2017 Florida Condominium and Homeowner Association Legislative Update

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

Click here for the .pdf version.

Condominium & Homeowner Associations

Financial Reporting Requirements

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

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

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

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

 Estoppel Certificates

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

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

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

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

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

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

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

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

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

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

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

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

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

Condominiums Only

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

Directors.

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

Recalls.

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

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

Voting Rights.

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

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

Conflicts of Interest.

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

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

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

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

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

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

Official Records.

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

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

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

Websites.

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

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

Financial Reports.

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

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

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

Criminal Penalties added to F.S. §718

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

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

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

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

Debit Cards.

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

Ombudsman.

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

Condominium Terminations

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

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

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

Requires approval of the termination by the Division;

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

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

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

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

Noteworthy Veto
Condominium Fire Sprinklers

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

Stay Informed, Subscribe to the Gerstin & Associates Newsletter

  • 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.

 

 

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

By Seth Amkraut, Esq.neighborhood_watch_05b

Click here for .pdf version of this article

Potential Personal Liability for Board Members.

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

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

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

Individual board member liability.

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

What can an association do? 

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

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

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

Name: ____________________________      Association name: _____________________

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

Email address: ______________________     Telephone number: __________________

Looming ADA Rules Could Affect Millions of Websites

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

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

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

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

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/

Commercial Landlord’s Blanket Refusal to Allow Sublease Fails

Recently, in the case of  Siewert V. Casey, 37 Fla. Weekly D527 (Fla. 4th DCA 2012), Florida’s Fourth District Court of Appeal illustrated the pitfalls and “time bombs” awaiting commercial landlords using “boilerplate” or outdated leases. In Siewert, the landlord’s commercial lease required the tenant to obtain the landlord’s written consent to an assignment or sublease.  The lease did not contain any specific standards (financial ability, credit score, etc.) governing the landlord’s approval process. Nevertheless, the landlord’s blanket refusal to allow a sublease was considered by the Court a breach of the lease:

 When a lease contains a boilerplate clause requiring the landlord’s consent for any
proposed sublease—without specific standards governing
the landlord’s approval—
the landlord may not then arbitrarily
withhold approval of a sublease.

This decision stems in part from Florida’s “implied covenant of good faith”.  The implied covenant of good faith is a common law doctrine requiring contracting parties to fulfill their contractual obligations in good faith.

To avoid suffering a similar fate, commercial landlords should seek assistance from an attorney in maintaining up to date master templates and leases. A lease should always be as short and concise as possible, while at the same time meeting the latest standards of Florida law and the landlord’s specific needs.  The full text of the Court’s decision can be found here: Siewert V. Casey, 37 Fla. Weekly D527 (Fla. 4th DCA 2012).

Hotel and Community Association Pools Given a Temporary ADA Reprieve

Recently, the Department of Justice adopted final rules relating to the provision of accessible entry and exit to existing swimming pools, wading pools, and spas (pools built before March 15, 2012).  If you have not heard by now. . . the new rules required all public use pools (hotel, community associations, etc.) to conform with new ADA regulations. In essence, the entry and exit to a public use pool has to be handicap accessible (a lift). These regulations were due to take affect on March 15, 2012 but were postponed due to an outcry from small business owners because of the high cost of compliance in such a short period of time. Today the implementation of these same regulations were postponed again. However, the postponement only applies to existing pools, in which the compliance date until January 31, 2013.  All new pool construction must be in compliance with the new ADA rules.

Hotels, motels and community associations with public use pools should consult with their attorney to ensure compliance with these new regulations (as well the multitude of other regulations pending or in effect).  Non-compliance is always more costly than complying. A brief primer for small businesses attempting to navigate ADA regulations can be found here: http://www.ada.gov/in