Florida Community Association

Florida Supreme Court Issues Ruling Regarding Property Managers

Posted on by Gerstin

Charged with administering Florida’s laws regarding the Unauthorized Practice of Law, the Florida Supreme Court recently issued an opinion stating the following tasks must be performed by an attorney:

• draft a claim of lien and satisfaction of claim of lien;

• prepare a notice of commencement;

• determine the timing, method and form of giving notices of meetings;

• determine the votes necessary for certain actions by community associations;

• address questions asking for the application of a statute or rule;

• advise community associations whether a course of action is authorized by statute or rule;

• prepare a certificate of assessments due once a delinquent account is turned over to the association’s lawyer;

• prepare a certificate of assessments due once a foreclosure against the unit has commenced;

• prepare a certificate of assessments due once a member disputes in writing the amount owed;

• draft amendments (and certificates of amendment that are recorded in the official records) to declaration of covenants, bylaws and articles of incorporation when members have to vote on these documents;

• determine the number of days to be provided for statutory notice;

• modify limited-proxy forms promulgated by the state;

• prepare documents concerning the right of the association to approve new prospective owners;

• determine affirmative votes needed to pass a proposition or amendment to recorded documents;

• determine the number of owners’ votes needed to establish a quorum;

• draft pre-arbitration demand letters;

• prepare construction lien documents;

• prepare, review, draft and have substantial involvement in the preparation and execution of contracts, including construction, management and cable television contracts;

• identify, through the review of title instruments, the owners to receive pre-lien letters; and

• oversee any activity that requires statutory or case law analysis to reach a legal conclusion.

Full opinion available here sc13-889 .

 

 

New Proposed Federal Regulation: Amateur Radio Antennas & Towers Must Be Allowed in Your Community Association

Posted on by Gerstin

Presently pending in the United States Congress, H.R. 1301 is a bill proposed to protect the installation and use of amateur radio antennas and towers in community associations.  According to the bill, “[t]here is a strong Federal interest in the effective performance of amateur radio stations established at the residences of licensees”.  In regard to a community association’s restrictive covenants, the bill applies existing FCC policy used when dealing with State restrictions on antennas and towers to community association declarations.  The bill would, among other things, require community association “to permit erection of a station antenna structure at heights and dimensions sufficient to accommodate amateur service communications.”   H.R. 1301 would also apply to private office parks and essentially any privately owned land with use restrictions related to amateur radio antennas and towers.

 

The full text of the bill is available here: HR Bill 1301, United States Congress, Amateur Antennas and Towers.

Hidden Dangers–10 Declaration Provisions Every Community Association Must Change

Posted on by Gerstin
10 Declaration Provisions Every Community Association
Must Change

Click here to download the full report.

 

  1. The Magic Language Exception. Known as the “Magic Language Exception”, inserting the words “as amended from time to time” after a Declaration’s statement of adherence to Florida law allows the Declaration to automatically adapt to changes in Florida law. Failing to incorporate the Magic Language Exception into a Declaration often times results in the loss of income from, and the benefits of, changes in Florida’s law related to the collection of delinquent assessments. Coral Isles East Condominium Assoc. v. Snyder, 395 So. 2d 1204 1981.

 

  1. The percentage for passage of an amendment is too high. Many associations are stuck with damaging and confusing Governing Documents because the threshold of affirmative votes for an amendment is too high. Consider amending your Governing Documents to a lower threshold of affirmative votes needed to pass an amendment in the future.

 

  1. Requiring tenant approval without the authority to do so.  Many community associations require pre-approval of tenants without the authority to do so in their Governing Documents. Undertaking an action (and possibly collecting a fee to do so) without the requisite authority can result in an expensive lawsuit.

 

  1. Enforcing Outdated and Illegal Provisions. Banning solar panels, improper age restriction enforcement (16 instead of 18), banning satellite dishes or improper debt collection techniques are only a few of the many outdated provisions in the Governing Documents of many community associations. Lack of intent and ignorance of the law is not a defense if the association is sued. Guidance to the Board of Directors and the amendment of these provisions should be undertaken.

 

  1. Failing to Rein in Rentals. Community associations, especially condominium associations, that do not limit renting in their communities may scare away lenders from lending to owners or may lose their FHA accreditation. Consider a Declaration amendment restricting new owners from renting until at least two years after their purchase.

 

  1. Releasing Homes Purchased at a Foreclosure Auction From Delinquent Assessments. Although Florida law limits a lender’s liability for past due assessments, the same restriction does not apply to third party purchasers at a foreclosure auction, unless otherwise stated in your association’s Governing Documents. Consider amending all provisions that release third party purchasers of a foreclosed home from payment of past due assessments.

 

  1. Borrowing limits. Many older community associations have bank borrowing limits set at amounts so low such loans would only be obtainable from a payday lender. Consider eliminating or increasing borrowing limits.

 

  1. Spending Limits. As a way to attract buyers in an era of “community association board’s waste money” many developers incorporated into their Governing Documents limits on the amount a Board of Directors can spend without owner approval. Unfortunately, the effects of inflation and increase costs have locked many of these community associations into unrealistic spending limits. Consider eliminating or increasing the amount your Board of Directors can spend without first obtaining owner approval by inserting an amendment that allows for a per year increase formula based on inflation.

 

  1. Unattainable Quorum. Florida law limits the percentage required for a members’ meeting quorum to 30% of the members. Nevertheless, many community associations are still unable to attain a quorum to conduct important business. Consider an amendment that lowers the required quorum for a member’s meeting below 30%.
  2. Regulating Guests. Associations with guests residing in units in the absence of an owner or approved tenant often find themselves ill prepared when a problem arises.  Declaration provisions relating to the use of homes by guests in the absence of an owner or approved tenant stops people from circumventing rental restrictions. Consider an amendment stating guests can only occupy a unit so many times per year. Another approach to dealing with long-term guests (e.g., guests staying for more than 30 days) is to require them to be screened in the same manner as tenants.

