SB 1196; Suspension of Voting & Use Rights; Fines
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Associations have new enforcement mechanisms available - due process requires careful planning & paperwork for associations to take advantage of these new remedies effectively.
Condominium Associations:
Up until now condominium associations had to have authority to levy fines in the recorded governing documents and did not have the ability to tell delinquent owners to stay out of the pool or gym. That changes as a result of SB 1196.
After July 1, 2010 (the effective date of the new law), condominium associations will be able to levy fines as a result of violations of the governing documents or rules. Of course the association must still provide 14 days written notice of the violation and the opportunity for a hearing before a committee of unit owners before imposing any fines, The fine cannot be levied or imposed if the committee does not agree.
Delinquent condominium owners have more to worry about than fines - the new laws will allow the association to suspend voting rights and use of common, recreational facilities if they are more than ninety (90) days past due in paying a monetary obligation. The term "monetary obligation" is not defined - it could include non-assessment obligations such as late fees, fines, transfer approval or screening fees and the like. The association cannot suspend the use of limited common elements (such as the balcony attached to the unit), nor may it suspend portions of the property necessary to access the unit - such as hallways, elevators, parking spots, etc. The association cannot suspend utilities.
Homeowners Associations:
The new laws actually limit homeowners' associations powers when it comes to suspensions. In the past, suspensions could be imposed in the HOA context for either use violations (violations of the governing documents or rules) or delinquencies. After July 1, 2010, suspensions may only be imposed by HOAs when a member is more than ninety (90) days past due. While it doesn't make sense (especially since Section 720.3085 limits late fees for delinquent assessments), the changes arguably limit fining as well. Fourteen (14) days written notice and an opportunity for a hearing before a committee is required in either case. If the committee (by majority vote) does not agree with the fine or suspension, it may not be imposed.
HOAs cannot suspend use of portions of the property necessary to access the parcel (roads, etc.) or utility services.
The law prohibits the HOA from filing a lien if the fine is less than $1,000 - does that mean that it can lien for fines of $1,000 or more? Well, that remedy certainly needs to be included in the governing documents - so check with counsel. If you're governing documents limit the amount of the fine, now is a good time to consider amendments.
Fines and suspensions must be considered at a properly noticed meeting. Written notice of the fine or suspension (voting or use) must be furnished to the owner (and occupant if applicable).
Will these new procedures and remedies work? Its hard to say, but attempting to take advantage of these remedies without following the required procedures is certainly likely to lead to disputes and may expose the association to liability. Proceed with caution.
Do the owners make the decision to go this route or is this a decision that the Board can make. Some associations have scads of petty rules with many rules formulated based on perhaps one incident. I would think that in some association you could wind up with very puritanical people sitting on rules formulation committes and review boards. There could be retaliation by those who disagree with decisions. It would seem like any homeowner groups would need to proceed with caution. No one is going to want to live in a place with a reputation of being a police state. Word could get out to the general community and those interested in purchasing a home or condo that the situation is hostile, slowing sales and maybe severely lowering home prices. Associations need to think twice before going heavy into rules and enforcement.
As the president of a condo association in Pompano Beach, I have a question about the provision in SB 1196, regarding the rights of a condo association to collect rent from a tenant, as a remedy for a unit owner who is delinquent in paying financial obligations such as monthly dues and assessments.
Has the actual procedure for implementing this remedy -- ie giving notice to the owner, etc - been discussed or mentioned in this forum?
Thank you.
RESPONSE: Not yet. There are still a few wrinkles in the law that require analysis. The language regarding collection of rent is on pages 46 and 47 of the bill. There is a link to the bill (in blue) on the site
If a delinquent owner's voting rights are suspended, does that change the votes required to pass an issue? In other words, if we have 400 units but 20 are delinquent and have their voting rights suspended, do we need 75% of 380 or 400 to approve.
Can a delinquent condo owner be barred from using shared/common laundry facilities?
If an HOA imposes a fine on a homeowner, does the state law specify an appeals process? As a former resident of NY, i know that in NY any civilly imposed fine or sanction must have an independent appeal process.
RESPONSE: Community Associations must give the owner (or violator) written notice and the opportunity for a hearing before a committee of other owners (not board members) before a fine may be imposed (for violations). The committee hearing is the "check and balance" process. If the committee does not agree with the fine, the fine may not be imposed. Please see §718.303 or §720.305 for the procedures.
