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Florida Condo & HOA Legal Blog

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

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.

Investment of Condominium Association Funds Warrants Caution

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

ThinkstockPhotos-532147913Question: I am a member of my condominium association’s board of directors. Recently, we were discussing how the association’s reserve funds should be invested. Historically, we have kept the association reserve funds in savings accounts and CDs, which are fully insured. However, the returns on these accounts have been minimal. Certain members of the association are insisting that the association diversify how the reserve funds are invested, including investing in the stock market. Is this appropriate for a condominium association? (J.M. by e-mail)

Answer: The Florida Condominium Act does not specifically address what type of financial institutions an association may use, or how funds may be held or invested. It is not uncommon for an association’s bylaws to require that funds only be deposited in insured accounts. Therefore, before the association could consider if other investment vehicles are appropriate, the association would have to review the condominium documents to confirm that there is no express limitation on the types of financial accounts the association may maintain.

In my opinion there is cause for substantial concern with an association placing its reserve funds in investments that carry risk, like the stock market. I have seen associations lose money in non-guaranteed investments, sometimes major sums. It often gets ugly. Simply stated, I do not recommend it.

The association is investing funds as a fiduciary. Return should be the lowest priority on the totem pole. Safety should always be the board’s main objective, and then liquidity. While we all have different tolerances for risk when investing our own money, different considerations apply when the association is in essence acting as the caretaker for the money of others.

Listen Live to Donna DiMaggio Berger on Topical Currents Discussing “Sprinkler Opt-outs”

Posted in Common Areas, Water Sprinklers

Donna DiMaggio Berger, Sprinkler Opt-outs, Topical Currents

Donna DiMaggio Berger, Shareholder in Becker & Poliakoff’s Community Association Law Practice Group will appear on WLRN’s Topical Currents with Joseph Cooper Wednesday, November 30 at 1:00 PM. The topic of this episode will be “Sprinkler Op-outs”. Please call in and join the discussion!

For more information and a link to the show’s archive, please visit: http://wlrn.org/programs/topical-currents

The call-in line is 1-800-743-9576 — 1-800-743-W-L-R-N (9576). You can also email your questions to radio@wlrn.org. For cell phone area codes outside South Florida, you can also dial directly 1-305-995-1800.

For more information on this topic, please visit: http://soflcooperator.com/article/sprinklers-life-safety-systems/full#cut

Grant Funding Available Now for Wind Mitigation Retrofits for Vulnerable Condominium Community in Florida

Posted in Construction, Housing for Older Persons (55 and Over), Safety and security

Becker & Poliakoff Condo LawyersFAIR (Florida Association for Insurance Reform) is seeking a low to moderate income condominium community to benefit from a Residential Construction Mitigation Program (RCMP) grant from the Florida Division of Emergency Management.  The $194,000 grant will be used to supplement the cost of wind mitigation improvements that increase community safety and reduce insurance premiums and energy costs.  Senior communities receive preference.

Funding must be used for a systemic approach to wind mitigation that involves the entire residential structure; for example, replacing roof coverings as well as installing wind-resistant windows and doors.  Grant money will be awarded to residents with the most financial need.  PACE (Property Assessed Clean Energy), grant assessments, or other financing, can be used to finance the balance of the project costs.

FAIR will use the grant-funded project as a case study to present options and strategies for wind mitigation, creating a blueprint for community associations throughout Florida on how to plan and execute similar wind mitigation projects using a combination of PACE financing, grant money, and other funds to finance the improvements.  Actual insurance and energy savings will be documented to provide better guidance on cost benefits and payback periods.

If your condominium association is a senior (55+) and/or low to moderate income community in Florida and is interested in this grant funding, please contact FAIR at (754) 200-4538, mdeen@floridainsurancereform.org.  The deadline is Monday, December 12, 2016.

Before applying for the grant, please be sure that your Board has a clear understanding as to whether there are any requirements for an owner vote for alterations to the roofs, windows, and doors.  Contact your association attorney if you have any questions.

Are Social Event Expenses a Proper Expense for Florida Condominium Associations?

Posted in Association Documents, Budgets, Reserves & Financial, Governing Documents, Reader Q&A

Question: My condominium association holds an annual holiday party at a nearby restaurant. The association pays for everything, including the banquet hall, food and refreshments, by using common funds. Is this a proper common expense? J.A.

Answer: Maybe. Your condominium association’s governing documents likely include a definition of “common expenses.” If this definition specifically includes social event expenses, like the expenses referenced in your question, it is likely that these expenses will be considered a proper common expense. If, however, your governing documents do not include social event expenses within the definition of common expenses, these expenses may not be considered a proper common expense. Like many community association legal issues, the specific facts of a given situation will dictate the answer.

