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Florida Condo & HOA Legal Blog

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

Can a Candidate Withdraw From a Condominium Election and Then Change Their Mind?

Posted in Elections, Governing Documents, Voting

Can a Candidate Withdraw From a Condo Election and Then Change Their Mind?Question:  The bylaws of our condominium association specify that the board of Directors shall be comprised of not less than five nor more than seven members.  Six members filed their applications for candidacy by the required deadline (40 days before the annual meeting).  One of the members subsequently sent an email requesting that their application be withdrawn.  Upon learning at our regular board meeting, held four weeks prior to the annual meeting, that there were only five candidates and would thus be no need for an election, this member verbally requested to have their application re-instated.  Can this member be seated on the new board at the annual meeting? R.S. via e-mail

Answer: No. A candidate for the election, who has submitted their written notice of intent to run for the board by the deadline, may withdraw from the election by sending the association a written statement to that effect.  The e-mail sent by the candidate in question does constitute a “writing” and the association should implement that withdrawal upon receipt.  Since the self-nomination deadline has passed, and the withdrawal takes effect upon receipt, the candidate does not have the right to reconsider their withdrawal. Based on the facts you have provided, there is no need for an election.

If your association receives the withdrawal notice before the ballot package is sent out, the second notice of annual meeting should be revised before mailing since there will be no election. However, if the association receives the notice of withdrawal after the ballot package is sent out, the association should send out a supplemental notice to the owners confirming that there will be no election as a result of the recent withdrawal by one of the candidates.

You should also ask your association’s attorney about the proper size of your board. I almost never include a range of permissible board members in the governing documents I draft.  Instead, I prefer the bylaws to establish a specific, non-fluctuating number of directors. The Florida Condominium Act states that the size of the board must be specified in the bylaws. If the bylaws fail to set a size, the default number of five directors is imposed by the statute. The state agency which arbitrates condominium election disputes has ruled that this type of bylaw language, similar to what you have noted (5 to 7 directors), results in a default of five directors if the number is not set in advance of the election.  Their rationale is that you can’t set the size of the board at the membership meeting where the election occurs because you have to know how many seats are open to prepare the ballots.

Voter Apathy Plagues Florida Community Associations

Posted in Association Documents, Voting

Voter Apathy Plagues AssociationsQuestion: Our condominium association has been trying to amend our condominium documents since the developer sold out 10 years ago. The documents require 75% of all unit owners for amendment. This has failed several times, primarily due to voter apathy. Is there anything the board can do to amend the documents? (R.M. by e-mail)

Answer: If at first you don’t succeed, keep on trying. I have found that the best way to get this type of project completed is to appoint a committee of enough volunteers so that every owner can be called and asked to vote (either yes or no). While the Association should not bother or harass people, it is not unreasonable to ask them to put in at least enough effort to fill out a proxy form. Some associations also “knock on doors” to get proxy votes. While perhaps a bit aggressive, I don’t think there is a legal concern about doing this (though there might be in an association where members own their land).

There is no provision in the law that allows you to follow a different procedure than what is provided in your documents. If your documents require the approval of 75% of all members, the documents can only be amended if approval is obtained. This can be difficult when members simply do not vote, as these members are considered to have voted “no” on the matter.

The board may wish to propose an amendment only dealing with amendment procedures. To account for voter apathy, the required vote for future amendments can be based on only those members who are present, in person or by proxy, and voting. While you will still need to obtain the approval currently set forth in the documents (75% of all units), if the amendment is approved, future non-voters will no longer count as “no” votes.

Why the Florida Legislature Needs to Fix Condo Sprinkler-System Problem | Sun Sentinel Opinion

Posted in Common Areas, Fire Sprinklers, Safety and security, Uncategorized, Water Sprinklers

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bogdanoff_e_20161004For more than a decade older high-rise condominiums throughout Florida have been discussing, debating, and exercising their legal rights with regard to sprinkler system retrofitting requirements. In 2003, the Florida Legislature responded by allowing each community to vote to opt out of sprinklers inside their units and the right to opt out of installing an engineered life safety system (ELSS). Many communities missed the opportunity to exercise this right because they were pressured by their local fire marshals to hire life safety engineers and commence installation of a full sprinkler system at a significant cost to the residents.

In 2010, responding to the outcry from the condominium community, as a member of the Florida House I sponsored House Bill 561 to allow associations the right to opt-out of sprinklers in the common areas and reduced the vote requirement from 2/3 to a simple majority. However, as a compromise, the words “engineered life safety system” were removed from the statute because we were assured that an ELSS system was cost effective, and much less intrusive than the installation of a fire sprinkler system. As a result, associations taking an opt-out vote after July 1, 2010 could not opt out of an ELSS.

Now, fast forward to January 2017. Scores of local fire marshals throughout the Sunshine State are knocking on the doors of high-rise condominiums that previously opted out of sprinklers (and some who opted out of both sprinkler systems AND ELSS) and advising them that they must immediately hire life safety engineers and begin to pull permits to install an ELSS. Many of these same officials are telling high-rise condominiums that an ELSS will actually be MORE expensive and more intrusive to install than a full sprinkler system.

