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

Published January 24, 2023

In this article, I am going to review some tips and suggested procedures to deal with some common misperceptions and/or misunderstandings in regard to various association items. These suggested procedures are based on what I have found to be recurring questions / actions or inactions from and/or by associations. Let’s dive right in.

Timesavers

Proxies and Limited Proxies

In condominiums and cooperatives, general proxies are used for establishment of a quorum and limited proxies are used to vote on a particular matter – amendments, waive reserves or financial reporting requirements, etc. In homeowner associations proxies may also be used for elections. Proxies and limited proxies are not secret. When returned in an envelope to the association, they can be opened in advance of the meeting. They should be opened in advance of the meeting and placed in unit order (whether numerical for a condominium or cooperative or by street address in a homeowners’ association). This allows you to keep a running tally of whatever is being voted on, ensure you are using the most recent proxy submitted, and saves time at the actual meeting. By keeping a running tally of the vote, the only proxies that have to be tallied at the actual meeting are those turned in at the meeting. Depending on the number of units in your association and the question or questions being voted on, this can save an enormous amount of time at the actual meeting.

Keep in mind that owners can always rescind or change their limited proxy, and the most recent one submitted controls. This is different from an election ballot in a condominium and cooperative, which cannot be rescinded or changed once submitted.

Voting Certificates

The same concept as above applies to voting certificates. When owners are returning voting certificates, whether for an annual / election meeting or any other meeting, open the voting certificates and file them before the meeting. If your association requires voting certificates, the association should maintain a book of voting certificates, in numerical or address order, for use as needed at membership meetings. The most recent voting certificate will always control.

Ballots

In condominiums and cooperatives, owners are required to submit their election ballots in an inner and outer envelope. The owner envelope has to have the owner’s name, address and signature. While some associations keep the submitted ballots in a locked ballot box until the election meeting is called to order, there is nothing in the law that requires this. Ballots should be placed in unit / address order before the meeting. This will speed up the outer envelope verification process as well as identity duplicate ballots.

Documents for an Annual / Election Meeting

When preparing for an annual / election meeting, you should always have at the meeting:

• Sign in roster
• Unit roster by last name
• Unit roster by unit/address
• Voting certificate book
• Meeting notice
• Proof of meeting notice
• Minutes from last membership meeting
• If using electronic voting, a printout of the electronic vote tally by unit number /street address
• Tally sheet(s), whether for an election, to vote on a matter, etc.
• Letter openers
• Empty bankers’ box for all the meeting documents required to be kept
• Extra ballots and envelopes (for an election) and ballots and limited proxies for other matters being voted on
• Designated person(s) for owner sign in

I cannot tell you how many times meetings have been delayed, sometimes significantly, because of a lack of some, or most of, the items listed above being prepared before the meeting.

Verify Outer Envelopes Before Annual / Election Meeting

This can be a real time saver of at least an hour, if not hours, at a condominium or cooperative annual / election meeting. Both the condominium and cooperative statutes allow an association to have a meeting on the day of the election, before the election meeting, to verify the information on the outer envelopes. This means that by following the required procedures, the ballot outer envelope information can be verified before the annual / election meeting, allowing an association to perform the tedious task of verifying the outer envelope information before the annual / election meeting is called to order. This allows an association to spend the time, in many cases an hour or more, before the meeting verifying the information as opposed to at the actual meeting, so the actual meeting can be completed much sooner than if the verification process took place after the annual / election meeting was called to order. Florida Administrative Code Rule 61B-23.0021(10)(b) provides:

Any association desiring to verify outer envelope information in advance of the meeting may do so as provided herein. An impartial committee designated by the board may, at a meeting noticed in the manner required for the noticing of board meetings, which shall be open to all unit owners and which shall be held on the date of the election, proceed as follows. For purposes of this rule, “impartial” shall mean a committee whose members do not include any of the following or their spouses:

1. Current board members;
2. Officers; and
3. Candidates for the board.

At the committee meeting, the signature and unit identification on the outer envelope shall be checked against the list of qualified voters. The voters shall be checked off on the list as having voted. Any exterior envelope not signed by the eligible voter shall be marked “Disregarded” or with words of similar import, and any ballots contained therein shall not be counted.

Verifying the outer envelope information before the annual / election meeting is a real time saver at the actual meeting. Note that this type of meeting must be noticed at least 48 hours in advance like a board meeting.

