Blog

“Master Association Elections Can Be Confusing,” News-Press

Q: What are the Florida requirements for election of the board of directors and the eventual election of officers in a multicondominium association? Can anyone who is a member of any of the individual boards run for election? Does each association get a single vote? Does each association choose a representative who then becomes a member of the board which then elects officers? How does it work? (J.J., via e-mail)

A: The legal structuring of multi-tiered condominium communities is a rather complex issue, and the manner in which the developer chose to set up the community will be of the most relevance. Developers usually set up multibuilding projects under some sequential development scheme, using “phase” condominiums, “series” condominiums (which then often involve a “master” association and “association property”) and “multicondominiums.”

Since your question mentions “individual boards,” I assume you are really asking about a “master association” since a multicondominium by definition is one association that operates more than one condominium, since there is only one board. In multicondominiums, you still sometimes see bylaws that provide for representational board seats from the various condominiums operated by the association, although it is my experience that the majority follow “at large” voting procedures where any unit owner from any condominium has an equal opportunity to run for the open board seats.

For multicondominium associations created on or after July 1, 2000, Section 718.405 of the Florida Condominium Act requires, among other things, that the voting rights of the unit owners in the election of the directors be described in the condominium documents. Section 718.103(30) of the Florida Condominium Act also states the voting interests of the association are the voting rights distributed to the unit owners in all condominiums operated by the multicondominium association. For matters related to a specific condominium, the term “voting interests of the condominium” is used, sometimes referred to as “class voting.” So for true multicondominium associations electing directors, the simple answer is “follow the documents.”

If, as I suspect, you are actually dealing with a “master association,” the situation is decidedly more complicated. The first question to resolve is whether the association is governed by the condominium statute, or some other statute. At the risk of oversimplification, if any members of the association are not condominium unit owners or their governing representatives (e.g. “subassociations”) you are not covered by the condominium statute. If all members are condominium unit owners or their representatives, you would fall under the condominium statute although there is a different rule for pre-1991 communities where there is a split of authority under the Florida case law.

I have seen many different types of board election procedures for “condominium master associations.” Obviously, the simplest, and most clearly compliant with the statute is the “regular” condominium election procedure where “at large” elections are held and anyone can put their name in to run for the board. Beyond that, there are many different types of procedures I have seen, including where the president of each subassociation is a master board member, where the board of each subassociation appoints the master board member, where the unit owners in the subassociations elect their master board representative, and where all members get to vote on all candidates, even those from another condominium (an “at large” election).

The law in this area is different for condominiums than it is for homeowners’ associations. For condominium master associations, the basic rule is, again, “follow the documents.” However, there are some issues that have not been addressed by the courts, and have proven problematic for the state agency which enforces the statute, such as how you square a particular voting procedure with certain provisions of the statute, such as the provision stating “any unit owner” wishing to run for the board may do so by following certain procedures. This is definitely an area where there are some “holes” in the law which I hope are someday fixed.

Joseph E. Adams

Office Managing Shareholder, Becker
Fort Myers | bio

Back to Basics

There are articles every month covering community association issues, which you can find from a plethora of sources. This magazine, other similar magazines, national magazines, newspaper articles, everyone’s favorite blog, attorney resources, Internet, etc. Most of these articles deal with specific issues, such as short term rentals, or emotional support animals, or the latest case law and how it applies in general to associations, and other specific issues. I want to go back to some of the basic tenants of association operations, back to many items that are not discussed on a day to day basis, but which can, and do, lead to problems and issues in community associations.

I want to discuss items that appear to be so basic, board members and managers overlook them, take them for granted, misconstrued how such items are to be handled or just plain forgot how to deal with such basic issues.

Proxies

Limited proxies are required to be used for many things in condominiums, such a voting on proposed amendments, waiver of reserves and waiver of financial reporting requirements, to name a few. When the limited proxies are turned in to the association, either via mail or in person, they are not required to remain sealed until the meeting, like election ballots. Proxies should be opened and tallied as they come in; this way the association knows where it stands in regards to the proxy vote before it calls the meeting to order. This can save the association a lot of time at the meeting that is spent finally opening and tallying all the proxies at the meeting. You do not need a special meeting, committee, open the proxies in front of everyone at the meeting, etc., as is required with condominium election ballots.

The same theory holds true for proxies in homeowner association elections, which, unlike condominium associations, can be used for the election of directors unless the governing documents provide otherwise. There is no requirement that homeowner association election proxies can only be opened at the election meeting, unless the governing documents provide otherwise. Save some time at your meetings – open proxies in advance of the meeting and keep a running tally.