 

For a free analysis of your association’s community association Governing Documents please complete and fax the following to: (561) 750-8185 (no cover page needed) A representative from Gerstin & Association will contact you to set up your community association’s free Governing Document analysis.

 

Name: ____________________________

 

Association name: _____________________

 

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

 

Email address: ______________________,

 

Telephone number: __________________

7 Deadly Sins of Collecting Delinquent Assessments

Posted on by Gerstin
7 Deadly Sins of Collecting Delinquent Assessments

Click here to download the full report.

 

1.    Failing to follow the specific procedures in your community association’s Governing Documents such as written notice from the association of the delinquent debt. Often times such failures, when objected to by a delinquent owner, requires the entire collection process to be restarted. Sometimes, such failures lead to expensive lawsuits and a large payout to the delinquent owner.

 

2. Agreeing to payment plans that are not in writing. A payment plan that is not in writing, is not worth the paper it is written on. Secure all payment plans in writing.

 

3.  Extending grace periods and granting concessions to neighbors and friends but no one else. It is understandable you want to help a neighbor or friend that is having problems with paying your association’s assessments. However, each owner has to be treated in the same, uniform manner. Extending grace periods only to friends or neighbors exposes the entire community association to an expensive lawsuit from an aggrieved owner to whom a grace period was refused.

 

4. Publishing a list of delinquent owners.       Shaming debtors is not only insensitive, it violates the Federal Fair Debt Collection Practices Act and exposes the association to an expensive lawsuit.

 

5.     Failing to follow the specific collection deadlines in your community association’s Governing Documents. If the collection deadlines are too long or too short, have them amended. In the meantime, collections must proceed in accordance with the specific deadlines contained in your association’s Governing Documents. Failure to do so can easily lead to an expensive lawsuit and a large payout to the delinquent owner.

 

6.  Failing to add interest and late fees onto delinquent assessments. Many community associations are unaware of their ability to impose late fees or are unable to properly calculate interest. Foregoing late fees and interest can significantly undermine a community association’s financial stability.

 7. Failing to timely forward a delinquent account to your attorney for collection. Depending on whether it is a condominium or homeowners’ association, attorneys are required to wait between 60 and 90 days prior to the institution of foreclosure litigation. Banks are required to pay only 12 months of delinquent assessments. Sometimes, a bank will wait years before filing a foreclosure lawsuit.       Association’s that fail to act timely and foreclose upon a delinquent owner’s home and rent the home until the bank takes title, can cost an association a year or more of assessment payments.

 

For help with avoiding the 7 Deadly Sins of Collecting Delinquent Assessments, and for a free analysis of your association’s community association collections, please complete and fax the following to: (561) 750-8185. A representative from Gerstin & Association will contact you to set up your community association’s free collection analysis.

 

Name: ____________________________

Association name: _____________________

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

Email address: ______________

Telephone number: _____________________

Pet Weight Limits Don’t Apply to Emotional Support Animals in Florida’s Community Associations

Posted on by Gerstin

Another example of the expanding scope of the Fair Housing Act, is the recently decided case of Bhogaita v. Altamonte Heights Condo. Ass’n, Inc., No. 13-12625 (11th Cir. Aug. 27, 2014). In Bhogaita a jury was persuaded the Altamonte Heights Condominium Association discriminated against the Plaintiff when it enforced its pet weight policy and demanded a removal of the plaintiff’s emotional support dog. The jury awarded Bhogaita $5,000 in damages, and the district court awarded Bhogaita more than $100,000 in attorneys’ fees. The association appealed both the judgment entered on the jury’s verdict and lost the appeal. Click the link below for the full text of the case

Bhogaita v. Altamonte Heights Condo. Ass’n, Inc., No. 13-12625 (11th Cir. Aug. 27, 2014)–Fair Housing Act-disability provisions-pet weight limit for emotional support dog failed to accommodate disability

 

 

 

2014 Florida Community Association and Real Estate Legislative Update

Posted on by Gerstin
 2014 Florida Community Association and Real Estate Legislative Update
By: Joshua Gerstin, Esq.

Click here to download .pdf version

Approximately 200 bills were introduced in the Florida legislature in 2014, 264 bills were passed by the legislature and Governor Rick Scott signed 158 into law. Many of these new laws will directly impact the operations of Florida’s community associations and the ownership of real estate for years to come.

 

HB 7307

Condominiums and Homeowner Associations.

Contains significant changes to the services a CAM (Community Association Property Manager) can perform.  The newly expanded CAM duties include:

  • Collecting delinquent assessments prior to the filing of a civil action.
  • Completing forms related created by statute or by a state agency.
  • Drafting letters of intended action, calculating and preparing certificates of assessments.
  • Estoppel letters.

Conspicuously absent from the new law are provisions lessening or mitigating the association’s liability if a CAM violates the Fair Debt Collection Practices Act. Instead, associations remain ultimately responsible. HB 7307 also provides:

  • New professional liability standards for CAMS
  • CAM contracts can only require Association’s provide limited indemnification to a CAM.
  • Lists conduct a CAM cannot be indemnified for such as grossly negligent, reckless or the derivation of an improper personal benefit.
  • Creates new forms in Chapters 718, 719 and 720 for notifying delinquent unit owners of their past due assessment balances.

 

SB 1524 Condominiums and Homeowner Associations.

  • Information Protection Act. Imposes new requirements on businesses, including community associations, to protect customer/members records containing the following information:
    • names;
    • social security numbers;
    • medical histories ( ex. medically necessary pets) and;
    • other identification numbers
      • Security breach reporting to the Department of Legal Affairs is required
      • Limits required disclosure by businesses of a breach if proper reporting, and other procedures to rectify the situation, are followed

 

HB 807, Condominium and Homeowner Associations.

