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Florida Condo & HOA Legal Blog

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

New Laws Will Impact All Associations in Florida

Posted in Legislation, Reader Q&A

Today’s post is the second and final installment of my annual report on new laws affecting community associations. In the first installment, we looked at some of the changes for condominiums, cooperatives and homeowners’ associations in HB 791, the main Bill affecting community associations. The remainder of HB 791 includes the following:

  • Official Records (Condominiums and Cooperatives): The bill amends the official records “catch-all” provision which currently provides that “all other records of the association…which are related to the operation of the association” are official records. The new law states that these “other” records are limited to “written” records. This makes the condominium and cooperative statute consistent with the HOA statute. So, non-written records (for example audio tapes of board meetings or security camera video recordings) are presumably not “official records” under the new law and thus not available for owner inspection as a matter of right.
  • Extension of Distressed Condominium Relief Act (Condominiums): The bill extends the “distressed condominium relief act” also known as the “bulk buyer law” until July 1, 2018. Currently, the bulk buyer law is set to expire on July 1, 2016. This law gives companies that buy out distressed condominium projects immunity from various obligations affiliated with being a developer.
  • Insurance (Condominiums): The bill removes the provision that requires the association to be responsible for “uninsured losses.” This is a glitch fix and is intended to clarify that the association’s obligation to subsidize insurance shortfalls for items that may otherwise be the unit owner’s responsibility and limited to situations where the association is responsible to insure the damaged element.

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Can HOA Prevent Flag Pole In My Yard?

Posted in Covenant Enforcement/Violations, Reader Q&A, Rules & Regulations

ThinkstockPhotos-76806835Question: I live in a community governed by a homeowners’ association and recently asked permission to install a permanent flag pole on my lot. My homeowners’ association denied the request and stated that the documents only permitted the use of portable and removable flags and only allowed the display of the flag on specific dates. Can my homeowners’ association do this?  J.B. (via e-mail)

Answer: Probably not.

Section 720.304(2) of the Florida Homeowners’ Association Act provides that any homeowner may display one portable, removable United States flag or official flag of the State of Florida in a respectful manner, and one portable, removable official flag, in a respectful manner, not larger than 4½ feet by 6 feet, which represents the United States Army, Navy, Air Force, Marine Corps, or Coast Guard, or a POW-MIA flag, regardless of any covenants, restrictions, bylaws, rules, or requirements of the association. This law was written in 2002 and perhaps formed the basis of the provisions of your governing documents.

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Does a Condominium Owner in Florida Have the Right to Have Records Mailed to Her?

Posted in Fiduciary Duty of Board of Directors, Official Records, Reader Q&A

ThinkstockPhotos-464628879Question: I requested that my homeowners’ association send me a copy of the association’s contract with the pool cleaning company. I sent this request via certified mail, but the association has refused to send me a copy. Rather, the association president is insisting that I go to the office to review a copy. He further noted that a copy will only be provided if I request a copy and pay for the copy in advance. Is this legal? S.M. (via e-mail)

Answer: Yes. Chapter 720 of the Florida Statutes, now officially known as Florida’s “Homeowners’ Association Act”, addresses this issue. Section 720.303(5) of the law provides that an association’s failure to provide “access” to official records within 10 business days after receipt of a written request submitted by certified mail, return receipt requested, creates a “rebuttable presumption” that the homeowners’ association willfully failed to comply with the association’s duty under the statute.

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Fair Housing Law: U.S. Supreme Court upholds disparate impact claims

Posted in Discrimination/Fair Housing

lisa 100 women picture alternativeCan enforcement of a rule, regulation, practice or procedure that is completely neutral on its face create liability for discrimination?  The U.S. Supreme Court said “yes” today in the case of Texas Dep’t of Housing and Community Affairs v. The Inclusive Communities Project.

The Inclusive Communities Project (ICP) claimed that awarding the bulk of low-income housing tax credits in predominantly black inner-city areas as opposed to predominantly white suburban areas continued segregation in housing patterns.  The trial court found that ICP met its initial burden to prove there was a disparate impact and then expected the Texas Dep’t of Housing and Community Affairs (Texas) to prove there were no less discriminatory alternatives that would meet goals established by the program. Texas claimed that shifting the burden of proof violated the law.  That issue, whether discrimination can be based upon a disparate impact, was fought all the way up to the U.S. Supreme Court and a decision was rendered today.

