Florida Condo & HOA Legal Blog : Florida Condo Lawyer & Attorney : Becker & Poliakoff Law Firm : Condominium & HOA Law Blog

"Florida-Friendly" Landscaping Found to Conserve Water and Prevent Pollution.  HOAs and Large Property Owners Also Realize Significant Savings.

I reviewed the annual budget for a large HOA master association recently and was surprised that maintenance of the grounds accounted for more than 40% of the association's annual expenses.  The budget included line items for various grounds maintenance such as:

The Manager explained that irrigation repair was a constant source of expense.  There is a school in the community and the pick-up waiting area formed over the association's landscape.  Pumps required constant maintenance and repair and the association uses a vendor to detect leaks or weaknesses in the system   Pest control became an enormous expense, due to white-fly and other insects.  It also became more expensive to thwart algae and plant growth in the lakes/ponds (which supply water for irrigation) due to all the nutrients from the fertilizer used to keep the lawn/turf areas green and lush.  All-in-all these costs amount to over $500,000 annually.

Wow - that is a lot of money.

The University of Florida reports that Ocean Gallery, a 42 acre community comprised of 439 condominiums saved $65,000 its first year after employing Florida-Friendly landscaping practices.

 The Ocean Hammock Community won awards. both within Florida and nationally.  In 2009, Ocean Hammock won an Award of Excellence for its landscape maintenance by the Florida, Nursery Growers and Landscape Association and it also won the Professional Landcare Network Environmental Improvement Grand Award. For a full case study of improvements and savings, click HERE.

Florida-Friendly landscaping is defined in the Statutes.  Section 373.185, Florida Statutes says, in part:

"Florida-friendly landscaping" means quality landscapes that conserve water, protect the environment, are adaptable to local conditions, and are drought tolerant. The principles of such landscaping include planting the right plant in the right place, efficient watering, appropriate fertilization, mulching, attraction of wildlife, responsible management of yard pests, recycling yard waste, reduction of stormwater runoff, and waterfront protection. Additional components include practices such as landscape planning and design, soil analysis, the appropriate use of solid waste compost, minimizing the use of irrigation, and proper maintenance.
 

Check back to this site for more resources and examples of significant savings gleaned from innovative thinking and planning.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Take a well deserved bow. You did it! Today the Florida House of Representatives overwhelming passed CS/CS/CS/SB 1196 (passed on 4/16/2010 by the Florida Senate) sending it to Governor Crist for his signature. Please take a moment to contact the Governor (http://www.flgov.com/contact_governor) and urge him to sign the bill right away. This is very important given his veto of similar last year.

This bill is of SIGNIFICANT POSITIVE IMPACT to community associations. It addresses everything from mortgagee liability (foreclosure crisis) to elevators, to sprinklers, to renters, etc. CALL has sent out earlier alerts containing details and be on the lookout for another summary to be released via the CALL website soon. Please contact your Legislators (both Representative and Senator) and thank them for their support.  From your CALL team on the ground at the Capitol…..THANK YOU!

All your emails, calls, visits and involvement were invaluable. We are only as good as the rest of our team…YOU! Thanks for once again proving you are THE voice for good community association public policy. Attention has been paid.

• Email This
• Print
• Comments (7)
• Trackbacks
• Share Link

The Regular Session ends April 30th.  We've previously highlighted changes in SB 1196 and HB 561 that would impact Condos & Co-Ops, here is some information for HOA leaders and managers: 

Records Access:   §720.303(5)

• Owner entitled to presumption that Association willfully denied record access after 10 business days if owner submits request via certified mail, return receipt requested.  Doesn't address what happens if no one picks up the certified letter.
• Association may charge "reasonable costs" in addition to photocopy fees to reimburse it or a vendor for the lost employee time associated with duplicating the records.
• Personnel records for the association's employees will not be subject to inspection (including disciplinary, payroll, health, insurance).
• Personal identifying data of members (ss #, credit card #, emergency contact info, etc.) will not be subject to inspection, although the address used for association mailings is still part of the roster list and subject to inspection.
• Passwords used to safeguard data and software and/or operating systems will not be subject to inspection.