Rules

In my experience board members and managers have more trouble in properly amending and passing rules as any other topic. There are many subtleties and complexities when discussing an association’s rule making powers, and an association should never attempt to undergo rules changes without consulting its attorney.

The first thing to look at is if the Board has the authority to pass rules and regulations. While most documents grant such authority, some do not. If the Board is not granted the authority in the governing documents to pass rules, it has no authority to do so. So while most documents do contain such authority, just make sure yours do so.

Some documents state that the Board has the authority to make rules regarding the use of the common elements. Common areas does not include the units. So if your documents only allow the Board to pass rules regarding common elements, the Board cannot pass rules regarding unit use, such as quiet hours, limiting work hours in the unit, arguably guest restrictions, etc.

A few association documents require the members to approve all changes to the Rules. Obviously this can be problematic. It is more of a problem if you have such a requirement, it is not followed, and then an owner challenges the Board’s attempted enforcement of an improperly passed rule.

Assuming the Board has the authority to pass rules, changes in a rule regarding unit use requires a fourteen (14) day posting and written (or electronic if authorized) notice to owners regarding the proposed rule change. I have seen many rules invalidated because the requirement was not followed.

Finally, as a general overview, any rule must be reasonable. Who decides what is reasonable? Ultimately a judge or jury, which is a situation you do not want to be in, where a judge or jury is making such a determination. Word to the wise – check with your association attorney when considering adopting or amending rules and regulations.

Contracts/Notice of Intent

Obviously most contracts (especially those in excess of $10,000.00) should be reviewed by the association’s attorney before being executed by the Board. Sometimes a contractor will ask the association to sign a notice of intent, which, according to the contractor, merely puts the contactor on notice that the association intends to sign a contract without actually signing the contract yet. DO NOT SIGN such a notice of intent without running it by the association attorney first. Most notices of intent are, in fact, a form of a binding contract, and provide for penalties and payments in the event the association does not, eventually, sign a contract. Any time a vendor tells you that it is not necessary to have your attorney review such a “simple” document, a red flag show go up in your mind. I have seen this become more prevalent recently in regard to rooftop leases for cell towers. I through reading of the notice of intent revealed the association was locking itself into a 99 year lease with the vendor. I do not think or advise, that any association would want to enter into such an agreement without its attorney reviewing such a document.

Please be extremely careful before signing a one page contract that has print so small on the back of the page that it is hard to read even with a magnifying glass (I am not exaggerating). Many of these types of “simple” contracts (telephone systems, garbage removal / dumpsters, etc.) are simple only for the contractor, as they lock an association into the vendor’s right of first refusal, automatic renewals, etc.

Running an association is not easy for volunteer board members, and is not easy for trained, professional managers either. Do not make the job harder than it already is, and open the association up to criticism of legal action, over simple, day to day matters. Don’t be afraid to ask your professionals for help, and don’t be penny-wise and pound foolish when it comes to seeking legal advice to help with association operations.

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

Borrowing Money

As buildings age, repairs become necessary. For associations that have not funded reserves, money will be in short supply, leaving two possible options depending on what is permitted under your governing documents: special assess and/or borrow money from a bank.

The problem with special assessing, especially in some communities, is that unit owners may be on fixed incomes and cannot afford a sudden spike in monthly payments. Under such circumstances some associations consider applying for a loan from a bank so that funds are immediately available for repairs or reconstruction but repayment is spread over time, thus lowering the monthly payments for each unit owner.

In considering these issues, I have prepared the following checklist which should be followed to guide you through this process.

Speak to your attorney first. There are a number of legal issues with regard to loans such as, whether you have the authority to borrow; and if you do, whether the Board can make this decision or if a vote of the owners is required. It is also import to consider whether the association has the authority to special assess its members or if a membership vote is required for that as well. These are threshold issues that must be reviewed.
It is important to discuss with your attorney, first, and then with the bank, what type of collateral you will use. Some loans have not been able to be finalized because the Board did not consider this issue in advance. Generally speaking, real property is not used as collateral for community association loans. The collateral is created primarily by providing the bank a lien on your accounts receivables; which includes your assessments and special assessments as well as other income derived from other sources. Most term sheets require that “all” funds be used as collateral without any consideration of the three points listed below because they are not used to working with community associations. Keep in mind the following basics regarding collateral:
– Reserves accounts and reserve funds can only be used for the purposes for which they were intended, unless the membership vote to use those funds for another purpose. Therefore, as a general rule, you should not use your reserve accounts (without a vote of the membership) as collateral.
– Special assessment funds can only be used for the purposes for which they were levied. If the special assessment was not levied for the purpose of repaying the loan it should not be used as collateral.
– Property/casualty insurance proceeds should not be used as collateral. Such insurance is usually purchased for the unit owners and their mortgagees (a general statement in Declarations of Condominium) and, therefore, should only be used for the purposes for which they were intended without the risk that the bank will retain those funds to pay down the loan when you need those funds in the aftermath of a casualty.

