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Florida Condo & HOA Legal Blog

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

Condo Boards Can Prohibit Remote Attendance At Board Meetings By Unit Owners

Posted in Meetings, Operations, Reader Q&A

488563681(1)Question: Our condominium board has decided that they will no longer allow unit owners to attend board meetings “remotely” via telephone conference. Rather, the board has now ruled that only board members may participate via telephone conference. Is it legal for the board to prohibit unit owners from attending a board meeting “remotely?” R.P. (via e-mail)

Answer: Yes. The ability  to attend board meetings “remotely” via telephone or live videoconferencing (as long as there is a speaker in use so that all who attend in person may hear the conversation) is solely and exclusively for directors, pursuant to Section 718.112(2)(b)(5), Florida Statutes. Even then, there is no requirement that the board permit telephonic or remote participation in board meetings, and I have seen a few associations refuse to allow directors the ability to call into meetings (i.e. they only permit in-person participation). While I do not recommend this, it is not illegal.

The purpose of the relevant statutory provision is to allow directors the ability to attend board meetings and conduct business without having to be physically present at the meeting. However, under the statute, no unit owner has a legal right to be a “remote” meeting participant. I do believe the bylaws could confer such a right.

The board certainly has the discretion to permit its unit owners to call into the board meetings. However, in my experience this is seldom done. When it is, it is usually limited to investment-type properties (e.g. resorts) where many owners are rarely on the property and, in most cases, the owner calling in must pay the charges. Where owner call-in is permitted, there is often a higher incidence of meeting disruption and inefficiency, which gets worse with larger groups. I have, however, represented several associations where owner call-in is permitted as a matter of course, and the meetings run like clock-work.

So, the bottom line is that the final decision on this question lies with the board, unless the bylaws provide otherwise, which would be rare.

Garage Sale or Thrift Shop in Disguise? How Should an HOA Respond?

Posted in Rules & Regulations

wilson_sFall is the time of year when a lot of people are cleaning out their closets, gathering up unused household items, and having garage sales.  Over the past few weeks, in fact, I noticed banners posted at many community entrances announcing community wide garage sales.   But what about the homeowners who on a monthly basis fill their driveway with multiple used strollers, suitcases, microwaves, vacuums, toaster ovens, mountains of clothes and the occasional spare tire?  Can this possibly be a legitimate garage sale?  And if not, what can a homeowners association do to stop such activity?

A garage sale is a sale of used household or personal articles (such as furniture, tools, or clothing) held on the seller’s own premises.  Sellers are not required to obtain a business license or collect sales tax for the items sold.  So how do the owners who seem to be operating a driveway thrift shop fit into this category?  The answer will depend upon the language in the association’s particular governing documents.  Some communities have restrictions covering garage sales while others do not.  The strongest restrictions prohibit garage sales altogether while others only allow them as a community wide event held once or twice a year.  If your community is having problems with the recurring garage sale scenario, it may want to amend its documents to include tighter restrictions.

In the spirit of pre-holiday cleaning, check your documents to see what garage sale restrictions, if any, are included in your governing documents, and consult with your association attorney as to whether those best fit your current community needs.

Voluntary and Mandatory HOAs Differ In Many Ways

Posted in Board Eligibility, Reader Q&A

186281221Question: I am the president of a voluntary homeowners’ association and wanted to know if the members of the Board of Directors of our voluntary homeowners’ association have to comply with the new Board Member certification requirement in Chapter 720, Florida Statutes? R.G. (via e-mail)

Answer: No. Chapter 720 of the Florida Statutes, often informally referred to as the Florida Homeowners’ Association Act, defines a “homeowners’ association”, for the purposes of the  Act, as requiring mandatory membership in the association. Accordingly, a voluntary homeowners’ association is not subject to the provisions of Chapter 720. Because a voluntary homeowners’ association is not regulated by Chapter 720, the Board Member certification requirement added to Chapter 720 would not apply.

Rather, voluntary homeowners’ associations are regulated primarily by Chapter 617 of the Florida Statutes, the Florida Not For Profit Corporation Act. Section 617.0601(7) of that statute addresses voluntary homeowners’ associations and provides that “[w]here the articles of incorporation expressly limit membership in the corporation to property owners within specific measurable geographic boundaries and where the corporation has been formed for the benefit of all of those property owners, no such property owner shall be denied membership, provided that such property owner once admitted to membership, shall comply with the terms and conditions of membership.” Therefore, while the Association is voluntary, every owner within the community is entitled to join.

