel certificate is produced within three business days.

The statute lists a sliding scale of estoppel certificates charges for owners with multiple units.

The following information is required to be in an estoppel certificate:

  • date of issuance;
  • name(s) of unit/parcel owner(s);
  • unit/parcel designation and address;
  • parking or garage space number;
  • attorney’s name and contact information if the account is delinquent and has been turned over to an attorney for collection;
  • the fee for preparation and delivery of the estoppel certificate;
  • name of the requestor; and
  • assessment information and other information, including:
      • regular periodic assessment amount and frequency;
      • date for which the regular periodic assessment is paid through;
      • next installment due date and amount;
      • itemized list of all assessments, special assessments, and other money currently owed or to become due after issuance of the estoppel certificate;
      • other fees, such as capital contribution fees, resale fees, transfer fees, etc.;
      • whether there are any open violations of rules or regulations;
      • whether association approval of transfer of the unit/parcel is required and, if so, whether the board has approved the transfer;
      • whether there is a right of first refusal and, if so, has the right been exercised;
      • list and contact information for any other associations of which the unit/parcel is a member;
  • contact information for all insurance maintained by the association; and signature of an officer or authorized agent of the association.

Condominiums Only

HB 1237, full text of the law can be found here.  Law goes into effect July 1, 2017.

Directors.

Unless approved by an affirmative vote of two-thirds of the total voting interests of the association or there are not enough eligible candidates to fill the vacancies on the board, a board member may not serve more than four consecutive 2-year terms.

Recalls.

Boards are no longer required to certify a recall or initiate arbitration proceedings for not doing so.  Boards are required to a meeting within 5 business days after receipt of a written recall agreement.

Recalled board members must turn over to the association all records and property of the association within 10 business days after the recall vote.

Voting Rights.

Only monetary obligations more than 90 days delinquent totaling more than $1,000 can an association suspend a member’s voting rights. The delinquent member must be provided 30 days notice accompanied by proof of the delinquency before such suspension takes effect.

Receiver cannot vote on behalf of a unit owner if the owner’s unit was placed in receivership to protect/benefit the association.

Conflicts of Interest.

An association cannot hire an attorney who also represents the association’s management company.

Board members, the property manager and the property management company are prohibited from purchasing a unit at an association foreclosure sale or accepting a deed in lieu of foreclosure.

Associations are prohibited from hiring service providers owned (at least 1% of equity shares) or operated by a board member, any person who has a financial relationship with a board member, or a close relative of a board member.

Officers and directors must disclose to the board any activity that may be construed as a conflict of interest. A rebuttable presumption of a conflict of interest exists if a director, officer, or relative of a director or officer enters into a contract for goods or services with the association or holds an interest in a business entity that conducts business with the association or proposes to enter into a contract with the association.

Any proposed activity that may be a conflict of interest must be subject to a board vote. The meeting notice agenda for such vote must list the proposed activity and all transactional documents (contracts) related to the proposed activity must be attached to the meeting agenda.

If the board votes against the proposed activity, the director or officer must notify the board in writing of his or her intention not to pursue the proposed activity or to resign from the board. If the board finds that an officer or a director has violated this provision, the officer or director is automatically deemed as being removed from office.

Official Records.

Bids for materials, equipment or services are considered part of an association’s official records.

In addition to unit owners, designated representatives of unit owners may inspect and copy condominium documents and records. Tenants may inspect and copy only the association’s rules and by-laws.

Associations with 150 or more units must post copies of certain specifically designated official records on its website, be inaccessible to the general public.  Does not go into effect until July 1, 2018.

Websites.

Condominium association with 150 or more units must maintain a secure website containing the following items:

  • Owner password and login.
  • The secure portion of the website must contain all condominium documents, rules and regulations, management and other agreements to which the association is a party, annual budget and proposed annual budget, financial reports and board certifications.
  • The ability to post on the front page of the website, or a separate subpage labeled “Notices”, which is linked to and visible from the front page. Documents to be considered or voted upon by the board or the owners must also be posted.

Financial Reports.

Condominium associations with less than 50 units are no longer exempt from the financial reporting requirements applicable only to larger condominiums.

Unit owners are entitled to the most recent financial report within 5 business days after the receipt of a written request.