Moreover, there is no clear description of what an ELSS system looks like and some are being told that they will need to install a comprehensive fire sprinkler system to “pass the test,” so to speak.

In 2010, I responded to the requests of the condominium communities across this state. It was our intent to avoid the exact scenarios we are faced with today. The cost to install an ELSS could be in the millions and the impact to elderly residents living on fixed incomes could be devastating.

Where do we go from here?

The 2017 Legislative Session begins on Tuesday, March 7. Representative George Moraitis (R-Fort Lauderdale) has sponsored HB 653 (Senator Kathleen Passidomo (R-Naples) will sponsor the Senate version) which seeks to address the ELSS problem. This bill would allow older high-rises to opt out of an ELSS and, for those who do not or cannot, provides more time for installation of an ELSS beyond the current 2019 deadline. HB 653 also addresses the confusion that erupted in mid-2016 concerning whether low and mid-rise buildings are required to retrofit and clarifies that they do not. This will be a huge fight against the special interests that profit from this requirement and those that have little evidence that installing an ELSS is necessary for the safety of residents.

It is imperative that our elected officials understand that a promise made must be kept. We promised more than a million Floridians living in older multifamily buildings that were code-compliant at the time they were constructed that they would not have to undergo the financial or operational rigors of retrofitting their buildings. Call it a full sprinkler system, an ELSS, or something else entirely, the fact remains that our condominium residents should not be facing a deadline they thought was in their rear view mirror.

Former State Sen. Ellyn Setnor Bogdanoff is a shareholder with Becker Poliakoff, a Fort Lauderdale headquartered law firm, and represents a number of condominium associations throughout Florida on the ELSS issue in Tallahassee.   

Assessments and Combined Lots in Florida HOAs

Posted in Assessment Collection, Association Documents, Governing Documents, taxation

Senior black couple standing outside a large suburban houseQuestion: I live in a homeowners’ association community. Recently, one of our owners purchased the vacant lot next to their home. The owner has now combined the properties into one parcel with the taxing authorities and is now demanding that the association only charge them assessments for one lot, instead of two. Is this appropriate? (B.R by e-mail)

Answer: Probably not. Much of the answer will lie in the language in your governing documents and the version of the law which existed when they were initially recorded. Generally speaking, combining two lots into one property for property tax purposes, has nothing at all to do with the status of the lots under the governing documents of the association, including (but certainly not limited to) voting rights and assessment obligations.

Combining two lots into one lot for association purposes would be unusual, but not necessarily impossible (which is the case in the condominium context unless you have unanimous approval of all owners). First, you (or more accurately, your attorney) would have to review the applicable revisions of the governing documents. Section 720.306(1)(c) of the current version of the Florida Homeowners’ Association Act generally prohibits amendments to the governing documents which change the percentage by which owners share in the common expenses of the association, unless approved by all owners. However, this is a fairly recent addition to the law and older homeowners’ associations may be subject to a different version of the statute. Also, even the current law allows the governing documents to distinguish between assessment obligations for lots based on the state of development.

However, the mere fact that an owner has combined two lots into one parcel for property tax purposes changes nothing, in and of itself. I suspect an amendment to your governing documents is required and the association’s counsel should be able to assist in stating how that could be done, or if there is any obligation to even attempt to do so.

Florida Condominium and HOA Fining Laws are Slightly Different

Posted in Covenant Enforcement/Violations, Legislation, Suspensions, Fines & Remedies, Uncategorized

Row of brightly painted housesQuestion: There seems to have been a lot of change in the law about fining. Has the legislature finally made the condominium statute and the homeowners’ association statute the same on this issue? (C.M. by e-Mail)

Answer: More or less. The legislature is getting closer to making the statutes identical, but there are still a few minor differences. For an overview of the fining (and suspension process), see my column dated September 15, 2016, titled “Association Has Several Options to Enforce HOA Documents.

The first difference is who may serve on the independent committee. The condominium law only allows unit owners to be committee members. Those unit owners cannot be on the board or live with a board member. There is no ownership requirement found in the homeowners’ association statute, although the bylaws would still have some role on the composition of committees. The only restriction in the HOA law is that committee members may not be officers, directors, or employees of the association, or the spouse, parent, child, brother or sister of an officer, director, or employee.

There is also a difference between the two laws regarding the required number of committee members. The Homeowners’ Association Act states that there must be a minimum of three members on the committee, but the Condominium Act is silent. The Florida Not for Profit Corporation Act provides that a committee must have at least two members.

The statutes differ materially regarding the amount of a fine that can be imposed. The Condominium Act provides that no fine may be more than $100.00 per day and the total fine may not exceed an aggregate of $1000.00. The Homeowners’ Association Act contains similar limits, but also allows both a higher daily and aggregate amount if established in the association’s governing documents.

Homeowners’ associations provide that fines of $1000.00 or more may become a lien on the property. The Condominium Act prohibits fines from being secured by a lien.