  • Outgoing Board Members Relinquishment. Outgoing Board or committee members are required to relinquish all of the Association’s Official Records in their possession within five days after an election.
    • No “lame duck” provision for prior director whose term expires more than five days after an election.
    • Allows for civil penalties to be imposed by the Division for willful violation.
  • Member Directories. Owners can consent to information other than contact information being printed in an ownership directory. Associations can print a directory containing the name, parcel address and telephone numbers for each parcel owner without obtaining the owners’ consent. Individual owners may exclude his or her telephone numbers from the directory.
  • Board or Committee Meetings. Board or committee members appearing by telephone, videoconferencing or other real time video counts towards a quorum. The absent board or committee member appearing by telephone or video can also vote as if actually present.

 

HB 807, Condominium Associations Only

  • Abandoned Units: in addition to the reasons set forth in F.S. §718.111(5)(a), in which a condominium association has the irrevocable right of access to each unit. This legislation created a new statute F.S. §718. 111(5)(b)(1).
    • At the sole discretion of a condominium association’s board of directors a board may, after tendering the required notice, enter an abandoned unit to:
      • inspect the unit and adjoining common elements;
      • make repairs to the unit or to the common elements serving the unit;
      • repair or remediate the due to the presence of mold or similar deterioration;
      • turn on the power for the unit;
      • to otherwise maintain, preserve or protect the unit and its adjoining common elements.
  • Condominium Insurance Clarification: if an item is not damaged by an insurable or casualty event, the items repair or replacement costs are governed by the association’s Governing Documents.
  • Email. Condominium Board or committee members may communicate, but are prohibited from voting, via email.
  • Delinquencies. Condominium association’s that obtain title to a foreclosed property, or via a deed in lieu of foreclosure, from a delinquent owner are not considered a “previous owner” liable for past due assessments. Allows condominium associations that own foreclosed properties to seek the past due assessments of the prior owner from a new owner (subject to the limits of bank foreclosure, Safe Harbor statutes).
  • Condominium Optional Termination. A failed condominium termination plan cannot be sought again by joinder and consent or proposed at a meeting for 180 days after the date the termination plan failed.

 

HB 807, Homeowner Associations Only

  • Emergency Powers for Homeowners’ Associations: The bill incorporates the current emergency powers provisions in the Condominium Act into the Homeowners’ Association Act.
  • Allows homeowner associations to provide notice of adopted amendments via email.
  • In lieu of providing an actual copy of an amendment that passed, homeowner association owners can be notified the amendment passed along with the Official Records Book and Page and a notice a copy of the amendment is available at no charge to the owners. Allowable only if an exact copy of the amendment was sent to the owners prior to its passage. Amends F.S. §720.306(1)(b).
  • Requires HOA board and owner meetings to be held at handicap accessible locations only if requested by a physically handicapped person entitled to attend the meeting. This law does not apply to condominium associations. Amends F.S. §720.303(2)(a) & 720.306(1)(a).
  • Marketable Records Title Act (“MRTA”). Clarifies existing law. Newspapers do not have to publish a MRTA notice.

 

SB 440, Non-Residential Condominiums

  • Proxies can be used in voting for Board members of non-residential condominiums.
  • General proxies from owners in non-residential condominiums can now be used to vote on waiving or reducing the reserves, waiving financial reporting requirements or amending the Governing Documents.
  • Directors may now serve for an unlimited number of terms or years in a non-residential condominium.
  • If a unit is owned by more than one owner in a non-residential condominium, all owners can serve simultaneously on the board of directors.
  • Non residential condominiums directors do not have to take the “loyalty oath” certifying they are familiar with the Governing Documents and will discharge his/her duties in a fiduciary capacity.
  • Non-residential condominiums are excluded from the mandatory arbitration and mediation provision of Florida law.
  • Non-residential condominiums are excluded from the hurricane shutter provisions in the F.S. § 718.
  • Limitations on development phases meant to protect early purchasers of condominiums no longer apply to non-residential condominiums.

 

SB 356, Vacation Rentals.

  • The State of Florida reserved the exclusive right to regulate vacation rentals. Local municipalities can no longer pass ordinances that prohibit vacation rentals or that regulate the duration or frequency of vacation rentals. Applies only to ordinances adopted after June 1, 2011.

 

Real Estate.

  • Subsurface Mineral Rights. New disclosures are required when subsurface mineral rights are reserved by the Seller. Unwary buyers can now cancel contracts and statutory penalties exist for intentional violators.
  • Florida “GI Bill”. Tuition waivers veterans, military base upgrades and a multimillion-dollar marketing campaign, the Florida “GI Bill” intends to make Florida the most military-friendly state in the nation.

 

Insurance.

  • SB542 Flood Insurance.

o   Insurers may offer personal lines of residential flood insurance to residential customers (commercial condos or commercial residential excluded).

  • HB 1089 Citizen’s Insurance, Windstorm Coverage.

o   For wind only coverage for commercial lines residential condominiums, associations cannot have 50% of the units rented more than 8 times a year for less than 30 days.

  • SB 1672 Citizens Insurance.

o   Citizens Insurance may offer wind only policies and will discontinue certain multi-peril policies.

o   Insurance agents and public adjusters cannot obtain referral fees from an inspection company performing an insurance inspection for coverage.

o   Public adjusters cannot accept power of attorney that allows them to select the vendors and contractors to perform property repairs.

  • SB 708 Homeowner Insurance.

o   Insurers can no longer deny a claim for a misrepresentation in an insurance claim if the insurance policy has been in effect for 90 or more days.

o   A “Homeowners’ Claim Bill of Rights” was added enhancing protections afforded to personal line residential policyholders.

 

Service of Process HB 627.

  • Employer must permit service of process on employees.
  • $1000.00 fine on employer for not permitting service of process one employee.
  • Sheriff can rely on a levying creditor’s affidavit for the disbursement poof proceeds from the sale of levied property.