We had a meeting and passed a motion to send a letter to all owners telling them of the new laws regarding suspension of rights to use common areas for those owners who are 90 days delinquent, and advising them of the new law regarding fining.
Do we have to have another meeting on July 1 to formally suspend those rights, or does this meeting today do that?
Jan,
Check this out.
Let me know,
Thank you,
Ginny
Can the association tow your car out of your assigned parking spot over unpaid HOA fees?
for HOAs you stated the following:
Fines and suspensions must be considered at a properly noticed meeting. Written notice of the fine or suspension (voting or use) must be furnished to the owner (and occupant if applicable).
Pls cite exact location in 1196 of the requirement for a noticed meeting. I can't find it.
thanks
RESPONSE: For HOAs you need to provide 14 days notice and opportunity for a hearing. Lines 1538-1544 address the board action for condos; lines 2806-2810 address board action for HOAs. There are a number of arbitration decisions in the HOA context that require evidence of the board vote and notice to the owner before imposing any suspension. There is an argument that the board can adopt a policy of suspension based on delinquency status and once that policy is published it constitutes board action, but the HOA cannot skip the actual notice to the owner/tenant.
Regarding the new law/s.1196 Condo Assoc. rights to collect rent is very gray. It states that the Assoc. can collect "future" monetary obligations related to the unit from a tenant when the owner is deliquent in monetary obligations to the Assoc. How can they collect the entire rent from the tenant for "future" monetary obligations related to the unit. Deliquient fees are not "future" and rent is not an obligation related to the the Condo. unit.
Only maintenance fees and assessments are related to the Condo. unit.
RESPONSE: The language of the statute is subject to different interpretations.
Lisa,
you stated "Fines and suspensions must be considered at a properly noticed meeting." I asked for the specific cite and you said "there were a number of arbitration decisions..."
OK, but where in 1196 is the specific requirement for a noticed board meeting for an HOA?
Thanks
I use your blogs to advise my boards, and if you can show me where in 2806-2810 a "properly noticed board meeting" for an **HOA** is required, I'll buy you dinner. Otherwise, please revise your answer so I can use it. Also, those arbitration decisions may come into play in the event of a challenge, but I don't want to use a "possibility" when explaining to a board the requirements of 1196. Thanks
2798 (a) A fine or suspension may not be imposed without notice
2799 of at least 14 days notice to the person sought to be fined or
2800 suspended and an opportunity for a hearing before a committee of
2801 at least three members appointed by the board who are not
2802 officers, directors, or employees of the association, or the
2803 spouse, parent, child, brother, or sister of an officer,
2804 director, or employee. If the committee, by majority vote, does
2805 not approve a proposed fine or suspension, it may not be
2806 imposed. If the association imposes a fine or suspension, the
2807 association must provide written notice of such fine or
2808 suspension by mail or hand delivery to the parcel owner and, if
2809 applicable, to any tenant, licensee, or invitee of the parcel
2810 owner.
RESPONSE: Thank you for your kind comments. Please remember, information on the blog does not constitute legal advice - it is general in nature and there are many considerations that impact procedures for any community. I encourage boards to consult with association legal counsel before taking advantage of the new enforcement options in the statutes.
PS - If I explain the reasoning - do I still get dinner?
Please explain how the language changed from explicitly permitting actions to specifically restricting those same actions. In 2009, Associations could use the leverage of suspension for failure to pay maintenance assessments after notice of default. Voting rights could only be suspended after 90 days. Now - you say that the association is precluded from using any leverage, and instead must wait 90 days before taking such action. That makes no sense. Our experience is that, faced with suspension of common area use rights, owners find a way to pay their contractual obligation sooner.
And how can a law be effective July 1, 2010 and not be published on the State's website, which currently shows only FS up to 2009?
RESPONSE: The law is available on the State's websites. Go to www.flsenate.gov. Pursuant to the new law, suspensions may be imposed after ninety (90) days and there is a specific procedure for both Condos & HOA communities.
What about the condo owner? Their are plenty of us who delegently pay our HOA fees and any complaints are ignored!!! What if the HOA isn't keeping their end of the deal on maintaning shrubbery, etc? Our building is nearly totally obscurred by overgrowth and no-one on the board or at the management company seem to care. Their attitude is, "So what". What recourse do owners have????