Annually, associations are required to report to the DBPR all of the financial institutions at which it maintains accounts.  A copy of the submission is obtainable upon receipt of a written request by a member.

Criminal Penalties added to F.S. §718

Association officers, directors or manager may not solicit or accept kickbacks from vendors.

Voting certificate or ballot envelope forgery is now considered a crime.

Destroying official records or hindering their access in furtherance of a crime is punishable as a crime in F.S. § 918.13 or as obstruction of justice pursuant to Florida Statutes, Chapter 843.

An office or director charged with one of the above crimes must be removed from office and cannot be appointed, elected or have access to the association’s official records without a court order.  If the charges are resolved without a finding of guilt, the officer or director must be reinstated for the remainder of his or her term of office, if any.

Debit Cards.

Associations and their officers, directors and employees are prohibited from using a debit card issued in the name of the association, or which is billed directly to the association, for the payment of any association expense. Using a debit card in violation of this law, for a non-association expense, can be prosecuted as credit card fraud (confusing, poorly drafted statute)

Ombudsman.

If necessary to assist with an investigation of election misconduct, the Ombudsman can open and review ballots that are otherwise supposed to be cast in secret.

Condominium Terminations

SB 1520, full text of the law can be found here.  Law goes into effect July 1, 2017.

Provides for termination of a condominium when the community is no longer economically viable;

Requires affirmative vote of 80% or more of the owners and negative vote of no more than 5% of the voters;

Requires approval of the termination by the Division;

Requires a waiting period of 24 months to propose a subsequent plan of termination after rejection of a previous plan;

Requires the identity of the person or entity that owns or controls 25% or more of the units;

Requires the identity of the natural persons who own 10% or more of the entity which owns or controls 25% or more of the units;

Carries an effective date of July 1, 2007 – 10 years before the legislation was passed and signed into law.

Noteworthy Veto
Condominium Fire Sprinklers

Under current law, local governments are barred from requiring sprinkler retrofitting of condominium buildings (three stories or more) before the end of 2019.  Owners can also vote to opt-out of retrofitting sprinklers, but are not able to opt out of  the installation of alternative fire safety systems known as “engineered life safety systems”.  The legislation vetoed by Governor Scott would have postponed the retrofitting requirement until 2022 and would have allowed owners to opt-out of both retrofitting sprinklers and the installation of “engineered life safety systems”.

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Fax this completed page to (561) 750-8185 or email the above  information to: joshua@gerstin.com.

 

 

Vaccine Discovered to Prevent Zombie Homes from Plaguing Florida’s Community Associations!

Posted on by Gerstin

Two recent Florida Appellate Court decisions offer hope for community associations plagued with zombie homes.

-By Joshua Gerstin, Esq.

Within the last decade, almost every community association has encountered the same problem, a lender forecloses on an owner and nothing happens for years.  Either the owner vigorously contests the lender’s foreclosure, the lender simply does not move forward or both.  While the lender’s case meanders through the courts, the association is left with a “zombie house”, an abandoned home lowering property values and/or an owner no longer paying his/her maintenance assessments.  Until now, once a lender filed a foreclosure lawsuit a community association could do nothing other than sit and wait, sometimes for years.

In two recent Florida appellate court cases a vaccine for this zombie house problem was discovered, the community association’s “relation back” provisions in its Declaration.  In Fountainspring II Homeowners Association, Inc. v. Veliz, Case No. 4D-3408 (Fla. 4th DCA March 15, 2017), and Jallali v. Knightsbridge Village Homeowners Association, Inc., Case No. 4D15-2036 (Fla. 4th DCA Jan. 4, 2017), the Courts ruled the association was permitted to begin its own foreclosure action after the lender’s foreclosure had already begun (and stalled). In addition to the Florida laws governing both condominium and homeowner associations, the Courts found the governing documents of each association to be a major factor in their decisions.

According to both the Fountainspring and Jallali cases, well-drafted “relation back” provisions in a community association’s governing documents allow community associations to foreclose on an owner after the lender foreclosure lawsuit has already begun.  Although the association’s lien and foreclosure remains subordinate to the lender’s foreclosure, the association can drastically cut the effect and expense of a zombie home.  Properly worded “relation back provisions” in a community association’s governing documents is another tool available to community associations struggling to keep costs down and property values up.