Budgets & Reserves:  §720.303(6)

• Disclosure in financial report must notify owners of vote necessary to mandate reserves.
• If budget does include 'voluntary reserves', financial report must disclose that the funds may be used for non-reserve purposes and not calculated by statutory method.
• 'Statutory' reserves are reserve accounts established by the developer or created by membership vote.

Director Compensation:  §720.303(12)

Salary or compensation is generally prohibited for performing services as director, officer or committee member unless:

• the financial benefit of a lawful board action will benefit all or a significant number of members;
• the payment is reimbursement for out-of-pocket expenses (each association should adopt procedures or protocols for expense reimbursement, limits and types of expenditures that will be reimbursed);
• the payment is for recovery of insurance proceeds;
• the salary or compensation is authorized by the governing documents;
• the fee, salary or compensation is authorized by membership vote in advance; and/or
• a developer appointee may benefit financially from service to the association.

Fines/Suspensions of Use Rights:  §720.305

• Fines & Suspensions authorized if the member is delinquent for more than 90 days;
• Fines less than $1,000 cannot become a lien (doesn't specifically say that liens are permitted for fines exceeding $1,000);
• Suspensions cannot apply to utility services or property used to access the parcel;
• Written notice to the person fined or suspended is required.

Voting for Directors by Secret Ballot:  §720.306(8)

Adopts 'condo-like' double envelope procedure.

Collecting Rent from Tenants:  §720.3085(8)

Association may demand rent directly from tenant if owner is delinquent.

Acquisition of Recreational Leaseholds or Other Property/Property Use Rights:  §720.31(6)

Similar to §718.114 (condo act).  Allows association to enter agreements to acquire leaseholds, memberships or other possessory or use rights in lands and facilities.  Must be fully described in the declaration or if the action is not taken within 12 months of recording, the declaration must authorize said action as a material alteration/substantial improvement or at least 75% of the members must vote in favor of the action.

Special Assessments by Developer (before turnover):  §720.315

Pre-transition, developer controlled association may not levy special assessments without the approval of a majority vote of non-developer interests.  Vote must take place at duly-called meeting at which a quorum has been attained.

These are just brief bullet points, please refer to the actual legislation for more detail.  Committee amendments are still being filed and considered.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

Today is Earth Day - so I'm re-posting some information about energy efficiency, waste and water reduction improvements or techniques that have saved building owners money as well as information about the $1.7 million in savings Fannie Mae enjoyed by employing "green" practices.

Condominium Associations can reduce their energy consumption costs by installing renewable energy devices and are in a position to possibly create a new revenue stream. Condominium Associations are uniquely positioned to take advantage of these rebates, cost saving techniques and possible new revenue streams as a result of Section 718.113(8), Florida Statues, which provides:

"Notwithstanding the provisions of this section or the governing documents of a condominium or a multicondominium association, the board of administration may, without any requirement for approval of the unit owners, install upon or within the common elements or association property solar collectors, clotheslines, or other energy-efficient devices based on renewable resources for the benefit of the unit owners."

HOAs have many options available to reduce annual budgets.  There are plenty of examples of the “business case” for simple retrofits and changes in practices.

FBI Field Office, Chicago, Illinois:

Total improvements and modifications lowered operating costs by more than $400,000.00 annually. How many of us would reject a 400% return on an investment?

USAA Realty Company: 
Spending $140,000 resulted in $71,000 annual savings.

Adobe Towers / Multiple Hi-Rise Buildings:
Major improvements cost initially over $1 million, but rebates reduced those costs by approximately $300,000 (net cost $700,000) and the annual savings of $900,000 increased the value of the building by over $10 million!

Can your community afford not to reduce its future expenses? 

 Fannie Mae's data center saves an average of $340,000 per year in operating expenses as a result of the use of energy efficient systems and sustainable landscaping practices.