Many associations skip any discussions with their attorney during these initial steps which causes a number of problems when the process is too far underway.

The Board should determine which bank it wishes to use for its loan transaction. You should consult with your attorney as he or she has probably worked with a number of banks and can give you a list of banks which handle loans for community associations. The Board will determine which bank has the best interest rate and repayment terms based on its own discussions with these banks.
Provide the bank with all of the financial reports, budgets, audits, etc. that they may require. If you are approved, the bank will provide you with either (or both) of a term sheet and/or a commitment letter. These documents outline the main terms of the loan. Some banks use both; others use one or the other. It is by no means a complete list of terms but it outlines the most salient points and requirements. Your attorney should review the term sheet and commitment letter PRIOR TO execution of those documents. If you don’t take that step you could find your association stuck with the choice to live with bad terms or to walk away from the non-refundable loan commitment fee paid at the time you return this document.
Once the term sheet and/or loan commitment letter have been negotiated the bank will provide you with a set of loan documents. Generally, it is best to let a bank use their attorney to generate the loan documents than to use computer generated documents which are not specifically geared to condominium or homeowner association loans. It should be noted that the association will pay the bank’s attorney’s fees as well as its own attorney’s fees. That is standard practice. Your attorney will review the loan documents to ensure that not only the terms from the term sheet and/or commitment letter made it into the text of the loan documents but that the other terms are also equitable to the association. By way of example, some loan documents will include provisions which makes the officers signing the loans a personal guarantor. We reviewed one loan document recently which stated, that if the person signing is married that his personal assets, to the extent they were separable from his spouse, would be used as collateral. We required the bank to remove that text and all similar text and substituted a clause that stated that the persons executing are doing so for and on behalf of the association and not in his/her personal capacity. I think the reader can see the problem that could have resulted had the association president signed the loan documents without consulting legal counsel.
Revising and negotiating the text of the loan documents is the next step. Depending on the bank and their attorney this can be a quick process or a long drawn out process. That’s why the preliminary steps are important to follow as it can weed out a bank that may not wish to be flexible in changing its documents.
An opinion of counsel letters is required for most, but not all loans. This is the bank’s way of obtaining an extra layer of protection for the repayment of its loan. The opinion is done, with the permission of the association, for the benefit of the bank. The bank will want to know if the association has the authority to enter into the loan and if it took all of the proper steps to approve the loan.
Loan closing is the final step. All of the paperwork is signed and the loan and opinion of counsel letter (if required) returned in to the bank.

Loan documents are very complex documents and should not be handled by the Board without the assistance of legal counsel.

Mark D.Friedman

Shareholder, Becker
West Palm Beach | bio

Why Do They Need a Key to My Unit???

“Every man may justly consider his home his castle and himself as the king thereof; nonetheless his sovereign fiat to use his property as he pleases must yield, at least in degree, where ownership is in common or cooperation with others. The benefits of condominium living and ownership demand no less” Sterling Village Condominium, Inc. v. Breitenbach, 251 So.2d 685, 688 (Fla. 4th DCA 1971). The foregoing case is famous in condominium law circles for being a seminal case in defining material alterations and substantial additions in the context of common elements, but the passage I cite applies to many (if not most) contexts of common interest life. The issue de jour is a fundamental example of the need to yield some exclusivity rights for the benefit of all your neighbors.

Why do they (the condominium association) need a key to my unit? The answer is quite simple: water, fire, and other perils do not care where unit boundaries begin or end. The law recognizes this basic fact. Section 718.111(5)(a) of the Florida Condominium Act states “The association has the irrevocable right of access to each unit during reasonable hours, when necessary for the maintenance, repair, or replacement of any common elements or of any portion of a unit to be maintained by the association pursuant to the declaration or as necessary to prevent damage to the common elements or to a unit.” This provision of the Act recognizes that the association must be able to enter the unit to (1) perform its maintenance obligations and (2) protect the condominium property (both units and common elements).

