Florida Community Association

The Complete Beginner’s Guide to Drones in Community Associations

Posted on by Gerstin

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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: __________________

The 2016 Insider’s Guide to Newly Proposed Florida HOA, Condo & Property Management Laws

Posted on by Gerstin

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The 2016 Florida Legislative Session will begin on January 12, 2016. In Florida’s House of Representatives, three bills seeking to drastically alter the governance and operation of HOAs and property managers have already been filed.

Florida 2016, HB 653, grants authority to the Division of Condominium, Timeshares, and Mobile Homes to regulate homeowner associations in a manner similar to condominium associations

Florida 2016,HB 665-Property Managers:  seeks to place stricter licensing requirements and disciplinary proceedings on property managers and property management companies.

Florida HB 2016 667  seeks to combine HOA statutes (720), condo statutes (718) and cooperatives statutes (7210) into one body of law entitled “Common Interest Communities Act”.

None of these pending bills have a Senate companion.

2015 Florida Real Estate and Community Association Legislative Update

Posted on by Gerstin

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: __________________

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