Managers Report newsletter

Published November 5, 2024

     As budget season is in full swing, and annual meetings / elections are just around the corner, I thought it a good time to review some basic meeting information that is very frequently not done properly.

     Let’s start with budget meetings. As you should be aware by now, there have been some significant changes to this process.  To begin with, the condominium statutes now provide that the board shall adopt a budget within fourteen (14) days of the beginning of the fiscal year. Failure of a board to adopt a budget a second time is a minor violation of the Florida Administrative Code, which can lead to fines and other penalties.

     In addition, condominium and cooperative budgets adopted after December 31, 2024, must provide full reserve funding for all structural integrity reserve study (“SIRS”) items.  The members cannot waive funding SIRS reserves in any budget passed after December 31, 2024.  If you have questions regarding waiving SIRS funding for your 2025 budget, you should discuss this issue with your community association attorney.  Another recent change to the law is that unless your governing documents require a higher threshold, the vote to waive reserves is a majority of all voting interests.  It used to be a majority of those preset at a meeting where a quorum has been obtained; that was changed to now require a majority of all voting interests.

     In a condominium and cooperative association, typically the board passes a budget at a duly noticed board meeting, which must be noticed at least 14 days in advance by statute.  However, you need to check your Association governing documents, as they may have a longer budget meeting notification requirement, such as thirty (30) days.  Generally, you must always follow the more stringent requirement; 30 days is more stringent that 14 days.  That is why you should always check with your community association attorney regarding proper notification.

     The membership can vote to waive reserves (non-SIRS) at a membership meeting.  A very common mistake I see is that the budget meeting notice is either a board meeting notice, with waiver of reserves on the agenda, or a membership meeting notice, with passing the budget on the agenda.  These generally have to be 2 separate meetings – a membership meeting if reserves are being waived or reduced, and a board meeting to pass the budget. Remember, after December 31, 2024, only non-SIRS reserves can be reduced or waived by the membership.  Limited proxies may be utilized in a vote to reduce or waive non-SIRS reserves; however, there is specific statutory language that must be contained in such limited proxy.  Do not take the risk of going through an improper vote to reduce or waive non-SIRS reserves because of a defective limited proxy.  Work with your community association attorney to prepare such documents.

     Finally, remember that as circumstances change throughout the year, the board can adopt a revised budget, if necessary, by following the same procedures as approving the annual budget.

     A few comments on annual and election meetings.  I will not go into the basics of condominium and cooperative annual meetings and elections, and generally, homeowner association annual meetings and elections are in accordance with the provision in the association’s governing documents.  In condominium and cooperative annual meetings and elections, the statutory deadlines are strict. Deadlines for submitting notice of intent to be a candidate forms and candidate information sheets cannot be waived or modified.  Accepting either form after such deadline can invalidate an election and require a new election.  The Association cannot modify a candidate information sheet.  The required mail out dates are also strict, and failure to comply with such mailing deadlines will also invalidate an election and require a new election.

     There are new board member certification requirements, and new board member mandatory educational requirements.  Speak with your community association attorney to ensure your association and its board members are complying with such new requirements.

     Don’t forget about the statutory term limits, and the exceptions thereto, which may or may not apply to your board members and board member candidates.

     Everyone is aware of the effect the new condominium and cooperative laws in regard to SIRS, reserve funding, existing 40 and 50 year milestone requirements in south Florida, and other required maintenance is having on association budgets, assessment and special assessments.  Many owners are challenging the budget process, the assessment process, and special assessments.  Don’t take the risk of a successful challenge to the approved association annual budget, adopted assessments, or special assessments due to improper notice or other improper procedures.  All of these items should be coordinated with your community association attorney.

     Happy budget and annual meeting season!

Top photo by iStockphoto.com/jacoblund

Howard J. Perl, Esq. 

Shareholder, Becker
Ft. Lauderdale | bio

Published October 1, 2024

If your condominium association has a fiscal year that follows the calendar year, it is about that time of year to begin thinking about next year’s budget.  The Budget and Reserves Manual from the Department of Business and Professional Regulation, Division of Florida Condominiums, Timeshares and Mobile Homes recommends that associations start gathering information to prepare their budgets about three months before the budget is to become effective.  The board is required to adopt the annual budget at least 14 days before the start of the association’s fiscal year.  If you are unsure if your association’s fiscal year follows the calendar year, your By-Laws will usually identify your association’s fiscal year.  This budget season has some new deadlines on the horizon for certain condominiums association that boards should take into consideration. 