Can your community benefit from some changes?  Some changes are easy and very affordable.  Please let us know if your community is interested in an evaluation of the property for this purpose and please share what your community has done to reduce its expenses.

We will post more information concerning Florida-friendly landscaping and water conservation methods to continue examples of how community associations can save money by embracing new ideas. 

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Although there are many positive developments for Associations in this legislative session, noted below, there is at least one piece of legislation that will adversely impact associations, and all consumers.

Architects, engineers, surveyors and other design professionals may be anxiously awaiting  Senate Bill 1964 and House Bill 701  to pass.

If these provisions become law it will limit liability for design professionals, as of July 1, by:

• cutting off liability, in tort, of design professionals that fail to properly carry out their professional duties.

• overruling Florida Supreme court cases and Appellate decisions from all over the state which protected consumers and the general public with necessary redress in tort for economic damages cause by design professionals.

• permitting design professionals to escape liability for their own negligent conduct, if insurance exists, and

• elevating design professionals above other professionals, such as lawyers, doctors, and accountants, who cannot limit their liability by contract.

Associations are constantly fixing their roofs, roads, performing balcony concrete restoration, seawalls, fire alarm electrical engineering renovation, elevator modernization and structural repairs. All of these renovations are designed by engineers, architects etc, and are required to meet building codes including life safety codes. Associations hire design professionals to issue drawings and specifications to accomplish these goals.   Design professionals are also retained to monitor construction activities and approve applications for payment on these projects. Shouldn't they bear responsibility for damages that result from mistakes, omissions, lack of attention to detail or otherwise?

An error in design judgment can be devastating to unit owners and homeowners. Improperly designed elevator repairs, concrete repairs, shoring of buildings, electrical renovations, fire protection system renovations or repairs all could result in economic loss to Associations and ultimately unit owners and homeowners.

Should design professionals be allowed to practice without accountability for their negligent acts at the expense of Florida’s consumers? It is simply unfair.

Florida’s consumers should call their representatives immediately to prevent these bills from becoming law.

• Email This
• Print
• Comments (6)
• Trackbacks
• Share Link

There are only a few short weeks left for Florida's elected officials to pass meaningful legislation and at this point in the session it seems that the HB 561/SB 1196 Bill Package is the most likely to pass. These bills are in a constant state of flux and the information below only highlights major points in the bills (as of April 15, 2010). We encourage you to review the full text of the bills by accessing the Senate’s website here for HB 561 and here for SB 1196 and likewise encourage CALL members to contact the appropriate legislators by using the Legislator Connect feature on its website (www.callbp.com).  Here are a few highlights from the bills:

Fire Alarm Systems: - Amending s. 633.0215, F.S. 

Buildings less than four stories with exterior means of egress and exterior corridors will not have to install a manual fire alarm system (per Section 9.6, Life Safety Code in the Florida Fire Prevention Code).

Fire Sprinkler Retrofit - Amending s. 718.112 and s. 719.1055(5), F.S

Full “opt-out” will be permitted with affirmative vote of two-thirds (2/3rds) of the entire membership. Will only permit reconsideration of opt-out vote once every three years at a special meeting called by a petition of 10% of the voting interests.

Extends deadlines for associations that don’t opt out to the end of 2019.

Elevators – Amending s. 553.509(2)  and 399.02, F.S., (Phase II Firefighters’ Service)

Allows for a five (5) year delay to retrofit with a special access key for elevators in condominiums and cooperatives unless the elevator is replaced or requires major modification.  Allows associations to "opt-out" of elevator operation by alternative power source with affirmative vote of majority of owners of condominium.

Designation of Limited Common Elements by Amendment - Creates s. 718.110(14), F.S. - only in SB 1196

Allows association to designate limited common elements by amendment, so long as the building component is designed for use by specific owners.

Official Records – s. 718.111(12), F.S.