The DBPR’s Division of Condominiums, Condominiums, Timeshares, and Mobile Homes has recognized that owners must provide the condominium association with a means of access to the unit (e.g. key or punch code) in order to be able exercise the statutory easement rights contained in Section 718.111(5)(a), Florida Statutes. Of course, associations (and the managers and vendors providing services to associations) must exercise this right of access with respect for the occupants of the unit. In non-emergency situations, this means providing appropriate notice to the unit owner of the particular need for access and when the access will occur. In cases where the unit must be accessed in an emergency situation, the association should give a prompt report to the unit owner of why the unit needed to be accessed, who accessed the unit, and what, if any, actions were taken in the unit. Lastly, the statutory easement right discussed in this article should not be conflated in manner to allow an association agent access to a unit for any reason whatsoever. The language of the statute is clear that the purpose of the access is to perform association maintenance functions and to protect the condominium. Any easement for access other than those purposes needs to be stated within the declaration of condominium.

Jay Roberts

Shareholder, Becker
Ft. Walton Beach | bio

Say What?

In terminating a third party vendor, a board of directors must be careful in disseminating information concerning the basis for its decision – especially if the decision was due to poor performance or contractual violations by the vendor.

In Florida, a cause of action for defamation can be brought against a corporation, including specifically, a community association. “Defamation” is defined as the unprivileged publication of false statements which naturally and proximately result in injury to another.” Hoch v. Loren, 273 So. 3d 56 (Fla. 4th DCA 2019). “The elements of a claim for defamation are as follows: “(1) publication; (2) falsity; (3) actor must act with knowledge or reckless disregard as to the falsity on a matter concerning a public official, or at least negligently on a matter concerning a private person; (4) actual damages; and (5) statement must be defamatory.” Jews for Jesus, Inc. v. Rapp, 997 So.2d 1098, 1106 (Fla. 2008). “In order for a defamatory statement to be actionable it must be published. Publication requires communication to one other than the person defamed.” Am. Ideal Mgmt., Inc. v. Dale Vill., Inc., 567 So. 2d 497, 498 (Fla. 4th DCA 1990). However, “[o]ne who publishes defamatory matter concerning another is not liable for the publication if (a) the matter is published upon an occasion that makes it conditionally privileged and (b) the privilege is not abused.” Nodar v. Galbreath, 462 So.2d 803 (Fla.1984).

Given that defamation can be a viable cause of action against an association, the question becomes “how can a board convey to the membership the reasons it had for terminating a vendor.” The answer is that the board can convey the information to its members but it must be extremely careful in doing so.

The case of American Ideal Management, Inc. v. Dale Village, Inc. is extremely helpful in understanding how a board of directors can communicate information to its members regarding unflattering information involving a third party vendor. In American Ideal Management, Inc., the board of directors of a community association terminated its management company. Id. In explaining its decision, the board posted two informational bulletins outlining its reasons for terminating the company. Id. The company sued the Association for defamation. Id. In its defense, the association asserted that the bulletins were subject to a qualified privilege and, accordingly, the association could not be liable for defamation. Id. The management company countered the association’s argument by asserting that a qualified privilege did not attach to the bulletins because the elements of a qualified privilege were not met. Id.

The essential elements of a qualified privilege are (1) good faith; (2) an interest in the subject by the speaker or a subject in which the speaker has a duty to speak; (3) a corresponding interest or duty in the listener or reader; (4) a proper occasion, and (5) publication in a proper manner. The qualified privilege vanishes, however, when the defamatory statement is made with express malice.” Nodar v. Galbreath, 462 So.2d 803 (Fla.1984) (internal citations omitted).

Importantly, the management company was able to produce evidence that the bulletins had been sent to non-member residents. The bulletins had also been posted on the bulletin board of the association’s recreation center. The management company asserted that the recreation center was frequented by non-residents. The court noted that “the communication reached not only owners and residents of the park who would have a corresponding interest but also there is at least circumstantial evidence that it reached nonresidents. Id. The publication of the bulletins to these non-members opened the door to defeating the association’s claim of qualified privilege. Id.

The ability to successfully assert a qualified privilege is very important as it can defeat a defamation claim because “where a qualified privilege exists, plaintiffs must prove express malice or malice in fact in order to recover. Actual malice, or malice in fact, constitutes an abuse of a qualified privilege leaving the defendant liable.” Schreidell v. Shoter, 500 So. 2d 228, 230 (Fla. 3^rd DCA 1986) (internal citations omitted).

“The Supreme Court defines express malice as ‘ill will, hostility, evil intention to defame and injure.’ Nodar 462 So.2d at 811 citing Montgomery v. Knox, 23 Fla. 595, 3 So. 211 (1887). The Supreme Court has unequivocally established that all of the three elements (ill will, hostility and evil intention to defame and injure) and more must be shown. Nodar at 811 fn 8. It is insufficient that the speaker have generalized feelings of hostility and malice towards the Plaintiff. Only if the Plaintiff demonstrates the primary motivation for the statements uttered was express malice, is the privilege overcome.” Boehm v. Am. Bankers Ins. Grp., Inc., 557 So. 2d 91, 94 (Fla. 3rd DCA 1990).