The legal and technical requirements of condominium association budgets are found in Chapter 718 of the Florida Statutes and Section 61B-22 of the Florida Administrative Code.  The association’s governing documents may also contain a fiscal management section to which the Board should pay attention.  To begin, any meeting at which a proposed annual budget will be considered must be open to all the owners and notice must be mailed, hand-delivered, or electronically transmitted to those owners who have consented to receiving electronic notice, at least 14 days prior to such meeting.  If you have a budget committee that makes recommendations to the board, the meetings of this committee are subject to the same notice requirements and must also be open to all owners.  The person providing notice, whether an officer or the manager, must execute an affidavit as proof of notice, and this affidavit must be maintained as part of the official Association official records.  The annual budget and any proposed budget to be considered at the annual meeting must be posted on the association’s website.  Currently, associations managing a condominium with 150 or more units, which does not contain timeshare units, are required to have a website and thus post the required budget(s) on said website.  Effective January 1, 2026, associations managing condominium with 25 or more units will be required to have a website and thus follow the website posting requirements of the statute.

The proposed annual budget will need to have two sections – the operating budget and the reserves.  The operating budget will contain the estimated revenues and expenses.  This must be detailed and must show the amounts budgeted.  The amounts are not restricted to their estimates and can be used for different purposes. 

Reserves are funds set aside for specific future expenses.  The statute requires that the budget includes reserve accounts for capital expenditures and deferred maintenance, and must include accounts for roof replacement, building painting and pavement resurfacing, regardless of the amount, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000.  For condominium associations with buildings that are three stories or higher in height, which are now required to obtain a structural integrity reserve study, the budget must also include reserves for certain “SIRS components” listed in the statute for which the association is responsible for in the declaration.  The first deadline for said associations is upcoming, with the structural integrity reserve study to be completed by December 31, 2024.  The requirements of the SIRS and funding these reserve components is a complex one that should be discussed with association counsel.  This is so particularly because the statute also provides that members may not waive or reduce the funding of the SIRS components “for a budget adopted on or after December 31, 2024.”  This leaves the question of whether an association that is required to have a SIRS completed by December 31, 2024 but adopts its 2025 budget prior to December 31, 2024, may still waive the funding of those SIRS components for the 2025 fiscal year.  Boards should speak with association counsel as it is crucial that the association’s budget is in compliance with the statutory requirements.  For non-SIRS components, the members may determine to waive or reduce the funding of reserves as was done in the past.  The only recent change is that in 2023 the required vote to waive or reduce the funding of reserves was changed to a majority vote of the total membership. 

Lastly, if the board adopts an annual budget which requires assessments against owners which exceed 115% of the assessments of the preceding fiscal year, the members may by written request ask that the Board hold a special meeting to consider a substitute budget.  This calculation excludes any authorized provision for reasonable reserves for repair or replacement of the condominium property, anticipated expenses of the association which the board does not expect to be incurred on a regular or annual basis, insurance premiums, or assessments for betterments to the condominium property. 

Condominium association boards with any questions and concerns should consult with association legal counsel to navigate the legal requirements this budgeting season. 

Top photo by iStockphoto.com/Jacob Wackerhausen

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

Published September 3, 2024

     Whether your association is a condominium, a cooperative, or a homeowners’ association, chances are that, at one point or another, it has had to deal with a resident who just can’t seem to abide by your governing documents. We all have had that one neighbor who insists on blaring music at odd hours of the night, but what can your association do about it?

     Fortunately, Florida law may authorize your association with the ability to fine or suspend the common element or common area use rights of such troublemakers for violations of your governing documents. While there are other actions that your association may take to enforce your governing documents, fines and suspensions are often the most practical and economical option for associations because the legal procedures to implement fines and suspensions have been codified by the Florida legislature as part of the Florida Statutes. However, is your community association ready to fine or suspend?

     Chapters 718, 719, and 720 of Florida Statutes, which govern condominium, cooperative, and homeowners’ associations, respectively, all contain similar sections that are expressly dedicated to fines and suspensions. For example, consider section 718.303 of Florida Statutes, which governs condominiums, and provides in pertinent part as follows:

718.303 Obligations of owners and occupants; remedies.—

….

(3) The association may levy reasonable fines for the failure of the owner of the unit or its occupant, licensee, or invitee to comply with any provision of the declaration, the association bylaws, or reasonable rules of the association. A fine may not become a lien against a unit. A fine may be levied by the board on the basis of each day of a continuing violation, with a single notice and opportunity for hearing before a committee as provided in paragraph (b). However, the fine may not exceed $100 per violation, or $1,000 in the aggregate.

(a) An association may suspend, for a reasonable period of time, the right of a unit owner, or a unit owner’s tenant, guest, or invitee, to use the common elements, common facilities, or any other association property for failure to comply with any provision of the declaration, the association bylaws, or reasonable rules of the association. This paragraph does not apply to limited common elements intended to be used only by that unit, common elements needed to access the unit, utility services provided to the unit, parking spaces, or elevators.