Additionally, while voluntary homeowners’ associations are not subject to the provisions of Chapter 720, such associations may be entitled to preserve the covenants regulating the community, under the Marketable Record Title Act (MRTA), if the association has the authority to enforce use restrictions contained in the covenants. Section 712.01(4), Florida Statutes defines a homeowners’ association, for the purposes of MRTA, to include any association of owners that has the authority to enforce use restrictions imposed on the property within the community.

Organizational Session Signals Start of 2015 Florida Legislative Session

Posted in Legislation

old_capitolThe 2015 Legislative Session kicks off next week on Tuesday, November 18, when the Legislators come to Tallahassee for their organizational session.

The Senate President Andy Gardiner from Orlando and House Speaker Steve Crisafulli from Merritt Island recently announced their leadership appointments and they will soon be announcing Committee Chairs and Committee appointments.

Sen. Richter from Naples will be the Senate President Pro-Tempore,  Sen. Simmons from Altamonte Springs will be Senate Rules Chair, and Sen. Galvano from Bradenton will be the Senate Majority Leader.

Rep. Matt Hudson from Naples will be the Speaker Pro-Tempore, Rep. Dana Young from Tampa will be the Majority Leader, Rep. Rich Workman from Melbourne will be the Rules Chair, Rep. Rich Corcoran from Lutz will be the Appropriations Chair, and Rep. Jim Boyd from Sarasota will be the Deputy Majority Leader and Whip.

Other important dates to note:
January 5-9, 2015 Interim Committee Week
January 20-24, 2015 Interim Committee Week

February 2-6, 2015 Interim Committee Week
February 9-13, 2015 Interim Committee Week
February 16-20, 2015 Interim Committee Week

March 3, 2015 Regular Session convenes
May 1, 2015 Last day of Regular Session

I want to be a Director on my Condominium or HOA Board. Am I Eligible?

Posted in Board Eligibility, Elections

hinckley_pAs election season approaches, the issue of who is qualified to serve on a condominium or homeowners association’s board of directors can become a hotly contested issue.  This post examines how eligibility to serve as a director in such a community association is determined.

Most Florida condo associations and HOAs operate as not for profit corporations.  Florida law provides that directors of such corporations must be natural persons.  This means that corporations, limited liability companies, and other legal entities are not permitted to serve as directors.  The law also requires individuals serving on the board of directors to be at least 18 years old, so minors are not eligible for board membership in community associations.

There is no statutory requirement that directors be members of the community association on whose board they serve.  However, if the association’s articles of incorporation or bylaws require directors to be members, then non-members of the association may not serve as directors.  Membership in associations is determined by record ownership of lots or units in the condominium or community served by the association.  Record ownership is determined by examining the deed or other instrument by which title to the lot or unit is held.  With married couples, title to property is sometimes held solely in the name of one spouse.  In such cases, only the spouse who holds title to the property is a member of the association.

If title to the lot or unit is held in trust, and membership in the association is determined by record ownership of lots or units, Florida law provides that the grantor of the trust is deemed to be a member of the association and eligible to serve as a director.  If the beneficiary of the trust occupies the lot or unit, the beneficiary of the trust is deemed a member of the association and eligible to serve as a director.

A director who has been suspended or removed from office by the Florida Division of Condominium is not eligible to be a candidate to serve on a condominium association’s board of directors, and neither is a person who is delinquent in the payment of assessments.  For homeowners associations operating under Chapter 720, Florida Statutes, a person who is delinquent in the payment of any fee, fine, or other monetary obligation to the association for more than 90 days is not eligible for board membership.

A person who has been convicted of a felony is not eligible for board membership in either a condominium or homeowners association unless such felon’s rights have been restored for at least 5 years as of the date such person seeks election to the board.

If there is a question as to whether an individual in your association is eligible to serve as a director, consult your community association attorney.
Finally, if you plan on being a candidate for your condominium or homeowner association board, Becker & Poliakoff offers free Board Certification classes.  Please contact any one of our offices for further details or visit our website at www.becker-poliakoff.com/events.

