New Palm Beach County Flood Zone Maps Now Available

Palm Beach County homeowner associations, condominium associations, commercial and residential real estate owners can now  type in their property address at:  http://maps.co.palm-beach.fl.us/cwgis/?app=floodzones and immediately view their flood zone.  The press release from Palm Beach County regarding the new flood insurance map is as follows:

New Flood Zone Maps Now Available on the Palm Beach County Website

For more information contact: Building Division

561-233-5100

For this first time since 1982 the Flood Insurance Rate Maps (FIRMs) for Palm Beach County have been revised by the Federal Emergency Management Agency (FEMA). The new FIRMs for Palm Beach County will go into effect on 10/5/2017.

To help you view the current and pending flood zone information for your property, Palm Beach County has created a Flood Zone Map Viewer Application! You can search by address and view the FIRMs for your property by visiting http://maps.co.palm-beach.fl.us/cwgis/?app=floodzones or look for the link on our homepage at www.pbcgov.com.

Please note that this tool reports the flood zone designations that touch your property. Just because a Special Flood Hazard Area touches your property, that does not mean that your structure is located within the flood zone. It should also be noted that the flood elevations shown on the new maps are in a different Vertical Datum (North American Vertical Datum 1988) than the old maps were (National Geodetic Vertical Datum 1929). If you are comparing the new maps to a previous survey a conversion between two datum is required.

If you reside in the unincorporated area and are uncertain about your flood zone designation, please call the Palm Beach County Flood Information Hotline at 561-233-5374. If you reside in a municipality, you should contact your local floodplain administrator. For more information on the National Flood Insurance Program visit www.fema.gov/national-flood-insurance-program.

2017 Florida Condominium and Homeowner Association Legislative Update

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

 

 

It Has Begun, 2017 Florida Condominium Association Legislation

It’s only the beginning, Florida’s 2017 Pending Condominium Association Legislation

-By Joshua Gerstin, Esq.

Recently, Florida’s House and Senate passed a bill drastically changing the laws related to condominiums. Considering the public landscape of the various issues the bill addresses, it is unlikely Governor Rick Scott will veto the bill.   Therefore, condominium associations should begin to familiarize themselves with these new laws as soon as possible.

Following are changes to Chapter 718 from the recently passed Senate Bill 1682, additional legislative changes affecting community associations are expected from the legislature in the near future (will be detailed upon passage in subsequent articles):

1.     The term “kickback” was inserted, although undefined, in the list of prohibitions against a director when choosing a vendor for a condominium association.  In certain circumstances, kickbacks or other prohibited conduct can now be classified as a crime.

2.    Theft, embezzlement, forgery of ballot envelopes, election fraud, the destruction of official records in the furtherance of a crime and the acceptance of kickbacks are all classified as crimes.

3.    A condominium association is forbidden from hiring an attorney that also represents the association’s management company.

4.    Board members, the property manager and the property management company are prohibited from purchasing a property at a foreclosure sale resulting from the association’s foreclosure.

5.    No later than July 1, 2018, condominium associations with 150 or more units must have a website dedicated to the association’s activities on which required notices, records and documents can be posted. The website must contain a members only, password protected page accessible only to unit owners and employees of the association. The legislation contains an extensive list of documents that must be posted to the Association’s website.

6.    If permitted by the Association’s Bylaws, term limits of four consecutive two year terms can be imposed on a director and require a 2/3 majority to reelect.

7.    The Board certification requirement for recalls is removed in its entirety. Directors are required to step down at a meeting five business days after a recall petition with the requisite votes is submitted.

8.    An association or any officer, director, employee, or agent of an association may not use 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. Use of a debit card issued in the name of the association or billed directly to the association for any expense that is not a lawful obligation of the association may be prosecuted as credit card fraud pursuant to s. 817.61.

9.    A condominium association cannot employ or contract with any service provider owned or any person who has a financial relationship with a board member or officer, or a degree of consanguinity by blood or service provider in which a board member or officer, third degree of consanguinity by blood or marriage of a board member or officer, owns less than 1 percent of the equity shares of the service provider.

10.     Arbitrators hired by the Division are mandated to hold a hearing within thirty days of confirmation of a dispute and issue a written opinion thirty days after the hearing.