Myths and Misconceptions

• Presidents only vote to break a tie. Incorrect. We are not talking about the United States Senate. Presidents should vote on every motion, unless there is a bona fide conflict of interest. That is what board members are elected to do.
• A quorum of the board is required for a membership meeting. Incorrect. A membership meeting is not a board meeting. Board members do not vote at a membership meeting in any other capacity other than as a member. There are no board member votes at a membership meeting. A board member (usually the president or someone the president appoints) will usually run the annual meeting from an administrative point of view. Your governing documents usually contain an agenda for membership meetings.
• A quorum is a majority. Incorrect. A quorum is whatever your governing documents say it is. It can be a majority of all owners or a certain percentage of owners (30%; 25%; etc.).
• A majority of owners is 50% plus 1. Incorrect. While this seems to make sense, in certain circumstances it results in more than a majority. For example, if you have 100 owners, 50% equals 50, plus 1 equals 51, which is a majority of 100. But, if you have 99 owners, 50% of 99 equals 49.5, plus 1 equals 50.5, which is rounded up (you always round up) to 51, which is more than a majority of 99. (Note that 50.5 is more than a majority of 99 as well. A majority of 99 is 50).

If you have any questions regarding the above, contact your association attorney.

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

Associations and association managers routinely receive what are referred to as lender questionnaires on a regular basis. What is a lender questionnaire?

A lender questionnaire is usually a request from a bank, lending institution or title company that requests the Association provide information about the community to the lender. Such requested information generally includes request for information concerning the community make up, collection procedures, community delinquency information, recreation areas, etc. More recently, requests from Fannie Mae and Freddie Mac have requested the Association provide information regarding the structural integrity of the building, reserve analysis reports, pending code violations, etc. What is the Association’s legal responsibility to answer such questions?

Associations are not required by law to provide a prospective purchaser or lienholder with information about the association other than information or documents required by the statute that governs such association, such as 718, 719 or 720, Florida Statutes This generally means the Association is only required by law to provide estoppel information as required by the pertinent statute.

There are slight differences in the statutes in regard to Sections 718, 719 and 720, Florida Statutes.

Section 718.111(12)(e)(1), F.S.:

1. The association or its authorized agent shall not be required to provide a prospective purchaser or lienholder with information about the cooperative or association other than the information or documents required by this chapter to be made available or disclosed. The association or its authorized agent may charge a reasonable fee to the prospective purchaser, lienholder, or the current unit owner for providing good faith responses to requests for information by or on behalf of a prospective purchaser or lienholder, other than that required by law, if the fee does not exceed $150 plus the reasonable cost of photocopying and any attorney’s fees incurred by the association in connection with the response.

2. An association and its authorized agent are not liable for providing such information in good faith pursuant to a written request if the person providing the information includes a written statement in substantially the following form: “The responses herein are made in good faith and to the best of my ability as to their accuracy.”

Note the quoted language in the last sentence, which limits the liability for any response as long as the quoted language is included in such response.

Section 719.104(2)(d), F.S.:

The association or its authorized agent shall not be required to provide a prospective purchaser or lienholder with information about the cooperative or association other than the information or documents required by this chapter to be made available or disclosed. The association or its authorized agent shall be entitled to charge a reasonable fee to the prospective purchaser, lienholder, or the current unit owner for its time in providing good faith responses to requests for information by or on behalf of a prospective purchaser or lienholder, other than that required by law, provided that such fee shall not exceed $150 plus the reasonable cost of photocopying and any attorney’s fees incurred by the association in connection with the association’s response.

Unlike the Condominium Act, the Cooperative Act section does not contain any language limiting the liability of the responder. But of course, there is no harm in including such language in any response.

Section 720.303(5)(d), F.S.:

The association or its authorized agent is not required to provide a prospective purchaser or lienholder with information about the residential subdivision or the association other than information or documents required by this chapter to be made available or disclosed. The association or its authorized agent may charge a reasonable fee to the prospective purchaser or lienholder or the current parcel owner or member for providing good faith responses to requests for information by or on behalf of a prospective purchaser or lienholder, other than that required by law, if the fee does not exceed $150 plus the reasonable cost of photocopying and any attorney fees incurred by the association in connection with the response.

Also, unlike the Condominium Act, the Homeowners Association Act section does not contain any language limiting the liability of the responder. As noted above, of course there is no harm in including such language in any response.