RESPONSE: Condo Owners may contact the Division of Florida Condominiums, Time Shares and Mobile Homes and file a complaint with respect to certain statutory violations. They may also contact the Florida Condominium Ombudsman's office for assistance. Ultimately the board is elected by the members and if the board members do not listen or respond to member issues, they will not be elected again.
Can the hoa stop owner or renter who has not paid fees over 90 days from entering the gated area which leads to their townhouse garage by changing the access code ....Thanks
RESPONSE: While the new statutes allow associations to suspend use rights, the association cannot impede ingress or egress to the unit or home. Many associations have suspended the use of entry transponders or other devices, requiring the owner (or tenant, invitee) to use the guest entry.
Question: If the committee hearing is requested by the owner within the 14 days of the notice of violation, is it true that the only purpose of the committee is to agree or disagree with the fine amount and that the committee has no jurisdiction over the validity of the violation?
Florida law has negated the private pool exemption for HOA's of less than 32 units. Condo's and Co-ops can still qualify. We are a small HOA 20 units The pool and spa at our HOA was built 20 years ago and most recently refurbished and meets the latest safety standards for a private pool and spa. However, if the HOA is forced to apply for a public(commerical) pool permit, we are facing expenses may be well in excess of $30,000 to $50,000 to comply with the public pool requirenents. Do we have options to maintain our exmention as a private pool?
RESPONSE: This is a major issue in certain parts of the state. There are variance and other procedures to request relief. Our Firm's governmental team works on these types of issues for community associations clients throughout the state.
My relative is getting imposed with a fine by NOT the Board of Directors but by the Property Manager.
This Property Manager has tried to impose a fine for various things and when shown that she was out of order for trying to impose the fine she rescinded. For example, she tried to fine us because the relative was illegally staying there, when the relative had been living there for 9 years and had a Power of Attorney regarding the property that had to be approved by the BoD.
Then, we get another letter stating the same thing and that we were to be fined $100 a day until the situation was resolved. We told her to look in the files and to find the PoA and she finally found it and told us that no screening would be necessary.
A week later, my relative had a disagreement with a security guard at the Condo and now the Manager wants to fine her $100. She stated in a letter that the relative was a problem and that she had problem with past employees. I asked her for all complaints against the relative and there was 1, which stated that a security guard had a problem with a visitor/ guest that was going to the unit, NOT the relative. When we pointed this out to the Manager, she basically said that we were to pay the fine or go to a Fines Committee that is headed by one of her friends.
I asked for the name and e-mail address of the President of the BoD and she refused to give it to me. I asked for the video of the incident with the Security Guard and the relative and she refused to give it. I asked her about where the the funds go when a fine is paid and she gave a vague answer and told me that a fine would be imposed.
Upon reading the Rules & Regulations, it states that only the Board of Directors can impose a fine. The manager is not on the board. Can she just do this? It does not say Management Office, manager, agent, or proxy. Is it also legal for all the members of the fine committee to be chosen by the Property Manager? This does not seem fair. It should be an unbiased committee, not the lady that she has lunch with. Also, keep in mind that I am an owner asking for documents, which she is refusing and there is no way for me to get a hold of any one in the BoD to tell them about this Property Manager and her abuse of power.
Any advice or information would be greatly appreciated.
RESPONSE: The manager or management company takes direction from the Board of Directors. The roster list (showing the names and addresses of the owners) is an official record that must be made available for inspection after written request, but many Board members do not want to be disturbed at home. Attend a board meeting to learn how to address concerns with the board.
The Board of our Condo Assn. recently "decreed" that owners/tenants must pay a non-refundable move in/out fee of $100; that owners/tenants must give a refundable $300 deposit (money order or cashier's check) to the Association "to cover any possible wrongdoing while movinv in/out". Also, that the approved tenant must deposit 1/2 of one month's rent with the Association, "to cover any possible damages to the building common areas". and refundable to the tenant once the lease is terminated. They also require copy of the lease at time of prospective tenant's application for approval by the Association.
They also say that violation of this as well as other rules and regulations should give way to fines from $100 to $1000.
As far as I know, the above changes have not been incorporated in the by-laws and they have not been approved by 75% of the owners, neither at a especially called meeting nor by written consultation.
Can the Board/Management company enforce these arbitrarily decided monetary rules just by bringing them up and approving them at a regular Board meeting that was called for another purpose?
RESPONSE: Board made rules are subject to a three part test to determine whether they are valid and enforceable. Counsel would need to evaluate all three factors in order to determine whether the rules are enforceable in your case.