Community Association Leadership Lobby What Community Association Bills Have Been Filed So Far?—CALL Alert for February 1, 2017

Posted in Budgets, Reserves & Financial, CALL Alert, Legislation, Uncategorized

Community Association Leadership Lobby

goin_y_20140606The Florida Legislature met in Talahassee for two weeks in January, but so far, no community association bills have been heard in committee. The House Judiciary Committee, chaired by Representative Chris Sprowls, did hear a presentation about “Condominium Terminations” and the termination provisions in Section 718.117, Florida Statutes.  We expect that there will be legislation filed on this subject.

The following are a few bills of note that have been filed so far:

SB 398/HB 483, Relating to Estoppel Certificates: The bill sets a “cap” on the amount that can be charged for estoppel certificates and prohibits associations from collecting the fee when the certificate is prepared. The bill also requires the association to provide a long list of information in the estoppel certificate, in addition to the amounts owed to the association.

SB 294, Relating to Condominium, Cooperative and Homeowners’ Associations: The bill requires associations with less than 50 units to prepare a financial report based on the association’s annual revenues. In addition, if an association fails to provide the financial report to the owners, the owners are prohibited from waiving the financial report for three (3) consecutive years and must file a copy with the State for those three (3) years.

HB 295, Relating to Homeowners’ Associations: The bill, among other things, increases the damages to be paid to an owner for the willful denial of access to official records from $50 per day to $500 per day, for up to 30 days; revises the turnover provisions; allows election and recall disputes to be mediated; provides for binding arbitration by the Department of Business and Professional Regulation (DBPR) for disputes involving, among other things, covenants, restrictions, rules enforcement, assessments, and official records; requires DBPR to provide training and educational programs for HOA board members;  provides that DBPR may enforce the HOA Act and may investigate complaints against an HOA; and provides for a cause of action against developers by the HOA or nondeveloper members of the HOA. The bill does not provide a funding mechanism for the additional responsibilities of the DBPR and therefore, it is unclear who will pay for the cost of the additional regulation on HOAs.

HB 135, Relating to Homeowners’ Associations: The bill provides an election procedure for HOAs with more than 7500 parcels.

SB 318, Relating to Covenants and Restrictions of Property Owners’ Associations: The bill is related to the Marketable Record Title Act (MRTA).  Last year’s version of the bill would have exempted the covenants and restrictions of a homeowners’ association from MRTA.  Unfortunately, because of opposition from the title industry, last year’s bill did not pass.  This year’s bill, while well-intentioned, is not very helpful to homeowners’ associations, and may actually create additional burdens.

The Legislature meets again starting on February 6 and the legislative session starts on March 7. The CALL Legislative Bill Report will continue to be posted on the CALL website, www.callbp.com, and will be updated periodically.

Very truly yours,

Yeline Goin, Executive Director
Community Association Leadership Lobby (CALL)

Landscaping Violations Should be Resolved Early in Florida HOAs

Posted in Governing Documents, Landscaping

Florida Lanscaping Condo Becker PoliakoffQuestion: I was recently elected to the board of directors for my homeowners association. One of the issues that led me to run was better enforcement of the restrictions in our governing documents. One of the homes in our community installed landscaping which violates our regulations. I have learned that the board was aware of this landscaping issue when it happened and that is was installed over ten years ago. Is there anything the association can do now? (C.G. by e-mail)

Answer: Probably not. The governing documents of a homeowners association, which typically include the declaration of covenants and restrictions, the articles of incorporation, and the bylaws, are generally considered a contract between the association and the owners. Like any contract, the documents can be enforced by either party if there is a breach of contract, such as an owner installing landscaping without approval, if approval is required by the documents.

Florida law imposes a statute of limitations on actions to enforce contracts. Section 95.11(2) provides that an action to enforce a contract must be brought within five years. Here, if the owner in question installed landscaping, which was a violation of the governing documents, the association would be required to bring an action to enforce the governing documents within five years. If the landscaping was installed over ten years ago, it is likely that the association would be barred by the statute of limitations bringing an enforcement action.

HOA Board Members Should be Wary about Contracting with Their Association

Posted in Budgets, Reserves & Financial, Fiduciary Duty of Board of Directors, Landscaping, Service Contracts

Man trimming hedges with shearsQuestion: I own the company that provides landscaping services to the community where I live. The association recently sent out a notice soliciting self-nominations for the board of directors. I submitted my nomination, but the board has indicated that I am not eligible to run given the current contract between the association and my landscape company. Is this correct? (F.P. by e-mail)

Answer: No, while it is probably not wise for you to be on the board, you are legally eligible.

The Florida Homeowners’ Association Act identifies three circumstances where a member is ineligible to run for the Board. A member is ineligible to run if he or she (1) is delinquent in the payment of any fee, fine, or other monetary obligation to the association on the day that he or she could last nominate himself or herself or be nominated for the board, (2) was convicted of any felony in Florida or convicted of an offense in another jurisdiction that would be considered a felony in Florida, unless his or her civil rights have been restored for a period of at least five years as of the date on which he or she seeks election to the Board, or (3) has a pending charge of felony theft or embezzlement offense involving the association’s funds or property.

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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.