Construction Lien Law Can Result In Condominium Associations Paying Twice For the Same Work

Posted in Construction Issues & Contractual Disputes, Reader Q&A

476196983(2)Question: Our condominium association is going to re-roof all of the condominium buildings this winter. In my home state, there was a “mechanics lien law” which applied to repairs of this nature. Does Florida have a “mechanics lien law”? B.H. (via e-mail)
 
Answer: Yes. Florida’s Mechanics Lien Law was renamed the “Construction Lien Law” about 25 years ago and is found at Chapter 713, Florida Statutes. If your association undertakes an improvement to real property (such as re-roofing), and the contract price is more than $2,500.00, then the association must comply with the Florida Construction Lien Law.

The first step in doing so is recording a Notice of Commencement in the public records in the county where the condominium is located, before the work starts, and posting a certified copy on the job site. Individuals or companies that supply labor or material for the project who are not in “privity” (direct contract) with the association will often serve “Notices to Owner” upon the association during the course of the work. This is the first step for a supplier of labor or material in perfecting their lien rights under Chapter 713.

If the association receives a Notice to Owner, then it must ensure that every time it pays the general contractor, it receives a proper lien release from anyone who served a Notice to Owner. The association should also receive a lien release from the general contractor each time it pays the general contractor.

Before making final payment to the general contractor, the association must receive a final lien release from any person or entity who served a Notice to Owner, a final lien release from the general contractor and a final contractor’s affidavit from the general contractor.

The Florida Construction Lien Law is very technical in nature and it is best that the association seek advice from counsel about how it works. If the association does not comply with the law, it may end up paying double for the same work, first to the contractor, and once again to the subcontractor or material supplier who the prime contractor did not pay. The law is clearly intended to favor the suppliers of labors and materials, and not the owner of the property.

Multiple Units/Common Title Holder — How to Collect Delinquent Fees

Posted in Assessment Collection, Covenant Enforcement/Violations, Owner Payment Responsibility, Reader Q&A, Suspensions, Fines & Remedies

159291895(1)Question: We have an owner that owns two units. He always makes prompt payment for one of the units, but is always behind on the other. Can we put a lien on both units? Can we do anything else? P.M. (via e-mail)

Answer: The two units should be treated separately. A claim of lien can only be recorded against a delinquent unit, as a lien for assessments is unique to that unit. Additionally, rent demands should be isolated to the delinquent unit. An attempt to collect a debt for one unit by recording a claim of lien against or collecting rent from another unit may be deemed an attempt to collect an illegitimate debt under the Florida Consumer Collection Practices Act and the Fair Debt Collection Practices Act.

Both the Florida Condominium Act (Chapter 718, Florida Statutes) and the Florida Homeowners’ Association Act (Chapter 720, Florida Statutes) provide associations with additional remedies that are aimed at encouraging members to remain current in the payment of all monetary obligations due to the association. These remedies are available even if a member is delinquent as to one of two units owned.

In a condominium association, any person who is delinquent in the payment of any monetary obligation due to the association at the time of the deadline for submitting a notice of intent to run is not eligible for board membership and cannot be listed on the ballot. In a homeowners’ association, the person must be more than 90 days delinquent before he is determined to be ineligible for board membership.

Additionally, an association may suspend common element/area use rights and voting rights of a member who is more than 90 days delinquent in the payment of any monetary obligation due to the association. As to use rights, the suspension can similarly be levied against the occupants, licensees, and invitees in a condominium association and the tenants, guests, and invitees in a homeowners’ association.

While these additional remedies are available to the association, they may not provide the incentive needed to keep all members current. A member who does not have the money available to pay assessments may simply not care that he cannot use the pool or participate in association meetings. In those cases, the best strategy may well be to foreclose on the delinquent unit. A lien foreclosure sends a strong message, even if the debt is paid in full. Lien foreclosures are costly to delinquent unit owners, as is the default interest rate of eighteen percent. Lien foreclosures and the high default interest rate act as strong incentives to remain current on assessments.

Individual Condo Unit Owners Should be Wary of Replacing Common Area Property

Posted in Maintenance & Repair, Operations, Reader Q&A

186332113Question: I want to replace the front door of my condominium unit because it is over 20 years old, it is beat up pretty badly, and I don’t think it is airtight. When I asked the manager for permission to replace it, he said that the association is responsible to maintain the front doors, except for the inside paint, and there are no current plans to replace the doors. How can I get a new door sooner rather than later?  H.O. (via e-mail)

Answer: One approach you can take is to apply to the association for permission to replace the door now. The association might approve this request on the condition that you replace the door, at your cost, with one that matches the existing doors.