While harm to another may be incidental as a result of an unflattering publication, unless the harm is the primary motivation, malice cannot be established. It goes without saying that a board should not make or publish any communication if the intent of the communication is to harm another.

While the court in American Ideal Management, Inc. remanded the case back to the trial court to determine whether non-residents would have a sufficient interest in the bulletins to warrant extending the qualified privilege to cover publicizing the bulletins to them, it would be very unwise for an association to publish unflattering information regarding a vendor to anyone other than its own members.

Thus, to protect itself from a defamation claim, a board must only make and publish information that is truthful and without malice, that is communicated only to its members and is made for the purpose of informing its members about association business.

Marielle E. Westerman

Community Association Law, Becker
Tampa | bio

Is Picking a Good Holiday Wine like Picking a Good Attorney?

As we approach the holidays, we often find ourselves in the hunt for a good bottle of wine to give as a gift. Each year the process of selecting a bottle of wine reminds us of challenges of picking a good attorney. How do we know when we have selected the right wine for the occasion or the right attorney for the project? On reflection, the considerations in making the selections are very similar.

Stores

It seems like we can find wine sold in grocery stores, gas stations, pharmacies, and even in some department stores. Similarly, lawyers are in homes, strip malls, bank buildings, and office complexes, among other locations. Although one may find an excellent wine being sold in a gas station, it is a given that there is a better chance of finding that fine wine in a store that sells wines. So it is with attorneys, you may find an excellent attorney who practices out of his or her home, but you are more likely to find a skilled attorney working in a professional office for a law firm that includes the exact type of law that you need.

Bottles

Wine comes in attractive bottles of different shapes and sizes, some looking traditional and others stylized to catch your eye. Attorneys likewise have a wide variety of appearances, some traditional and some progressive. Can you judge the quality of the wine by the appearance of the bottle and more importantly for our discussion, can you judge the quality of the lawyer by his or her appearance? Human nature tells us that, yes, we want the bottle of wine to look impressive much like we want our attorney to look appropriate for the task. So we conclude that appearance is a factor, whether we like it or not. But, is it true that good wine must be in an appropriately attractive bottle? No. The same is true for lawyers; appearance is not an indication of quality.

Names

As we pass by the wide variety of wines on display, there are names that we recognize. There are names we do not recognize. Sometimes an exotic name creates an aura of being special, but sometimes an unfamiliar name is a signal of a one-off, somewhat out of place, and not likely to impress. For lawyers, it is much the same, as there are names that represent quality while other names are unknown or even out of place as you make your search for an appropriate attorney. Just as it is highly unlikely that an automobile manufacturer will create a wine appropriate for your occasion, it is also unlikely that an attorney whom you know for providing excellent advice in maritime law would provide you with that same high quality advice in community association law and vice versa.

Labels

The label on a bottle of wine may indicate that it was made with the finest ingredients in a faraway country. That sounds exotic and therefore creditable in the world of wine, however is it any different than the label applied in marketing by your prospective attorney indicating his or her traits and legal pedigree? Should you not check on the experience of the wine distiller and the actual experience of the attorney being reviewed? The answer is, yes. The winery creates the label. The lawyer creates his or her marketing. You are not buying labels. You are buying wine or hiring an attorney. Don’t be sold by the label.

Awards and Ratings

Distinguishing oneself in a competitive industry such as fine wines, or the practice of law, is challenging. To complicate matters for the consumer, there are many ratings and award systems and sources, some more reliable and objective than others. Unfortunately, there are some organizations which, for a fee, will publish and promote a wine or a lawyer with virtually no vetting process. Just as when selecting the right wine, the consumer should view such recommendations with healthy skepticism and scrutiny, look beyond the appearance created by accolades. The attorney best suited to handle your issue should be specifically experienced in the right legal specialty, rather than in a “blend” of general experiences which do not provide the nuanced knowledge that is critical to properly handle legal challenges. Look beyond the shiny appearance of awards and ratings and judge the lawyer by his or her fitness and experience to handle your legal issue, much like you should judge the wine for the occasion.

Descriptions

Descriptions abound in the advertising of law firms as well as wines. Is your attorney “aggressive?” Is your wine “bold?” Do you want those characteristics, and do you even know what that means, practically speaking? Descriptions of a lawyer’s characteristics, as in wine, may be somewhat helpful and illustrative of what to expect; however, a description is just based on someone else’s opinion, generally someone trying to persuade the consumer. Choosing the right attorney should not be based on passionate, descriptive language alone. To ensure the right fit, do not be solely convinced by descriptions; look for an attorney with the depth of quality only created through experience. The same, they say, for wines. We are skeptical of a 2019 vintage wine, probably with good reason.

