Palm Beach County Condo Association

If I Only Knew! How to Avoid Being A Bad Director.

Posted on by Gerstin

Part 1

Congratulations on your recent election to your community association’s board of directors. Most likely, you scheduled or already attended your required director’s certification class. Certainly, your certification class was stimulating and covered important topics.  However, unlike your certification class, this letter is not based on the law and probably more helpful in your day-to-day life as a new director (or incumbent).  Following is a brief review of some observations I made during my twenty-plus years of representing community associations that most new and incumbent directors will find useful.

1. No Good Deed Goes Unpublished.

The maxim “no good deed goes unpublished” holds true for community association directors. Directors are elected to make both easy and difficult decisions for the community. Do not abstain from difficult votes or push difficult decisions down the road because these items only get worse over time. It is a dereliction of your duty to abstain from a decision solely because it is a tough decision to make. Although you may not have created the situation failing to act is failing as a director.

2. Favoritisim is Bad

Favoritism is Bad. Do not show favoritism. It is human nature to be kinder to those you know. In the context of a community association, this can get you, and the association sued. Although your friend who did not obtain prior approval for a standard paint color may not be a significant problem, the owner down the street wants his house purple also without approval is lurking. Playing favorites is a sure-fire way to a lawsuit and disastrous results as a director.

3. Avoid Populist Proposals.

Associations can only make decisions at a duly noticed and held Board meeting. Board members can request the placement of items of interest on a meeting’s agenda before it is posted. Having an item on the agenda allows for the particular item to be discussed and possibly voted on at a Board meeting. The Board is typically not allowed to vote on items that are not on the agenda. Non-agenda items can be discussed during a meeting’s “new business” portion and put on the next Board meeting agenda. As a director, I strongly suggest not reaching out to association members and rallying support for an item before bringing the matter properly before the Board to discuss. For example, rallying support from your neighbors for a clubhouse renovation before the Association has an opportunity to learn and inquire about the costs and other limitations is a waste of time and energy. Such efforts are premature, lead to a Board’s failure to act, and cause all those involved to get false hopes followed by bitterness about the lack of progress.

4. Know How and When to Contact the Attorney.

New Board members are expected to have questions. How you approach asking those questions will determine whether you will be an asset or distraction to your Association. The Association and its attorney should have a procedure for contacting the association’s attorney. Successful community associations utilize a legal liaison approach to save money (contact me for more details). Understand and work within this framework so you do not inadvertently incur attorney’s fees for legal opinions of no interest to the association as a whole. Engaging in personal “pet projects” is fine. Using your association’s resources to fund those projects without prior association approval is not.

Stay Tuned, Part 2 Coming Soon…

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2021 Florida Community Association Legislative Update.

Posted on by Gerstin

(click here for .PDF version)

Another big year for legislation impacting Florida’s community associations.  Now is the time for associations to contact their attorneys for guidance. The following items will become law on July 1, 2021, unless vetoed by the Governor.  Following is a summary of the highlights. For complete coverage, please click on the various links below to see the bill’s entire text:

Condominiums- SB 630 (available by clicking here):

1.         **Collections have changed. See below for important information.  Similar to homeowner associations. Condominium association collections require two forty-five-day notices from an attorney compared to the prior two thirty-day notices (SB 56available by clicking here).

2.         Renters have the right to inspect and copy only the declaration of condominium, by-laws, and rules.

3.         Requiring members to demonstrate any purpose or state any reason for a record inspection is prohibited.

4.         Documents required to be posted on a website can be made available via a mobile application (applies only to condominiums with 150 or more units).

5.         For condominiums with 150 or more units, instead of posting copies of certain required documents to a website, the association may make those documents available through an application on a mobile device.

6.         Discriminatory restrictions in governing documents (e.g., restrictions pertaining to race, color, national origin, religion, gender, or disability) can be amended by the Board without the necessity of a vote by the members.

7.         Board member term limits are clarified as beginning on or after July 1, 2018.

8.         If condominium association policies do not allow for subrogation against an owner, an owner’s policy cannot allow for subrogation against an association. This bill may have unintended and expensive consequences in the form of higher insurance rates if association insurers cannot recoup losses against a negligent owner.

9.         Bids have to be maintained by an association for only one year.

10.       Transfer fee maximum amount is increased from $100.00 to $150.00 and will have a CPI adjustment every five years.

11.       Recall disputes may go directly to court or arbitration, mediation is no longer an option.

12.       Contracts with a service provider owned or operated by a board member (or other relatives with a financial relationship) are no longer prohibited.

13.       Associations cannot prohibit the installation of a natural gas fuel station.  However, the installation must comply with all federal, state, and local laws.

