Litigation

Florida Community Associations, Disclosing the Names of the Infected.

Posted on by Gerstin

– Disclosing the Names of Infected Members in Florida’s Community Associations.

By: Joshua Gerstin, Esq.     (click here for .pdf version)

If a community association is aware a member has the coronavirus, the first step for the association should be to alert its members without naming the infected member(s). In this initial alert, the Association should remind its members to follow the guidelines of the local governing authorities and the CDC regarding staying healthy during this pandemic (washing hands, social distancing, etc.).  After sending the initial alert, determining whether the association can or must disclose the identity of an infected member is the troublesome next step.  Although this issue has not been decided by the courts or an administrative agency yet, there are various laws governing the disclosure of confidential medical information Florida’s community associations should familiarize themselves with.

The most widely known law covering medical information confidentiality is the federal Health Insurance Portability and Accountability Act known as “HIPPA”.  According to HIPPA, community associations do not qualify as a “covered entity” (ex. doctor’s office, etc.). As such, HIPPA generally does not apply to most of Florida’s community associations.  However,  Florida Statute §456.057 entitled Ownership and Control of Patient Records; report or copies of records to be furnished; disclosure of information (“Florida Medical Records Act”) and Florida Statute §720.303(5)(c)(4) (for homeowner associations) or §718.111(12)(c)(3)(d) (for the condominium associations) pertain to medical records within an association’s Official Records and may apply if the association has possession of the owner’s medical records indicating he/she is infected.  Based on a “strict reading” it is reasonable to conclude these Florida statutes ( §720.303(5)(c)(4), §718.111(12)(c)(3)(d) and §456.057) prohibit a community association from disclosing the identity of an infected member when knowledge of the infection was obtained from information contained in the infected member’s medical records.

In most instances, a community association will not be in possession of medical records indicating a diagnosis of infection.  Often times, an association will learn a member is infected from the inadvertent or purposeful disclosure by a care provider. In such instances, the association should determine whether the sick member authorized the disclosure to the association.  If so, the association should ask the sick member for written authority to disclose the information identifying him/her as having the coronavirus. Without written approval from the sick member, the purposeful or inadvertent disclosure by a medical professional of an infection does not give the association the ability to broadcast the same information to all of its members free from liability for its actions.

Most often, the association will have third or fourth hand information from an owner who knew or saw something leading them to conclude a member has been infected. Broadcasting such information to other members, although it may seem at least anecdotally accurate, will subject the association to liability.

Some alternative approaches to disclosing the name of the infected member(s) are:

1. Contacting the local health authorities and obtaining their opinion as to whether this person, based on the surrounding demographic, should be brought to a hospital for quarantine or what steps the person and the association should take.

2. Contact the individual to determine whether he or she would consent in writing to the disclosure of the infection. If the answer is yes, no problem, the association can disclose.

3. The Association should determine whether the individual and the in-home care givers are both isolating in the home and not going outside other than in their backyard or on their balcony. The association should routinely check-in with the person/caregivers via telephone and driving by as much as practical. Many condominium associations have security cameras that can monitor whether the infected member has left his/her unit and entered a common area or came into contact with a common element (ex. elevator).  The Association should continue this for the longest maximum time the CDC states a person is infectious. If an infected member flouts the CDC isolation guidelines, the police and local health department should be notified and asked to take action.  Relaying this health related information regarding an infected member to the health or police authorities would most likely not violate the above cited laws.

4.  Florida’s condominium associations should enact an action plan for banning any infected members from using the common areas and common elements (if they are not closed already). These plans should be done at a meeting of the board of directors with its attorney that is closed to the membership due to the discussion of medical information and anticipated litigation. However, the infected member(s) cannot be denied ingress or egress to their units/homes.  Therefore, especially in Florida’s condominium associations, a plan for extra, sustained cleaning of all common elements (ex. elevators) and common areas are a must.

Community association members, especially those in 55+ communities, are rightfully afraid of catching the coronavirus. As we become aware of the increasing amount of infections, community association members will demand their associations release the names of the infected with impassioned pleas for their own safety.  When this happens at your community association, your initial focus should be on alerting members to the many ways they can protect themselves while consulting with the association’s attorney and local health professionals in the development of an action plan.

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2019 Florida Community Association Case Law Year in Review.

Posted on by Gerstin

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

2019 Case Law Decisions

 

•  Condominium Board Member Term Limits.

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

•  Former Owner Awarded Attorneys’ Fees Against Community Association.

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

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

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

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

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

• Associations Beware of Mandatory Arbitration Provisions in Governing Documents.

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

• Unit Owners’ Defamation Lawsuit, Board Members Beware.

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

2018 Florida Community Association Legislative Update

Posted on by Gerstin

Click here for .pdf version

The following will become law on July 1, 2018.

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HB 7087

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

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

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

Name: _________________________________________________

Mailing address: ________________________________________

E-mail address: _________________________________________

Community name: ________________________________________

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

2017 Florida Condominium and Homeowner Association Legislative Update

Posted on by Gerstin

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

Click here for the .pdf version.

Condominium & Homeowner Associations

Financial Reporting Requirements

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

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

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

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

 Estoppel Certificates

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

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

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

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

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

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

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

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

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

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

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

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

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

Condominiums Only

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

Directors.

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

Recalls.

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

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

Voting Rights.

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

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

Conflicts of Interest.

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

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

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

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

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

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

Official Records.

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

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

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

Websites.

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

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

Financial Reports.

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

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

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

Criminal Penalties added to F.S. §718

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

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

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

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

Debit Cards.

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

Ombudsman.

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

Condominium Terminations

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

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

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

Requires approval of the termination by the Division;

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

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

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

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

Noteworthy Veto
Condominium Fire Sprinklers

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

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  • Community name: ________________________________________
  • Position on board, if any: __________________________________

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

 

 

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

Posted on by Gerstin

By Seth Amkraut, Esq.neighborhood_watch_05b

Click here for .pdf version of this article

Potential Personal Liability for Board Members.

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

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

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

Individual board member liability.

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

What can an association do? 

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

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

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

Name: ____________________________      Association name: _____________________

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

Email address: ______________________     Telephone number: __________________

Looming ADA Rules Could Affect Millions of Websites

Posted on by Gerstin

ada-website

As many small business property owners will attest, the ADA is a brutal and often times unfair law. Property owners that do not comply with the ADA are not entitled to any advanced notice prior to being sued.  Although important to promote access for the disabled, often times the ADA is exploited by a person that either has never actually visited the premises or visited the premises solely for litigation purposes.  This same heavy handedness is coming to websites and whether they are accessible to the disabled.  Property owners such as hotels and hospitality websites will be the first front which will soon be expanded to almost every website.

For more information, and how to check to see if your website is ADA compliant go to: http://www.sun-sentinel.com/business/small-business/fl-ada-website-accessibility-suits-20150623-story.html#page=2  

Please contact our office to assist your business with all of its legal technology needs, including the issue of ADA compliant websites.

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

Posted on by Gerstin

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

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 .

 

 

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

 

 

 

Owner Not Covered for Exploding Corpse in Palm Beach County, Florida Condominium

Posted on by Gerstin

A decomposing body that explodes does not give rise to coverage for explosions and personal property damage…

Full article here :http://nypost.com/2014/04/27/neighbor-must-pay-for-damage-caused-by-an-exploding-corpse/