Homeowner Association

New Federal Law Mandates Community Association Disclosures!

Posted on by Gerstin

By: Joshua Gerstin, Esq.

 (click here for .PDF version)

On January 1, 2024, a new Federal law known as the “Corporate Transparency Act” (“Act”) went into effect. The Act requires community association directors (and others) to disclose significant private personal information to the United States government by January 1, 2025.

Although the ACT was designed to pierce “shell” corporations in search of sex trafficking, money laundering, and other crimes, its overly and unnecessarily broad drafting ensnares community associations as not-for-profit corporations.

The ACT requires all corporations to report beneficial ownership information to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Individuals who willfully fail to report the following information are subject to civil and criminal penalties:

•           Association name.

•           Board members’ names, birthdates, home addresses, and identifying information from a driver’s license, government-issued identification, or valid passport. 

•           Names, birthdates, home addresses, and identifying information from a driver’s license, government-issued identification, or valid passport of individuals with substantial control. Whether or not this requirement includes property managers is unknown.

Additionally, the federal government has to be notified within thirty days if any of the information already submitted changes (e.g., new directors or property managers). Currently, efforts are underway to exempt community associations from the ACT. However, considering this law was passed over a presidential veto and the inability of Congress to pass legislation, hopes are dim that the law will be changed before compliance is required. For more information or to prepare, below is the link to the website for submission of information for the ACT.

Beneficial Ownership Information Reporting | FinCEN.gov

(click here for .PDF version)

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2023 Florida Community Association Legislative Update

Posted on by Gerstin

On May 5, 2023, Florida’s Legislature concluded its annual 60-day legislative session.  Unlike previous legislative sessions, this year’s session garnered little media attention while the legislators were busy at work passing many laws impacting Florida’s community associations.

For the .pdf version of this article, click here.

Following is a list of the bills Governor Ron DeSantis recently signed into legislation:

1.         Homeowner Associations.  House Bill 919 (“Homeowners Association Bill of Rights”) (click here for the full bill).  These laws will take effect on October 1, 2023.

Board meeting notices.  All Board meeting notices must specifically list the meeting’s agenda.

Owner deposits.  If a homeowners association collects a deposit from a member for any reason, including for a tenant or construction, and regardless if it is called a “security deposit,” the association must maintain all funds separately and not commingle them with association funds.  Additionally, all funds deposited with the association must be returned within thirty days after receiving notice the reason for which the deposit was collected is complete.  If requested by the owner, the association must provide an accounting of the funds deposited within seven (7) days of receiving the request.

Kickbacks.  If an officer or director (or property manager) solicits or receives anything of value for him or his family from any person or entity providing goods or services to the Association may be immediately removed from the Board by the remaining Board of Directors.  The violator is also subject to civil monetary fines.  However, an officer, director, or manager may continue to accept food consumed at a business meeting with a value of less than twenty-five dollars ($25.00) per person or a service or good receipt in connection with the trade fair or education program.

Official Records.  The law clarifies any parcel owner, or their authorized representative, may inspect Official Records.

Fines.  The existing law was clarified to make it clear that fines may be levied for violations of the declaration, bylaws, or rules.  Additionally, the notice to the member from the fining committee must include a description of the alleged violation, the specific action required to cure such violation, if applicable, and the date and location of the hearing.  A  parcel owner can attend a hearing by telephone or other electronic means.  The letter from the finning committee after its hearing must include any applicable fines or suspensions the committee approved or rejected and how the parcel owner or any occupant, licensee, or invitee of the parcel owner may cure the violation, if applicable.  All payments for fines are due within five days from the notice to the member.