11.    Management companies are required to disclose financial interests in any vendor they recommend to an association

12.    Management companies are required to turn over all association records when their contracts expire.
A determination of whether the Division has adequate funding to handle its increased responsibilities remains an open question.  Nonetheless, Governor Rick Scott is expected to sign Senate Bill 1682. Other bills affect community associations are winding their way through the legislature. We will keep you updated as further legislation develops.

Stay Informed, Subscribe to the Gerstin & Associates Newsletter

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 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

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

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.

Stay Informed, Subscribe to the Gerstin & Associates Newsletter

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 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

2017 Pending Florida Community Association Legislation

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.

 

Stay Informed, Subscribe to the Gerstin & Associates Newsletter

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 Name: _________________________________________________

Mailing address: ________________________________________

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Community name: ________________________________________

Position on board, if any: __________________________________

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

Here Come the Lawyers! US Supreme Court Declares Criminals Have a Right to Live in Your Community Association and a Right to Sue You for Trying to Stop Them

By Seth Amkraut, Esq.neighborhood_watch_05b

Click here for .pdf version of this article

Potential Personal Liability for Board Members.

Many community associations in Florida screen prospective buyers and tenants. This screening process typically includes a comprehensive background check into each applicant’s credit, rental, employment and criminal history.  Recently, an interpretation by the United States Department of Housing and Urban Development (“HUD”) of a recent United States Supreme Court Case, Texas Department of Housing and Community Affairs, et al v. Inclusive Communities Project, Inc., et al., severely curtailed community associations’ ability to deny sales or rentals to convicted criminals.  Enforcing blanket bans on convicted criminals purchasing or renting in your community can now subject both the community association and its Board members, individually, to liability.

With particularly awful circular reasoning, HUD issued an April 4, 2016, guidance memorandum declaring a higher percentage of adult minorities have criminal records when compared to the overall adult population.  Therefore, prohibiting a person with a criminal conviction to buy or rent in your community has a “disparate impact” on certain racial minorities tantamount to racial discrimination. Considering racial discrimination in housing violates federal law, HUD rounds the final corner and declares by extension the blanket use of criminal records to deny housing violates Federal law. This is a critical pronouncement effectively outlawing all blanket prohibitions on individuals with a criminal history and calls into question less restrictive policies. Even a narrowly tailored policy excluding only certain types of criminals must accurately distinguish between criminal conduct representing a genuine risk to other residents or property.

Making matters worse, HUD’s guidance on this issue shifts the long-standing burden requiring a Plaintiff to prove their case. Instead, community associations will be presumed to have discriminated against a proposed tenant or purchaser if a person within a protected class (e.g. a racial minority) is denied housing simply due to the person’s prior criminal record.   To rebut this presumption, community associations will have to prove the association’s denial of housing to persons with a “criminal history” actually assists in protecting resident safety and/or property. The only exception is for criminal convictions relating to manufacturing or distributing controlled substances. In essence, HUD has determined violent felons, such as murderers or rapists, are less dangerous than people manufacturing or distributing illegal drugs.

Individual board member liability.

As experienced Board members will tell you, often times upset owners (and their accommodating lawyers) name board members individually in lawsuits.  More often than not, these lawsuits are defended (and dismissed) by an association’s insurance counsel. However, most community insurance association policies will not offer coverage for housing discrimination or similar claims.  Without such coverage, both the association and the individual board members will have to pay out- of-pocket for representation and any resulting damages.  Although the individual board members may seek reimbursement from the Association (indemnification), claims for housing discrimination are known as intentional torts or intentional statutory violations. Typically, community associations are not required to indemnify individual board members against claims for damages related to intentional conduct. As you can surmise, the result of not a board member not being indemnified by his/her community association can be financially ruinous.

What can an association do? 

There is no one size fits all formula for creating Fair Housing Act compliant criminal background policies. In this new legal landscape, every community association that considers criminal history when evaluating prospective buyers and tenants must be prepared to defend the inevitable claims filed by rejected applicants.

Gerstin & Associates can assist your community association with drafting a criminal background policy allowing for the rejection of the most dangerous applicants while minimizing the risk of liability for discriminatory practices. Contact our office today for a free consultation.

Stay one-step ahead of new legislation, recent case law and new developments that impact your community association by subscribing to the Gerstin & Associates Community Association Newsletter.  Please complete and either email or fax the following to: (561) 750-8185 (no cover page needed).