In 2013, HUD adopted federal regulations recognizing disparate impact claims. Under the rules, once a plaintiff was able to show that a practice or rule had a disparate impact on a protected class, the defendant had to show that the rule or practice was necessary to achieve legitimate non-discriminatory purposes that could not be achieved by other means.  Various parties challenged the enforceability of those regulations.

A portion of that Rule (§100.5000) establishes the burden of proof in discriminatory effect cases. It says:

(1) The charging party, with respect to a claim brought under 42 U.S.C. 3612, or the plaintiff, with respect to a claim brought under 42 U.S.C. 3613 or 3614, has the burden of proving that a challenged practice caused or predictably will cause a discriminatory effect.

(2) Once the charging party or plaintiff satisfies the burden of proof set forth in paragraph (c)(1) of this section, the respondent or defendant has the burden of proving that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests of the respondent or defendant.

(3) If the respondent or defendant satisfies the burden of proof set forth in paragraph (c)(2) of this section, the charging party or plaintiff may still prevail upon proving that the substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice that has a less discriminatory effect.

(d) Relationship to discriminatory intent. A demonstration that a practice is supported by a legally sufficient justification, as defined in paragraph (b) of this section, may not be used as a defense against a claim of intentional discrimination.

What does disparate impact mean?   Well if rules, conditions, or practices in connection with the sale or rental of a dwelling, or services or facilities in connection with that dwelling, have a disproportionate adverse impact against persons in protected classes, the rule or practice may be deemed illegal discrimination, regardless of intent.

How does this apply to condominium, cooperative and homeowners’ associations?

You may run afoul of familial status (families with children) protection for one.

The term “familial status” is defined as having an individual or individuals under the age of eighteen living with their parent(s) or legal guardian(s). This includes adopted children, foster children, and stepchildren, as well as any person who is pregnant or in the process of obtaining custody or guardianship of a child under eighteen.

Take a close look at your governing documents, especially the rules and regulations.  Are there rules prohibiting children from engaging in certain activities?  Do the rules prohibit children from using any of the amenities?  Do you have an old provision in the declaration prohibiting children from under a certain age from becoming permanent residents?  If so, speak with legal counsel right away.

Courts have held community associations liable for discrimination by prohibiting “unaccompanied” minors from using the community pool or recreational facilities, for imposing limitations on the number of persons that may reside in a particular dwelling, for establishing “adult only” hours of use of facilities, for rules prohibiting children from “running or playing” on the common elements and the like.  With this ruling, it is now more important than ever to review your existing rules, practices and those old out-dated governing documents.

Here is a link to the actual Opinion itself:  http://www.supremecourt.gov/opinions/14pdf/13-1371_m64o.pdf

 

New Laws for Florida Condominiums, Cooperatives & HOAs Go Into Effect July 1st, 2015

Posted in Legislation, Reader Q&A

capitol_nolan.jpgToday’s column begins our annual review of new laws affecting community associations, condominiums, cooperatives, and homeowners’ associations. Governor Rick Scott, signed HB 791 into law effective on July 1, 2015. HB 791 impacts condominiums, cooperatives, and homeowners’ associations.

(1) Electronic Voting (Condominiums, Cooperatives, and Homeowners’ Associations): The bill provides that associations may conduct elections and other membership votes by utilizing an electronic (interned-based) method. The bill also specifies the requirements necessary to establish an electronic voting method, including a board resolution. The bill requires that an owner consent to online voting, and if the owner does not consent, the owner is entitled to vote by paper ballot.

(2) Digital or Electronic Transmission of Proxies (Condominiums, Cooperatives and Homeowners’ Associations): The current law does not specifically authorize owners to transmit a copy of their proxy to the association (for example, by fax or a scan of the proxy sent via email). The intent of this language is to facilitate voting. Many owners are not available to be at meetings in person and may wish to bypass U.S. mail and send their proxy to the association in some other fashion. The proposed language is similar to language currently found in Section 607.0722(10), Florida Statutes, which governs corporations for-profit. The proposed language is being added to Section 617.0721, Florida Statutes, which governs corporations not-for-profit, and therefore, will also apply to condominium, cooperative, and homeowners’ associations.