 

For information purposes only. For legal advice, please consult an attorney.

***Updated with Florida’s 2013 Legislative Amendments, Transition of Control of a Florida Community Association

Posted on by Gerstin

Transition of Control of a Florida Community Association  

Click here to download this article as a .PDF

A wise man once said “transitions are never easy”. A wise lawyer once said “transition of control of a Florida community association are never easy and can be disastrous”.

Following is a general list of items for a community association to be aware of as they proceed towards the important process of the transition of control from a developer controlled association to that of a member controlled association. The following information is intended as general information and not legal advice. For legal advice an attorney must be consulted.

We accumulated the following information based upon our experience in representing many community associations and have found the following tasks and information is important for an association’s members to undertake and review prior to signing a release with the developer.

1.    Interviewing of banks. Immediately after the transition the association should open new bank accounts.  The forms necessary to open the appropriate accounts should be secured now to avoid undue delay.

2.    Begin interviewing professionals, which should in the very least include:

a.    Accountant;

b.    Property manager;

c.    Attorney; and

d.    Engineer (with experience in community association transitions).

3.    If the post office is diverting the mail sent to the association to an address of the developer, secure the forms to have the mail sent directly to the association.

4.    Secure from the Florida Secretary of State a statement of change for the Registered Agent.  This document can be downloaded from www.sunbiz.org.

5.    A form known as “Request for Copy of Tax Form” should be retrieved from the Internal Revenue Service. The completion and eventual submission of this form will enable the association to obtain the previous three (3) years of tax returns after the transition of control is complete.

6.    Begin identifying potential candidates for Board of Directors’ positions.

Following are a list of items that we attempt to receive from a developer during the
transition period:

a.    A full and complete copy of the association’s Declaration of Covenants and Restrictions, Articles of Incorporation, Bylaws and Rules and Regulations;

b.    The financial records of the association from the date of incorporation through the present date;

c.    Access to, and control of, the association’s funds that remain in the developer’s bank accounts for the association;

d.    Copies of all deeds to common property owned by the association;

e.    Copies of the minute books from all of the meetings held by the Director;

f.    Bills of sale, or receipts for, any of the association’s tangible personal property;

g.    Copy of all contracts to which the association is presently a party.  Such contracts typically include landscaping, property management, accounting, janitorial, etc.;

h.    Name, address and telephone numbers of all contractors and/or employees that are presently being employed by the association;

i.    Copies of any and all insurance policies that are presently in effect;

j.    A complete list of all current home owners along with their address, telephone number and, if applicable, section or lot numbers;

k.    Any and all warranties the association might possess for items such as air conditioning, the pool, etc;

l.    Any and all permits issued by governmental authorities that regulate the association from the present date relating back to approximately one year prior;

m.    Any leases for the common areas to which the association is a party;

n.    Copy of any master keys or keys utilized for the common areas;

o.    An up to date ledger sheet for each owner and any assessment payments that are in arrears as well as a full payment history for each owner; and

p.    The “Official Records” of the association  Florida Statute §720.303(4), lists the official records that an association is required to maintain for a period of seven (7) years.  The developer is also under this duty and should have these documents in its possession.  I have enclosed for your review a copy of this statute.

 

***2013 Florida Legislative Amendments

 

F.S.§ 720.303 (6)(d) Budgets.  If a homeowner association developer elects to maintain a reserve account for the HOA, the developer’s budget must designate the particular purpose or use of the funds.  The underlined portion below is the amended text of F.S.§ 720.303 (6)(d):

(d) An association is deemed to have provided for reserve accounts if reserve accounts have been initially established by the developer or if the membership of the association affirmatively elects to  provide for   reserves. If reserve accounts are established by the developer, the budget must designate the components for which the reserve accounts may be used. If reserve accounts are not initially provided by the developer, the membership of the association may elect to do so upon the affirmative approval of a majority of the total voting interests of the association.  .  .

F.S. § 720.307 Transition of association control in a community —Added to the threshold for an “automatic transition” to member control are a developer’s abandonment of its assessment, maintenance or construction responsibilities or if the developer files for Chapter 7 bankruptcy, enters receivership or loses title to a common area through a foreclosure.  The underlined portion below is the amended text of F.S. § 720.307:

720.307 Transition of association control in a community.—

With respect to homeowners’ associations:

(1)        Members other than the developer are entitled to elect at least a majority of the members of the board of directors of the homeowners’ association when the earlier of the following events occurs:

. . .

c)  Upon the developer abandoning or deserting its responsibility to maintain and complete the amenities or infrastructure as disclosed in the governing documents. There is a rebuttable presumption that the developer has abandoned and deserted the property if the developer has unpaid assessments or guaranteed amounts under s. 720.308 for a period of more than 2 years;

(d)  Upon the developer filing a petition seeking protection under chapter 7  of the federal Bankruptcy Code;

(e)  Upon the developer losing title to the property through a foreclosure action or the transfer of a deed in lieu of foreclosure, unless the successor owner has accepted an assignment of developer rights and responsibilities first arising after the date of such assignment; or

(f)  Upon a receiver for the developer being appointed by a circuit court and not being discharged within 30 days after such appointment, unless the court determines within 30 days after such appointment that transfer of control would be detrimental to the association or its members.

 

F.S. § 720.307  Pre-transition Board of Directors. The amendment to F.S. §720.307 also lowered the threshold for a member to serve as a director on the pre-transition Board of Directors. Members, other than the developer, are allowed to elect at least one non-developer related member to the pre-transition Board of Directors if 50% of the parcels in all phases have been conveyed to the members.