Name: ____________________________      Association name: _____________________

Position at the association (director, property manager, etc.) _____________________

Email address: ______________________     Telephone number: __________________

9 Reasons Your Florida Condominium Association Should be Talking About The Sprinkler Retrofitting Deadline Now!

9 Reasons Your Condominium Should be Talking About The Sprinkler Retrofitting Deadline Now–By Joshua Gerstin, Esq.

Click here for .pdf version of this article

June 1, 2016

1. Time is running out. Condominium associations with more than two floors have until December 31, 2016, to vote on forgoing the State of Florida’s mandated sprinkler retrofitting/life safety system requirements or obtain a building permit for its installation.

2. The required retrofitting includes installing a fire sprinkler system or other life safety system within the condominium association’s common elements and individual units.

3. By December 31, 2016, a residential condominium association that has not voted to forego retrofitting must initiate an application for a building permit for the required installation demonstrating the association will become compliant by December 31, 2019.

4. If a condominium association wants to opt-out of the retrofitting requirement it must act now and obtain a vote by the majority of all voting interests through either: (1) a limited proxy; (2) a ballot cast at a duly called membership meeting with at least 14 days advance notice; or (3) the execution of a written consent by a member.

5. No later than 30 days after the opt out vote, results must be mailed or hand delivered to all unit owners.

6. An opt-out vote by the members is effective only upon its recording in the county’s Official Public Records. A report must be filed with The State of Florida’s Division of Condominiums, Timeshares and Mobile Homes, indicating the membership vote and enclosing proof the vote was recorded in the county’s Official Public Records.

7. After the recording of a successful opt out vote, all owners are required to provide a copy of the opt-out vote to all future potential purchaser or tenants of their unit.

8. Opting out of fire sprinkler/life safety system retrofitting could pose a major fire hazard, cause an increase in insurance premiums and a decrease in property values.

9. Deciding to forgo fire sprinkler retrofitting should be based on more than the cost of compliance. Local fire departments should be consulted to ensure adequate life-safety protections are in place. At a minimum, a condominium association should consider the following:

a) Does the association have a fire emergency plan? If so, have the residents and employees been given full instructions on the details of the plan?
b) Can the buildings be evacuated to the street without interfering with emergency personnel?
c) How will the association handle the evacuation of physically challenged residents?
d) Are all exit doors and exit ways marked, clear and well lit in the dark?
e) Are emergency items (fire extinguishers, defibrillators, etc.) in place and functional?

Please do not hesitate to contact our office for further information regarding Florida’s sprinkler retrofitting requirements for condominium associations.

The Complete Beginner’s Guide to Drones in Community Associations

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Background
Can Florida community associations prohibit drone use? What can a community association do to minimize legal liability if it decides to prohibit or permit drones? Drone usage is only going to increase over time. Acting now to intelligently regulate usage is the best way to safeguard members and increase property values.  Following are some pointers to get your community association started in the right direction and ahead of the curve.

In 2015, the Florida legislature passed the “Freedom from Unwanted Surveillance Act” (“Act”). Located at Section 934.50 of the Florida Statutes, the Act limits the use of drones by governmental and private entities. The Act prohibits operating a drone with a camera to record privately owned real property or the occupant of that property in violation of that person’s reasonable expectation of privacy. If a person cannot be seen on a property by anyone at ground level, a reasonable expectation of privacy exists.

The Act exempts the use of drone cameras by a person who is in a profession licensed by the state, to perform reasonable tasks within the scope of practice or activities permitted under that person’s license.  Theoretically, a licensed community association manager could use a drone camera to check for violations within the community. Also exempted are “cargo delivery drones” if the drone and its operator are in compliance with the Federal Aviation Administration (“FAA”) regulations. For recreational drones, the FAA has only issued an advisory to stay below 400 feet, within the sight of the operator and away from airports.

How Can/Should Community Associations Regulate Drones?

a)    Banning Drones is Not a Good Idea. As with satellite dishes and emotional support pets, outright bans imposed by community associations are often overruled.  Avoid having to amend your governing documents if a legislator undertakes drones as a personal cause by using reasonable Rules to regulate drone use in your community association.

b)    Prohibit Landing Drones on Common Areas (homeowner associations only). Owners should be prohibited from directing commercial delivery drones to land on a common area. Otherwise, the Association can be subject to liability if a drone related accident occurs. Malfunctioning drones crashing, packages dropped on people and landing on people and pets are only a few of the possible drone safety hazards.

