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Florida Condo & HOA Legal Blog

News & Updates on Condo & HOA Laws & Legislation in the State of Florida

What are Pooled Reserves and How do we Implement Them?

Posted in Association Documents, Budgets, Reserves & Financial, Meetings, Uncategorized

Business meetingQuestion: I am a new director on my condominium association board. At a recent board meeting, there was a discussion about switching to “pooled” reserves. What are pooled reserves and what does the association have to do to implement pooled reserves? R.G.

Answer: Cash flow funding of condominium reserves, often referred to as the “pooling” method of reserve funding, is a concept that was introduced many years ago through an amendment to the state’s administrative rules regulating condominium finances.

Under the traditional, straight-line method (which your question implies the association is now using), required reserve contributions are calculated by using a formula that divides the cost of replacing a particular item by the number of useful years that item has left, minus the reserve funds on hand for that item, with the result being the amount to fully fund that item for the next fiscal year. Each reserve component must be separately funded and must appear as a separate line item in the reserve schedule, which is part of the budget. Absent a majority vote of the unit owners, monies for each separate reserve item can only be used for that particular reserve item.

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Florida Associations Should Consider Amending Rental Provisions Now—CALL Alert for January 13, 2017

Posted in Association Documents, Governing Documents, Legislation, Rental

Community Association Leadership Lobby

Yeline Goin, CALLAs we start the New Year and the 2017 legislative session, community associations should be reviewing their current rental provisions and deciding whether to propose any amendments to address minimum rental terms. If your association has a problem with short term rentals in the community and would like to adopt amendments to the governing documents to address those issues, the amendment should be approved and recorded as soon as possible.  For example, some governing documents require rentals to be for a minimum of 6 months, or 12 months, so that the residential nature of the community may be maintained.  The documents could also be amended to clarify that the listing of a property in the community on a hotel-lodging type site constitutes a violation in addition to the short-term occupancy being the violation.

Why are we recommending this? Because while a bill has not yet been filed, we expect to see a bill that would change the law to limit the ability of homeowners’ associations (HOAs) to adopt amendments that prohibit rentals, alter the duration of the rental term, or limit the number of time unit owners are entitled to rent their units. This is already the law for condominium associations, and there is support to extend it to HOAs. There were a number of bills with this language that were filed during last year’s legislative session, but they did not pass. We expect to see similar bills filed again this year. As you can probably imagine, the special interests behind such bills are companies like AirBnb, VRBO, and investors who want the unrestricted ability to rent homes in residential communities.

In addition, there has been a bill filed, SB 188, that would prohibit local governments from adopting ordinances limiting the duration of vacation rentals. This bill would primarily impact community associations without minimum lease terms, as it will limit the ability of your local government to offer your association much help.

For more information about the 2017 legislative session, please visit the CALL website, www.callbp.com. We have posted a spreadsheet of the bills that have been filed so far for the 2017 legislative session that impact community associations.

Some Condominium Owner Information Is Public Record in Florida

Posted in Common Areas, Privacy, Safety and security

Florida Condominium Law Becker PoliakoffQuestion: I recently purchased a condominium unit. There is a board posted next to the elevator to my unit that contains the names of all unit owners and their unit numbers. Is the association authorized to do this? (D.L. by e-mail)

Answer: There is no legal prohibition against publishing this particular information. It is a matter of public record.

The Florida Condominium Act protects certain telephone numbers, e-mail addresses and other “personal identifying information” of unit owners, including social security numbers, driver’s license numbers, and credit card numbers.
Although the law does not clearly define what is and is not “personal identifying information,” unit owner names and unit number are not personal identifying information and can be readily obtained from the website of the county property appraiser.

However, I would say it is not common for owner lists to be posted in the common areas of condominium buildings. If you have privacy concerns, you should address it with the board or the association’s manager.