F.S. § 720.3075 Prohibited clauses in association documents–Developers. At any point pre-transition of control (not the 90% conveyed mark) a developer’s unilateral amendment to the Governing Documents will be subject to scrutiny as to its reasonableness. No longer considered reasonable or allowable are “ . . .amendments to the governing documents that are arbitrary, capricious, or in bad faith; destroy the general plan of development; prejudice the rights of existing nondeveloper members to use and enjoy the benefits of common property; or materially shift economic burdens from the developer to the existing nondeveloper members.”

The above list is not exhaustive; however, by beginning to request these items the association will be in a better position as the transition progresses.   Additionally, it is recommended the association accept the transition of the developer via the resignation of developer members of the Board and then placement of owner member directors after an election.  At that time, developers often request the association sign a release.  By signing a release the association will waive any and all rights that it might have to claims for construction defects and/or misappropriation of funds.  As such, the association should have the transition of control occur and then retain the services of an accountant, an attorney and an engineer.  These professionals will perform what is commonly known as “due diligence”.  Without hiring these professionals there is no way the association can truly know whether or not they are aware of every issue that remains outstanding, or liability incurred by the developer, that is now an association liability.

Certain times the above referenced reports issued by these professionals have minor problems that are easily settled with the developer. Other times, there are hidden problems that would have surely gone unnoticed if it were not for the diligent work of these professionals.  Either way, the association’s Board of Directors has a fiduciary duty to its members and should in the very least understand the present state of the association before signing a release with the developer.

After the reports from the professionals are returned to the association, the Board of Directors should attempt to informally negotiate with the developer for any repairs or funds they believe are owed.  This informal approach should involve keeping the association’s counsel informed as to its status and, if necessary, the review of documents.  If the association is successful in its negotiations, the attorney for the association, as well as that of the developer, can draft the final documents.  If the negotiations are not successful, the attorney for the association should still attempt to settle the matter with the developer’s attorney with a set time period for completion.  It is always better to try and settle for a fair amount then filing a lawsuit.  However, sometimes it is unavoidable and a lawsuit is necessary

2013 Florida Homeowner Association Legislative Update

Posted on by Gerstin

2013 Florida Homeowner Association Legislative Update

Click here to download this article as a .pdf

The past legislative session was an extremely busy one for homeowner associations.  Initial legislative proposals ranged from an entire rewrite of Chapter 720 to a depository scheme to collect assessments that would have been a disaster. In the end, at least for this past legislative session, Florida’s homeowner associations avoided disaster.  Most, but not all, of the recently passed Florida legislation affecting Florida’s homeowners’ association are reasonable. The hardest hit group in this year’s legislative session is by far homeowner association developers.

The time period for Governor Scott to veto legislation has not yet passed. As such, legislation may be added or removed from this article as time goes on.  Please check back often for updates. Following is a summary of the 2013 Florida legislation affecting homeowner associations that passed both the Florida House of Representatives and the Senate. If this legislation is not vetoed by Governor Scott, it will become effective July 1, 2013.

**********************
Officers and Directors

F.S. § 720.3033 Officers and Directors.- This past legislative session there many changes to the laws governing homeowner association officers and directors.  Both Homeowner association Boards of Directors and their property managers should immediately update themselves on these new legislative changes to avoid unknowingly running afoul of the law. The underlined portion below is the amended text of F.S. § 720.3033:

720.3033  Officers and directors.—

(1)

(a)  Within 90 days after being elected or appointed to the board, each director shall certify in writing to the secretary of the association that he or she has read the association’s declaration of covenants, articles of incorporation, bylaws, and current written rules and policies; that he or she will work to uphold such documents and policies to the best of his or her ability; and that he or she will faithfully discharge his or her fiduciary responsibility to the association’s members. Within 90 days after being elected or appointed to the board, in lieu of such written certification, the newly elected or appointed director may submit a certificate of having satisfactorily completed the educational curriculum administered by a division-approved education provider within 1 year before or 90 days after the date of election or appointment.

(b)  The written certification or educational certificate is valid for the uninterrupted tenure of the director on the board. A director who does not timely file the written certification or educational certificate shall be suspended from the board until he or she complies with the requirement. The board may temporarily fill the vacancy during the period of suspension.

(c)  The association shall retain each director’s written certification or educational certificate for inspection by the members for 5 years after the director’s election. However, the failure to have the written certification or educational certificate on file does not affect the validity of any board action.

(2)  If the association enters into a contract or other transaction with any of its directors or a corporation, firm, association that is not an affiliated homeowners’ association, or other entity in which an association director is also a director or officer or is financially interested, the board must:

(a)  Comply with the requirements of s. 617.0832.

(b)  Enter the disclosures required by s. 617.0832 into the written minutes of the meeting.

(c)  Approve the contract or other transaction by an affirmative vote of two-thirds of the directors present.

(d)  At the next regular or special meeting of the members, disclose the existence of the contract or other transaction to the members. Upon motion of any member, the contract or transaction shall be brought up for a vote and may be canceled by a majority vote of the members present. If the members cancel the contract, the association is only liable for the reasonable value of goods and services provided up to the time of cancellation and is not liable for any termination fee, liquidated damages, or other penalty for such cancellation.

(3)  An officer, director, or manager may not solicit, offer to accept, or accept any good or service of value for which consideration has not been provided for his or her benefit or for the benefit of a member of his or her immediate family from any person providing or proposing to provide goods or services to the association. If the board finds that an officer or director has violated this subsection, the board shall immediately remove the officer or director from office. The vacancy shall be filled according to law until the end of the director’s term of office. However, an officer, director, or manager may accept food to be consumed at a business meeting with a value of less than $25 per individual or a service or good received in connection with trade fairs or education programs.

(4)  A director or officer charged by information or indictment with a felony theft or embezzlement offense involving the association’s funds or property is removed from office. The board shall fill the vacancy according to general law until the end of the period of the suspension or the end of the director’s term of office, whichever occurs first. However, if the charges are resolved without a finding of guilt or without acceptance of a plea of guilty or nolo contendere, the director or officer shall be reinstated for any remainder of his or her term of office. A member who has such criminal charges pending may not be appointed or elected to a position as a director or officer.