• Individual director liability for failure to maintain or destruction of official records is limited to cases where there is intent to harm the association or one or more of its members.
• Association not liable for unit owner misuse of information obtained from official records.
• Exempts personnel records (disciplinary, payroll, health and insurance records) from unit owner access.
• E-mail addresses, telephone numbers, emergency contact information, and any unit owner contact information other than the addresses to send notices are exempt from unit owner access.
• Association’s electronic or computer security data, including passwords, software and operating systems are exempt from unit owner access.

Common Expenses - Amending s. 718.115(1)(d)1., F.S.

Communication services (as defined in Chapter 202), information services, and internet services obtained pursuant to a bulk contract shall be deemed a common expense. (In HB 561 contracts entered into for these services by the developer or prior to transition may be canceled within 120 days of the transition meeting.)

HB 561 also creates new §718.112(3), F.S. that allows the bylaws of umbrella organizations governing a minimum of 1000 units to employ a marketing firm for the community as a common expense.

Board Eligibility – Amending s. 718.112(2)(d), F.S.

Co-owners in condominiums with more than 10 units cannot serve together unless they own more than one unit or there are not enough volunteers to fill all slots. Does not apply to timeshare condominiums.

Requires directors to supply association with new certification form or take a state-approved education class. Directors are suspended until they comply.

Collections and Foreclosures – Amending s. 718.116 and s. 719.109(3), F.S

Changes mortgagee liability cap from 6 months to 12 months after acquisition of title by foreclosure (or deed in lieu) but retains 1% cap.

Association may demand a tenant pay rent to the association to satisfy delinquency for that condominium unit with written notice to the unit owner. Landlord/owner must provide tenant with credit for any amounts paid to association. Association can evict tenant that fails to comply.

Enforcement Mechanism – Amending s. 718.303, F.S.

• Allows suspension of use rights if owner is more than 90 days past due. Cannot suspend use of limited common elements, utility service, parking spaces, elevators or impede access to/from unit.
• Requires board to vote on suspension/fine at duly noticed board meeting and advance notification to the unit owner.
• Allows association to suspend voting rights after 90 days of non-payment.

Filling Vacancies on Board – Creating s. 719.106 (1) 6, F.S.

Vacancies are filled for remainder of the term by vote of majority of remaining directors, even if less than a quorum or only one director. In the alternative, the Board may hold an election to fill the vacancy.

There are many more provisions - click below for additional content and come back to this site for information on changes to the Homeowners' Association Act (Chapter 720, Florida Statutes) and updates directly from Tallahassee.

• Email This
• Print
• Comments (8)
• Trackbacks
• Share Link

Fourth District Court of Appeal Rules that Lender Cannot be Compelled to Pay Assessments Prior to Acquisition of Title.

Deutsche Bank National Trust v. Coral Key Condominium Association (at Carolina), Inc. and Luna, Opinion April 14, 2010.

An earlier post discussed the Third District's appellate ruling in the U.S. Bank National Ass'n v. Tadmore case which held that the Court cannot require a lender to pay condominium assessments before its completes its foreclosure case and obtains a Certificate of Title or otherwise acquires title to the unit.  The Fourth District ruled the same way in a case involving the Coral Key Condominium Association.  The ruling is hot off the press, so its not final yet.  If anything changes we will report it on this site.

Do these rulings mean the Association is powerless when a bank is foreclosing against a property within the community?  No - not at all.

The Motion to Compel filed in both cases asked the Court to require the lender to pay assessments immediately, reportedly since the mortgage foreclosure cases were taking so long.  The Associations supported their request for relief upon notions of equity and fairness.  Sure, it is unfair.  The Association has to insure the property, pay for common utilities, pay for maintenance and repair of the property, etc. all while the unit owner isn't paying assessments.  The lender derives a benefit from the Association's actions - its collateral is preserved and insured at the expense of all the paying unit owners. But, as my Dad used to say, life just isn't fair sometimes.