c)    Common Area Landing Site (Condos Only). Due to limited space within condominium associations and the nature of high-rise buildings, condominium owners are unable to direct drones to land on their own property.  Instead of having a condominium unit owner place himself and others in danger by trying to land a drone on his/her patio or balcony, consider establishing a common area landing site.  Safeguarding the site with warning signs and a fence, far away from a crowded space, could minimize potential safety hazards of wandering owners. Considering the time and effort it takes to alter a common area, the sooner a condominium association begins the process, the better off it will be.

d)    Restrict Delivery Times. As with land based parcel deliveries, associations should pass Rules that limiting drone delivery times.  Permissible drone delivery times should be during the day at times when most residents are at work or away from their homes. Due to noise concerns consider banning drone deliveries on weekends.

e)    Liability: associations should consider amending their governing documents to limit the association’s liability for damages to persons or property relating to drone deliveries. The act of ordering a drone delivery should be considered the conduct that signifies the owner’s agreement to indemnify the association for damages to persons or property related to his/her drone delivery.

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Stay one-step ahead of new legislation, recent case law and new developments that impact your community association by subscribing to the Gerstin & Associates Community Association Newsletter.  Please complete and fax the following to: (561) 750-8185 (no cover page needed).

Name: ____________________________      Association name: _____________________
Position at the association (director, property manager, etc.) _____________________
Email address: ______________________     Telephone number: __________________

2015 Florida Real Estate and Community Association Legislative Update

For printable .pdf version click here.

New 2015 Florida Statutes Affecting Both Condominium and Homeowner Associations:

1.    Voting Rights Suspensions (applies to HOAs and condos):  An association may now suspend the voting rights of a member or unit due to the non-payment of  any fee, fine or other monetary obligation due to the association which is more than 90 days delinquent.  Owners whose voting rights have been suspended are not counted towards the total number of votes of a homeowners’ or condominium owners’ association. Further,  a suspension of  voting or common element use rights can apply to all of an owner’s tenants and guests, including multiple unit owners, even if the delinquency that resulted in the suspension arose from less than all of the multiple units owned by a member.

2.    Proxies (applies to HOAs and condos): A copy of a proxy is valid and  can be transmitted to a community association via email (scan) or by fax.  Facilitates voting from absentee owners.

3.    Electronic Voting (applies to HOAs and condos):  Allows for the establishment of online voting.  Specific requirements are set forth in the law, including the passage of a resolution by the Board authorizing online voting.  Owners that do not affirmatively consent to online voting are required to be given paper voting materials.

4.    Fines (applies to HOAs and condos):  Prohibits board members and individuals residing in a board member’s household from serving on a Fining Committee.  The new law also requires a community association’s Board of Directors, not its Fining Committee,  to levy a fine. In turn, a Fining Committee’s authority is limited to rejecting or approving the fine levied by the Board. A fine that is rejected by a Fining Committee is not imposed. The new law fails to set forth the notice requirements to owners for the Board of Directors meeting in which a fine is levied.

5.    Electronic Notice (applies to HOAs and condos): No longer is the authority to transmit association notices required to be in the association’s Governing Documents.  A member’s consent to electronic transmission is now the only requirement.

6.    Service Animals (applies to HOA’s and condos): New law specifies the conditions where a service animal may be removed or excluded, penalties are provided for the misrepresentation of a service animal. In addition to the criminal penalties in the existing law, a business unlawfully denying or interfering with an individual’s right to use or train a service animal may be sentenced to perform 30 hours of community service with an organization that serves individuals with disabilities. This law does not affect “emotional support animals” which are the majority of the exceptions issued in pet restricted communities. As such, this new law will have little effect on the issue of emotional support animals in a pet restricted community.

7.    Required Notice to Tenants (applies to HOAs and condos):  A bona fide tenant must be given at least 30 days’ notice before being evicted from a foreclosed home.

8.    Transient Occupancy, Squatters (applies to HOAs and condos): New law  removes “transient occupancy” from the landlord-tenant regulation under Chapter 83. Squatters and transients can be removed from a residence by law enforcement officials instead of having to file for an eviction.

9.    Drones (applies to HOAs and condos):  If a reasonable expectation of privacy exists, a person, state agency or political subdivision are prohibited from using a drone to capture an image of privately owned real property or of the owner, tenant, or occupant of such property with the intent to conduct surveillance without his or her written consent. The existing law enforcement exception, subject to certain conditions, was expanded to include activities by any person or entity engaged in a business licensed by the state (such as property appraisers, utilities, cargo delivery systems). Civil remedies for violations include compensatory damages, punitive damages and injunctive relief.