 (5)  The association shall maintain insurance or a fidelity bond for all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this subsection, the term “persons who control or disburse funds of the association” includes, but is not limited to, persons authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association shall bear the cost of any insurance or bond. If annually approved by a majority of the voting interests present at a properly called meeting of the association, an association may waive the requirement of obtaining an insurance policy or fidelity bond for all persons who control or disburse funds of the association.

 

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Members

720.306 Meeting of the Members; voting and election procedures; amendments —Nominations from the floor at Annual Meetings are no longer required and an election is not required unless there are more candidates than vacancies. Further, all members are now required to receive amendments to the governing documents within 30 days of their passage.

720.303 (5) Inspection and Copying of Records. Official records must be maintained for at least 7 years and have to be made available to parcel owners for inspection and copying within 45 miles of the community or within the county in which the association is located. The Association has 10 business days after receipt by the board or its designee of a written request. Records can be made available electronically. Owners can scan or photograph the records at no charge (if they use their scanner or camera). Copying rates and personnel charges were also amended.

(5)        INSPECTION AND COPYING OF RECORDS.—The official records shall be maintained within the state for at least 7 years and shall be made available to a parcel owner for inspection or photocopying within 45 miles of the community or within the county in which the association is located within 10 business days after receipt by the board or its designee of a written request

 The association shall allow a member or his or her authorized representative to use a portable device, including a smartphone, tablet, portable scanner, or any other technology capable of scanning or taking photographs, to make an electronic copy of the official records in lieu of providing the member or his or her authorized representative with a copy of such records. The association may not charge a fee to a member or his or her authorized representative for such use of a portable device.

The association may impose fees to cover the costs of providing copies of the official records, including, without limitation, the costs of copying and the costs required for personnel to retrieve and copy the records if the time spent retrieving and copying the records exceeds one- half hour and if the personnel costs do not exceed $20 per hour. Personnel costs may not be charged for records requests that result in the copying of 25 or fewer pages.

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Assessment Collection

F.S. § 720.3085 Payment for assessments; lien claims. The most positive and important change this legislative session was legislation designed to correct or overrule the Court’s decision in the case of Aventura Management, LLC v. Spiaggia Ocean Condominium Association, Inc. HB 7119 amends F.S.§ 720.3085 and allows Florida homeowner associations to collect assessments, that were past due upon its ownership of a home, from a subsequent owner. The underlined portion below is the amended text:  

720.3085         Payment for assessments; lien claims.—

 (2)

(b)  A parcel owner is jointly and severally liable with the previous parcel owner for all unpaid assessments that came due up to the time of transfer of title. This liability is without prejudice to any right the present parcel owner may have to recover any amounts paid by the present owner from the previous owner. For the purposes of this paragraph, the term “previous owner” shall not include an association that acquires title to a delinquent property through foreclosure or by deed in lieu of foreclosure. The present parcel owner’s liability for unpaid assessments is limited to any unpaid assessments that accrued before the association acquired title to the delinquent property through foreclosure or by deed in lieu of foreclosure.

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  F.S. § 468.436 CAM Disciplinary Proceedings.  This law was amended to classify a Community Association Manager’s violation of either Chapt. 720, 719 or 718 as a violation subject to a disciplinary proceeding by the Department of Business and Professional Regulation. For the overwhelming amount of law abiding Community Association Managers, this legislative amendment should not be a cause for concern. The underlined portion below is the amended text of F.S.§ 468.436 (7):

Violating any provision of chapter 718, chapter 719, or chapter 720 during the course of performing community association management services pursuant to a contract with a community association as defined in s. 468.431(1).

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Homeowner Association Developers

F.S.§ 720.303 (6)(d) Budgets.  If a homeowner association developer elects to maintain a reserve account for the HOA, the developer’s budget must designate the particular purpose or use of the funds.  The underlined portion below is the amended text of F.S.§ 720.303 (6)(d):

(d) An association is deemed to have provided for reserve accounts if reserve accounts have been initially established by the developer or if the membership of the association affirmatively elects to provide for reserves. If reserve accounts are established by the developer, the budget must designate the components for which the reserve accounts may be used. If reserve accounts are not initially provided by the developer, the membership of the association may elect to do so upon the affirmative approval of a majority of the total voting interests of the association.  .  .

F.S. § 720.307 Transition of association control in a community —Added to the threshold for an “automatic transition” to member control are a developer’s abandonment of its assessment, maintenance or construction responsibilities or if the developer files for Chapter 7 bankruptcy, enters receivership or loses title to a common area through a foreclosure.  The underlined portion below is the amended text of F.S. § 720.307:

 720.307 Transition of association control in a community.—

With respect to homeowners’ associations:

(1)        Members other than the developer are entitled to elect at least a majority of the members of the board of directors of the homeowners’ association when the earlier of the following events occurs:

. . .

c)  Upon the developer abandoning or deserting its responsibility to maintain and complete the amenities or infrastructure as disclosed in the governing documents. There is a rebuttable presumption that the developer has abandoned and deserted the property if the developer has unpaid assessments or guaranteed amounts under s. 720.308 for a period of more than 2 years;

(d)  Upon the developer filing a petition seeking protection under chapter 7  of the federal Bankruptcy Code;

(e)  Upon the developer losing title to the property through a foreclosure action or the transfer of a deed in lieu of foreclosure, unless the successor owner has accepted an assignment of developer rights and responsibilities first arising after the date of such assignment; or

(f)  Upon a receiver for the developer being appointed by a circuit court and not being discharged within 30 days after such appointment, unless the court determines within 30 days after such appointment that transfer of control would be detrimental to the association or its members.