Associations may provide additional information as requested by lender questionnaires. Associations may charge up to $150.00 to provide such information, as well as any reasonable attorney’s fees and costs incurred in connection with such a response. In the past, associations would routinely provide this additional information, which sometimes included information on association amenities, a percentage of how many accounts were delinquent, etc. As mentioned above, Fannie Mae and Fannie Mac have now added questions requesting the Association to provide information regarding the structural integrity of the building, reserve analysis reports, pending code violations, etc.

Generally, board members, managers and even the association attorney are not in a position to provide answers to these questions, and the Association is not required to provide answers to such questions. It has been my experience that most loans will close even if the specific questions are not responded to.

If the association does respond to these structural questions, it should be the association engineer that provides such responses. Some of the questions cannot be answered – questions that ask if there will be any violations in the future, for example.

If your association decides to respond to the lender questionnaire, before it just routinely responds to these lender questionnaires, take a close look at the questions; include the limited liability language mentioned above; and engage the association’s engineer to answer the appropriate questions.

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

The short answer: there is no express prohibition against this, but it’s complicated and not recommended for either the association or the lawyer. There are several ethical issues that arise due to the lawyer’s duties to the entity as its counsel, fiduciary duties to the entity as a director, and the lawyer’s personal self interest in both roles.

A board member who is also an attorney can be a great asset for a community association board, as she may have the attention to detail, certain knowledge, and communication skills that are useful to serving on the community’s board. Many attorneys do sit on the boards of their communities and are of great service to their communities. However, this does not substitute the need for independent legal advice from an attorney who specializes and is experienced in community association law.

If a lawyer serves as both director and counsel, the lawyer must be extremely careful in examining which hat—lawyer or director—she is wearing during all communications as she navigates between the two roles. This also needs to be clearly communicated to her fellow board members. For example, an attorney-client relationship may unintentionally arise when the entity reasonably believes that the lawyer-director is acting as its counsel in providing legal advice. Or when acting as counsel, she must take every reasonable step to ensure that the board understands that she is representing only the association itself and that she does not represent any of its individual board members, officers, employees, or anyone else.

Even with careful navigation between the two roles, there are a number of issues that may arise. The first, as briefly touched upon, is that conflicts of interest may arise. A lawyer-director who is personally affected by the legal advice she is giving to the board undermines her capacity to provide objective advice.

The second is in determining the scope of the lawyer’s representation. Generally, a client determines the objectives or goals of the representation, and the lawyer must abide by the client’s decisions. Meanwhile, the lawyer typically determines the means, such as the technical and legal tactical issues, to reach those objectives. However, the lawyer should consult with the client as to the means, as required. For the lawyer-director, this may cause some issues. For example, when wearing the “lawyer hat,” she must abide by the decisions of the entity regarding the objectives, even if as a director, she disagrees. She must also use her best judgment in determining whether to follow certain instructions as to the means of representation. This may put her at odds with her fellow board directors, who may urge her otherwise. On the other hand, the lawyer-director cannot retire her best judgment when putting on her “director hat” especially where she may disagree with the board’s instructions as to the means of representation.

Third, certain courts have held that a lawyer-director is held to a higher standard of care than a non-lawyer-director. When she is wearing her “counsel hat,” she is required to provide competent representation. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation. This may put the attorney in an unintended position where board members are simultaneously shielded from certain liability. The lawyer-director must remind her fellow board members when she is wearing her “director hat” and not providing legal advice, otherwise she will be held to the level of competence required of lawyers. This is especially true if the lawyer does not specialize in community association law, which reinforces the point that community associations should hire independent counsel specializing in community association law even if a lawyer sits on their board.

A fourth issue concerns confidential information. As the entity’s lawyer, the lawyer is required to maintain certain information confidential and privileged. As a board member, the director will have to make certain disclosures. Again, this would require careful switching of hats to determine where legal advice is protected by the attorney-client privilege and when business-related advice is not. The line is not clear and outside the scope of this article.

Given the complexities and importance of the statutory requirements impacting Florida community associations, it is strongly recommended that associations seek independent legal counsel who will best serve the needs of the community.

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

The previous boards failed to enforce the parking restrictions in the community, and now parking has become a nightmare. The new board would like to remedy the solution, but can the board begin to enforce a restriction that has not been enforced in the past?