The Division of Florida Condominiums, Timeshares and Mobile Homes has jurisdiction to investigate complaints from owners who allege that their condominium association is impermissibly spending common funds. As part of any investigation, the Division will closely scrutinize the subject expense and the scope of the common expenses, as defined by the governing documents. If the Division feels that the subject expenses exceed the authority contained in the governing documents, they have the right to pursue enforcement efforts against the association. The amount of the social event expenses and what the expenses are being used for will be relevant factors in any Division investigation.

Many condominium association governing documents do not include social event expenses within the scope of the common expense definition. For those associations, who wish to pay for social event expenses via common funds and avoid the risk of a legal challenge or penalty being imposed by the Division, an amendment to the governing documents can be pursued.

Condo Association Must Make Records Available Within Five Working Days of Written Request

Posted in Official Records, Reader Q&A

Woman writing on paperQuestion: In a recent article, you stated that the Florida Condominium Act requires associations to make records available within 5 working days of a written request. However, I thought that the Association has 10 working days to provide access to the records. Which is correct? (P.G. by e-mail)

Answer: You are referring to my column  “7 Year Rule Does Not Apply to All Condo Records.”

In that column, I was referring to Section 718.111(12) of the Florida Condominium Act, which requires condominium associations to keep official records for 7 years, with certain exceptions. Additionally, pursuant to Section 718.111(12)(b), Florida Statutes, the official records of the association must be made available to unit owners for their inspection within 5 working days of a written request. However, Section 718.111(12)(c), Florida Statutes provides, in relevant part, as follows: “The failure of an association to provide the records within 10 working days after receipt of a written request creates a rebuttable presumption that the association willfully failed to comply with this paragraph. A unit owner who is denied access to official records is entitled to the actual damages or minimum damages for the association’s willful failure to comply. Minimum damages are $50 per calendar day for up to 10 days, beginning on the 11th working day after receipt of the written request.”

Accordingly, the association is obligated to make records available within 5 working days of receipt of a written request. However, the association is not penalized, and the rebuttal presumption that the association has willfully failed to comply with an owner’s right to inspect records does not arise, if the records are made available within 10 working days.

Florida HOA Board Required to Act in Response to Member Petition

Posted in Meetings, Reader Q&A, Voting

Question: I am the president of my homeowners’ association and recently the board voted to proceed with a construction project within the community. Shortly after the vote, the association received a petition signed by a number of owners asking the board to reconsider the issue. Since the board has already discussed and voted on this issue, the board would prefer not to do so again. Does this petition mean the board must consider the issue again and change its decision? (R.B. by e-mail)

Answer: Both Chapter 718, Florida Statutes, the Florida Condominium Act, and Chapter 720, Florida Statutes, the Florida Homeowners’ Association Act, contain a provision that allows association members to petition the board to address a particular matter. Both statutes provide that, if the association receives a petition signed by at least 20% of the total voting interests in the association, the board is required to place the subject of the petition on the agenda of the next regularly scheduled board meeting or a special board meeting called for that purpose. The meeting at which the board will consider the agenda item must be held no later than 60 days after the receipt of the petition.

The fact that the association has received a petition does not require the board of directors to take any specific action or change its previous decision. The only obligation is for the board to place the item on the agenda of a board meeting and address the item at the board meeting. Members must be given the opportunity to speak on the agenda item, but the members have no mechanism by which they can change the decision of the board.

Condo Balcony Grills Still A Burning Issue in Florida

Posted in Reader Q&A, Safety and security

Question: In your February 10, 2016 blog post, you stated that electric grills are no longer permitted to be used or stored on condominium balconies. I consulted with our local fire marshal who issued a letter that says that only gas and charcoal grills are prohibited. Which is correct? (R.J. by e-mail)

Answer: You are referring to my column titled “Grilling on the Balcony: What is Permissible in Florida Condominiums?” Section 633.202 of the Florida Statutes requires the State Fire Marshal to adopt the Florida Fire Prevention Code. Thereafter, it must be updated every three years. Each newly adopted Florida Fire Prevention Code explicitly provides that it supersedes all previous editions. Pursuant to the same statute, each municipality, county, and special district with fire safety responsibilities is required to enforce the most recent version of the Florida Fire Prevention Code as the minimum fire safety code. Local governments are permitted to adopt local amendments, but those amendments may only strengthen the Fire Prevention Code requirements, which are a statewide minimum.

The last time electric grills could be used on balconies pursuant to the NFPA 1 Fire Code was October 9, 2008.