(b) A fine or suspension levied by the board of administration may not be imposed unless the board first provides at least 14 days’ written notice to the unit owner and, if applicable, any tenant, licensee, or invitee of the unit owner sought to be fined or suspended, and an opportunity for a hearing before a committee of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee. The role of the committee is limited to determining whether to confirm or reject the fine or suspension levied by the board. If the committee does not approve the proposed fine or suspension by majority vote, the fine or suspension may not be imposed. If the proposed fine or suspension is approved by the committee, the fine payment is due 5 days after notice of the approved fine is provided to the unit owner and, if applicable, to any tenant, licensee, or invitee of the unit owner. The association must provide written notice of such fine or suspension by mail or hand delivery to the unit owner and, if applicable, to any tenant, licensee, or invitee of the unit owner.

     As reflected in the above statute, once a violation is identified, a condominium association, via its Board of Directors, may decide at a duly noticed meeting to either levy a fine or a suspension against the violator. All that is seemingly required beyond that is 14 days’ written notice to the appropriate parties and an opportunity for a hearing before a committee that will either confirm or reject the proposed fine or suspension. Once the fine or suspension is levied, confirmed, and imposed, the association must provide written notice of same to the appropriate parties.

     Sounds like a fairly simple and straightforward process, right? Nevertheless, your association should always consult its legal counsel before attempting to fine or suspend, as there is more than meets the eye when it comes to fines and suspensions. To begin with, does your association even have the power to impose fines or suspensions?

     Notice that this article began with the statement that “Florida law may authorize your association with the ability to fine or suspend”. That is because, arguably, your association may only invoke the fining and suspension procedures of Florida Statutes if your governing documents authorize your association to do so in the first place.

     In fact, some governing documents may even contain their own fining and suspension procedures, some of which may conflict with the procedures laid out in Florida Statutes. In that case, should the association follow the procedures of the governing documents or that of Florida Statutes? Other governing documents do not contain any reference to fines and suspension whatsoever  – what does the association do then? These are questions that your association must resolve with its legal counsel and before the association invokes any fining or suspension procedures, if it all.

     Furthermore, assuming your association is authorized to exercise the fining and suspension procedures of Florida Statutes, has it established the appropriate committee to review proposed fines or suspensions?  A resident that is the subject of a fine or suspension may very well decide to exercise their right to “an opportunity for a hearing before a committee”. Establishing such a committee is not a matter that should be left for last minute or done casually. In addition to complying with the relevant statutory requirements, the Board of Directors should also take its time to ensure that the members they appoint are ready to accept the responsibility and pressures of deciding whether or not their fellow residents should be fined or have their use rights suspended.

     Another issue of concern is that of evidence – is your association ready to present evidence to, for example, a Court, that there was, in fact, a violation of the governing documents? Are the violations in question documented in writing? What about witnesses or audio or video? While not addressed in any of the Florida Statutes that govern fines and suspensions, an association should never attempt to impose a fine or suspension without determining the strength of the evidence supporting such action. Improper fines and suspensions can be the basis for an expensive lawsuit against the association and the association should always consider that, at one point, the evidence supporting a fine or suspension can and will be scrutinized.

     Lastly, what if your association decides to impose a fine and the violator refuses to pay? What does the association do then? As always, it depends on a number of variables that need to be analyzed by your association’s legal counsel well before a fine is imposed in the first place. For example, section 718.303 of Florida Statutes quoted above makes clear that, “[a] fine may not become a lien against a unit.” Yet, section 720.305 of Florida Statutes, the statute governing fines and suspensions in homeowners’ associations, only provides that “[a] fine of less than $1,000 may not be come a lien against a parcel.”

     Ultimately, this article is not intended to serve as an exhaustive list of issues and concerns that your association may need to resolve in fining or suspending. Rather, this article is intended to emphasize that your association must be ready to fine or suspend before it attempts to do so, which necessarily means that your association must work with its legal counsel well before fining or suspension is even necessary in your community. 

Top photo by iStockphoto.com/weiyi zhu

Nico Jimenez

Attorney at Law, Becker
Miami | bio

Published July 30, 2024

Architectural restrictions are one of the many reasons people purchase homes governed by homeowners’ association as they serve to preserve an aesthetic quality to the community and the value of the homes in the community. However, architectural restrictions are also historically a great source of contention between the Board or architectural review committee and the owners.