That doesn't mean Association's are without options when a bank is foreclosing against a property in the community, especially when there is a feeling that the bank is 'dragging its feet'.  The Florida Rules of Civil Procedure allow the Courts to establish deadlines or schedules for certain actions to take place.  Any party is entitled to request a case management conference at which the judge may (among other things):

• Set deadlines for service of motions, pleadings or other papers;
• Limit, schedule, order or expedite discovery;
• Require preliminary stipulations to narrow the issues; and
• Set a date for trial.

Any party to the case can advise the Court that the case is ready for trial.  Basically, once the pleadings are closed (all motions concerning the pleadings have been resolved or withdrawn or 20 days after the last pleading is served), the case is eligible for placement on the Court's trial calendar.   

The Court has the power to award sanctions against a party that fails to comply with its scheduling orders and our Firm has had success showing that the lack of action on the part of the bank (and/or its counsel) justified sanctions.  

That is not to imply that every bank in every case has done something wrong, even if the case takes what seems to be an extraordinarily long time. There are legitimate reasons that a foreclosure case can be on 'hold'  Owners/borrowers may be trying to modify their mortgages, there may be an offer for a short sale on the property, and/or a bankruptcy filing may prevent the bank from moving forward, etc.   You know, there is a pretty big load on the Courts right now as well.

Nonetheless, we have learned that some lenders deliberately allow some foreclosure cases to linger for various reasons.  Those are the cases that Associations should address - first with the lender (actually, lender's counsel) and then with the Court.  It is important to discuss your options in each of the cases involving property in your community with counsel.  The board can't be expected to make reasonable strategy decisions unless it is fully advised.

• Email This
• Print
• Comments (5)
• Trackbacks
• Share Link

This week marks the final three weeks of the 2010 Legislative Session. The Regular Session is scheduled to end “Sine Die” on Friday, April 30. This, folks, is when things get…how shall…I say it….uh, interesting.

Every Session about 3000 bills are filed and about 10 percent, or 300 bills are actually passed by the Legislature. Therefore, as Committee meetings shut down and bills are no longer being heard, Sponsors start looking for moving bills (or vehicles) which are heading to each Chambers’ Floor to amend their bill language onto. This is a two-edged sword. Nothing is ever really dead until that final gavel raps the Session’s end. So if you are a proponent of certain language you are trying to pass you can attempt to load it onto a germane bill but so can those trying to pass language you are opposed to. The CALL team is pouring over the many, many Floor amendments which are being filed to make certain the Legislature passes those things which are helpful to community association residents and the volunteers who serve their communities and doesn’t pass language deemed harmful.

The most important Community Association package CALL is diligently working with the Legislature and Governor on is SB 1196 and its companion bill, HB 561. Both bills have successfully passed several Committees and are still on track to head to each Chambers’ Floor in a timely manner. As is the manner of the “give and take” legislative process, the bills have changed since their initial introduction. The latest version can be found at  http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s1196c3.pdf and we urge you to visit the link and review the 102 pages in the coming days and provide your feedback. Language addressing mortgagee liability was added in the last Committee. As of this version, it increases the liability cap from 6 months to 12 months. Given the VIGOROUS opposition of the lending industry, this is a significant move in the right direction but CALL isn’t through pushing for even more fair and appropriate reforms. For example, removing the “or 1 percent of the mortgage debt, whichever is less” language found in current law, requiring lenders to pay for  necessary repair assessments, etc. The language pertaining to the fire sprinkler retrofit opt out appears to be acceptable to the Governor’s office. There is helpful language pertaining to elevators, fire alarms, etc. which are all helpful to association residents who have been called upon in recent years to bear higher retrofitting costs.

Please stay engaged as we make the final push. This is the most imperative, “volatile”, sensitive time. Don’t assume anything and don’t walk away from the process now. We aren’t.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Lenders Cannot Ignore Foreclosure Cases With Impunity. 

Becker & Poliakoff Attorney Scott Petersen obtains second court ruling requiring a lender and its attorneys to pay an association for failure to proceed with its foreclosure action and failure to obey Court Orders.