14.       An association can install, operate and charge for an electric vehicle charging station or natural gas fuel station on the common elements or association property.  The installation of an electric vehicle charging station or natural gas fuel station will not constitute a material alteration or substantial addition to the common elements or association property.

15.       The Division now has jurisdiction to investigate complaints related to association records.

16.       Fines are due five days after notice to the violator compared to five days after the Fining Committee approved the fine.

17.       Based on the advice of emergency management officials, licensed professionals retained by the association or public health officials, the Board may limit entry or occupancy of any portion of the condominium or association property to protect the health, safety, and/or welfare of the members, tenants, guests, and invitees.

18.       During an emergency, the Board may use heightened sanitation protocols and remove debris to mitigate the spread of fungus, mold, or a contagion. In addition, the Board may contract for services or items that assist with the mitigation of damage, further injury, or the spreading of a contagion.

19.       Emergency powers are limited to only the amount of time reasonably necessary to protect the health, safety, and/or welfare of members, guests, and invitees, mitigate further damage or injury or make necessary repairs.

20.       An association no longer has to wait for a problem to occur.  Emergency powers can be used in response to anticipated damage or injury. The term “contagion” was added to the types of emergencies.

21.       An association’s emergency powers cannot be used to prohibit owners, tenants, guests, agents, or their invitees from accessing a unit, common elements, and limited common elements if access is necessary to facilitate the sale, lease, or transfer of title to the unit.

22.       In response to a records request, condominium associations must provide the owner a certified and itemized list of records produced.  

23.       Fourteen days’ notice is required for all member meeting notices unless other stated in the association’s by-laws.

24.       Service provider conflict of interest provisions have been deleted.

25.       Fines are due 5 (five) days after notice from the association.  

26.       Unpaid fines are no longer considered a type of financial delinquency that would bar an owner from becoming a candidate for a directorship (SB 1966, available by clicking here).

Homeowner Associations- SB 630 (available by clicking here)

1.         **Collections have changed. See below for important information.

2.         Similar to condominium associations, amendments to homeowner association governing documents that prohibit or regulate rentals will apply only to owners acquiring title after the amendment is passed or to the existing owners that consent. Rental restrictions in a governing document amendment will not apply to owners that do not vote on the amendment or that vote no. Instead, the rental restrictions would apply only after the home is sold. A home transferred to an affiliated entity in which the beneficial ownership remains the same, or a home devised (transferred) through a will, does not give rise to the imposition of a rental restriction amendment. This new law does not apply to governing document amendments seeking to prohibit or regulate rentals for terms of less than six (6) months or seek to limit rentals to no more than three times a year.  The new law also does not apply to a homeowners’ association with less than sixteen homes.

3.         Records or other information obtained by a community association when a guest visits an owner or resident (security check at gated communities, etc.) are not accessible to members.

4.         Rules & Regulations are no longer included in the definition of “governing documents.” The inclusion of Rules and Regulations in the definition was the reason homeowner associations started recording them. Considering the flip-flop nature of the legislature and that most Rules and Regulations have now been recorded, continuing to record new Rules and Regulations makes sense. 


5.         Sign-in sheets, ballots, voting proxies, and all other records pertaining to parcel owners’ voting must be maintained for one year after the vote.

6.         If governing documents do not obligate the developer to create reserves, no reserves are accounted for in the budget, and the association is responsible for the repair and maintenance of

capital improvements for which a special assessment may be necessary, financial reports for the preceding year must contain disclosure language in conspicuous type.

7.         Reserves are to be considered mandatory only if the governing documents obligated the developer to provide reserves or the reserve(s) are approved by a majority of the association’s total voting interests.

Applicable to both condominium and homeowner associations

1.   **Collections SB 56 (available by clicking here):

An association may not require payment of attorney fees related to a past due assessment without first delivering a written notice of late assessment to the unit owner which specifies the amount owed to the association and provides the unit owner an opportunity to pay the amount owed without the assessment of attorney fees. The notice of late assessment must be sent by first-class United States mail to the unit owner at his or her last address as reflected in the association’s records and, if such address is not the unit address, must also be sent by first-class United States mail to the unit address. Notice is deemed to have been delivered upon mailing as required by this subsection. A rebuttable presumption that an association mailed a notice in accordance with this subsection is  established if a board member, officer, or agent of the association, or a manager licensed under part VIII of chapter 346 468, provides a sworn affidavit attesting to such mailing. The notice must be in substantially the following form:

NOTICE OF LATE ASSESSMENT

RE: Unit …. of …(name of association)…

The following amounts are currently due on your account to …(name of association)…, and must be paid within 30 days of the date of this letter. This letter shall serve as the association’s notice of its intent to proceed with further collection action against your property no sooner than 30 days of the date of this letter, unless you pay in full the amounts set forth below:

Maintenance due …(dates)… $…..