One of the ways to minimize such contention is to have architectural restrictions that are specific and detailed to avoid uncertainty which leads to disputes between the association and the owners. In 2007 the Florida legislature enacted Section 720.3035 of the Florida Statutes to govern architectural review covenants and owner improvements in an effort to decrease the number of disputes. This section required associations to have detailed architectural standards.  Effective July 1, 2024, House Bill 1203 made significant changes to Chapter 720 of the Florida Statutes, also known as the Homeowners’ Association Act. One of the areas impacted by the Bill is the architectural review authority of homeowners’ associations, including revisions to Section 720.3035, Florida Statutes.

Changes made to Section 720.3035, Florida Statutes, prohibit an association, or an architectural review committee of the association, from adopting a covenant, rule or guideline limiting or restricting interior changes to a dwelling if the changes are not visible from the frontage of the parcel, an adjacent parcel, an adjacent parcel common area, or the community golf course. In addition, the association or architectural review committee may not require the review of plans and specifications for air conditioning systems, refrigeration systems, heating or ventilation systems that are not visible from the frontage of the parcel, an adjacent parcel, adjacent common area, or community golf course, if such systems are substantially similar to systems that have been approved by the architectural review committee or the association in the past.  If the association or the architectural review committee denies a request or application for the construction of a structure or other improvement on a parcel, the association or committee must provide the owner with written notice of any denial of request for architectural modification, stating with specificity the rule or covenant the committee relied upon when denying the request and the specific aspect of the proposal that does not conform to such rule or covenant.

Section 720.3035, Florida Statutes, was further amended by another bill this legislative session, HB 293. The Legislature has stated its intent that HB 293 apply to all homeowners’ associations regardless of when created. This requires every homeowners’ association to adopt hurricane protection specifications for every parcel governed by the association. These may include the color and style of hurricane protection products and any other factor that the board finds relevant so long as the specifications comply with the applicable building code. The new section also provides a list of examples as to what the term “hurricane protection” means. For example, it includes certain roof systems, storm shutters, impact-resistant windows and doors, and more. The association or architectural review committee may not deny an application for the installation, enhancement, or replacement of hurricane protection that conforms to the specifications. The board or committee may require the owner to adhere to “an existing unified building scheme.”  The association should work with its counsel in adopting and publishing such specifications.

Another section that was changed is Section 720.3045 of the Homeowners’ Association Act regarding the installation and storage of items by adding other areas from which backyard storage items cannot be visible. So long as backyard storage items, such as artificial turf, boats, flags, vegetable gardens, clotheslines, and recreational vehicles are not visible from the parcel’s frontage, an adjacent parcel, an adjacent common area, or a community golf course, the association may not restrict an owner from installing, displaying or storing such items.

With the changes in the law, the association should discuss architectural guidelines and policies with its counsel.  If the association does not have a policy or guidelines, one should be developed. Moreover, associations should develop code-compliant hurricane specifications that ensure uniformity within the community while allowing owners to protect their property.    

Top photo by iStockphoto.com/-Vladimir-

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

Published June 4, 2024

The Florida Legislature adopted House Bill (HB) 1021, which makes certain changes to the Chapter 718, or the Condominium Act. Assuming the bill is not vetoed by the Governor, it will become law on July 1, 2024. A comprehensive review of all of the changes is beyond the scope of this article, but one of the areas of law impacted by this bill is the inspection of the official records of the association by unit owners. The association should have reasonable rules in place regarding records requests. If the association does not, this would be a good time to talk to association counsel about adopting such rules. If there are already rules in place, association counsel should be consulted to ensure that the updates to the law are adequately and accurately reflected in the rules.

Maintaining the official records in an organized manner that facilitates inspection will be a requirement under the new law. What is considered an “organized manner” is not described. However, this might be an impetus for the association to digitalize its official records and make them available on a section of its website only accessible to unit owners. Currently, all condominium associations with 150 or more units are required to have a website. Effective July 1, 2026, associations with 25 or more units will be required to post digital copies of the documents on its website or via an application that can be downloaded on a mobile device. Having a website with records available thereon will simplify inspections as the association may fulfill its obligations by directing an owner who has requested records to the website. (This can also be done via an application on a mobile device.) Additionally, when an owner requests records, the association will have to provide the requestor with a checklist of all of the records that were made available for inspection and copying, as well as identifying the records that were not made available to the requesting owner. The checklist itself also becomes an association record to be kept for seven years. Moreover, in the event that official records are lost, destroyed or unavailable, the association’s obligation to maintain the records will also include a good faith obligation to obtain and recover those records. 

The law also makes changes to the accessibility of email addresses and fax numbers of other unit owners. A current roster of all owners is part of the association official records. Email addresses and fax numbers are currently not accessible by other owners if consent to receive notices by electronic transmission is not provided. The new law provides that email addresses and fax numbers are only accessible to unit owners if consent to receive notice by electronic transmission is provided, or if the owner has expressly indicated that such personal information can be shared with other owners and the owner has not provided the association with a request to opt out of such dissemination with other owners. Further, the Association must ensure that this information is only used for Association business and is not sold or used by outside parties. This information must be redacted if it is included on documents released to third parties.