Florida Condominium Residents Should Leave Contractors Alone

Posted in Common Areas, Construction, Construction Issues & Contractual Disputes, Maintenance & Repair

group of builders with tools indoorsQuestion: I live in a condominium association and there has been discussion concerning who has the authority to direct the association’s contractors and vendors, including the landscapers. We feel that because we pay for these services, these individuals work for us, and we should be able to tell them what to do. The manager told us not to speak to contractors or vendors and said that only she, as the board’s authorized representative, has that authority. This is completely unacceptable since we, the unit owners, are the ones who are having to foot the bill. Who is right? (C.O. by e-mail)

Answer: Your manager is correct. The law specifically states that a unit owner does not have any authority to act for the association simply by reason of being a unit owner. Further, most condominium documents provide that the powers and duties of the association are exercised exclusively by the board or its authorized agents, except where an owner vote is specifically required by the documents or Florida law.

Secondhand Smoke on Condominium Lanai: What are my Rights?

Posted in Common Areas, Reader Q&A, Safety and security

smoking a cigarette and laughing."

Question: I just read the question you answered in one of your prior columns about a man wanting to smoke cigars in the common area of his condominium complex. You said that “the ill-health effects of secondhand smoke are well established.” I live on the second floor of a two-story condominium building. When someone smokes on the lanai downstairs, the smoke comes up into my lanai. I don’t mind what anyone does in their own home. But when they smoke on their lanai, I can’t use my lanai. I have had cancer twice and I do not want to be exposed to secondhand smoke. Is there anything I can do? What are my legal rights?

M.T.

Answer:  You are referring to my Oct. 19, 2016 post, “Can my condo snuff out my right to smoke?” That piece focused on the legality of a condominium association’s board of directors implementing a ban on all smoking at the swimming pool and other common elements, which I said was generally legally permissible. Your question focuses on your individual legal rights.

You may have the legal right to address the smoking issue if you can prove it is a “nuisance.” Florida courts generally define a “nuisance” as a condition which annoys or disturbs another in the free use, possession or enjoyment of their property or which renders the property’s ordinary use or occupation physically uncomfortable. For a nuisance to be proven, there must be a substantial and continuous or recurring harm. A mere annoyance is not sufficient. Also, the effect of the nuisance will be tested against an ordinary reasonable person with a reasonable disposition, in ordinary health, and possessing average and normal sensibilities. In essence, the courts will not afford protection to the hypersensitive individual.

In a widely reported 2005 lawsuit in Broward County, a smoking dispute in a condominium was litigated as to whether secondhand smoke amounted to a nuisance. In that case, the plaintiff argued that excessive secondhand smoke from a neighboring apartment was detrimental to her family’s health. The judge ruled that the secondhand smoke gave rise to a disturbance of possession, or trespass, because it exceeded common secondhand smoke customarily a part of everyday life. The Court also found the secondhand smoke to be actionable as a nuisance because it interfered with the plaintiff’s use of the property that was beyond mere inconvenience or customary conduct. The plaintiff and her family had recurring illnesses as a result of the smoke and had to vacate the premises on several occasions.

Additionally, the judge found that the excessive secondhand smoke was a breach of what is known as the covenant of quiet enjoyment. The plaintiff was awarded medical expenses, loss of use of the premises, and remedial expenses from the neighboring owner. However, this was only one trial court decision that has no binding value as legal precedent. I recommend you consult with an attorney to further explore this situation.

Condominium Association Must Repair Air Conditioning Lightning Damage

Posted in Budgets, Reserves & Financial, Hurricane/Disaster Issues, Insurance, Maintenance & Repair

Question: Recently, the outdoor air conditioning unit servicing my condominium unit was struck by lightning. I turned the claim into my insurance policy. My insurance carrier denied the claim stating that it does not insure the air conditioning unit, and that the air conditioning unit is supposed to be insured by the condominium association under Florida law. Is this correct? (R.L. by e-mail)

Answer: Yes. The obligations to insure the condominium property, and to repair the condominium property following damage caused by an insurable event, is one of the areas that causes the most confusion for condominium associations, association managers, and unit owners. The reason for this confusion is mainly due to the fact that in 2008 the Florida Legislature significantly rewrote the insurance requirements for condominium associations in the Florida Condominium Act, Chapter 718 of the Florida Statutes. The 2008 amendments to the Condominium Act have been previously discussed on this blog.