Section 10.11.6 of the 2009 NFPA 1 Fire Code was effective on October 10, 2008. It removed the distinction between gas and charcoal grills and electric grills and, for the first time, provided that no grill, regardless of type, may be used on balconies of residential buildings, other than one- and two-family dwellings. The only exception to this blanket prohibition is for equipment which has been installed in accordance with its listing, applicable codes, and manufacturer’s instructions.

Section 10.11.6 of the 2012 NFPA 1 Fire Code, effective on June 20, 2011, added the prohibition against storage of grills on balconies. The current (fifth) edition of the Florida Fire Prevention Code, effective on December 31, 2014, is based on the 2012 NFPA 1 Fire Code. Accordingly, it too included the prohibition against storage of grills on balconies in Section 10.11.6.

The prohibitions against use and storage of grills on balconies have been carried forward in Section 10.10.6 of the 2015 NFPA 1 Fire Code, effective on September 3, 2014. Accordingly, it is likely that the sixth edition of the Florida Fire Prevention Code, currently under review, will also continue to prohibit the use and storage of grills on balconies of residential buildings, other than one- and two-family dwellings.

I am not sure why your local fire official disagrees with my interpretation. But I have been wrong before. I would suggest your association’s attorney take this up with the local fire official and advise your association as to his or her opinion on the subject.

Vote for Becker & Poliakoff in this Year’s FLCAJ Readers’ Choice Award

Posted in Voting

fcaj_readers_choice2

Becker & Poliakoff would like to thank FLCAJ Readers for our nomination in this year’s Readers’ Choice Awards.

We have been serving Florida’s communities in Condominium and Homeowners Association, Real Estate, Business Litigation and Construction law for more than 40 years.

These milestone achievements and accomplishments would not exist without the support and relationship from our readers and clients.

Vote for us in this year’s FLCAJ Readers’ Choice Award:

http://www.fcapgroup.com/readerschoice/vote.cfm?RID=83&CID=7

The Top 5 Reasons Your Community Association Should Consider Online Voting For Important Membership Votes

Posted in Elections, Operations, Voting

Voter apathy is nothing new in most community associations but to really understand the reason why your community regularly fails to achieve a quorum, elect a new board or to successfully tackle longstanding projects which require membership approval, it is important to look a little at human nature.

It is no secret that most of us like things to be easy and voting in your condominium, cooperative or homeowners association often is not. This is particularly true for out of state and international owners for whom the mail is not always delivered with sufficient turnaround time for those members to vote. Even for those owners who are full-time residents having to stuff an envelope and mail it may just not be worth it to them. Psychologists attribute this tendency to the fact that for most people to embark on a project or undertake an activity he or she has to value the return on labor more than the loss of comfort.  For many association members they just don’t see the return on their investment in terms of turning out for the meeting or sending in a proxy.

In addition to the convenience factor, some owners also believe that paper ballots are subject to easy tampering and, in some communities, their fears are well-founded. A private community located in Hialeah, Florida was dismayed to learn that in their 2015 elections with a total of 457 possible votes, somehow the complex mysteriously gained 61 additional units. In one Broward County community, the Board president and secretary tried to rig their election by filling out blank ballots for people who generally don’t vote.

Given that most people like convenience and dislike the possibility that their vote may be discounted, discarded or changed, could  electronic voting be a viable voting option for your community?

The Top 5 Reasons your Community Association should consider online voting for important membership votes:

  1. It’s Legal. In July 2015, The Florida Legislature authorized electronic voting for condos, co-ops and HOAs. This legislation was designed to help Florida associations function better by increasing membership participation and reducing the possibility for fraud.
  2. It’s inclusive. Online voting removes the line between owners who live in the community year-round and those who do not.
  3. It’s convenient.  Those communities choosing BPBALLOT do not have to download software or pay an annual subscription fee. With BPBALLOT, your Board Members and owners only need an internet connection to go on www.bpballot.com to cast a vote.  Voting can be done on your mobile phone, tablet or desktop.
  4. It’s cost effective.  If your members have agreed to receive meeting notice by electronic transmission then online voting is the next logical step to reducing all of the labor and costs involved with a manual mailing of voting materials.
  5. It deters fraud. The skill set needed to forge a signature on a paper ballot, throw out a ballot or stuff a ballot box is much lower than the skill set needed to hack into a computer and interrupt a ballot in electronic transit. Moreover, any nefarious activity online leaves a digital footprint so the culprit is much more likely to be caught.

Take a moment to test drive BPBALLOT and see if it might make sense for your upcoming election or other membership vote.