The Manatee Observer published an article yesterday notifying its readers that action on the part of a community association can achieve good results in bank foreclosure cases.  The Bank of New York was recently ordered to pay a condominium association over Thirteen Thousand ($13,000) Dollars in sanctions, representing assessments that accrued during the stalled foreclosure case.

In the most recent case, Mr. Petersen filed a Motion to Compel after six (6) months of little or no activity in a bank foreclosure case.  The Court granted the Motion and entered an Order requiring the bank to proceed.  Later on the Court found that the bank did not show 'good cause' why it disobeyed the earlier ruling.  The association incurred attorney's fees and costs for attendance at hearings, writing several letters demanding compliance and additional motions, including the Motion for Contempt - all sent without any response from the bank or its counsel.  It took almost four (4) months for the bank's attorney to acknowledge the motions, letters and rulings.  Another three (3) months went by before the bank filed any responses with the Court.

The responses were apparently too little too late.  The Court granted the association's Motion for Contempt and awarded attorney's fees to the association.

• Email This
• Print
• Comments (4)
• Trackbacks
• Share Link

55 & Older Housing  - what does that mean?

The Federal Fair Housing Act prohibits discrimination because of race, color, religion, sex, handicap, familial status or national origin.  Many States have their own Fair Housing Act - in Florida Chapter 760 of the Florida Statutes is dedicated to discrimination issues that expand the protection to age and marital status. The term 'familial status' generally refers to occupancy by children (person under 18) with parent, guardian or designee of the parent.   So why or how are there 55 & older communities?  Well, every rule has exceptions, right?  The Fair Housing Act is no different. 

The Housing for Older Persons Act (HOPA) is an exception that allows communities to operate as “55 or over” housing. To qualify for this exemption, the following criteria must be met: 

1. At least 80% of the units must be occupied by at least one resident over the age of 55; 
2. The community must publish and adhere to policies and procedures demonstrating an intent by the housing provider (the association) to provide housing for persons 55 years of age or older; and
3. The housing provider must engage in appropriate age verification procedures that includes a community census from time to time.

Ok - at least one person 55 or older must reside in at least 80% of the occupied units.  What do you do with the other 20%?

On April 1, 1999 the United States Department of House and Urban Development (“HUD “) published Federal Regulations implementing the Housing For Older Persons Act of 1995 (“HOPA”).  Basically, HUD does not care how a community handles the 20% “cushion" as reflected below:

There continues to be confusion concerning what is often referred to as the 80/20 split. HOPA states that the minimum standard to obtain housing for persons who are 55 years of age or older status is that “at least 80%” of the occupied units be occupied by persons 55 years or older. There is no requirement that the remaining 20% of the occupied units be occupied by persons under the age of 55, nor is there a requirement that those units be used only for persons where at least one member of the household is 55 years of age or older. Communities may decline to permit any persons under the age of 55, may require that 100% of the units have at least one occupant who is 55 years of age or older, may permit up to 20% of the occupied units to be occupied by persons who are younger than 55 years of age, or set whatever requirements they wish, as long as “at least 80%” of the occupied units are occupied by one person 55 years of age or older, and so long as such requirements are not inconsistent with the overall intent to be housing for older persons.
 

Does that mean a community that desires to sustain is Housing for Older Persons status should let everyone in up to the 20%?  No, not really.  The "cushion" is designed to allow the housing provider (association) to permit exceptions when appropriate.  If a couple resides in a property and one is 55 and the other not, do you, as a community leader or manager, want to be put in a position that requires you to say "you're in violation" if the resident over 55 passes away?  What if the couple gets divorced?  What if someone resides with their adult child?  In our view, the 'cushion' is exactly that - something that protects you or softens the requirements to avoid unpleasant results.

Does your community qualify as Housing for Older Persons?  Community leaders that aren't sure should consult with counsel, as penalties for discrimination (even unintentional discrimination) can be harsh.

• Email This
• Print
• Comments (27)
• Trackbacks
• Share Link