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Am I “Grandfathered in” from the New Condo Rental Restrictions?

Posted in Association Documents, Elections, Rental

Rental Real Estate Sign in Front of houseQuestion:  My condominium has always allowed units to be rented for a minimum period of 14 days.  I only use my unit a few times a year and rent it when I am not in residence.  I usually rent to 10 or more different groups in a given year, always obeying the existing 14 day minimum.  I make a considerable amount of rental income during the high season.  I just received notice that my condominium association is proposing a rental regulation amendment vote which will impose a 6 month minimum.  I stand to lose a lot of money.  Can they do this and shouldn’t I be “grandfathered in”? K.E. via e-mail

Answer: If you vote “no” on the proposed amendment, and it passes, the new 6 month minimum rental restriction will not apply to you.

The Florida Supreme Court addressed a similar issue in a 2002 landmark case called Woodside Village Condominium Association v. Jahren, in which my firm had the privilege of arguing before the Court on behalf of the association.  In that case, a condominium association amended its declaration to severely limit rentals by prohibiting annual and other long term rentals and basically only permitting seasonal rentals.  Certain unit owners complained that they bought their condominium units with the specific intention of leasing them annually, a practice permitted by the declaration when they bought their units.  These owners sued the association on the theory that they had lost vested property rights when the amendment was passed.  The trial judge and an appeals court sided with the investors.  However, the Florida Supreme Court ultimately found in favor of the association, ruling that when condo owners buy their units they are on notice that the contract that spells out their legal rights, the declaration of condominium, can be amended by the vote specified therein.

After this decision, investor groups lobbied the Florida Legislature for a change.  In 2004 the law was amended and now provides that: “An amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment.”
If your condominium was developed before 2004, there is some room to debate the retroactive effect of the statute.  However, most associations follow the law.

As applied to your situation, the proposed amendment will, if adopted, alter the duration of the minimum rental term.  As such, the statute will be triggered and if you do not vote in favor of the amendment the new rental policy will not apply to you.  When you sell or transfer your unit, the new rental restriction will apply to the future owner of your unit.  Also, rental amendments that do not impair minimum lease terms or frequency of leasing can generally be applied retroactively without running afoul of the statute discussed above.

Defending (My) Our Castle: A Look at Gun Regulation by Community Associations

Posted in Safety and security

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By Joseph E. Adams and Jay Roberts
Please click here for the entire article as a PDF

spot_flabar_journalOn September 6, 2012, David Merritt, president of the Spring Creek Homeowners Association, called a homeowners association meeting to order. Approximately 30 minutes later, Merritt, and former president of Spring Creek Marvin Fisher, would be fatally shot by their neighbor, Mahmood Hindi. The dispute between Hindi and Spring Creek involved an unapproved driveway and fence installed by Hindi. Hindi was charged with murder, but committed suicide in jail prior to his trial. The Hindi case may not be familiar to many Floridians, but the case of George Zimmerman certainly is. Zimmerman was allegedly acting as an unofficial neighborhood watch participant within Retreat at Twin Lakes, a Sanford townhouse development, when he had an altercation leading to the shooting death of Trayvon Martin. Zimmerman was found not guilty of criminal wrongdoing in the death of Martin. Martin’s family later sued the homeowners association. The homeowners association and the Martins reached an undisclosed settlement in that case, however, there were reports that the association paid Martin’s family upward of $1 million to settle the dispute.

The issue of gun control is everpresent in America, and engenders strong emotions and arguments on all sides. This article does not seek to advocate a position for or against gun control, or assume that gun regulation by community associations will prevent or cause additional harm to the residents governed by such regulations. Rather, the article analyzes the legal basis upon which gun restrictions by Florida community associations would be examined by a court.

Both the United States and Florida constitutions state that the right of the people to keep and bear arms shall not be infringed. In general, the federal and state constitutions limit the powers of government, not private citizens or private corporations. In certain circumstances, courts have imposed constitutional restraints on private actors. These circumstances include state action through judicial enforcement, the performance of public functions, and state involvement.