Please contact our office for an evaluation to determine whether your association’s governing documents have the necessary “relation back” provisions to benefit from these recent Florida court decisions.

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Fax this completed page to (561) 750-8185 or email the above  information to: joshua@gerstin.com

2017 Pending Florida Community Association Legislation

Posted on by Gerstin

Click here for PDF version of this article

The weather outside is cool in Florida, but the heat is surely on community associations, their directors, officers and property managers in Florida’s 2017 legislative session.

 

SB 294 (Condos, Cooperatives, HOAs)

The bill requires associations with less than 50 units to prepare a financial report based on the association’s annual revenues. In addition, if an association fails to provide the financial report to the owners if requested, the owners are prohibited from waiving the financial report for three (3) consecutive years and must file a copy with the State for those three (3) years.

  • This bill eliminates the option for associations with fewer than 50 units and more than $150,000 in annual revenue to submit less comprehensive annual financial statements.
  • Penalizes association with enhanced financial reporting requirements if they fail to provide owners with annual financial reports upon request.

HB 295 (HOAs)

  • Increases penalties for not providing access to official records to $500 per day for up to 30 days.
  • Imposes financial liability on property managers for failing to provide proper access to association official records.
  • Revises the timeframe for members to take control of the board of directors from the developer.
  • Provides for binding arbitration of disputes involving assessments, official records, and enforcement of covenants, rules, and restrictions.
  • Requires home sellers to provide prospective buyers with the association’s governing documents and operating budget at least 7 days before closing, and allows buyers to terminate the contract within 3 days after receipt of the documents.

SB 318 (HOAs)

  • This bill provides for a new, alternative procedure for homeowners associations to preserve their governing documents under Florida’s Marketable Record Title Act.
  • At the first board meeting following each annual meeting of the members, the board of directors must consider whether to preserve the association’s governing documents under Florida’s Marketable Record Title Act.
  • At least every 5 years, homeowners association must record a notice in the public records containing specific information including, the name and address of the association, a list of its recorded governing documents, contact information for the current property manager, and a legal description of the community.

SB 398 (Condos, Cooperatives, HOAs)

  • Requires estoppel letters to be issued within 10 days of a request, and caps fees at $200 An additional $100 may be charged if the estoppel letter is requested on expedited basis (3 business days). An additional $200 may be charged if the owner is delinquent.
  • Creates a maximum fee schedule for multiple estoppel letter requests.
  • Requires estoppel letters to include a long list of various information beyond standard financial information.
  • Association must publish on their website the name and address/email address of person responsible for receiving estoppels requests.

 SB 744 (Condos, Cooperatives, HOAs)

Condos

  • Requires bids for work to be performed be maintained in the official records for 1 year.
  • Eliminates the July 1, 2018 deadline to be classified as a bulk buyer or bulk assignee.

Cooperatives

  • Prohibits co-owners from serving on the board simultaneously in communities with more than 10 units, unless there not enough eligible candidates to fill all board vacancies.
  • Allows board members to communicate via email, but prohibits voting via email.
  • Directors and officers who are over 90 days delinquent in any monetary obligation to the association are deemed to have abandoned their position.

Condos & Cooperatives

  • Includes electronic records relating to unit owner voting in the list of official records of the association.
  • Eliminates the option for associations with less than 50 units to prepare a report of cash receipts and expenditures in lieu of complete financial statements.
  • Removes a restriction prohibiting associations from waiving certain financial reporting requirements for more than 3 consecutive years.
  • Authorizes the board to adopt a procedure for posting meeting notices and agendas on the association website.
  • Clarifying that associations under 75 feet high are not required to undergo fire sprinkler/life safety retrofitting and do not need to conduct an opt-out vote.
  • Extends the deadline to opt-out or apply for a permit for fire sprinkler/life safety retrofitting to December 31, 2018, and extends the deadline to complete fire sprinkler/life safety retrofitting to December 21, 2021.
  • Clarifies certain rules and procedures for fire sprinkler/life safety retrofitting.