If the association later replaces all doors with something different than what you installed, it can replace your new door at that time too. If that is the case, you will be required to pay your share of the assessments for that project.

If the association later replaces all doors with the same style door you installed, you might still have to pay your share of the assessments for that project. An exception may apply if the door you install is code compliant at the time the association upgrades the remaining doors. This is because the Florida Condominium Act allows owners who have code-compliant doors to get a credit when the association later upgrades to code-compliant doors.

Another approach is to convince the association to replace all doors now. Since the association is responsible to repair and replace the doors, there should be a reserve account for this project. Or, you could enforce your rights as a member and insist that the board do its duty to keep the community looking nice, and to keep the building in good repair. If you can demonstrate that the door detracts from the appearance of the building or is not sound, you can demand that the association take action to fix that condition.

Accepting Partial Condominium Maintenance Fee Payments Can Compromise Rights

Posted in Assessment Collection, Owner Payment Responsibility

517846881Question: We have an ongoing dispute with an owner. They are always late on maintenance fees and they claim they have a right to deduct half their fees because of a water leak affecting their unit. They just sent us a check for about 75% of what is owed, and said that this was payment in full. Is there any reason we should not cash the check?  J.M. (via e-mail)

Answer:Owners have the obligation to pay their assessments in a timely manner and do not have the right to withhold any portion of their assessment payments due to such a dispute. Appellate courts have found that an owner’s contention that the association is failing to maintain the common elements is not a defense to an assessment lien foreclosure action. However, the appellate courts have recognized that “setoff” can be a defense to a foreclosure action.

Therefore, if the owner is able to demonstrate that she suffered damages as a result of the association’s failure to maintain the common elements,  those damages could reduce the amount of the association’s lien foreclosure judgment.

With regard to the owner delivering a check to the association for less than the full amount owed but stating on the check that it was for “payment in full,” the Florida Condominium Act provides that any payment received by an association must be applied first to any interest accrued by the association, then to any administrative late fee, then to costs and reasonable attorney’s fees incurred in collection, and then to the delinquent assessment. The Act further provides the foregoing is applicable notwithstanding any restrictive endorsement, designation, or instruction placed on or accompanying a payment. Many have believed these provisions entitle the association to accept payments such as the one in your case without any adverse risk to the association.

Florida appellate case held the statutory language concerning restrictive endorsements is limited to restrictive endorsements instructing how the association must apply the payment on the account, and not necessarily to those restrictive endorsements intended to operate as an accord and satisfaction or a settlement of the claim. Therefore, the association should consult with its attorney concerning whether it should accept the payment in your particular case. Accepting the payment might result in a full settlement of the amounts due to the association.

Opening Condominium Board Meeting With A Prayer Raises Legal Question

Posted in Meetings, Operations, Reader Q&A

178743773Question: How does the Florida Sunshine Law or other legal restrictions apply to a condominium association board meeting that would permit or prohibit opening the meeting with a prayer? G.B. (via e-mail)

Answer: I believe you are confusing two separate legal principles. The “sunshine law” is often referred to, albeit in “legal slang”, in connection with condominium associations and the requirement that board meetings be open to the unit owners. The second main aspect of the “sunshine laws” for associations is that most of the association’s official records are open for inspection and copying by unit owners. The shorthand reference “sunshine laws” developed out of  the use of that term in laws that govern the public sector.

The United States Constitution limits the involvement of governmental entities in the establishment of religion. There has been substantial constitutional litigation over the years involving prayers before public school graduations, public school football games and various governmental entity meetings.

Because a condominium association board meeting is a private gathering involving a private entity, and not a governmental entity, it is my opinion that those constitutional principles do not apply. As such, although some may disagree based upon a more expansive view of whether an association can undertake “state action”, it is my opinion that there is no legal prohibition against opening an association meeting with a prayer. However, in today’s pluralistic and diverse society, I believe associations should be cognizant of the potential objections of various owners, or the potential for excluding different religious groups, and avoid such issues. Perhaps a recitation of the Pledge of Allegiance would be a good substitute.