(3) Electronic Notice to Owners (Condominiums, Cooperatives, and Homeowners’ Associations): Currently, in order to provide notice to owners electronically, the bylaws must provide for electronic notice and the owner must consent in writing. The bill removes the requirement that electronic notice be authorized by the bylaws. Therefore, as long as the owner consents in writing, the association can provide the owner with electronic notice.

(4) Fines/Penalties (Condominiums, Cooperatives, and Homeowners’ Associations): The bill clarifies that it is the board of administration of the association that is responsible for levying any fines. Furthermore, the committee formed to hear cases regarding potential fines must be impartial and limited to that purpose. It also clarifies that the role of the fining committee is to confirm or reject the fine levied by the Board.

(5) Suspension of Voting Rights (Condominiums, Cooperatives, and Homeowners’ Associations): The bill provides that if an owner or member’s voting rights have been suspended for any reason, the total number of votes of the suspended member(s) must be reduced from the total number of voting interests of the association when calculating the vote needed for any action. The bill also provides that the suspension of voting rights or right to use common elements applies to members and tenants and guests, regardless of number of units owned by the member.

(6) Application of Payment/Assessments (Condominiums and Cooperatives): Current law provides for a specific order in which payments received from a unit owner are to be applied (first accrued interest shall be paid, followed by any administrative late fees, then any costs and attorney’s fees, and, finally, the delinquent assessment). The bill amends Sections 718.116(3) and 719.108(3), Florida Statutes to clarify that the required distribution of delinquent assessment payments applies in spite of any purported “accord and satisfaction.” This change is intended to overrule a 2014 appeals court case that held that if a check is tendered for less than the total amount of a disputed claim, the acceptance creates an accord and satisfaction if the tender is accompanied by an offer to settle for the tender amount. The case raised concerns as to whether an association could accept partial payment for a delinquent assessment.

Next week, I will complete the 2015 legislative review.

How Does Board Certification Work With Re-Elected Condominium Association Board Members?

Posted in Board Eligibility, Fiduciary Duty of Board of Directors, Reader Q&A

ThinkstockPhotos-180411432Question: I know you have addressed the new board member certification requirement previously, but my question involves when a director is considered “newly elected.”  Would a board member who has continuously served on the board, prior to the amendment to the statute, but who has now been re-elected to the board be “newly elected” and have to comply with the certification requirement? G.G. (via e-mail)

Answer: In my opinion, yes. Both the Condominium Act, Chapter 718, and the Homeowners’ Association Act, Chapter 720, have been amended to require that board members be “certified.”  There are two ways a board member can comply with the certification requirement. The board member can sign a form that has been developed by the Division of Florida Condominiums, Timeshares and Mobile Homes that states he or she has read the association’s declaration of condominium or covenants, as applicable, articles of incorporation, bylaws and written rules and policies and that the board member will work to uphold such documents and policies to the best of his or her ability and faithfully discharge his or her fiduciary responsibility to the association’s members. In lieu of signing the written certification, the newly elected or appointed director may submit a certificate demonstrating that he or she has satisfactorily completed an educational curriculum administered by a Division-approved education provider.

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Florida Condos & HOAs: Are you ready for electronic voting?

Posted in election, Elections, Legislation, Meetings, Operations

lisa 100 women picture alternativeEvery year I hear the same complaints about the procedures associated with obtaining a membership vote to approve some action or with respect to the election itself.  Apathy on the part of owners can really restrict community operations.  Many communities are stuck with governing documents written in the “dark ages” and cannot take advantage of statutory changes, more clearly delineate maintenance responsibilities between the owners and the association or make improvements for the benefit of the community at large, even if a majority of the owners truly desire that change. This is even more of a problem in large communities that haven’t held elections in years.  When not enough HOA members participate, there is no quorum, and the meeting scheduled for the election turns into a gathering for discussion purposes without any real corporate action taken.

Wouldn’t you have better owner participation if voting was easier? 

What about allowing owners to vote on association matters from the comfort and privacy of their home?  

New laws taking effect July 1, 2015 will finally bring community associations into the 21st Century, at least with respect to voting.  Community leaders and CAMs can get ready to dispense with complicated double balloting for elections and confusing proxies.  They can also get ready to deal with the anticipated barrage of providers purporting to comply with the requirements imposed by this law.  Electronic voting is not as easy or as simple as writing either “yes” or “no” in an email and clicking the “send” button.  There is a lot of legwork to be done before the first vote.