10.    Construction Defects (applies to HOAs and condos): In addition to the existing requirements of  Chapter 558, Florida Statutes, this new law introduces a new method for resolving construction defect disputes before filing a lawsuit.

11.    Private Property Rights (applies to HOAs and Condos):  Bert Harris Private Property Rights Act was amended to create a cause of action for damages if a landowner is  subjected to local and state governmental requirements so onerous they are considered “unconstitutional exactions”. Landowners now have a legal remedy when a state or local government make extortionate demands on property owners in exchange for permit approvals.  Pre-suit notice to the government is required. If a lawsuit is filed, the governmental entity is required to prove the exaction complies with the standards set by the U.S. Supreme Court and the property owner must prove damages. The measure of damages recoverable are clarified and include injunctive relief, costs and attorney fees. Governmental entities may recover attorney fees and costs if they prevail.

New 2015 Florida Statutes Affecting Condominium Associations Only

1.    Application of Assessment Payments (applies to condos only):  The use of “full and final” payment language on a check for partial payment does not apply to, nor overcome the existing statutory requirements for applying the partial payment of assessments (accrued interest, administrative late fees, costs, attorney’s fees, the delinquent assessment). Allows an association to accept a partial payment without fear an owner is trying to establish an “accord and satisfaction” fact pattern to eliminate the remaining amounts owed.

2.    Damage Not Caused by Insurable Event (applies to condos only):  Clarifies damage not caused by an insurable event is not automatically an association responsibility. Instead, the unit owner or the association is responsible for non-insurable events according to the reconstruction, repair or replacement provisions of the association’s Governing Documents.
3.    Official Records (condos only):  Non-written records (audio recordings, videos of board meetings or security camera video recordings, etc.) are not “official records” available for owner inspection as a matter of right.

4.    Extension of Bulk Assignee/Bulk Buyer Classification (Condos only): The bulk buyer law is extended until July, 2018.  Bulk buyers of  distressed condominium projects are granted additional immunity from various typical developer  obligations.

5.    Expenses in Annual Budget (condos only): Extends and clarifies the minimum applicable expenses that have to be listed in an annual budget.  Full list of expenses available at Florida Statute §718.504(21).

6.    Lien for Late Fees (condos only): Administrative late fees can now be included on a  claim of lien for past due assessments.  Important for condominiums associations whose Governing Documents do not provide for the imposition of late fees.

7.    Condominium Association Terminations (condos only):  New restrictions imposed on the termination of condominiums created by the conversion of existing improvements under Part VI of the Condominium Act. The methodology for determining market value of condominium units is clarified. First mortgages are now required to be fully satisfied prior to termination of the condominium. Further, if a termination vote fails, another vote to terminate may not be considered for 18 months. When holding a termination vote, voting interests that have been suspended are still entitled to vote on the termination. In addition, a termination vote may not take place until 5 years after the recording of the declaration of condominium, unless there is no objection to the termination.

New 2015 Florida Statutes Affecting Homeowner Associations Only

1.    Amendments (HOAs only): Failure to provide the required statutory notice of the recordation of an amendment does not nullify or affect the validity of the amendment.

2.    Naming Florida Statute Section 720 (HOAs only):  Chapter 720 of the Florida statutes is now officially known as the “Homeowners’ Association Act”.

3.    Board Member Delinquencies/Eligibility (HOAs only): Any person who is delinquent in the payment of any financial obligation as of the last day he or she could nominate himself or herself to the board, is not eligible to be a candidate and may not be listed on the ballot.  Additionally, any director 90 days delinquent in the payment of any monetary obligation is deemed to have abandoned his or her directorship.  In such instances, a  vacancy required to be filled according to law and the association’s Governing Documents is created.

Stay one-step ahead of new legislation, recent case law and new developments that impact your community association by subscribing to the Gerstin & Associates Community Association Newsletter.  Please complete and fax the following to: (561) 750-8185 (no cover page needed).

Name: ____________________________

Association name: _____________________

Position at the association (director, property manager, etc.) _____________________

Email address: ______________________

Telephone number: __________________

U.S. Supreme Court Bankruptcy Ruling Will Help Florida Community Associations

In Bankruptcy, community association liens are often times “stripped off” if the home is worth less than the amount of the mortgages that are securing it. The United States Supreme Court put an end to that practice as it relates to second mortgages which presumably would also apply to community association liens. Full article here