The Legislature has also increased penalties for certain failures related to association records requests, which makes it even more important to ensure that the records are kept in an organized manner and that the association has rules in place to timely handle requests. The new law provides that a director or member of the board or association or a community association manager who “knowingly, willfully, and repeatedly” violates this section commits a misdemeanor of the second degree and must be removed from office and a vacancy declared. The term “repeatedly” means two or more violations within a 12-month period. Under the new law, it will also be a first degree misdemeanor if any person knowing or intentionally defaces or destroys accounting records that are required to be maintained, or who knowingly or intentionally fails to create or maintain accounting records that are required to be created or maintained, with the intent of causing harm to the association or one or more its members. This person will also be removed from their office. 

With this in mind, the Condominium Act allows an association to adopt reasonable rules regarding frequency, time, location, notice, and manner of record inspections and copying. As stated, the association should discuss with counsel adopting such rules, or updating existing rules to ensure compliance with the new laws. Again, this is a large bill with major impact in a lot of different areas governing condominiums. The above only grazes the surface. Consulting with association counsel to navigate these changes is recommended.    

Top photo by iStockphoto.com/AmnajKhetsamtip

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

Published May 2, 2024

Whether your community association is a condominium, cooperative, or a homeowners’ association, Florida law empowers your association to enter into contracts in connection with the maintenance and operation of the community. Often times, your association is all but required to contract with third parties in order to maintain and operate the community, as it does not have the in house employees required for specialized, but essential tasks, such as the maintenance and repair of your community’s plumbing, elevators, or fire alarms. However, as explained in this article, your association should  always consult its legal counsel before entering into any contract, as association contracts are not only the subject of varying legal requirements, but they also may burden your association with long lasting terms and conditions that may be very costly and difficult to renegotiate once a contract is signed. 

Chapters 718, 719, and 720, Florida Statutes, governing condominium, cooperative, and homeowners’ associations, respectively, have similar but different laws concerning contracts. For example, each of those Chapters require association contracts for the purchase, lease, or renting of materials or equipment, and contracts for the provision of services, that are not to be fully performed within 1 year, to be in writing. However, Chapter 718, specifically governing condominiums, goes a few steps further, requiring the contracts of condominium associations to specify certain information, such as the minimum number of personnel to be employed by the party contracting to provide maintenance or management services, or the disclosure of any financial or ownership interest of a board member. Failure to identify and adhere to such requirements may render a contract unenforceable or subject your association to liability, regardless of how long the contract has been place at your community.  As such, it is very important your association works with its counsel to identify such requirements at the earliest opportunity possible.

Similarly, Chapter 718, 719, and 720 require associations to obtain competitive bids for the materials, equipment, or services subject of the contract if the contract price exceeds a certain percentage of the association’s annual budget. However, that certain percentage of an association’s budget differs among the Chapters, with Chapter 718 and 719, governing condominiums and cooperatives, imposing a 5 percent (5%) threshold, while Chapter 720, governing homeowners’ associations, imposing a 10 percent (10%) threshold. As such, again, your association must work with its counsel to identify such requirements as early as possible.

Another issue of common concern is the issue of contract terminations. It is a common misconception that the Board of Directors are afforded the exclusive right to cancel contracts. However, under certain circumstances, Florida law empowers unit owners to cancel certain association contract pursuant to a certain vote, and, in some instances, within a certain time. Therefore it is extremely important that your association work with its counsel to negotiate the cancellation provisions of any contract it is a party to. Ideally, association contracts should afford the association the flexibility to cancel the contract at any point during its term and without a required cause or penalty, but that is not the norm that is offered to associations. Instead, vendors typically offer associations a contract that locks in the association for years and penalizes earlier termination. Some of these contacts may not even allow the association to cancel the contract if the vendor fails to provide the services it agreed to. Instead, such contracts may require the association to provide the vendor a reasonable opportunity to “cure” the problem before cancellation is effective and if the vendor attempts to do so, the association may be at a risk of a cancellation penalty if it ultimately decides to cancel the contract.  Usually these onerous provisions can be negotiated to mitigate their harshness.

Another common issue of concern is the issue of price escalations. Often times, vendors will offer contracts that provide the vendor the unilateral right to raise the price of their services every year or for even less clear reasons, such as “market conditions”. Sometimes such price escalations are unavoidable in the context of construction services that depend on overhead, material, and labor costs to be obtained over a long period of time. But, in any event, given that your association has a fixed budget and limited sources of revenue, the association should work with its counsel to ensure that it understands exactly what it is obligated to pay from the first day of the contract, to the last.