Voting.  Each of the following acts is considered a fraudulent voting activity and constitutes a misdemeanor of the first degree:

  • Willfully and falsely swearing to, or affirming at oath or affirmation, or willfully procuring another person to falsely swear to, or affirm an oath or affirmation in connection with or arising out of, voting activities.
  • perpetrating, or attempting to perpetrate, or aiding in the perpetration of, fraud in connection with a vote cast, to be cast, or attempted to be cast.
  • Preventing a member from voting or preventing a member from voting as he or she intended, by fraudulently changing or attempting to change a ballot, ballot envelope, vote, or voting certificate of the member.
  •  Menacing, threatening, or using bribery or any other corruption to attempt, directly or indirectly, to influence, deceive, or deter a member when the member is voting.
  • Giving or promising directly or indirectly anything of value to another member with the intent to buy the vote of that member or another member or to corruptly influence that member or another member in casting his or her vote.  However, this does not apply to any food served which is to be consumed at the election rally or meeting or to any item of nominal value which is used as an election advertisement, including a campaign message designed to be worn by a member.
  •   Using or threatening to use direct or indirect force, violence or intimidation or any tactic of coercion or intimidation to induce or compel a member to vote or refrain from voting in an election or on a particular ballot measure.

2.         Homeowner Associations.  House Bill 437 (click here for the full bill).  These laws took effect on July 1,  2023:

Flags.   If displayed respectfully, a homeowner may display up to two (2) of the following flags:

  •  The United States flag.
  • The official flag of the State of Florida.
  • U.S. Army, Navy, Air Force, Marine Corps, Space Force, or Coast Guard flag.
  • POW-MIA flag.
  • A first responder flag.

Storage & Display of Items.  An association may not restrict parcel owners or their tenants from installing, displaying, or storing any items on a parcel that are not visible from the parcel’s frontage or an adjacent parcel, including, but not limited to, artificial turf, boats, flags, and recreational vehicles.

3.         Condominiums.  Surfside “glitch” bill, reserves, and inspections.  This legislation has already taken effect:

On June 9, 2023, Governor DeSantis signed the “glitch” bill to purportedly fix some issues with the recent “Surfside” related inspection law.  The full text of the law is available here, and a .pdf of this portion of the article is available here.  Unless otherwise indicated, this legislation takes effect immediately.  As with many legislative efforts, determining the effectiveness of the legislation and the discovery of unintended consequences takes time.  At the very least, the changes to the Structural Integrity Reserve Study law (SB 154) listed below are a good start:

Reserve Funding:

  • Multi-condominium associations operating at least 25 condominiums can use a line of credit as an alternate funding source for reserve funding.
  • Reserve funding must be based on the association’s most recent Structural Integrity Reserve Study.
  • The requirements to waive reserves or use reserves for an alternate purpose (allowable only until 2025) has changed to a majority of the total membership from a majority of those present at a meeting in which quorum was attained.
  • Inflation can be considered by an association when determining reserve funding.
  • Depending on specific requirements, a 40 or 50-year certification may be used instead of the visual survey portion of a SIRS.
  • The unduly harsh strict liability standard to find a director liable for a breach of fiduciary duty for not complying with the new reserve requirements has been changed.  The new standard is now the more reasonable “willful and knowing.”
  • Reserves are only required for components an association is responsible for according to its Declaration.  Reserves are not needed for items whose useful life exceeds 25 years.  However, deferred maintenance reserves for these items are still required.
  • Along with architects and engineers, a reserve specialist can now perform the visual inspection portion of a SIRS.
  • Exterior doors are now reserve components, and the floor and foundation are not unless the floor and foundation are part of the building’s “structure,” which, of course, they are.

Inspections:

  • Insurance premiums are excluded from the 115% calculation that allows members to challenge a budget.
  • The Florida Building Code is designated as authoritative to determine the height of a building.
  • An association has a year or less (depending on local ordinances) to repair damage identified in an inspection.
  • Fourteen days’ notice to members is required upon an association’s receipt from a local governing authority a milestone inspection is required.  The notice must also include the date the milestone inspection must be completed.
  • An architect and an engineer acting as a licensed design professional may conduct a milestone inspection.
  • The definition of “substantial structural deterioration” was broadened to include “substantial structural weakness.”
  • A local governing authority has the discretion to extend an inspection deadline for “good cause,” which at the least requires the association to have entered into a contract for a milestone inspection that cannot be completed by the deadline.
  • No more than 45 days after receiving the inspection report from the architect or engineer, the association must post a summary on its website, mail it to the members, and make the summary or report available to renters.
  • Community association managers no longer have to comply with the structural inspection laws solely because they manage a property  “that has a building” on it.
  • Local authorities can set a 25-year inspection requirement based on environmental conditions, such as proximity to a shoreline.
  • Condominium units in which personal property is covered under a flood master policy or located above specific floors may not be required to have flood insurance.
  • As of July 1, 2027, mediation is available to members for certain structural and life-safety disputes.
  • Developers must provide prospective buyers with statements regarding milestone inspections, SIRS, and reserve studies, if applicable.  The law introduces additional presale notice requirements in contracts to ensure buyer awareness.

4.         Condominiums.  Safety, Security and Crime Prevention.  House Bill (HB) 837 overhauls Florida’s litigation landscape.  The law is already in effect and is expected to reduce frivolous liability claims against residential associations (click here for full bill text):

When implemented by an association, the following safeguards exempt an association from liability if a third party commits a crime on their property:

  • Security cameras at points of entry and exit that keep video retrievable for 30 days.
  • Lighted parking available from dusk to dawn.
    1. Lighting in common areas, porches, walkways, and laundry rooms from dusk to dawn.
  • Deadbolts measuring at least one inch on every door of every unit.
  • Locking devices on every window and sliding door not used for community purposes.
  • Locked gates at pool areas with fob or key access.
  • Peepholes or viewers on doors that do not have windows or window next to doors
  • By January 1, 2025, associations must have a Crime Prevention Through Environmental Design (CPTED) study performed by a law enforcement agency or a Florida Crime Prevention Through Environmental Design Practitioner (FCP).  CPTED studies should be no older than 3 years old, and the association must substantially comply with the assessment.
  • Associations must also provide their employees with safety and crime prevention training by January 1, 2025.  This training must familiarize employees with security principles, devices, measures, and standards.  After January 1, 2025, associations must train new employees within 60 days.  The Florida Crime Prevention Training Institute of the Department of Legal Affairs will develop a proposed curriculum or best practices to implement the training.

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Are the million-dollar PPP loans many PBC golf communities collected justified?

Posted on by Gerstin

In the News:

https://www.palmbeachpost.com/news/20200709/are-million-dollar-ppp-loans-some-palm-beach-county-golf-communities-collected-justified

By Mike Diamond Special to The Post

Posted Jul 9, 2020 at 7:30 AM
   

Six golf country clubs in Palm Beach County – Hunters Run, Quail Ridge, Wycliffe, Old Palm, Banyan Cay and the Loxahatchee Club – may have received as much as $18 million in PPP loans through the Small Business Administration.

Six golf course communities are among the more than 3,000 businesses in Palm Beach County that received Payroll Protection Program (PPP) loans through the Small Business Administration (SBA).

An analysis of the loans released this week by the SBA shows that the six clubs may have received as much as $18 million. The SBA had been sued by a number of newspaper organizations over the identity of the loan recipients. When the applicants applied, they were told the loans would be public record.

The program was designed to keep employees on the payroll. If employers do that and comply with the loan conditions, the loans become grants and do not have to be repaid.

The SBA agreed to identify all recipients of loans in excess of $150,000 but only provided ranges of funds received, refusing to reveal the exact amount.

The data released by the SBA do not include the amount of the loan but rather the loan amount a bank has approved. The actual amount of a loan could be smaller than the approved amount. All amounts are in ranges.

Some golf course communities that accepted PPP loans in Palm Beach County have recently spent upward of $10 million on massive improvements to their clubhouses and golf courses.

The clubs that took the money include:

– Hunters Run ($2 million to $5 million) in Boynton Beach.

– Quail Ridge ($1 million to $2 million) in Boynton Beach.

– Wycliffe ($2 million to $2.5 million) in Wellington.

– Old Palm ($1 million to $2 million) in Palm Beach Gardens.