Generally, the association may lose its right to enforce a restriction if it does so inconsistently, unevenly, or arbitrarily. This is known as “selective enforcement,” and when selective enforcement is shown, the association may be estopped from enforcing a given restriction.

However, all is not lost. A previously unenforced restriction may be “revived” with notice from the board that it will enforce the restriction going forward. Essentially, the board draws a line in the sand, which lets owners know that from this point forward, the board will actively and evenly enforce the restriction in question. The process for reviving a provision comes from the case of Chattel Shipping and Investment, Inc. v. Brickell Place Condominium Association, Inc., 481 So.2d 29 (Fla. 3rd DCA 1985). In Chattel Shipping, the association’s declaration of condominium prohibited unit owners from enclosing their balconies without prior approval from the board. Multiple owners, nevertheless, enclosed their balconies without the requisite approval. The board, prompted by a letter from the city that the enclosures violated the city’s zoning ordinance, informed the owners that it would enforce the restriction and prohibit future balcony constructions. After this announcement, one unit owner, Chattel Shipping and Investment, Inc., enclosed its balcony. When the association secured a mandatory injunction requiring the removal of the balcony enclosure, the unit owner sought a reversal on the ground that the association had failed to require the dismantling of the other existing enclosures and thus was unequally and arbitrarily enforcing the restriction.

The Court rejected the owner’s argument, holding that the association could adopt and implement a uniform policy under which a building restriction will be enforced only prospectively without the enforcement of the same being deemed selective and arbitrary. Thus, the Chattel Shipping case stands for the proposition that an association can revive the enforcement of a restriction despite previous non-enforcement by notifying the members of the board’s intent to prospectively enforce the restrictions.

The purpose of properly notifying owners of prospective enforcement is to dispel the arguments and even appearance of unequal and selective enforcement that may be raised by owners. To prove selective enforcement, an owner needs to show that there are instances of similar violations of which the board had notice, but has refused to act. The Florida Administrative Code provides that the owner shall indicate the unit(s) to which each example pertains, the unit owner(s), how long the violation has existed, and shall indicate whether the board knew of the existence of the violation(s).

In drawing this line in the sand, the restriction is “reset.” This works well for temporary violations, such as a parking restriction, but what about violations with more permanent consequences, such as pet violations?

If the previous boards have turned a blind eye to house cats or has not enforced the one-dog policy and now a number of owners have pets in violation of this restriction, the board cannot reasonably expect that following the date of a resolution all owners with pets in violation will move or get rid of their pets.

In that case, in addition to a Chattel Shipping resolution, the board may also determine that it’s best to adopt a “grandfather clause” as part of the restriction. “Grandfathering” allows owners or residents who are already doing something to continue doing so, even if they would be in violation of the new (or newly enforced) restriction. Over time, there will be fewer and fewer exceptions to the restriction as grandfathered owners move away or pass away. And eventually, the restrictions will apply to all owners and residents of the community, as subsequent purchasers in the community will be buying the units under constructive notice of the community’s restrictions.

In adopting the restriction and providing for grandfather status, the language should be drafted carefully with the guidance of association counsel. The association should request that owners who seek to be grandfathered provide a written request to the association by a certain deadline. The deadline allows the association to clearly determine whether a violation existed prior to or after the passage of restriction in the event of a challenge. With a written request, the association can also evaluate each request and have a written record of which owners and/or what (i.e., which vehicle, which pet, etc.) has been granted grandfather status. For example, if the association seeks to restrict oversized vehicles or pickup trucks, the association will request that those owners who currently have oversized vehicles or pickup trucks register their current vehicle, including details such as the model, make, color, and year. This specific vehicle will be granted grandfather status, which means that if the owner exchanges his pickup truck for a different or newer truck, his new vehicle will not be grandfathered in and if the new vehicle is oversized, he will be in violation of the new restriction.

There are times when grandfathering owners or a Chattel Shipping resolution may not be appropriate. For example, if a new restriction to balcony enclosures is adopted by the association due to a need to protect the structural integrity of the building, the prior right to place items on the balcony will need to yield to the overriding safety considerations of the new rule. In such a case, the board should obtain documentation of the overriding safety concerns, such as from an engineer’s report, before requiring owners to change structures that were previously allowed. Another example is if certain items are no longer code compliant, even if the equipment would ordinarily be entitled to grandfather status, the equipment should be brought up to code, if possible, or removed if rendered inoperable.