Rules regarding the use of the unit must be considered by a condominium association's board at a meeting noticed 14 days in advance.
The statute regulates security deposit requirements. The board should consult with counsel to learn whether its security deposit or other regulations are enforceable.
You say: "The law prohibits the HOA from filing a lien if the fine is less than $1,000 - does that mean that it can lien for fines of $1,000 or more? Well, that remedy certainly needs to be included in the governing documents - so check with counsel. If you're governing documents limit the amount of the fine, now is a good time to consider amendments."
Our documents certainly allow for fines, but make no mention of a limit on accumulation. Does this mean that we can file a lien for any amount, without limit, so long as it is over $1000? Ancillary questions: Are fines imposed prior to July 'lienable' under the new statute? Are fines that are for different offenses bundleable under the new statute?
We have 2 units that are in foreclosure and one that is not up today with their maintenance fees.
We are voting now on changing the common elements, do they have voting rights.
Thank you.
RESPONSE: 2010 laws allow a condo or homeowners association to suspend voting rights if an owner's account is more than 90 days past due. Please consult with counsel regarding the procedure to suspend voting rights.
Dear Mr. Poliakoff:
I refer you to your column as printed in the High Riser of April 28, 2011.
In that column you state that the authority to fine unit owners no longer has to be in the condo docs because it is expressly permitted by the new law, even when the documents are silent on the subject.
Yet 718.303(3) specifically states ‘if the declaration and bylaws so provide’.
Moreover, unless the declaration specifically states that it is subject to 718 as amended form time to time no laws enacted subsequently apply.
I have provided the research on which I base my conclusions below.
Am I wrong?
Ron Bibace 954-564-1831
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There appears to be some difference of opinion as to whether or not the changes in the law enacted in 2010 [718.303(3)] with respect to the rights of associations to fine unit owners over rule violations, enables our Association to do so .
I have done some initial research on the issue and here are the results:
1. The new law amended (inter alia) section 718.303 (3). That is the section that determines the rights of associations to fine unit owners.
That amended law as copied from the web appears below with certain emphasis added by me:
F.S. 718.303(3) If the declaration or bylaws so provide, the association may levy reasonable fines against a unit for the failure of the owner of the unit, or its occupant, licensee, or invitee, to comply with any provision of the declaration, the association bylaws, or reasonable rules of the association. No fine will become a lien against a unit. No fine may exceed $100 per violation. However, a fine may be levied on the basis of each day of a continuing violation, with a single notice and opportunity for hearing, provided that no such fine shall in the aggregate exceed $1,000. No fine may be levied except after giving reasonable notice and opportunity for a hearing to the unit owner and, if applicable, its licensee or invitee. The hearing must be held before a committee of other unit owners. If the committee does not agree with the fine, the fine may not be levied. The provisions of this subsection do not apply to unoccupied units.
2. I believe it is established law that unless the words ‘as amended from time to time’ appear in the original declaration (or some subsequent amendment to it) no new condominium law can inure to the benefit of any association, unless perhaps some ‘carve out’ language specifically addressing that issue is included. I believe that view is shared by your colleague Donna Berger, and has just been confirmed by a very recent Supreme Court decision. There does not appear to be any carve-out provision in the law. Therefore, if I am right, the new law does not now and will not apply to us unless and until we amend our docs.
3. The fact that our rules may or may not say the Association can fine is not relevant to the issue at bar. That is because the law does not say … declaration or bylaws or rules
4. Since FS 718.303(3) specifically sates ‘If the declaration or bylaws so provide’ and since neither our declaration nor our bylaws so provide, it seems clear to me that even if the new law was deemed to apply to our situation we would still not qualify under the rules, unless and until we amended either our bylaws or our declaration or both.
5. I believe that amending the bylaws requires the same voting process and the same 60% majority vote, as does amending the declaration.
6. Therefore there is nothing to be gained by amending the Bylaws as opposed to amending the declaration.
My current conclusions:
Regardless of whether I am right or wrong about the ‘as amended from time to time’ issue, it seems that the only way that the Association can legally fine unit owners is if, as, and when the Association amends its declaration, first to include the words ‘as amended from time to time’ and second to include the ‘right to fine unit owners’.
RESPONSE: The "if the bylaws so provide" language was taken out of the statutes in 2010. You will need to discuss the impact of the Cohn decision on your personal situation - but please look at the post I did regarding that issue.