– Banyan Cay Resort Club ($700,000 to $2 million) in West Palm Beach.

– The Loxahatchee Club Homeowners Association ($150,000 to $300,000) in Jupiter.

Scores of other Palm Beach country clubs had applied for the PPP loans. Many were approved but decided to refuse to accept the money on both moral grounds and legal grounds after reading the fine print. Government auditors are expected to review how the money was spent and can ask for the money to be returned and penalties to be imposed if they find misrepresentations.

Fifty-seven country clubs in Florida accepted the PPP funds. According to CNBC, more than 400 country clubs and golf courses received loans throughout the country. The issue of whether it is appropriate for golf course communities to receive PPP loans has been debated.

Assessment revenue a factor

Joshua Gerstin, a Boca Raton lawyer who specializes in homeowner and condominium association law, said he expects one factor the SBA will consider is how much revenue a country club gets from its assessments.

“If it is mostly assessment driven, the country club might have a problem,” he said. “If members continued to pay their assessments, there was no real loss of revenue. But if much of it comes from dining and other sources that members pay outside of their assessments, they could be eligible.”

According to the SBA, businesses must certify that the loan is needed “to support ongoing” operations and that they are unable to access “other sources of liquidity” to support their ongoing operations.

Addison Reserve General Manager Michael McCarthy said once he and his board saw those revised requirements, they decided that it would be wrong to participate in the PPP program.

“There was no way I could certify that we needed it stay in business or that we didn’t have other sources of liquidity,” he noted.

Wycliffe, Quail Ridge: We preserved jobs

Hunters Run President Michael Soroka declined to comment on the issue. According to the SBA, Hunters Run and Banyan failed to provide data to indicate how many jobs were saved by the loans. Wycliffe was chastised on CNBC early Tuesday morning for accepting its loan. The Post has learned that the Wycliffe loan amount was $2 million. It was able to preserve 281 jobs. Wycliffe’s general manager, Rob Martin, released a statement to The Post that read:

“At Wycliffe, we are thankful to all of our employees for their hard work and dedication through these challenging times. We took PPP money because we care deeply about our team and wanted to make sure that we had the ability to provide them a regular paycheck. Following the legal parameters, we only requested and received enough to cover our payroll needs and did not use our loan in any way to disadvantage other companies. We are thankful that we qualified to receive money so that our employees and their families could make ends meet during these challenging times.”

Quail Ridge GM William Langley said the PPP loan was used as intended. He noted that Quail Ridge would have had to have laid off many of its 300 employees without the loan. “We are not a club with deep pockets,” he said.

The Club at Admiral’s Cove in Jupiter was one of those that returned the funds – $3.1 million. “We saw too many issues, both moral and legal,” said CEO Bret Morris. “We did not want to take the risks.” He said Admiral Cove was able to keep its 500 employees working, noting: “We found other things for them to do.”

Finally! Florida Passes Emotional Support Animal Law.

Posted on by Gerstin

Finally, the Florida legislature passedSB1084 a bill regulating the out of control problem of Emotional Support Animals in Florida’s community associations.  SB 1084 was signed into law by Governor DeSantis on July 1, 2020, and takes effect immediately.  The new law provides for the following (a copy of SB 1084 can be found here)(a copy of this page in .pdf can be found here)

1.  Amends Florida’s Fair Housing Act by prohibiting a housing provider, to the extent required by federal law, rule, or regulation, to deny housing to a person with a disability or a disability-related need who has an animal that is required as support. It defines emotional support
animal as an animal that is not required to be trained to assist a person with a disability but, by virtue of its presence, provides support to alleviate one or more identified symptoms or effects of a person’s disability.

2.  The bill prohibits a housing provider from charging a person with an emotional support animal additional fees. It does allow a housing provider to prohibit the animal if it poses a direct threat to the safety, health, or property of others and to request written documentation that reasonably supports that the person has a disability. The supporting information may be provided by any federal, state, or local government agency, specified health care practitioners, telehealth providers, or out-of-state practitioners who have provided in-person care or services to the tenant on at least one occasion. If a person requests to keep more than one emotional support animal, the housing provider may request information regarding the specific need for each animal and may require proof of licensing and vaccination requirements for each animal.