Lastly, your association should also work with its counsel to determine what, if any, requirements are imposed by its governing documents with respect to contracts. Some governing documents require a certain amount of unit owners to vote and approve certain contracts, while others may only require a majority vote of the association’s board of directors. For example, some association governing documents may require unit owner votes on any financing or loans, while others may require a unit owner vote if a contract is over a certain dollar amount threshold or over a certain percentage of the association’s budget for that year.  While perhaps not common, you should always check with your association counsel before executing any contract.

This article is not intended to serve as an exhaustive list of issues and concerns that your association may need to address in evaluating its contract, but rather as a reminder that association contracts should be reviewed by your legal counsel to ensure compliance with Florida law, that your community’s interest are well served, and to put the association on an even playing field with the contractor.

Top photo by iStockphoto.com/Worawee Meepian

Nico Jimenez

Attorney at Law, Becker
Miami | bio

Published April 3, 2024

     The 2024 Florida Legislative Session ended Friday, March 8th, and it was one of the busiest sessions in memory in terms of producing new community association legislation. Please remember that these bills do not become law until they have been sent to the Governor who then has fifteen (15) days to sign a bill, veto a bill, or allow a bill to pass into law without his signature.  As such, we may not know the final outcome for some bills until later this May or June.

HB 1021 is known colloquially as the Condo 3.0 bill but it goes well beyond the scope of its predecessors, SB4D and SB 154, by, among other items, expanding the enforcement jurisdiction of the Division of Condominiums; creating new standards for CAMS; imposing new funding and notice requirements related to structural integrity reserve studies (SIRS); imposing mandatory board member educational requirements; imposing new penalties for voting fraud; and requiring associations who manage 25 or more units to maintain an association website where specific association documents must be posted.

     HB 1029 creates the “My Safe Florida Condominium Pilot Program” within the Department of Financial Services (DFS). This legislation will create a state-funded inspection program to determine mitigation measures that hopefully will reduce a property’s vulnerability to hurricane damage and provide for mitigation grants to retrofit the condominium property.

     HB 293 requires HOAs to adopt specifications for hurricane protection and prohibits HOAs from denying an owner’s installation or replacement of certain hurricane protections including storm shutters, metal roofs, erosion controls, and other forms of hurricane protection.

     HB 59 amends Section 720.303, F.S. to require an HOA to provide digital copies of the governing documents and rules to every new member of the association and provide all members with amendments to the covenants and rules.

      HB 1203 was passed as a response to the massive Hammocks HOA fraud case in Miami-Dade County. Among its many provisions, this bill imposes mandatory educational requirements for HOA directors; limits an HOA’s ability to regulate parking and commercial vehicles, limits the function of an HOA’s architectural control committee, imposes stiff penalties for the denial of records access to owners; requires websites for associations with 100 parcels or more and further revises the fining process in a less than helpful manner.  

     HB 1645 provides that HOA covenants may not prohibit the types of fuel sources that serve customers in the community, including natural gas utilities and liquefied petroleum gas (aka propane) dispensers, and also provides that the HOA covenants may not preclude appliances using those energy sources. It is troubling to note that HOA residents must now be allowed to install EV charging stations and propane gas/natural gas; let’s hope installers for each take proper safety precautions. 

     SB 1420 modifies the language in Section 720.406, F.S. regarding the meeting procedures when homeowners’ association covenants are being revitalized. 

     SB 280 limits the ability of local government to regulate short-term vacation rentals but does permit occupancy limitations. The legislation provides for the DBPR’s Division of Hotels & Restaurants to regulate vacation rental platforms. The good news is that the legislation specifically does not preempt or supersede community covenants. 

     Remember, none of the above bills go into law until they have been sent to the Governor who then has fifteen (15) days to sign a bill, veto a bill, or allow a bill to pass into law without his signature.  We expect many, if not all, of these new bills to be approved by the Governor or he will allow to pass into law.  

     Of course, you will need to consult with your association attorney for information on how these new bills, once they go into law, will affect your association. 

Howard J. Perl, Esq. 

Shareholder, Becker
Ft. Lauderdale | bio

Published February 29, 2024

In many communities, voter apathy can be a real issue with members not turning in proxies and not attending meetings.  This does not only impact elections, but also other membership votes, such as amending the governing documents and voting on material alterations.  Simplifying the voting process for owners can go a long way in remedying this problem.  One way to simplify the voting process for members is for the board of directors to authorize and set up electronic voting. This is especially true for communities with a lot of seasonal or part-time residents.  Many communities, however, have not taken advantage of this option even though electronic voting is a beneficial tool to encourage participation by members. 