If your association is facing an enforcement problem, association counsel can assist in reviving a restriction.

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

Attention to detail. A simple phrase that’s not always so simple to comply with, especially in a community association context.

There are several technical provisions in the statutes governing community associations that must be complied with. Chapters 607, 617, 718, 719, and 720, Florida Statutes have numerous requirements that associations must adhere to. A few examples include meeting notice requirements, board member eligibility requirements, record inspections, and others. Associations must be cognizant of changes to the statutes regarding such requirements, some of which pertain to regular or recurring events.

As associations go through the process of annual and election meeting notices, budget meeting notices, etc., one cannot just blindly use the previous year’s notice as a template for the current year’s notice. Associations must review any changes in the statutes to ensure this year’s notices are still in compliance. Having your association attorney prepare, or at least review, all such notices before they are sent out will help ensure the association is in compliance with the most recently enacted statutes.

For example, Section 718.112(2)(d)(2.), Florida Statutes, previously provided that a person who is delinquent in the payment of any monetary obligation due to the association, is not eligible to be a candidate for board membership and may not be listed on the ballot. That provision was changed in 2021 to now provide that a person who is delinquent in the payment of any assessment due to the association, is not eligible to be a candidate for board membership and may not be listed on the ballot. A small but significant difference. If your election meeting notice includes any information about candidate eligibility, blindly copying the previous year’s notice would have the association sending out inaccurate information regarding board member eligibility. Attention to detail.

Another example pertains to a condominium unit owner’s suspension of voting rights due to a delinquency. Section 718.303(5), Florida Statutes, previously provided an association may suspend the voting rights of a unit or member due to nonpayment of any fee, fine, or other monetary obligation due to the association which is more than 90-days delinquent. That provision was changed in 2017 and now provides that an association may suspend the voting rights of a unit owner or member because of nonpayment of any fee, fine, or other monetary obligation due to the association which is more than $1,000 and more than 90-days delinquent. While this change went into effect a few years ago, unfortunately I still run across associations attempting to suspend voting rights of owners who are more than 90-days delinquent, but such delinquency is not more than $1,000. Again, attention to detail.

Another area where attention to detail is necessary is the preparation of limited proxies. When voting on a waiver of reserves in a condominium, Section 718.112(2)(f)(4), Florida Statutes, provides that proxy questions relating to waiving or reducing the funding of reserves or using existing reserve funds for purposes other than those for which the reserves were intended must contain the following statement in capitalized, bold letters in a font size larger than any other used on the face of the proxy ballot: “WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.” When reviewing limited proxies prepared by associations for such votes, very frequently I notice that while the disclaimer language is in capitalized, bold letters, it is not in a font size larger than any other used on the face of the proxy ballot. Attention to detail.

Posting of meeting notices is required by the statutes. Forty-eight (48) hours’ notice for a regular board meeting; fourteen (14) days for some board meetings; 60-days for election meetings, etc. Only mailing, or emailing notices is not sufficient. Some meeting notices require an association to execute a proof of meeting notice (usually an affidavit signed by an association board member or manager). While these notice requirements may seem trivial, especially since the notices are mailed and/or emailed to owners, they are required by statute. Failure to properly post such notices may result in any action taken at said meeting being void. Failure to maintain proof of meeting notices when required may have the same effect, if any action taken at said meeting is challenged. Attention to detail.

In regard to homeowner associations, Section 720.306, Florida Statutes, previously provided that official notices were to be sent to the address on the property appraiser’s website. That provision was changed to provide that official notices once again are to be sent to the mailing address in the official records of the association under section 720.303(4), Florida Statutes. Attention to detail.

There have been technical changes in how associations must notify owners of delinquent assessments before the owner can be sent to the attorney for collections. These are technical requirements that should be discussed with your association attorney. Blindly following previous practices in regard to such collection notices and actions will result in delays and owner defenses to association collection actions. Attention to detail.

In regard to budgets, remember that budgets mailed to association members must contain the period of the budget year (for example, Jan 1, 2022 – Dec 31, 2022). I have seen many associations go through the arduous process of preparing and adopting a budget, only to have such budget challenged by a member because it did not contain the actual budget period, even though there was enough information on the budget to know what period it was for. Attention to detail.