The seminal case concerning state action involves a central component to all community associations in Florida, namely, restrictive covenants. Shelley v. Kraemer, 334 U.S. 1 (1948), concerned two sets of private restrictive covenants (one in Missouri and one in Michigan). Both sets of restrictive covenants prohibited non-Caucasian persons from occupying the real property encumbered by the restrictive covenants. Preceding Shelley, the U.S. Supreme Court had invalidated restrictive state laws and local ordinance that prohibited residential occupancy based on race. The Buchanan v. Warley, 245 U.S. 60 (1917), and Harmon v. Tyler, 273 U.S. 668 (1927), cases were based upon the 14th Amendment to the U.S. Constitution being the conduit, which makes the U.S. Constitution’s fundamental rights apply to actions by state government.

Please click here for the entire article as a PDF

Community Update 2016, Volume 07

Posted in Community Update, Construction Issues & Contractual Disputes

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martinez_m2The end of the year holidays bring about many changes. Some of the most important for community associations center on new Board members and budgets which will pave the way for what the coming year is to bring. In This Issue:

Learn ways to obtain on-going assessments despite an owner’s bankruptcy filing in I Filed Bankruptcy, It’s Not My Problem!

The importance of choosing words wisely not just in speaking but in contracts, covenants and even Statutes, in Words Have Meaning and, Possibly, Meaning Lots of Money

If screening is an option for your community, then New HUD Guideline Limit the Use of Background Checks for Associations to Prohibit Discrimination will help keep your Association from running afoul of Federal guidelines.

We also announce changes planned for the Community Update Newsletter (“CUP”) in our Did you Know? series. Next year promises to be one of continued technological changes and CUP will not be left behind. In 2017 we will phase out paper copies instead providing you the same community association insight you have come to expect from Becker & Poliakoff in a digital format readily accessible with just a few clicks of the mouse or taps on your phone or tablet.

Marilyn Perez-Martinez
Editor

Florida Condominium and HOA Directors Can Usually Serve on Committees

Posted in Board Eligibility, Reader Q&A

Casual businesswoman smiling at camera during meetingQuestion: Can a board member also be a member of a committee, such as the fining committee or the landscape committee? (L.D. by e-mail)

Answer: Yes and no. Generally, a board member can also be a committee member. However, there are exceptions. Section 718.103(7) of the Florida Condominium Act defines committee as “a group of board members, unit owners, or board members and unit owners appointed by the board or a member of the board to make recommendations to the board regarding the proposed annual budget or to take action on behalf of the board.” Such committees, sometimes called “statutory committees,” may clearly contain both (or either) board members and non-board members. The composition of other committees, usually called “non-statutory committees” is not addressed in the condominium statute.

The Florida Homeowners’ Association Act, Chapter 720 of the Florida Statutes, does not define what a committee is or its permissible composition.

To add a bit more to the legal complexity of a seemingly simple topic, Chapter 617 of the Florida Statutes, the Florida Not For Profit Act, authorizes the formation of committees, but only speaks to committees comprised entirely of board members.

Finally, many association governing documents address the composition of committees, and occasionally limit who may serve on committees.

In the absence of any provision in the governing documents to the contrary, I have always interpreted the law to mean that the board can create committees and that board members may be committee members. However, if a quorum of the board has been named to any particular committee, or if the committee in question is a “statutory committee,” that committee meeting would be subject to the “sunshine” rules, including appropriately posted notice for the members, allowing for member attendance and participation, and requiring that minutes be kept. Non-statutory condominium committees must also follow the sunshine rules unless the association’s bylaws exempt them.

In the homeowners’ association context, committees are also required to follow the sunshine rules if the committee has the authority to make the final decision regarding the expenditure of association funds or the committee has the authority to approve or disapprove architectural decisions with regard to a specific parcel.

One major exception involves fining and suspension committees, sometimes called grievance committees, compliance committees, or some similar name. Both the Florida Condominium Act and the Florida Homeowners’ Association Act specifically require that such committees be comprised of individuals who are not officers of the association, directors of the association, employees of the associations or the spouse, parent, child, brother or sister of such persons.