F.S. § 720.307  Pre-transition Board of Directors. The amendment to F.S. §720.307 also lowered the threshold for a member to serve as a director on the pre-transition Board of Directors. Members, other than the developer, are allowed to elect at least one non-developer related member to the pre-transition Board of Directors if 50% of the parcels in all phases have been conveyed to the members.

F.S. § 720.3075 Prohibited clauses in association documents–Developers. At any point pre-transition of control (not the 90% conveyed mark) a developer’s unilateral amendment to the Governing Documents will be subject to scrutiny as to its reasonableness. No longer considered reasonable or allowable are “ . . .amendments to the governing documents that are arbitrary, capricious, or in bad faith; destroy the general plan of development; prejudice the rights of existing nondeveloper members to use and enjoy the benefits of common property; or materially shift economic burdens from the developer to the existing nondeveloper members.”


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F.S. § 720.303 (13) Reporting Requirements — Homeowner associations are now required to register with the Division of Florida Condominiums, Timeshares, and Mobile Homes.  Whether this will lead to enhanced regulation similar to condominiums, and its associated higher cost of compliance, is yet to be seen.  The legislation is due to expire in 2016.

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Soon to come more HOA 2013 legislation and 2013 Florida Condominium Association legislative changes.

Check back soon.

2013 Pending Florida Community Association Legislation

Posted on by Gerstin

 


Pending Florida Senate Bills

 


SB 1618: Condominium Associations
GENERAL BILL by Sachs

 
Condominium Associations; Removing a specific date by which updates to the safety code for certain existing elevators and escalators may not be enforced in condominiums or multifamily residential buildings; authorizing an agent, employee, or representative of a condominium association to enter into a condominium unit that has been abandoned or unoccupied under certain conditions; providing that the unit owner and the tenant are jointly and severally liable for attorney fees and costs of the association if the association prevails in an action to recover rent after proper demand, etc. Last Action: 03/02/2013 Filed.

 

CS/SB 264: Firesafety Devices
GENERAL BILL by Community Affairs ; Hays

 

Firesafety Devices; Requiring certain battery-operated smoke alarms to meet specified standards, etc.

Senate Committee References: Community Affairs (CA) , Commerce and Tourism (CM)  Governmental Oversight and Accountability (GO)

Last Action: 02/12/2013 Now in Commerce and Tourism

Effective Date: July 1, 2013

 

SB 112: Property Fraud
GENERAL BILL by Dean

 

Property Fraud; Prohibiting a person from filing or causing to be filed, with intent to defraud another, a document relating to the ownership, transfer, or encumbrance of or claim against real or personal property, or any interest in real or personal property, which the person knows contains a material misstatement, misrepresentation, or omission of fact; providing criminal penalties; providing that a person who fraudulently records a construction lien is subject to specified fraud provisions, etc.

Senate Committee References: Judiciary (JU) , Criminal Justice (CJ) , Rules (RC)

Last Action: 01/04/2013 Referred to Judiciary; Criminal Justice; Rules

 

CS/SB 120: Condominiums
GENERAL BILL by Regulated Industries ; Latvala

 

Condominiums; Allowing condominium units to come into existence regardless of requirements or restrictions in a declaration; extending the amount of time that a clerk of the circuit court may hold a sum of money before notifying the registered agent of an association that the sum is still available and the purpose for which it was deposited; changing the requirements relating to the circumstances under which a declaration of condominium or other documents are effective to create a condominium; revising the conditions under which a developer may amend a declaration of condominium governing a phase condominium; providing for an extension of the 7-year period for the completion of a phase, etc.

Senate Committee References: Regulated Industries (RI) , Judiciary (JU) , Rules (RC)

Last Action: 01/28/2013 Now in Judiciary

Effective Date: Upon becoming a law.

 

CS/SB 436: Residential Properties
GENERAL BILL by Regulated Industries ; Altman

 

Residential Properties; Exempting certain elevators from specific code update requirements; revising specified supervision and regulation exemptions for homeowners’ association swimming pools; providing requirements for a condominium association board relating to the installation of hurricane shutters, impact glass, code-compliant windows or doors, and other types of code-compliant hurricane protection under certain circumstances; revising provisions relating to imposing remedies against a noncompliant or delinquent condominium unit owner or member, etc.

Last Action: 02/25/2013 Pending reference review under Rule 4.7(2) – (Committee Substitute)

 

CS/SB 530: Dispute Resolution
GENERAL BILL by Judiciary ; Thrasher

 

Dispute Resolution; Revising the short title of the “Florida Arbitration Code” to be the “Revised Florida Arbitration Code”; providing that an agreement may waive or vary the effect of statutory arbitration provisions; requiring a court to decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate; providing that a person waives any objection to lack of or insufficiency of notice by appearing at the arbitration hearing; requiring certain disclosures of interests and relationships by a person before accepting appointment as an arbitrator, etc.

Senate Committee References: Judiciary (JU) , Rules (RC)

Last Action: 02/21/2013 Now in Rules

Effective Date: July 1, 2013

 

SB 182: Homestead Exemption
GENERAL BILL by Detert

 

Homestead Exemption; Authorizing a person to report to a local property appraiser a possible homestead exemption violation under certain circumstances; requiring that the tax collector pay a specified maximum reward to the reporting individual after the recovery of any back taxes, interest, or penalties; requiring associations for condominiums and cooperatives to provide a list of rented units to the property appraiser’s office, etc.

Senate Committee References: Community Affairs (CA) , Appropriations Subcommittee on Finance and Tax (AFT) , Appropriations (AP)

Last Action: 01/11/2013 Referred to Community Affairs; Appropriations Subcommittee on Finance and Tax; Appropriations

 

SB 286: Design Professionals
GENERAL BILL by Negron

 

Design Professionals; Providing that certain contracts executed by a business entity may specify that certain architects, interior designers, landscape architects, engineers, and surveyors may not be held individually liable for negligence in the performance of professional services provided under those contracts; specifying that a contract that prohibits individual liability must meet certain requirements, etc.