While some of the above matters may seem minimal in regard to their impact on the association or its members, the Florida Department of Business and Professional Regulation, Division of Condominiums, Timeshares and Mobile Homes (“Division”) has recently changed its approach in regard to association education versus fining. In the past, a first violation of one of the above provisions, or another what would appear to be “minor” violation, was generally resolved by the issuance of a warning letter from the Division, recounting the violation, the remedial measures, and a warning to the association that future similar violations could result in a fine. Those “warning” days appear to be over, as the Division has adopted a much more stringent enforcement posture, which usually results in a fine to the association, even for a first violation of a seemingly minor provision. Fines range from $10 to $30 per unit, with a maximum fine of $5,000. I have seen recent cases where the Division initially sought to impose the maximum $5,000 fine for an initial, minor violation (minor in accordance with Rule 61B-21, Florida Administrative Code.)

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

Yes, it’s that time of year again. The six month long hurricane season in South Florida. South Florida has seen an increase in hurricane activity over the past years, and that is expected to continue this year.  Let’s look at some ways community associations to prepare for such storms.

Information on how to prepare for storms and emergencies usually revolves around preparing the building, securing association property, etc. Let’s talk about some of the other, just as important aspects that community associations need to be aware of in order to properly prepare for a storm, natural disaster or emergency.

Preparing for hurricanes, tropical storms and other disasters is a year round endeavor.    Management contracts, landscaping contracts, security contracts, elevator contracts and construction contracts should all be reviewed for emergency procedures and in particular named storms. Some of the particular provisions that can be added into these types of contracts are:

Management Contracts

• What extraordinary relief services will be provided by your management company?

• What is the priority of relief services to be provided?

• What additional charges will you incur to have your manager oversee repair projects and does your management contract obligate the association to use your manager in this capacity?

Landscaping Contracts

• What relief and cleanup services will be provided and in what time frame post-storm?

• What preventative services can be provided pre-storm (i.e., tree trimming, staking trees, etc.)?

• Tree trimming should be completed before June 1st.

Security Contracts

• What relief services will be provided and in what time frame post-storm? How soon after a storm passes will you once again have security personnel in place?

• In the event of a name storm, when will security leave their post? When do they return ?

• If you have electronic gates, what does your contract require in terms of securing those in the event of a storm?

Elevator Contracts

• What relief services will be provided and in what time frame post storm?

• If you do not have a generator for your elevator(s) what arrangements has the board made in the event the power is out for any length of time and residents cannot use the elevators?

• What preventative services can be provided pre-storm? Is a generator advisable and affordable?

Construction Contracts

• Any contracts for construction work on the association property should contain a clause requiring the contractor to secure the premises and their work material in the advent of a storm.

Miscellaneous Contracts

• Does the association lease any space to third parties? If so, do those contracts require the association to take any steps to secure the leased premises or clean up the leased premises in the event of a storm?

Association storm preparation and recovery should be a part of every one of the above types of contracts.

An association should have video and photographic documentation of the property condition, as well as an inventory of all association property, before a natural disaster or emergency occurs.  This documentation should he updated every year

Documents

Community associations are not-for-profit corporations and, as such, rely heavily on various documents to function properly. Association records should be scanned and uploaded for temporary secure internet storage with hard copies placed in watertight Ziploc bags and secured in a fireproof box. With proper advance planning, your board will have peace of mind that the following documents have been safeguarded and will be available in the immediate aftermath of a storm.

Documents to be secured include:

• Insurance policies
• Resident lists
• Financial records
• Employee records
• Contracts
• Association Governing Documents
• Community Plat
• Plans & Specifications for the community
• Video, photographs and inventory list of association and association property

Computer Records

• Hard Drive back-up – thumb drive, online storage, thumb drive

Staff

Don’t forget your staff!  If the association has employees, the association’s policies and procedures with regard to those employees’ duties regarding storm preparation and storm cleanup need to be reviewed with legal counsel to ensure compliance with all local and federal ordinances. In addition, the board needs to discuss with counsel proper protocol to allow employees to leave early to secure their own residences and property in the advent of a storm and/or not to report to work after the storm until the property has been determined to be safe.