References

We like to ask the clerk in the wine store to recommend a bottle. We can accept or reject the clerk’s recommendation, but it is almost certain that the clerk behind the counter in the wine store knows more about wines than we do. In picking an attorney to represent a community association, seek references from people who know community association attorneys. The best references come from people who work in the area of law. He or she may be a judge, a lawyer, an accountant, a community association manager, or an engineer, if that person has regular contact with attorneys providing services to community associations. You are free to accept or reject those references. Consider the source and his or her opportunity to know quality just as we consider the recommendations of the clerk behind the counter.

Age

A newly minted attorney and a newly bottled wine may have a lot in common. They look good on the outside, but it is what’s inside that counts. Does your wine just taste like grape juice, or is it a carefully aged delicacy befitting the occasion for which it was chosen? Is your attorney fresh out of school, eager to aggressively represent you, but without experience applicable to your issue? Or, has your attorney dealt with your specific problem before? If so, how many times and under what circumstances? Has your attorney successfully reached settlements for other clients dealing with your legal problem?

Keep in mind that passing the bar exam and obtaining a license to practice law is an accomplishment as is bottling a brand new wine. Exciting and long-anticipated, to be sure; however, passing the bar exam only demonstrates a grasp of the minimum foundation of understanding needed to practice law; and sometimes, a new bottle of wine is just fermented grapes. Experience, specific to the applicable area of law, is what provides the breadth and depth to successfully resolve your legal issue.

Free Samples?

The wine distributor’s representative in the grocery store will happily give you a taste of wine for free, hoping that you will buy the bottle. However, you can be certain the free sample is not from the carefully aged bottle of reserve. A fine bottle of wine does not need free samples to sell itself. This is a good example of “you get what you pay for,” and similarly applies to legal representation. When a lawyer offers below-market prices, or “freebies” to handle ancillary issues if you also bring other work to their firm, you may find yourself getting unfavorable outcomes, which can require exponentially more expensive fixes later, or worse, result in losing an opportunity forever. Picking an experienced attorney, qualified with the depth of knowledge to advise you correctly from the beginning, will not be free, or even cheap. However, in the long run, in legal representation, you get what you pay for and choosing an attorney because he or she is inexpensive (or free) may leave you disappointed and possibly paying heavily later on.

Cost

Does anyone want to give a cheap bottle of wine as a gift? We suspect that you would prefer to have an appropriately priced bottle; one that represents you well. The same concept applies to attorneys. A cut rate attorney is easy to recognize, like the cheap bottle of wine, and in the end neither provides value. Yet we know that many of us could not tell the difference between an expensive wine and a moderately priced quality wine. Here, there may be a difference. The attorney working at the “cheap” rate may take longer to accomplish the task. Assuming that the task is completed as it should be and ends up costing much more than the “expensive” attorney who charges that rate because he or she is worth it and does get the task completed efficiently, which attorney would you choose? That attorney may have years of experience, legitimate credentials that set him or her aside from his or her peers, and with experience that yields efficiency and quality and after all, isn’t that what you are looking for in your lawyer?

So, no easy answers, just considerations. Given the market place is crowded with so many bottles to choose from, pick the best quality that you can afford, based on doing your homework before you enter the store and do the same before you hire the lawyer.

Steven H. Mezer

Board Certified Condominium and Planned Development Law Attorney, Becker
Tampa  | bio

Carolyn Meadows

Attorney at Law, Becker
Tampa  | bio

Sea Level Rise: Forewarned is Forearmed

We have all heard the environmentalists’ cry about the Dead Sea shrinking. Water levels are falling at an average rate of three feet per year due to evaporation and human diversion of tributaries. The opposite conundrum sea level rise is not occurring quite as rapidly but is equally as concerning.

Sea-level rise is an important issue which cannot be discounted by Florida communities, especially coastal ones, if they want to be resilient and prepared for expected adverse effects. The statistics for Florida are not encouraging. Miami has the most to lose in terms of financial assets of any coastal city in the world, just above New York City. Florida has more residents at risk from sea level rise than any other U.S. state. Relative sea levels in South Florida are roughly four inches higher now than in 1992. The National Oceanic and Atmospheric Administration predicts sea levels will rise as much as three feet in South Florida by 2060.

Thus far, government and municipal action seems lacking. Some cities have approved bonds for measures such as shoreline stabilization, storm drainage improvements, elevating sea walls, and raising roads. Municipalities also need to address legal issues, such as changing building and zoning codes, eminent domain, land takings, and tax incentives for developers, among others.