The association’s Board of Directors is required to adopt a resolution to implement electronic voting at a duly called meeting noticed at least 14 days in advance and must:

  • Have the owner’s written consent to online voting;
  • Have a method to authenticate the identity of the voter;
  • Have a method to ensure the secrecy and integrity of each election ballot; and then
  • Test the system and confirm, at least 14 days before the vote that the owner’s computer, tablet, Smartphone or other device communicates correctly with the system.

Mailings may still be required even after developing the procedures, collecting owner written consents and testing the system.  Owners that consent to electronic voting may “opt-out” later on, creating administrative burdens on management or the Board of Directors.

The system itself must:

  • Authenticate the voter;
  • Authenticate the vote itself (ensure it wasn’t modified or altered in transit);
  • Transmit a receipt to the voter;
  • Separate the identity of the voter from the vote itself (with respect to elections); and
  • Store and keep votes accessible for future record inspections or other purposes.

Who will be the first to offer a compliant service in Florida?  How can you, as a CAM or community leader, be assured the program itself is compliant?  How much will this all cost?  Those and other questions have yet to be answered.  Chime in if you have thoughts to share.

 

Is A Hearing Required Before Attorney’s Fees Are Assessed Against Condominium Owner?

Posted in Assessment Collection, Owner Payment Responsibility, Reader Q&A, Suspensions, Fines & Remedies

ThinkstockPhotos-100682488Question: I read one of your recent blogs on the levy of fines by associations. Do the same “due process” requirements apply to collecting attorney’s fees from a unit owner? J.M. (via e-mail)

Answer: No. The Florida statutes applicable to condominiums, cooperatives, and homeowners’ associations state that an association cannot levy and collect a fine unless notice is first given that a fine is sought to be imposed and an opportunity for hearing is provided before a committee of non-board members upon no less than fourteen days’ notice. The “fining committee” basically has the right to “veto” a board decision to levy a fine.

Attorney’s fees are generally not collectible from an owner unless awarded by a court. One exception involves the collection of unpaid assessments. Under the applicable statutes and most governing documents, pre-litigation attorney’s fees incurred in collecting delinquent assessments are added to the amounts due. Further, under the “application of payments” provisions of the statutes, payments made on delinquent accounts are applied to attorney’s fees before the principal amount due.

There is no legal right to a hearing to determine whether or not the attorney’s fees are owed, the obligation is imposed by statute. If the fees are unreasonable, or if the account was not in fact delinquent, you would have the right to withhold payment, but would have to contest the propriety of the fees in court, with substantial exposure (including lien foreclosure and more attorney’s fees) if you lost your argument.

Should Background Checks Be Performed On Renters in Florida Condominiums?

Posted in Reader Q&A, Rental

ThinkstockPhotos-101149911Question: Our condominium association would like to conduct background checks for rental applicants. Our manager advises that we cannot do this because our documents do not permit it, and that we would need one hundred percent approval from the owners. Is this correct? R.S. (via e-mail)
 
Answer: No. Your board should not be asking its property manager for legal advice, nor should the manager give such advice. It puts both parties in jeopardy should someone choose to press the issue.

Normally, I recommend that the right to approve tenants be contained in the declaration of condominium, or at least the bylaws. A well-written “tenant approval” provision will cover many topics, including how long an application must be filed in advance, the type of information the association is permitted to ask for, how many days the association has to consider an application, what grounds can be used for the basis of disapproval, and the like.

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Can Condominium Associations Enter Foreclosed Units?

Posted in Covenant Enforcement/Violations, Foreclosures, Reader Q&A

ThinkstockPhotos-147689747(1)Question: Our condominium association has a unit where the mortgage was foreclosed. It has been sitting empty for seven months. The asset management company for the bank changed the locks and put a “lock box” on the door for use by realtors. We have concerns about this unit because there has been no electricity for some time and we are worried about mold. Can the condominium association demand access to the unit?  A.M. (via e-mail)
 
Answer: Yes. A foreclosing lender, such as a bank, is subject to almost all provisions of Chapter 718 of the Florida Statutes, known as the Florida Condominium Act. The main exception to the general applicability of the statute as to units owned by foreclosed lenders has to do with unpaid assessment amounts due after the foreclosure.

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