Late fee, if applicable $…..

Interest through …(dates)…* $…..

TOTAL OUTSTANDING $…..

*Interest accrues at the rate of …. percent per annum.

2.       Covid-19.  SB 72 (available by clicking here).  If community associations follow safety guidelines properly, they may be immune to COVID-19 related lawsuits.  The hurdles for a plaintiff to prove a COVID-19 infection was the fault of an association are sharply increased.

Act Now!

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No Shirts, No Shoes, No Shots- No Service?

Posted on by Gerstin

By Joshua Gerstin, Esq.
Click here for .pdf version

As the COVID-19 vaccine rollout begins to spread across the country two opposing sides are emerging, individuals refusing to get vaccinated and others hoping to refuse them service. Board members across Florida are wondering whether their community association can and should require anybody residing in and/or entering their community to be vaccinated. In short, the answer is not clear. Dealing with a novel virus-induced pandemic brings novel legal challenges without clear answers.  

According to the Appellate Court in the case of Hidden Harbour Estates, Inc. v. Norman:

“It appears to us that inherent in the condominium concept is the principle that to promote the health, happiness, and peace of mind of the majority of the unit owners since they are living in such close proximity and using facilities in common, each unit owner must give up a certain degree of freedom of choice which he might otherwise enjoy in separate, privately owned property. Condominium unit owners comprise a little democratic sub-society of necessity more restrictive as it pertains to use of condominium property than may be existent outside the condominium organization.  .  .”

Hidden Harbour Estates, Inc. v. Norman, 309 So.2d 180 (Fla. 4th DCA 1975).

The Hidden Harbour Court went on to hold the test to determine a rule’s validity is “reasonableness”. Only if a board of directors has the power to adopt a rule, the rule is reasonable, and the rule does not conflict with some other right contained in a superior governing document, can the association adopt it. In this instance, rules requiring members to be vaccinated may conflict with the easements granted to owners to enjoy the common areas (a superior governing document). In addition to possibly conflicting with a member’s easement to enjoy the common areas, vaccines are not yet available to everyone and members will present religious and medical accommodations. As anyone dealing with emotional support animals in a no animal environment will readily explain, there are many easy-to-find medical providers ready, willing, and able (for a fee) to attest to an ailment or affliction to assist a member avoid a rule. Despite their often-dubious attestations, requiring a vaccine and refusing an accommodation based on a medical or religious exemption is difficult and expensive for community associations to fight. Adding the proverbial fuel to the fire is Florida’s lack of a Covid-19 vaccine mandate and pending legislation to strip the Florida Department of Health’s authority to implement a COVID-19 vaccine mandate  (HB 6003).

Another problematic issue is increased association liability. In addition to the ever-increasing “HIPPA type” liability that comes from storing health records, community associations will be placing themselves as the weak (and liable) link in a chain if an unvaccinated member sneaks in. Further stoking potential community liability is the science (many people seem to ignore), vaccinated people can catch and transmit COVID-19.  Community associations promoting the safety of mingling in their clubhouse or similar area with only vaccinated people may find themselves in a lawsuit from a person infected in an area promoted as safe.

What can a community association do?

Although requiring members to be vaccinated may not be the best approach, requiring individuals other than members to be vaccinated may be a position worth exploring.  Depending on a community association’s governing documents, passing rules requiring all vendors for the common areas and elements to be vaccinated is a good first step.  Association’s that rent clubhouse rooms or common elements (tennis, bocce, pickleball, etc.) to groups in which outsiders are allowed to participate may also want to consider a vaccine requirement for the outsiders. However, for the reasons expressed above related to members, it is doubtful a community association can prohibit an unvaccinated guest of a member who is not part of a member-group renting an area from using the area with a member.

Until the emergency declaration by Governor DeSantis expires, Florida’s community associations will have extended leeway to propose rules limiting the spread of COVID-19.  However, an emergency declaration is not going to overcome the multiple religious and medical accommodations that will be presented in response to a vaccine mandate. Combined with potential liability in storing medical records and the implied notion a common area with only vaccinated people will be 100% safe, community associations looking to require vaccinations should look outward towards their groups that rent common areas and vendors. Combined with this outwardly focus should be a relentless effort on behalf of every community association to educate and promote to its members through easy-to-understand and readily available information the use of the COVID-19 vaccine.

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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.

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