In addition, the legal implications of sea level rise in Florida, at every level, are vast. When the state or local municipalities enact stricter building elevation requirements and developers elevate new construction, what will happen to adjacent properties which have lower elevations? This would likely cause water run-off and flooding on adjacent parcels which may, in turn, create private litigation in neighbor vs. neighbor disputes based on negligence or nuisance concepts. Suddenly your older condominium is being flooded by water run-off from the new building next door which is at a higher elevation. Aggrieved owners might sue local governmental agencies, planners, realtors, and even their own real estate transactional attorneys.

Condominium and homeowner associations are quasi-governmental microcosms which also need to be proactive to protect their residents’ property values. Boards may likewise face liability for failing to take preventive measures to avoid water intrusion. There are important factors for boards to consider, such as planning for the financial impact of mitigation efforts through reserve funding. A reserve study can help plan for necessary capital improvements and address underground facilities such as garages and drains. If your community is on the water, consider raising the seawall. If your community is undergoing a 40 or 50 year recertification, consult with your electrical contractor to see if any adjustments can or should be made to low-lying electrical wiring and outlets even if not yet required by code. Review the municipal codes which affect your community. Boards should begin taking proactive steps now to address future needs.

While sea level rise is nowhere near as dramatic as the Dead Sea’s sea level drop, there are many factors which need to be considered by Florida communities to mitigate the adverse impacts. The question with tides is not whether they’re rising, but when will a significant impact be felt? Efforts and energies can be focused on beginning to prepare for your community’s future needs, including addressing a myriad of legal issues.

Steven H. Mezer

Board Certified Condominium and Planned Development Law Attorney, Becker
Tampa  | bio

The (Tree) Root of the Problem: Who is Responsible when Tree Roots and Branches Cause Damage?

They say good fences make good neighbors. But trees, on the other hand, have been known to strain the relationship between neighbors. Damage and disruption amongst neighboring lot owners, caused by tree roots and branches, is a very common problem in Florida. Not surprisingly, Florida courts have addressed this issue and have carved out a very specific rule of law on this topic.

There are two theories which have been brought before Florida courts in an attempt to hold adjacent property owners liable for damage caused by trees encroaching past the property line. They are actions for nuisance or negligence. However, neither action has succeeded. The Third District Court in Vaughn v. Segal, 707 So.2d 951 (Fla. 3d DCA, 1998), held that there is no cause of action in such circumstances in either nuisance or negligence.

In Richmond v. General Engineering Enterprises Co., 454 So.2d 16, 17 (Fla. 3d DCA, 1984), the plaintiff sued for money damages based on the alleged “negligence” of the defendant in permitting branches of a ficus tree growing on its property to extend over and onto the next lot where the plaintiff’s home was located. While the Court acknowledged that there was substantial authority to the contrary in other States’ jurisdictions, the Court took the position that in Florida, “in view of the undoubted right of the land owner himself to cut off intruding roots or branches at the property line, no such action may be maintained.”

As for nuisance, the rule of common law and the majority rule in this country, which is followed in Florida, is that a possessor of land is not liable to persons outside the land for a nuisance resulting from trees and natural vegetation growing on the land. The joint property owner to such a nuisance, however, is privileged to trim back, at the adjoining owner’s own expense, any encroaching tree roots or branches and other vegetation which has grown onto this property. While the complaint claimed certain damages for a nuisance allegedly created by the trees growing on the neighboring land, such damages were not recoverable under the established law of this State. Gallo v. Heller, 512 So.2d 215 (Fla. 3d DCA, 1987).

As a result of the above referenced rule of law in Florida, many community associations refuse to get involved in these types of “owner versus owner” disputes. The law gives owners the right and obligation to have the tree roots and branches cut at the point when they “cross over” onto their property.

Steven H. Mezer

Board Certified Condominium and Planned Development Law Attorney, Becker
Tampa  | bio

FHA Issues New Rules Regarding Condominium Approvals

Many of you are aware that the Federal Housing Administration (FHA) insures financing to owners for their purchase of a home. These homes include condominiums in condominium associations. FHA loans are great for new home buyers, or those who cannot afford a large down payment, as they typically require a lower down payment. In regard to condominiums, the entire condominium association / building has to be approved by the FHA in order for applicants to qualify for an FHA insured loan.

Some condominium associations go through the exhaustive FHA approval process, some choose not to do so. Some associations want to be FHA approved to facilitate sales; some associations do not want to be FHA approved because they do not like the low down payments and low initial owner equity in the units. If an association is not FHA approved, the FHA will not insure financing in that community. If a prospective purchaser wanted to move into a non-FHA approved building utilizing an FHA insured loan, they could not do so, and had no options, other than securing other than FHA insured financing, to buy in that building.