Post disaster

Immediate Actions

• Account for the whereabouts of residents;
• Attend to the injured;
• Secure the community from acts of vandalism and looting.
• Notify the police in the event of a theft;
• Document damage with photographs and video;
• Before making arrangements to remove storm debris other than life threatening or access obstructing, contact your city to see what plan of action it has for debris removal;
• “Drying In”/”Shoring Up” the building structures in order to mitigate against further damage;
• Remove, where necessary, wet carpet, wall board, cabinets, etc. when necessary to prevent the growth of mold;
• Survey the property and identify areas needing priority attention; and
• Open lines of communications with the unit owners, contact emergency services, and notify the contractors and employees, advising of their duties and needs.

Reconstruction & Restoration

• Contact Your Attorney Immediately. This is critical to ensure that your insurance provider’s requirements are met and that your community’s rights are protected.
• Contact Your Insurance Agent.
• Resist the natural urge to use a public adjuster to shepherd your claim without first discussing advantages and disadvantages with legal counsel.
• Do NOT sign any contracts or releases without having them properly evaluated in advance by legal counsel.
• Resist the attempts by out-of-state and possibly unlicensed vendors who swarm to our state in the aftermath of a disaster to do business with you.
• Do not suspend common sense and/or forget to use the resources available to you. Performing due diligence on contractors should still be the norm.
• Discuss possibilities for conventional financing and/or SBA disaster loans to fund repair and reconstruction projects with your legal counsel.
• Be aware that most damage is not apparent to the visible eye or to anyone other than trained experts. Even if hurricane damage is not readily apparent at first, experts should be consulted to determine the extent of battering your community suffered.

Claims process

DO NOT SETTLE A CLAIM WITHOUT YOUR ATTORNEY’S INVOLVEMENT.

Carefully document the event; this will provide the claims adjuster with a head start in evaluating the claim.

• Retain damaged property until a claims adjuster approves disposal (unless retaining such items poses a danger to safety).
• Prepare an inventory list of property damaged. List the quantity, the description, the actual cash value and actual loss. Attach bills, receipts and related documents.
• The claims adjuster from the insurance company should contact you in 2-5 business days from the date that you reported your claim.
• With your attorney obtain all possible evidence in the claim.
• Evidence includes, but is not limited to invoices, receipts, pictures, estimates, governing documents and correspondence regarding the claim.
• The evidence will be used to document the condition of the property and maintenance prior to the event, as well as damages caused by the loss, emergency repairs performed to mitigate further damage, and repairs made to the property.
• The damages that still need repair will be determined with an engineering baseline.
• Ensure compliance with all conditions precedent pursuant to the terms of the policy.
• Hire forensic experts to obtain a scope of repairs to bring the property back to its pre-loss state.
• Notify the insurance company that the association’s attorney is representing the insured (association).
• Attempt to coordinate a re-inspection of the property with the association’s expert and the insurance company to review discrepancies between what the insurance company says is due and what the association’s expert says is due.
• Make all attempts to settle claim amicably.
• Do not “give in” just to settle a claim.
• Take further steps as necessary after consultation with your attorney.

Taking the above steps will assist the association in preparing for natural disasters or emergencies, dealing with the immediate aftermath and properly processing insurance claims

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

What a year. Because of COVID-19 issues, associations have dealt with owners working from home, children remote learning, contractor issues, common area issues, the pool, the gym, the visitors, the cleaning, the quarantine, the masks, and so on. Quite a year indeed. Many associations have spent more time speaking with their attorney, and hopefully insurance agents, than they would have liked to. But along with all the other lessons, dealing with a pandemic has taught associations, perhaps the most important one in the long run will be – know when to contact your professional.

Of course, it is easy to determine when to contact your attorney when the association has a contract dispute, has been sued, violations, problem owners, problem tenants, etc. But there are other, not so obvious times as to when an association should contact its attorney. We will get to those in a bit. But what about other association professionals? When should an association contact its accountant, its insurance agent, engineer? Let’s discuss some of these scenarios.

Accountant

Your association should be working with an accountant that specializes in association work. There are many nuances in dealing with condominium, cooperative and homeowner associations, especially in regard to what forms to file, how to present the year-end financial statements, including statutory required information, etc. How will pre-paying a loan affect the association’s tax filing status? Are surplus funds taxable? Can the association sell a unit it owns via foreclosure and make a profit? Is that profit taxable? These are all questions that should be discussed with your association accountant before the association takes action on the questioned items. The response from your accountant may allow the association to make a more informed decision as it pertains to how such decisions affect the association’s year end statement and taxable items. The association should be in communications with its accountant as needed, and certainly more than once a year, especially when it is time for the year-end report. Utilize your accountant when assessing the above issues.