HOAs

  • Allows board members to communicate via email, but prohibits voting via email.
  • Requires the annual budget to include reserve accounts for capital expenditures and deferred maintenance which the governing documents require the association to undertake and which exceed $10,000.
  • Allows a developer to waive reserves until the end of the second fiscal year after the declaration is recorded, after which, only a majority of non-developer owners can waive reserves.
  • Revises certain voting procedures and calculations for reserve accounts.
  • Imposes certain limitations on adopting budgets that exceed the prior year budget by more than 15%.
  • Prohibits write-in nominations at an annual meeting when no election is required because the number of candidates does not exceed the number of vacancies, unless nominations from the floor are required by the bylaws.

SB 950 ( HOAs)

  • Prohibiting fines from being imposed on a home for 6 months after the death of the owner.
  • Prohibiting late fees and interest on delinquent assessments for the first year after the death of the parcel owner.
  • If a fine is imposed against a home after the owner dies, the association must provide written notice to the executor of the owner’s estate at least 5 times by certified mail.

 SB 1186 ( HOAs)

  • Specifies procedures for amending the declaration.
  • States that declaration amendments restricting rentals only apply to owners who consent to the amendment, or who purchase their home after July 1, 2017.

SB 1258 (Condos)

  • Imposes fines on board members and officers who knowingly violate any association bylaw or the Condominium Act: $250 for the first violation, $500 for the second violation, and $1,000 for third and subsequent violations. After 3 or more violations, the Department of Business and Professional Regulation may issue an order recalling the director or officer.

SB 1520 (Condos)

  • This bill makes it more difficult to terminate a condominium association.
  • Increases the minimum threshold for approving termination a condominium from 80 percent to 90 percent of the total voting interests.
  • Lowers the threshold for rejecting condominium termination from 10 percent to 5 percent of the total voting interests.
  • Expands the definition of owners who are entitled to receive fair market value for their condominium unit.

SB 1650 (HOAs)

  • Allows disputes relating to amendments of the governing documents to be resolved by mandatory arbitration in lieu of presuit mediation.

 SB 1652 (HOAs)

  • Creates specific election procedures for communities with 7500 or more homes.

SB 1682 (Condos)

  • Prohibits attorneys from representing both an association and its management company.
  • Prohibits board members and management companies from acquiring units at a foreclosure sale arising from the association’s foreclosure of the unit, or via deed in lieu of foreclosure.
  • Adds bids for materials, equipment, or services to the list of association official records.
  • Allows tenants and authorized representatives of members to inspect association official records.
  • Any board member who knowingly, willfully, and repeatedly refuses to comply with a valid request to inspect the official records is guilty of a second degree misdemeanor
  • Any person who knowingly or intentionally defaces or destroys accounting records, or who fails to create or maintain required accounting records in order to harm the association or any member, is guilty of a first degree misdemeanor.
  • Any person who knowingly and willfully refuses to release or produce association official records to facilitate a crime or to prevent a crime from being discovered, is guilty of a third degree felony.
  • Requiring associations with over 500 units to post many types of official records on its website, including the governing documents, financial statements, contracts with third parties, documents to be considered at membership meetings and notices of such meetings.
  • Allows board members to serve 2-year terms only if permitted in the bylaws or articles of incorporation. Prohibiting board members from serving more than 4 consecutive 2-year terms unless approved by an affirmative vote of 2/3 of the entire membership
  • Modifies director recall procedures.
  • Restricts association from contracting or employing service providers in which a board member has a financial stake.
  • Makes it a felony to engage in fraudulent voting activities, aid another person in committing fraudulent voting activities, or help someone avoid being caught for committing fraudulent voting activities.
  • Prohibits any party who provides maintenance or management services to the association from owning more than 50% of the units and purchasing any property subject to a lien of the association.
  • Sets forth detailed disclosure requirements for directors with possible conflicts of interest
  • A unit owner who is 90 days delinquent can be suspended from voting only if the delinquency exceeds $1,000 and requires 30-day notice.

 

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 Name: _________________________________________________

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Community name: ________________________________________

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Fax this completed page to (561) 750-8185 or email the above  information to: joshua@gerstin.com.

Attorney advises communities on support animals

Posted on by Gerstin

SunSentinel, January 17, 2017.  Attorney Joshua Gerstin recently provided Alliance of Delray Residential Associations members with advice on medically necessary pets, making decisions through emails and governing documents, topics that community board of directors will face this year.  Read full article here.

 

To watch the video presentation or to download the presentation by Joshua Gerstin, Esq. click here.