In an effort to promote affordable and sustainable homeownership, the FHA recently published a new final regulation and policy implementation guidance, establishing a new single unit condominium approval process.

Previously, if you wanted to purchase a condo using an FHA loan, you had to choose a unit that was located within a previously approved condominium project. The entire building had to be FHA approved before a person could buy an individual unit with an FHA-insured mortgage loan.

The new FHA rule introduces a new single-unit approval process to make it easier for individual condominium units to be eligible for FHA insured financing. The new rule also extends the recertification requirement for approved condominium projects from two to three years, and allows more mixed-use projects to be eligible for FHA insurance.

The new rules create a pathway for an individual owner to get an association FHA qualified. This owner initiated pathway did not exist before, as only the association itself could apply for, and become, FHA qualified. The new FHA rules do not affect any possible restrictions in an association’s governing documents, and there is nothing in the new rule to imply that an Association must accept an FHA loan (although an association should certainly to check with its attorney if contemplating not to do so).

According to HUD Secretary Ben Carson, these FHA rule changes could be especially helpful for younger first-time buyers, as well as some seniors:

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families … Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

According to the press release, as of October 15, 2019, individual units in a non-FHA approved association may be eligible for Single-Unit Approval if the individual condominium unit is located in a completed project that is not FHA approved and, for condominium projects with 10 or more units, not more than 10 percent of individual condo units can be FHA-insured; and projects with fewer than 10 units may have no more than two FHA-insured units.

While this new rule opens up a pathway for an individual to qualify a community, the process is almost as complicated as the association qualifying, which may make it challenging for an individual owner to process such an application.

The HUD press release goes on to state

“The vast majority (84 percent) of FHA-insured condo buyers have never owned a home before. While there are more than 150,000 condominium projects in the U.S., only 6.5 percent are approved to participate in FHA’s mortgage insurance programs. As a result of FHA’s new policy, it is estimated that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.”

Both associations and potential buyers need to be aware of these changes in the FHA approval process.

The HUD press release can be found at https://www.hud.gov/press/press_releases_media_advisories/HUD_No_19_121, last viewed 1:12 pm on August 20, 2019.

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

When Construction Occurs Next Door, Your Board Needs to Get Involved Early!

It’s likely that at some point during your community’s lifespan, new construction will occur nearby and the impact on your residents will vary both short and long-term depending on the steps your Board takes early in the process. Sometimes new construction is welcomed enthusiastically by the members of an established community but more often than not, nearby construction strikes dread in the hearts and minds of many residents and board members who fear noise, disruption, debris, impaired views and incidental damage.

Communities facing the prospect of new construction next door should not go “on the attack” but should engage experienced counsel to help them navigate the construction process, set realistic expectations for their residents, reach agreement on protective measures to be provided by the contractor/developer, and receive compensation where appropriate. If handled properly, the new construction can do much to enhance your community’s value. If mishandled, you could wind up with new construction that encroaches on your land, damages your landscaping and exterior amenities, adversely impacts drainage, and, in severe cases, causes structural cracks in your buildings.

Naturally, the individuals or corporate entity driving the new construction want your community’s support to sail through the governmental approval process. Boards who feel that their concerns and issues have been properly addressed by the developer next door will be much more likely to provide that support.

There are many factors to discuss and consider with the developer including the intensity of the proposed use, traffic, compatibility issues, construction management, easement agreements, rezoning, and other material issues. Municipal Land Developer Codes usually require public participation so starting a dialogue early in the process affords your Board with an opportunity for your community and the developer to speak with a unified voice and to address major issues and concerns before being heard in a public hearing. The developer will certainly want to address your concerns in private rather than face them at a public hearing.

Some common issues that should be addressed include:

Debris
Nuisance
Structural impact
Encroachments (both on their side and yours)
View Impairment
Buffering and noise mitigation measures
Trademark Infringement (depending on the name of the new community, shopping center, etc.)
Security

These kinds of negotiations may take six months to well over a year and will include your counsel attending and speaking at multiple Board meetings, Developer Town Halls, Municipal Public Hearings, researching City Zoning and Land Use, reviewing Mas6ter Plan Design guidelines, clarifying construction issues/timelines and negotiating the design to take into account view-lines, setbacks, traffic, loading, etc.

If you serve on an association board, you well know that directors are sometimes held responsible by some community members for issues completely outside your control. Don’t let neighboring construction become another boiling point in your community.

Donna Berger

Shareholder, Becker
Fort Lauderdale | bio

Blog

Stay Informed

Go Mobile

Professional Growth Through Learning

Contact Us