3.  The bill prohibits a housing provider to request information that discloses the diagnosis or severity of a person’s disability or any medical records relating to the disability. The housing provider is authorized to develop a routine process for reasonable accommodation requests relating to emotional support animals, but prohibits the denial of a request based only on a tenant’s failure to use a specific form or process.

4.  The bill creates a new cause for disciplinary action against a health care practitioner’s license for providing supporting information for an emotional support animal, without personal knowledge of the patient’s disability or disability-related need. It also creates the misdemeanor crime of providing false or fraudulent emotional support animal information or documentation, and requires a convicted person to perform 30 hours of community service for an organization serving persons with disabilities, or another entity or organization the court determines
appropriate.

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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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Coronavirus & Florida Community Association Emergency Powers.

Posted on by Gerstin

How Florida’s Emergency Power Statutes Can Help Keep Your Community Safe.

(click here for .pdf version)

Both President Trump and Governor DeSantis invoked states of emergency and triggered the statutory emergency powers for Florida’s community associations. Found in Sections 718.1265, and 720.316 of the Florida Statutes, these emergency powers were enacted with hurricanes in mind.  However, the statutes apply whenever a national or state emergency is declared.  As such, these emergency powers can assist community associations in their fight against the spread of the Coronavirus.  Below is the statute with certain parts highlighted in bold you may find useful for your community association. Although the statute set forth below is the version for condominium associations, an identical version applies to homeowner associations. As always, speak with your association’s attorney before implementing any of these statutory emergency powers and follow the most updated directives from your local health officials.

718.1265 & 720.316?Association emergency powers.— (click here for HOA version)

(1)  To the extent allowed by law and unless specifically prohibited by the declaration of condominium, the articles, or the bylaws of an association, and consistent with the provisions of s. 617.0830, the board of administration, in response to damage caused by an event for which a state of emergency is declared pursuant to s. 252.36 in the locale in which the condominium is located, may, but is not required to, exercise the following powers:

(a)   Conduct board meetings and membership meetings with notice given as is practicable. Such notice may be given in any practicable manner, including publication, radio, United States mail, the Internet, public service announcements, and conspicuous posting on the condominium property or any other means the board deems reasonable under the circumstances. Notice of board decisions may be communicated as provided in this paragraph.

(b)   Cancel and reschedule any association meeting.

(c)    Name as assistant officers persons who are not directors, which assistant officers shall have the same authority as the executive officers to whom they are assistants during the state of emergency to accommodate the incapacity or unavailability of any officer of the association.

(d)   Relocate the association’s principal office or designate alternative principal offices.

(e)   Enter into agreements with local counties and municipalities to assist counties and municipalities with debris removal.

(f)?Implement a disaster plan before or immediately following the event for which a state of emergency is declared which may include, but is not limited to, shutting down or off elevators; electricity; water, sewer, or security systems; or air conditioners.

(g)   Based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine any portion of the condominium property unavailable for entry or occupancy by unit owners, family members, tenants, guests, agents, or invitees to protect the health, safety, or welfare of such persons.

(h)  Require the evacuation of the condominium property in the event of a mandatory evacuation order in the locale in which the condominium is located. Should any unit owner or other occupant of a condominium fail or refuse to evacuate the condominium property where the board has required evacuation, the association shall be immune from liability or injury to persons or property arising from such failure or refusal.

(i)  Based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine whether the condominium property can be safely inhabited or occupied. However, such determination is not conclusive as to any determination of habitability pursuant to the declaration.

(j)   Mitigate further damage, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus, including, but not limited to, mold or mildew, by removing and disposing of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the condominium property, even if the unit owner is obligated by the declaration or law to insure or replace those fixtures and to remove personal property from a unit.