Insurance Agent

The association insurance agent should be involved in many aspects of your association. If the only time you hear from your insurance agent is when it is time for the annual renewal, the association should consider a new agent. Your insurance agent should proactively be working with management and the board to reduce risks in the community. Your agent should inspect the property at least once a year to identify risks and advise the association how to eliminate or mitigate such risks.

Large association contracts (roof repair/replacement, painting, concrete restoration, air conditioning, cooling towers, renovations, etc.) typically have association insurance requirements as well as indemnification provisions. These contract provisions should be sent to your insurance agent for review and comment before any such contact is signed (of course they should be reviewed by your association attorney as well). The contract may call for insurance the association currently does not have, or indemnification requirement specifically excluded by the association’s current policies. If the association signs a contract that contains insurance requirements or indemnification that the association’s existing polices do not cover, in the event of a claim, the association may be paying out of pocket for such claims. If the association is paying out of pocket to defend a contractor for damages or injury caused by the contractor, such costs can get very high very quickly. Always have your insurance agent review the insurance and indemnification provisions of these types of contracts after your association attorney has made any revisions he or she deems necessary.

Finally, you may want to contact your insurance agent in regard to social events. If the association plans on serving alcohol, such as at a holiday event, do you have insurance for that? What about allowing others to serve alcohol when a social room is used by the owners for an event – does the association have insurance for that? Are you inviting the public in for an event? Does the association have insurance for that?

Engineer

Most condominium and cooperative associations have engaged an engineer from time to time, whether to prepare specifications for a job or to oversee large construction or renovation projects. But there are other times an association may want to utilize an engineer.

The roofing company will tell you they will supervise the roof installation. The painting company will tell you they will inspect the paint job. The general contractor will tell you they will inspect the concrete restoration work. And they all will. So why should as association pay an engineer to inspect and oversee such work? I would hope the answer is obvious. No disrespect to any of the aforementioned contractors, but an association should always have its own engineer overseeing such work. The association engineer works for the association; the inspectors from the various companies work for the company. An association should always factor in the cost of its own engineer when planning the costs for such large projects.

There are other times an association should utilize its engineer. If your association is approving owner renovations through an architectural control board (“ARB”) or other similar body, or even just the board, generally board members are not qualified to review plans. If an owner is installing a new floor or changing out a door, an engineer may not be necessary; when an owner is making structural changes in a unit, combining units, installing a pool, adding an addition, etc., the association should engage an engineer to review all plans and inspect the work to insure it is done according to the association approved plans. Generally, an association can pass such costs on to the owner, but you need to check with your association attorney to determine if any amendments or rules must be enacted to do so.

Attorney

As you can see from the above information, there are many times an association should consult with its professionals. Typically, the attorney is the one associations consult with the most. I am not exaggerating when I tell you I have some clients I am in contact with on a daily basis. There are many factors at play when considering when to contact the association attorney – manager experience, board experience and involvement, age of the association, etc. Some associations contact their attorney regarding every violation or violation letter. Other associations only contact their attorney when they have been sued. There is no one size fits all.

Any large contracts should be reviewed by your attorney. Does that mean the attorney needs to review the contract for a $5,000 water heater? Perhaps not. But be wary of one page “proposals” contractors ask you to sign; be wary if asking for 50% or more down (never sign such a contract without attorney review); be wary of signing any proposal that is valid “today only” or “this week only”; and never sign an AIA contract before your attorney has reviewed the contract.

All requests for a reasonable accommodation (handicap parking, emotional support animal, service animal, ramp, pool lift, etc.) should always be sent to the attorney for review.

If the association is considering denying a sale or lease application for any reason, consult with your attorney before the association denies the transaction.

If there are any questions on official record requests, or written inquiries, contact your attorney. Rule interpretation. Guest interpretation. Vehicle towing questions. Employee questions. Document interpretation. Consult your association attorney for all of these questions before the association makes a decision that may require your attorney to untangle later.

Finally, please do not make the mistake I see all too often. The association sends the attorney a significant contact for review.  The attorney diligently reviews the contract, making notes as to revisions, addendum, etc. Turns to the last page of the contract – already signed by both parties. Asks the association why it is signed already – “we already signed it, just wanted to see if you had any comments”. Don’t be that association!

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | 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