Senate Committee References: Regulated Industries (RI) , Judiciary (JU) , Community Affairs (CA)

Last Action: 02/07/2013 Now in Judiciary

Effective Date: July 1, 2013

 

Pending Florida House Bills

 

SB 596: Homeowners’ Associations
GENERAL BILL by Hays

 

Homeowners’ Associations; Renaming the Division of Florida Condominiums, Timeshares, and Mobile Homes in the Department of Business and Professional Regulation to the Division of Florida Condominiums, Homeowners’ Associations, Timeshares, and Mobile Homes; requiring all moneys collected by the division relating to the regulation of homeowners’ associations to be deposited into the Florida Condominiums, Homeowners’ Association, Timeshares, and Mobile Homes Trust Fund; creating the Office of Community Association Ombudsman, etc.

Senate Committee References: Regulated Industries (RI) , Governmental Oversight and Accountability (GO) , Appropriations Subcommittee on General Government (AGG) , Appropriations (AP)

Last Action: 02/07/2013 Referred to Regulated Industries; Governmental Oversight and Accountability; Appropriations Subcommittee on General Government; Appropriations

 

SB 580: Homeowners’ Associations
GENERAL BILL by Hays

 

Homeowners’ Associations; Providing for association members to take photographs or images of association records without charge in certain circumstances; requiring association directors to file with the association secretary certification that they have read certain association documents, will uphold the documents, and will uphold their fiduciary responsibility to the members, or that they have completed an educational course approved by the department; providing procedures to be followed which relate to contracts or transactions between the association and a director or entity in which a director or officer is financially interested, etc.

Senate Committee References: Regulated Industries (RI) , Community Affairs (CA) , Rules (RC)

Last Action: 02/07/2013 Referred to Regulated Industries; Community Affairs; Rules

 

HB 87: Mortgage Foreclosures
GENERAL BILL by Passidomo ; (CO-INTRODUCERS) Caldwell ; Moraitis ; Rodrigues

 

Mortgage Foreclosures; Revises limitations period for commencing action to enforce claim of deficiency judgment after foreclosure action; provides for applicability to existing causes of action; specifies required contents of complaint seeking to foreclose on certain types of residential properties; authorizes sanctions against plaintiffs who fail to comply with complaint requirements; requires court to treat collateral attack on final judgment of foreclosure on mortgage as claim for monetary damages; prohibits court from granting certain relief affecting title to foreclosed property; provides for construction relating to rights of certain persons to seek relief or pursue claims against foreclosed property; limits amount of deficiency judgment; revises class of persons authorized to move for expedited foreclosure; provides requirements & procedures with respect to order directed to defendants to show cause; provides failures by defendant to make filings or appearances may have legal consequences; requires court to enter final judgment of foreclosure & order foreclosure sale; provides for liability of persons who wrongly claim to be holders of or entitled to enforce a lost, stolen, or destroyed note & cause mortgage secured thereby to be foreclosed.

Last Action: 02/07/2013 Now in Justice Appropriations Subcommittee

Effective Date: upon becoming a law

 

CS/HB 175: Condominiums
GENERAL BILL by Civil Justice Subcommittee ; Fitzenhagen

 

Condominiums; Allows condominium units to come into existence regardless of requirements or restrictions in declaration; extends amount of time that clerk may hold sum of money before notifying registered agent of association that sum is still available & purpose for which it was deposited; changes requirements relating to circumstances under which declaration of condominium or other documents are effective to create condominium; revises conditions under which unit owners may vote on issues related to preparation of financial reports; revises conditions under which developer may vote to waive or reduce funding of reserves; revises conditions under which developer may acquire leaseholds, memberships, or other possessory or use interests; revises conditions under which unit owners other than developer are entitled to elect at least majority of members of board of administration; revises requirements related to documents that developer must deliver to association; revises conditions under which developer may amend declaration of condominium governing phase condominium; provides for extension of 7-year period for completion of phase; provides requirements for adoption of amendment; provides that amendment adopted pursuant to this section is exempt from other requirements of law.

Last Action: 02/12/2013 Now in Business and Professional Regulation Subcommittee

 

CS/HB 73: Residential Properties
GENERAL BILL by Civil Justice Subcommittee ; Moraitis

 

Residential Properties; Exempts certain elevators from specific code update requirements; revises specified supervision & regulation exemptions for homeowners’ association swimming pools; requires community association to allow member or member’s representative to use certain portable devices to make electronic copies of association records; revises provisions relating to association’s power to purchase land or recreational lease; revises terms of members of association’s board of administrators & revises eligibility criteria for candidates; revises condominium unit owner election & condominium association meeting notice & recordkeeping requirements; provides requirements for condominiums relating to election challenges, recalls, & installation of impact glass or other code-compliant windows; provides requirements for condominiums created within condominium parcels; revises provisions relating to imposing remedies; revises liability of unit owners; provides liability limitations of certain first mortgagee or its successor or assignees; revises records not accessible to members or parcel owners; revises provisions relating to amendment of declarations; provides criteria for consent to amendment; requires notice to mortgagees regarding proposed amendments.

Last Action: 02/21/2013 Now in Business and Professional Regulation Subcommittee

 

Weir Gate Operation Guide for South Florida Community Associations

Posted on by Gerstin

The Lake Worth Drainage District has issued a new ” how-to” guide for for Weir Gate operation at South Florida community associations.  This helpful guide is a great resource for both homeowner and condominium associations tasked with the important job of safely and efficiently operating a weir gate.  Considering the instability of South Florida’s weather, along with its flat, low lying landscape, knowing how to operate your community associations weir gate can go a long way in avoiding or preparing for rising water.  The guide can be found here: 2922012_lwdd_guidelines_for_associations