(k)  Contract, on behalf of any unit owner or owners, for items or services for which the owners are otherwise individually responsible, but which are necessary to prevent further damage to the condominium property. In such event, the unit owner or owners on whose behalf the board has contracted are responsible for reimbursing the association for the actual costs of the items or services, and the association may use its lien authority provided by s. 718.116 to enforce collection of the charges. Without limitation, such items or services may include the drying of units, the boarding of broken windows or doors, and the replacement of damaged air conditioners or air handlers to provide climate control in the units or other portions of the property.

(l)  Regardless of any provision to the contrary and even if such authority does not specifically appear in the declaration of condominium, articles, or bylaws of the association, levy special assessments without a vote of the owners.

(m) Without unit owners’ approval, borrow money and pledge association assets as collateral to fund emergency repairs and carry out the duties of the association when operating funds are insufficient. This paragraph does not limit the general authority of the association to borrow money, subject to such restrictions as are contained in the declaration of condominium, articles, or bylaws of the association.

(2)  The special powers authorized under subsection (1) shall be limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the unit owners and the unit owners’ family members, tenants, guests, agents, or invitees and shall be reasonably necessary to mitigate further damage and make emergency repairs.

Educational purposes only. Not meant for legal advice, please consult your attorney for legal advice.

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Gerstin & Associates
40 SE 5th St., Suite 610
Boca Raton, FL 33432
Telephone: (561) 750-3456
Fax: (561) 750-8185
Email: joshua@gerstin.com
Web: www.gerstin.com

Update. Florida Vacation Rental Bill SB1128 Amended to Protect Community Associations

Posted on by Gerstin

No longer do Florida’s homeowner and condominium associations have to worry they are losing the ability to regulate vacation rentals. The ability of homeowner of condominium associations to limit or restrict vacation rentals such as Airbnb and VRBO is reestablished in a recently filed and approved amendment to SB1128 with the addition of the following provision:

“ The application of this act shall not supersede any current or future declaration or declaration of condominium adopted pursuant to chapter 718, Florida Statutes, cooperative documents adopted pursuant to chapter 719, Florida Statutes, or declaration of covenants or declaration adopted pursuant to chapter 720, Florida Statutes.”

Click here to read the original bill and click here to the recent amendment.   SB2118 remains in committee and has a long way to travel before it reaches the Governor’s desk.

 

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) .

If You Only Read One Article About Community Associations and Solar Panels, Read this One.

Posted on by Gerstin

Regulating Solar Panels the Right Way

By Seth Amkraut, Esq.

Click here for .pdf version of this article

With its never ending sunshine and our nation’s collective desire to reduce greenhouse gas emissions, it is little surprise residents in our “Sunshine State” are eager to install solar panels. Unfortunately, solar panel designers did not consider engineering solar panels that match the aesthetics of a home or community.  Often times, these “ugly” solar panels result in misguided efforts by community associations to strictly regulate or ban them outright.

Florida law guarantees owners the right to install solar panels on their roofs and community associations are not allowed to ban them. Therefore, trying to enforce either strict rules or an outright solar panel ban invites an expensive lawsuit the association has little chance of winning.

Although outright bans are unenforceable, community associations do have some authority to regulate solar panels. In fact, as long as a community association restriction does not impair the effectiveness of solar panels the restriction will be enforceable.  One such restriction often implemented by Florida’s community associations is requiring solar panels to have a southward orientation or within 45 degrees of due south.

In addition to the above, community associations are allowed to conduct due diligence and require documents from owners such as: proof of the contractor’s license and insurance, images or diagrams showing the proposed location and orientation of the solar panels.  Additionally, although your community associations may be obligated to repair and maintain your owners’ roofs, owners can be required to maintain and repair their solar panels (as well as any damages they cause to a roof).

Every community association is different and drafting legally compliant solar panel rules is difficult.  Therefore, the best way to get started is to speak with your community association’s attorney.  Gerstin & Associates can assist your community with drafting a solar panel policy to allow for maximum regulation without running afoul of Florida and federal law. Contact our office today for a free consultation.

 

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