In authorizing electronic voting, the Legislature set forth several statutory requirements for setting up such a system, which are discussed below.  As always with statutory requirements, it is important to discuss with association counsel to ensure that your community correctly implements its online voting system.  First, the board must approve electronic voting as discussed further below.  Next, a unit owner must consent in writing to online voting.  This consent is distinct from a unit owner’s consent to receiving certain notices by electronic transmission.  However, for administrative ease and efficiency, association counsel can prepare a form for your community on which owners have the option to consent to either or to both receiving notices by e-mail and to online voting together.  An owner whose consent to electronic voting may also opt out later.     

In addition to the consent form, the association should have association counsel prepare the board resolution authorizing the online voting system as the statute contains several requirements for this resolution.  The board resolution must provide that unit owners receive notice of the opportunity to vote through an online voting system, must establish reasonable procedures and deadlines for unit owners to consent, in writing, to online voting, and must establish reasonable procedures and deadlines for unit owners to opt out of online voting after giving consent. Written notice of a meeting at which the resolution will be considered must be mailed, delivered, or electronically transmitted to the unit owners and posted conspicuously on the condominium property or association property at least 14 days before the meeting. Evidence of compliance with the 14-day notice requirement must be made by an affidavit executed by the person providing the notice and filed with the official records of the association.

The statute dictates several requirements for the association to set up online voting.  The association must provide each unit owner for a method to authenticate the unit owner’s identity to the online voting system and a method to confirm that the unit owner’s electronic device can successfully communicate with the online voting system.  The method to confirm that the unit owner’s device will be able to communicate with the system must be available at least fourteen days before the voting deadline.  The online system must also be able to authenticate the unit owner’s identity and to authenticate the validity of each electronic vote to ensure that the vote is not altered in transit.  The system needs to also be able to transmit a receipt to each unit owner who casts his or her electronic vote. 

In addition to the above, for elections of the board of directors of the association, the association must also provide a method to transmit the electronic ballot to the online voting system that ensures the secrecy and integrity of the ballot.  They system must also be able to permanently separate any authentication or identifying information from the electronic election ballot.  This is so that it is impossible to tie an election ballot to a specific unit owner.  The system needs to be able to store and keep electronic votes as accessible to election officials in the event that a recount, inspection, and/or review is required. 

Prior to any membership vote taken at a meeting, except for the election of board directors, a specific quorum must be reached.  The statute provides that a unit owner voting electronically is counted as being in attendance at the meeting for purposes of determining a quorum.  Thus, setting up electronic voting and having owners consent to using electronic voting helps the association achieve quorum and required approvals by making it easier for owners to be “present” and to vote.

Another option for participation issues is to amend the governing documents to lower the voting threshold required for approvals.  One way that is particularly effective is to change the threshold required from a percentage of the entire membership of the community to a percentage of those who vote.  Otherwise, all members who do not vote are essentially casting a “no” vote.  Lowering the quorum requirement can also be effective.  Association counsel can review your current requirements and discuss where improvements might be made that would make membership approvals easier to obtain. 

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

Published January 29, 2024

If your community association is served with a complaint or subpoena, you must promptly forward it to the community association’s legal counsel. As explained in this article, receipt of a complaint or subpoena triggers time sensitive legal obligations that can expose your community association to serious liability.

With respect to complaints, Florida Courts generally deem their filing the start of litigation. Depending on what rules apply to the complaint in question, your community association may only have 20 days to prepare and serve a response or an answer to the complaint. Moreover, if your community association fails to timely serve a response or answer to a complaint, it may have a “default” entered against it in the related court case. A default not only severely limits the ability of the community association to defend itself in court, but it also empowers a court to rule that all well-pled factual allegations have been “admitted” by the community association.

In most instances, you will turn over the complaint to your insurance agent, asking him or her to immediately forward to all your insurance carriers for evaluation and providing of insurance defense counsel and coverage in accordance with your insurance documents.  Failing to provide timely notice to your insurance carriers of a claim or lawsuit may result in denial of coverage, regarding of your insurance policy, for failure to inform the carrier of a claim in a timely manner. 

Moreover, even when insurance counsel is assigned, you may need your association counsel to file a motion for extension of time to respond to the complaint, if your carriers or their assigned defense counsel are slow in responding to the complaint or filing a response.  You should work closely with you association counsel to make sure all required responses are timely filed or extensions requested.

In the event your community association was only served with a subpoena, you still must act quickly, as service of a subpoena also triggers multiple deadlines and obligations. For example, some subpoenas may not only require your community association to prepare and serve an objection within a few days, but it may also require the community association to prepare to attend a hearing to resolve that objection. If no objection is served, a subpoena may require the community association to produce certain materials or an employee for examination by a certain deadline. Some subpoenas may even require the community association to designate a corporate representative and prepare them for an examination as to certain topics, wherein their testimony is considered binding on the community association.  If your community association fails to timely object or adhere to a subpoena, it may result in a waiver of rights or objections. And, in some cases, failure to timely object or adhere to a subpoena may even result in a court order finding your community association in contempt of court and requiring the community association to pay attorneys’ fees and costs to the party that issued the subpoena.

Ultimately, while complaints and subpoenas can vary in content and form, they all generally require quick and calculated action. Accordingly, you should always consult your legal counsel with respect to a complaint or subpoena as soon as possible so as to ensure compliance with Florida law and that your community association’s interest are well served.

Nico Jimenez

Attorney at Law, Becker
Miami | bio

Published January 5, 2024

Your community association functions as a democratic subsociety, which works most effectively with an active and informed membership.  This requires a level of knowledge and understanding about the community’s operations from both the Board and the membership at large.  We continue to hear that unprecedented changes are coming down the pipeline in the ways that community associations operate.  Part of getting ahead of these coming changes is to ensure that the basics of a well-functioning community association are already in place.  As this new year rolls on, make it a goal to assist where you can in making your community the best it can be. 

Let’s start with the Governing Documents.  The Governing Documents are legally binding on all members.  In addition to legal liability for noncompliance, understanding and adhering to the Governing Documents and policies of your community constitutes being a good neighbor. For example, being familiar with architectural restrictions and maintenance standards allows the community to maintain a certain level of cohesion that helps maintain property values.   Community willingness to actively comply goes a long way and saves the community money and time by avoiding enforcement actions.  Board members should be particularly familiar with the Governing Documents as members of the body charged with upholding these documents to the best of their ability.  Understanding and complying with the Governing Documents is much simpler when the Documents are clear and cohesive.  Are there outdated provisions in the Governing Documents that no longer serve the needs of the community?  Having legal counsel perform a thorough review of the Governing Documents is a first step.  Outdated provisions can be removed, and legal counsel can advise whether provisions are also not in line with current law and recommended best practices.  Clear and effective documents are an important line of defense in a well-functioning association.   

Your community association operations also largely depend on dedicated volunteers and guidance from experts.  Serving on the Board is one way to assist in the direction of your community.  It is no small task.  If you do not have the time to dedicate to effectively serving on the Board, the community may have committees that are also looking for volunteers.  Serving on a committee is another way to effect positive change, whether that is a budget or finance committee, an enforcement committee, an architectural review committee, or social committee.  In addition to dedicated volunteers, reliance on experts where needed can avoid the community serious (and potentially expensive) headaches down the line.  Legal counsel experienced in community association law should guide the Board in navigating the numerous requirements stemming from Florida statute and the association’s Governing Documents.  The association should also seek guidance from other experts, including but not limited to accountants, engineers, and architects, when the situation calls for such guidance.    

Effective outreach and communication are also vital.  A certain level of communication is required by law.  Proper and timely notices of membership meetings and board meetings are required.  All agenda items to be discussed at the meeting are to be set forth in the notices.  If the Board is unsure about the required notice for special types of meetings, association counsel should be consulted.  One way members can assist the Board with effective communication is to ensure that the Board has the correct designated mailing address, especially if the owner has a primary address outside of the community.  If you have consented to receiving notices via e-mail, does the Board have your most recent email address? And are you checking this e-mail address consistently and have made sure that the e-mails from the Board or manager are not going to your spam folder?

Last but not least, showing up.  Sending and receiving notices is all well and good, but is of little effect if members do not attend meetings.  This can be done in person, or online if the option is available, or by submitting a proxy when permissible.  Membership meetings cannot move forward without a quorum of the membership.  As such, it is imperative that enough members attend, or submit a proxy, so that operations can move forward.  Encourage your neighbors to attend and participate as well.  At the meeting, the agenda needs to be adhered to.  The agenda should not serve simply as guidance for discussion but rather should be used as the basis for an effective meeting that does not devolve into unproductive tangents.  Discourse should be kept civil.  Not every member will agree but talking over one another and not letting others talk is unproductive.  The law allows the Board to adopt reasonable rules and regulations for participation at meetings.  Useful minutes should be kept for each and every board and membership meeting.  This is not a complete transcript of the meeting.  However, enough detail needs to be included so that the minutes may serve as a useful reference point in the future. 

Good governance starts with effective governing documents and volunteers.  Participation and effort by the Board and membership go a long way in the smooth and efficient operation of the community.  Effective communication helps maintain community morale.  Association counsel can help in navigating the legal requirements for your community as 2024 moves forward.   

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio