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

One of the most daunting aspects of construction projects is understanding the different legal documents presented (or that should be presented) by contractors, subcontractors, laborers, and suppliers.  Although construction contracting is not something most board members are familiar with, the State of Florida requires them to follow very detailed procedures when making payments to the contractors hired to do work on the condominium property.  If payments aren't made correctly you may face liens on the property that interfere with sales and which may be foreclosed by the contractor.

The first step to take when commencing a construction project is to record a Notice of Commencement. Florida Statutes require you to record a Notice of Commencement in the public records identifying the legal title of the property being improved, and the names and addresses of the owner (or association as the agent of the owners), contractor, lender, bond surety (if any), and any other individuals who should receive copies of documents associated with the Florida Construction Lien Law.  It is also critical to make sure that if your contractor or subcontractors are posting payment bonds (which may exempt your property from liens), those bonds must be recorded in the County Records along with the Notice of Commencement. A copy of the Notice of Commencement and Bond should also be given to the appropriate building department and inspecting authority.

As your construction progresses, you will receive documents called Notice to Owner. Sometimes these documents are called Notice to Owner/Preliminary Notice and are usually served upon you via Certified Mail. If you included your fax number in the Notice of Commencement, the Notice to Owner may also be faxed to you. They may also hand-deliver it to you and, in some instances, it may just be posted on your job site. It is very important that you keep track of everybody who has served a Notice to Owner on you. The Notice to Owner is not a cloud on title; rather, it is a document from those entities, hired by your contractor, that you must ensure get paid to avoid liens on your property.

Every time you pay your contractor for the construction on the project, which may vary depending upon your specific contract, it is vital that you ensure that all subcontractors and suppliers that have served you with a Notice to Owner have been paid in full. Before you make payments to your contractors, you should call everybody who served a Notice to Owner on you and find out how much they are owed. When you make your next payment to your contractor, it is critical that you make sure that you get a Release from everybody who served a Notice to Owner in the amounts which you learned are due. If you do not get a Release in that amount, you can be sure the company is not being paid, and they will look to you later for payment or lien your job. Sometimes, you may even want to consider writing joint checks, which are checks made payable jointly to your contractor and the company who served the Notice to Owner. These checks, even though they are joint in nature, will still count as payment towards your contractor and still be credited against the contract price. The bottom line is to ensure that everyone who serves a Notice to Owner is current with their payments every time you pay your contractor, and issue a Release of Lien to reflect this. The Florida Construction Lien Law also gives you the right to require a list of money owed to subcontractors from your contractor every time you make a payment. This Affidavit should be given to you by your contractor, but the law does not allow you to legally rely on whatever the contractor tells you. Rather, you have an affirmative duty to make sure everyone who serves a Notice to Owner is paid in full.

When the final payment under your contract becomes due, you should not make final payment until the contractor gives you an Affidavit stating that all lienors under the direct contract who have timely served a Notice to Owner have been paid in full or, alternatively, identify the names of the lienors who have not been paid in full and the amount due or to become due to each of them. Once again, although this Affidavit is helpful, you have no legal right to rely on it for any entity who served a Notice to Owner. Do not, under any circumstances, make your final payment to your contractor until you receive final Releases of Lien from every entity who served a Notice to Owner. If there is a problem getting these releases, you must make sure that everyone serving a Notice to Owner gets paid before you issue that last check to the contractor.

It is often a difficult procedure to ensure that you make your final payments properly, so please consult with the Association's Attorney if you have any questions whatsoever.  From time to time we will include case examples involving associations on this blog.

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CALL recently notified its members of changes to HB 319 which is the community association bill filed by Rep. Moraitis.  The changes were considered and approved by the House Civil Justice Subcommittee on December 7th.  The five (5) amendments:

1. Clarify that condo election procedures do not apply to timeshare condominium associations.
2. Clarify that mortgagees only have to pay 12 months of base assessments that accrued prior to acquisition of title (or 1% of the original mortgagee, whichever is less), but also clarify that other purchasers bear responsibility for all debts owed by the prior owner including collection costs and attorney's fees;  
3. Require a majority of condominium unit owners to approve creating a "condo within a condo", giving those owners a voice in determining the future of their community;
4. Conform the laws governing cooperative associations to be more consistent with condo laws.  This portion of the bill would allow co-ops to hold closed board meetings to discuss personnel matters; impose a deadline for challenging elections; require board member education or self-certification and otherwise mirror portions of the condo laws; 
5. Clarify mortgagee financial obligations in homeowners’ associations.

Future amendments to the bill will hopefully speed-up foreclosures and give judge’s more power to impose sanctions for delays.  There are efforts to relieve associations from liability for payment of past due amounts when title to property is acquired as a result of lien foreclosure.  

Look for more legislative updates directly from Tallahassee as this is just one of the bills being tracked by CALL.
 

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Ok - Florida's Government in the Sunshine Act does not apply to community associations, but community associations do have what is commonly referred to as 'sunshine' requirements.  Several years ago the Firm published a pamphlet outlining the 'dos' and 'don'ts' of noticing meetings.  We have recently updated this publication to incorporate changes to the statutes governing community associations and include more information for volunteer board members and CAMs.

 Check out our other informative publications.

 Download this informative pamphlet to learn about or refresh your knowledge of:

• Meeting Notice Requirements
• Owners' Rights at Board Meetings
• Keeping Minutes of Board Meetings
• Notice of Committee Meetings &
• Exceptions to the 'Sunshine' Law

We include a chart for your use as a at-a-glance guide as well. 

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Everything You Wanted to Know about Being a Condominium Board Member… But Were Afraid to Ask!   Condominium Board Member Certification Approved by the Department of Business & Professional Regulation**
	Why Attend?
	Comply with State Law** (see below) Understand your legal responsibilities and obligations including your “fiduciary duty” Gain insights into governing through case studies and real situations Receive a Quick Reference Guide of checklists, statutory deadlines and charts to assist with elections, meetings and other Board responsibilities.
	Topics Covered:
	Operations • Records Maintenance • Dispute Resolution • Elections Budgets & Reserves • Financial Reporting • Insurance • Audits Broward Dates & Times Saturday, December 3, 2011 9:00 AM - 12:00 PM         Reserve your space by calling Steve Bahm at 954-364-6018 or sbahm@becker-poliakoff.com Becker & Poliakoff 3111 Stirling Road, Fort Lauderdale, FL 33312 [MAP]   Light refreshments will be served. There is no charge to attend but you must call to reserve your space. First come, first served. YOU WILL RECEIVE A CERTIFICATE OF COMPLETION SUITABLE FOR FRAMING

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The burden is on the association to show that all required steps for adoption of assessments are completed – and documented.

Section 718.112(2), Florida Statutes, sets forth a list of provisions that condominium association bylaws must contain and states that if the bylaws do not contain the listed provisions, they shall be deemed to include them. With regard to procedures for adoption of non emergency special assessments, the statutory requirements set forth in Section 718.112(2)(c), Florida Statutes, are:

• Written notice incorporating an identification of agenda items mailed, delivered, or electronically transmitted to the unit owners (if owners have consented to electronic transmission and the documents so allow) and posted conspicuously on the condominium property not less than 14 days prior to the meeting;
• Evidence of compliance with the 14-day notice by an affidavit executed by the person providing the notice and filed among the official records of the association;
• The notice shall specifically state that assessments will be considered and advise the nature, estimated cost, and description of the purposes for such assessments; and
• Written notice of any special assessment levied by the association must be delivered to each unit owner, including a statement of the specific purpose or purposes of the assessment. (See Section 718.116(10), Florida Statutes).

Notice of meetings at which a proposed annual budget (a non-special assessment) will be considered by the board of directors or unit owners must also be delivered to each unit owner, mailed to each unit owner at the address last furnished to the association by the unit owner, or electronically transmitted to the location furnished by the unit owner for that purpose, and evidence of compliance with these requirements must be documented by an affidavit of the person providing the notice, with the affidavit being filed among the association’s official records. (See Section 718.112(2)(e), Florida Statutes).

Failure to comply with notice requirements in connection with the adoption of a budget or a special assessment, or failure to document compliance, can result in loss of ability to obtain enforcement of the collection of an assessment from a defaulting unit owner.

Evidence of compliance with the requirement of posting and delivery to all unit owners of timely notice of meetings at which association budgets or special assessments will be considered is typically not a problem. While seemingly simple and perfunctory, failure to comply with, and document compliance with these statutory requirements, can cost the association its ability to collect an assessment. It can also result in the expense of having to go through the entire process again in order to correct the procedural deficiency.
 

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You may wonder why the distinction is important. There are different laws for each type of association. The rights and responsibilities of owners are different in each type of community and procedural operations are likewise different. Here are a few examples:
 

Election Procedures:

Proxy wars in condominiums led to substantial revisions of the Condominium Act - one of those revisions eliminated use of proxies for elections and created a balloting procedure requiring advance nominations (no nominations from the floor) and a 2 envelope system for casting election ballots. Once an election ballot is received by a condominium association, it cannot be revoked. Most HOAs use general proxies for most matters, including the election of directors. In an HOA nominations are allowed from the floor. The proxy holder would then consider the nominees and vote in the manner they believe is appropriate without consulting the voter (proxy giver). Proxies can be revoked and a later dated proxy will control, leading some HOA owners to solicit proxies multiple times if they want to control the outcome of an election.

Quorum Requirements:

A quorum is not necessary to hold a condo election. The Condominium Act only requires participation (ballots) by 20% of the members in order to hold a valid election. This provision ensures that the members (owners) have a say in association leadership even if the majority of the members don't care and don't vote. HOA owners do not enjoy that benefit as there must be a quorum to hold an election. Many owners do not participate in association affairs. They ignore mailings, do not attend meetings and do not send back proxies. That number rises when homes are abandoned, in some stage of foreclosure, bank owned and the like. The lack of participation can prevent an election from being held and the existing board members stay in office which leads to owner complaints from time to time.
 

Dispute Resolution:

The State’s mandatory, non-binding arbitration program has been in place since 1992. The Court system became overburdened with condominium cases and litigation is highly procedural, creating a substantial disadvantage to pro-se defendants (homeowners without legal counsel). The purpose of the statutorily-mandated arbitration procedure is to provide a more informal and cost-effective forum for resolution of condominium disputes. HOAs don't have access to the arbitration system with 2 exceptions: election and recall issues. Thus, a homeowner frustrated because the board ignores all requests for records has to file a lawsuit after he or she sends a statutory offer to participate in pre-suit mediation. That HOA owner does not have an enforcement agency to call to get help obtaining the records and doesn't have the option of filing a user-friendly petition for arbitration. 
 

There are many other differences between condominium and homeowners' association operations and some associations turn to the Division of Florida Condominiums, Timeshares and Mobile Homes for guidance.  We will discuss one recent declaratory statement that addressed leasing office space in a future post.

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Board members at the Village of Doral Place have been embroiled in a legal battle involving the community pool for years. Clever investors bought the pool parcel at a tax sale in 2003. Condo owners didn’t even know about any property tax delinquency until the investor put up a locked chain link fence and a “no trespassing” sign, blocking entry. Finally, after years and years of litigation, the appellate court ruled that the swimming pool was a common element of the condominium, and the statute barring separation and partition of common elements prevented a tax deed sale even though the condominium association failed to pay the property taxes assessed against the parcel. The condominium association regained control after the court set aside the tax deed and it reimbursed the investors for the amount paid for the parcel, plus interest.

This case should remind community leaders of some basic due diligence tasks.

Many developments (whether HOA or condominium) contain property that for one reason or another is not categorized by the Property Appraiser as common element or common area. In some cases the property was not officially deeded to the association. Often, the tax collector will continue to utilize the developer’s prior address or an old management company address for all tax notices, since no one updated the records. If taxes remain unpaid, the county will hold a tax certificate sale. Whoever bids for the lowest interest rate for a particular property, and the taxes which are in arrears, will obtain the tax certificate. Once a tax certificate is outstanding for a period of two years, the tax certificate holder may apply for a tax sale to occur. Unfortunately, failure to update records maintained by the Property Appraiser can lead to issuance of tax certificates and then tax sales can take place without any real notice to the association. 

The distressed real estate market increases the chances that issues like these will ‘slip through the cracks’. Some developers went bankrupt or lost the property as a result of foreclosure before transferring title or completing the development. Simple title searches will often reveal whether all property subject to the covenants or declaration of condominium has been categorized properly for tax purposes.

Community leaders should be aware that under Florida Statute §193.0235, ad valorem taxes or non-ad valorem assessments by a county, municipality, special district, or water management district may not be assessed separately against common elements utilized exclusively for the benefit of lot owners within a subdivision, regardless of ownership. Any subdivision property that is designated on the plat or plan as a common element is included in this definition. Therefore, recreational facilities or property actually and exclusively used by the lot owners, regardless of ownership, and designated as such on the plat, approved site plan, or otherwise as a common element for the exclusive benefit of lot owners should not result in a separate tax bill, but many associations pay these taxes for years and years since they didn’t take the appropriate action. The same is true with respect to the common elements of a condominium. Valuation of the units for property tax purposes takes into account the common elements.

Don’t let this happen to you – make sure the community common elements or common areas are categorized and assessed properly before you pay years of tax bills or face similar disputes.

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One of the Federal housing programs benefiting low-income renters is commonly referred to as "Section 8" which is rental subsidy, limiting the monthly rent payment for the person qualifying for the program.   If someone qualifies for the program, the federal government pays for a portion of the rent and the tenant pays the rest.  The program coordinator evaluates whether the rental payment sought by the owner of the property is appropriate (fair market).  In most cases the bulk of the payment is made by the government entity (usually administered by a local housing authority) directly to the owner of the leased property.  Many types of properties house tenants that participate in the Section 8 program - condominiums and houses within homeowners associations are no exception. 

The Florida community association laws allow the association to demand rent paid by a tenant if the owner fails to pay assessments.  What if the actual tenant only pays a nominal sum since he or she participates in this rental subsidy program?  Does that mean the association can only collect a hundred dollars (+/-) when the rent may be closer to a thousand dollars?  Does the housing authority continue to pay the bulk of the rent to the delinquent owner? 

A homeowners association in Palm Beach County did not accept the nominal payment from the actual tenant at face value.  It obtained a Court Order directing the housing authority to divert the Section 8 rent subsidy payments from the owner to the association. Wptv (news channel 5) featured a story on this issue (below):

The owner of a property used in connection with a rental subsidy signs a contract with the local housing authority.  That Housing Assistance Payments Contract (HAP) imposes conditions on the owner - one of which is to maintain the property.  The housing authority is entitled to cancel or terminate the contract upon breach by the owner.  

Questions remain whether forcing the housing authority to divert rental payments to an association will result in termination of the contract.  However, this association certainly benefits from the immediate payments. Perhaps its time for HUD to modify the HAP and/or to promulgate rules allowing the housing authority to comply with the Florida community association laws, especially considering the fact that the tenant hasn't violated the terms or conditions of the program. 

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The Sun-Sentinel included a story about a South Florida condo owner this week.  The condo owner filed a law suit against the condominium association for discrimination, claiming that the association failed to make a reasonable accommodation.  The deaf owner reportedly demanded the association to make arrangements and pay for a sign-language interpreter at meetings, shows or condo activities, so he can participate in those activities.

Community leaders and managers should know that the Fair Housing Act prohibits any person to refuse to make a reasonable accommodation in rules, policies, practices, or services, when such accommodations may be necessary to afford a handicapped person equal opportunity to use and enjoy a dwelling unit.  The use of the dwelling unit likewise includes the public and common use areas available to unit owners.  

The housing provider (community association in this context) must make requested accommodations unless:

1. the accommodation imposes an undue financial or administrative burden, or
2. requires a fundamental alteration in the nature of its program.

There is a big distinction between accommodations and modifications under the Fair Housing Laws.   A modification is generally defined as any change to the public or common use areas of a building or any change to a dwelling unit.  In 2008, the Department of Justice (“DOJ”) and the Department of Housing and Urban Development (“HUD”) issued a Joint Statement providing technical assistance regarding the rights and obligations of handicapped persons and housing providers under the Act relating to reasonable modifications.  The Joint Statement gives examples of modifications that are typically considered reasonable, such as:

1. widening doorways to make rooms more accessible for persons in wheelchairs;
2. installing grab bars in bathrooms;
3. lowering kitchen cabinets to a height suitable for persons in wheelchairs;
4. adding a ramp to make a primary entrance accessible for persons in wheelchairs; or
5. altering a walkway to provide access to a public or common use area.

Modifications are made at the expense of the person requesting the modification.  Accommodations are made by the housing provider and can result in an expense to the housing provider.  However, if the expense creates a financial burden on the housing provider, it is not reasonable.  The Joint Statement issued by DOJ and HUD regarding reasonable accommodations says you determine whether a requested accommodation presents an undue financial and administrative burden on a case-by-case basis taking various factors into account, such as the cost, the resources of the provider, the benefit of the accommodation, and whether alternatives
would meet the disability-related needs.

So, what will happen in this case?  We'll have to wait to hear whether the costs to all of the owners and the administrative burden placed on association management make this particular request unreasonable under the circumstances.

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Has your association collected rent from tenants when the landlord/owners fail to pay assessments?  If so, you should be aware that the 2011 Florida community association legislation (HB 1195) includes a form of letter to use when notifying a tenant to make rent payments to the condo or HOA.  The statute clarifies the obligation on the part of the tenant to divert rent payments to the association.  Section 718.116(11)(a), Florida Statutes provides, in relevant part, the following:

Pursuant to section 718.116(11), Florida Statutes, the association demands that you pay your rent directly to the condominium association and continue doing so until the association notifies you otherwise.  Payment due the condominium association may be in the same form as you paid your landlord and must be sent by United States mail or hand delivery to ...(full address)..., payable to ...(name)....  Your obligation to pay your rent to the association begins immediately, unless you have already paid rent to your landlord for the current period before receiving this notice. In that case, you must provide the association written proof of your payment within 14 days after receiving this notice and your obligation to pay rent to the association would then begin with the next rental period. Pursuant to section 718.116(11), Florida Statutes, your payment of rent to the association gives you complete immunity from any claim for the rent by your landlord for all amounts timely paid to the association. 
 

The 2010 statute already protected tenants against eviction by the landlord when payments were made to the condo or HOA as a result of the association's demand.  That didn't stop landlords from threatening eviction or otherwise intimidating tenants though.   There should be less and less resistance as more Florida residents become aware of the law - hopefully improving the association's bottom line!

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Ever been to a community association meeting where it takes a half hour (or more) to address the form of the minutes from the previous meeting?  I've seen reasonable people debate, argue and become animated over the content of meeting minutes. Criticisms such as "that's not what I said" or "you only included a portion of what I said" are common.  These discussions create tension that could easily be avoided.  Community leaders asked the following question:

Question:What should be in our minutes? We have entire conversations and "thank yous" to everyone, added in each month. 

The content of the minutes is somewhat stylistic. The minutes must include the date, time (when called to order) and place of the meeting.  Minutes of a board meeting must include the names of the board members that participated (in person or by teleconference).  The minutes must include all motions and how each director voted (or abstained from voting) on each motion.   It is a good idea to attach the notice of the meeting to the minutes and, if an affidavit of mailing/delivery is required, go ahead and attach that document as well.  That way all the documents relevant to noticing the meeting and a record of all actions taken at that meeting are in the same place (the minute book).

While some provisions (i.e. recall procedures) require specific findings in the minutes, as a general matter the minutes are merely a record of all the actions taken at meeting of the general membership, a committee or of the Board.

Minutes of a general membership meeting should reflect the number of members participating, whether in person or by proxy and describe notice of the meeting.  Again, if an affidavit is required, its a good idea to attach that document to the minutes. The administrative rules require a record of certain votes in the minutes.  For example, Rule 61B-22.006(7) of the Florida Administrative Code requires the minutes of the association to reflect the actual number of votes cast by the membership to waive the requirement for audited, reviewed or compiled financial statements and specify the type of financial statement to be prepared as a substitute.

Here is an excerpt of a piece I wrote for a magazine several years ago:

Perhaps Sgt. Joe Friday from Television’s Dragnet said it best when he requested “Just the facts, Ma’am”. In my opinion there are too many opportunities to editorialize when summaries of statements made by the members are included in the minutes. Unless the Secretary (or other person that prepares the minutes) has made a video or audiotape of the meeting, attributing specific comments to specific individuals may provide yet another source of controversy within an Association and the comments rarely help (but often hurt) the Association in the future if the same issues are addressed repeatedly without affirmative action on the part of the Board. Owners often argue that completely accurate statements appear out of context in the minutes and are therefore misleading, not accurately conveying the issue or position of the member on an issue. Creating an actual transcript of the meeting is overly cumbersome and unnecessary.

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The American Heart Association encourages the purchase and availability of automatic external defibrillators and many community associations have already purchased this life safety equipment for on-site use.  These machines have become commonplace in airports, hotels and shopping centers throughout the country.

You may wonder if there is any downside to having this machine available in the community association setting.  While Florida's Cardiac Arrest Survival Act provides broader liability insulation than the Good Samaritan Statute, the protection is not absolute.   The Cardiac Arrest Survival Act does protect the owner of the device from civil liability if:

• The device is properly maintained and tested; and
• Employees or agents of the owner have received appropriate training in the use of the device.

However, specific training isn't required if: 

1. The device is equipped with audible, visual, or written instructions on its use, including any such visual or written instructions posted on or adjacent to the device;
2. The employee or agent utilizing the device was not an employee or agent who would have been reasonably expected to use the device; or
3. There wasn't a reasonably sufficient time period between hiring the employee or agent and the event, or between the acquisition of the device and the occurrence of the harm.

 The Internet has many resources available for community leaders showing the proper use of this device, including the following:

Each community association should first consult with its insurance adviser or liability carrier to learn whether there are special conditions associated with purchase or use of a defibrillator.  Your carrier may require testing and regular maintenance of the unit.  Your carrier may require employees to undergo training.

While the Florida law offers protection from civil liability under most circumstances, that immunity will not necessarily apply if the machine malfunctions.  However, fire and life safety officials indicate that the machines will not deliver an electrical shock unless the circumstances so warrant.  The AED devices have become less expensive over the years and actually walk the user through the process with audible commands.  Associations should test the battery every so often (yearly) and replace the pads when they expire. 

Having a defibrillator on the property could mean the difference between life or death of a resident.  If your community is considering such a purchase, please consult with your insurance adviser and legal counsel.  Moreover, contact your local first responders - many fire departments will gladly send a representative to come speak to your residents about the use and responsibilities of ownership of these devices as well as train your employees in life safety measures.

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More in our series of questions asked by local community leaders. 

Question:  What makes a contract legal? Who has to sign it? Is it only our Secretary?

Answer: There are entire treatises devoted to this subject.

From an attorney’s point of view, contracts must contain mutual obligations and adequate consideration to be valid and binding. The parties to the contract must have the legal capacity to contract (i.e. an incompetent person cannot enter into binding contracts) and the object or purpose of the contract must be legal (i.e. a contract to murder someone is not legally binding). These issues are much more complex than they seem and thousands of cases each year address disputes whether contracts are legal or binding.

Community association boards confront various contract issues from time to time and should have a basic understanding of legal obligations so as not to incur unnecessary liability or expense. One issue we see frequently concerns the doctrine of apparent authority. An association can be held liable for a contract entered into by someone with apparent authority, even if that person did not have actual authority. We’ve all heard of situations where the President, Vice President or even Manager goes out and enters into a contract before the board even knows or agrees to buy that product or service. The doctrine of apparent versus actual authority is well settled in the law. For example the Fourth District Court of Appeals held:

“When, in the usual course of business of a corporation, an officer or other agent is held out by the corporation or has been permitted to act for it or manage its affairs in such a way as to justify third persons who deal with him in inferring or assuming that he is doing an act within the scope of his authority, the corporation is bound thereby.”

Officers of corporations typically have authority to enter into contracts on behalf of those corporations. If the other party to the contract is led to believe the person they are negotiating with has authority and they rely on that apparent authority to their detriment, the association may bear responsibility for damages and expenses.

Consequently, it is very important to define the authority of the officers and the manager. If the board wants to enable the President to contract for minor repairs without advance authorization, it should adopt a resolution to that effect – and put the exact limits on expenditures in that resolution. Many associations allow their managers to contract for repairs or buy supplies so long as they spend less than $500 or $1,000 at a time.

Officers (President, Vice President and so on) must likewise understand they do not acquire any special power when they are elected or appointed to their position. With limited exceptions, contracts must be approved by the Board of Directors, voting at a duly called meeting.

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Does your community association enforce all pet restrictions uniformly and consistently?  It’s typical, expected, and almost commonplace when community association boards of directors, managers, maintenance staff or residents “ignore” what is seen as harmless violations of the recorded restrictions or rules and regulations with regard to pets, only to be outraged later when someone sneaks in a 60 lb. pit bull or a 4 foot snake. Sometimes the board’s lack of action stems from its reluctance to spend money to enforce the pet restriction and/or sympathy for the long-term resident and his or her “cute little kitty” or “very quiet bird.”

However, that "niceness"  is likely to work against the board in the end.  A board of directors in Palm Harbor has reportedly reconsidered enforcement action against a homeowner with a dog weighing more than 35lbs.   ABC Action news reported:

Pursuant to Florida case law, the defense of selective enforcement may be established by demonstrating that an association failed to enforce the restrictions in its governing documents against comparable violations. In Killearn Acres Homeowners Assoc., Inc. v. Keever, the board of directors prevailed in a case seeking a homeowner to remove a satellite dish on the side yard since the unit owner could show no other instances of dishes being permitted on a side yard. In another case the court rejected a home owner's attempt to establish selective enforcement by showing the board ignored home businesses, fences, decorative items and solar panels. In, McMillan v. Oaks of Spring Hill Homeowner’s Assoc., Inc., the association was able to obtain a court order requiring the owner to remove a shed that had been installed in their yard.  On the other hand, in Prisco v. Forest Villas Condominium Apartments, Inc. the board lost the enforcement case against a dog owner where the owner proved the board did not require owners to remove cats from the property.

In this Palm Harbor matter, the board reportedly decided to reconsider taking enforcement action since the owner acquired the dog after her brother's tragic death.  Its difficult to know whether the board's reconsideration stems from the circumstances or from the selective enforcement claim. 

The 'take-away' for community leaders and managers:  Do your homework.  Summer is typically slower than other parts of the year - so conduct a survey of the residents and determine who owns pets and what pets are on the property.  Review your parking restrictions and vehicle registrations.  Conduct inspections to determine whether there are any non-conforming uses.  If the rules are important to the community, take them seriously, as a few 'slips through the cracks' can be fatal to an enforcement action.

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We want to thank the hundreds of people that registered for our webinar on June 1.  You raised important questions and issues for community leaders and managers.  The webinar is now available for replay if you could not attend.  Click HERE to view the recorded webinar.

We received so many questions both during the live event and after that we couldn't respond to due to time constraints.  Some of those questions are answered on the Florida Construction Law Authority blog.  Others are:

Question: If a unit owner does not maintain their personally owned shutters and is notified in writing by the Board and the shutters fail and parts fly off and cause damage to the building or personal property of other owners, is that owner deemed negligent and responsible for the costs of repair of any such damage?

Answer: Even if you suspect negligence, treat any damages as a casualty losses. The shutters wouldn’t have created damages without the storm or casualty event. Make sure the adjuster knows what damages occurred and do not exclude damages from your Proof of Loss or report to the insurance company.

There are actions you can take now to mitigate losses in the event of a storm – have a professional inspect all hurricane shutters to confirm they are operating properly. If not, the board can then address the issue directly with the home owner. Many governing documents allow the association to perform repairs on an owner’s account (if the owner fails to do so after notice) and there are other remedies available as well. An ounce of prevention is worth a pound of cure.

Question: Please discuss whether there are changes for association requirement to repair to air conditioning equipment on the roofs of high rises.

Answer: This issue confuses both board members and unit owners. The laws changed in 2009. The condo master policy must include coverage for all HVAC – that means air conditioners, air handlers, compressors, duct work, etc. Having insurance coverage doesn’t mean the association is always responsible for repairs to air conditioners though. The association is only responsible for casualty losses – not wear and tear, not unavoidable damages as a result of age, etc. If your a/c unit is 15 yrs old and cannot be re-installed after roof work – that is not a casualty. If your a/c stops cooling – that is not a casualty. If your a/c unit is hit by lightening, that’s a different story.

Question: Discuss the extraordinary powers granted to condominium BODs during an emergency.

Answer:   If a state of emergency is declared where the condominium is located:
 The board can contract for debris removal without bids.
 The board can, prohibit unit owners, family members, tenants or guests from entering the condominium property upon advice of emergency management officials or licensed professionals. (i.e. the condo is unsafe for one reason or another)
 The board can require residents to evacuate in the event of a mandatory evacuation order.  The board can authorize removal and disposal of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the condominium property.
 The board can levy special assessments without approval of the unit owners.
 The board can even borrow money and pledge association assets without prior unit owner approval.

The purpose of this law is to give boards flexibility to handle the immediate needs of the condo – once the state of emergency expires (for that area) the emergency powers expire as well.

Question: Responsibility for damages to condos that are in foreclosure and have not yet been auctioned by the bank.

Answer: This is a good question – the association still wants to take actions necessary to mitigate further damage to the building. So, that means you would still board up windows, remove items that must be removed to prevent or minimize mold and get the a/c working for the same reason, etc. It is money well spent (and should, for the most part, be included in insurance coverage), even if you suspect you will never recover the money from the deadbeat owner or the bank.

 Don't forget to join us for upcoming webinars for community leaders and managers.

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LIVE WEBINAR
Disaster Planning for the 2011 Hurricane Season - Are You Ready to Weather the Storm?

Wednesday, June 1, 2011
10:00 AM– 11:00 AM 
 

Hurricane Season is officially here. While we have had a couple of years in Florida that have perhaps lulled us into a certain complacency, the prediction in 2011 is for nine hurricanes in the Atlantic. Are you ready to weather the storm?

Join Bill Strop, who will moderate this webinar, and Rob Rubin and Sanjay Kurian, to learn about recent cases and experiences resulting from recent disasters that will affect how you prepare yourself and your community before the storms hit.  Both Bill and Sanjay are Florida Board Certified Construction Lawyers with tremendous expertise in repair/reconstruction issues.  Bill and Rob both spent years working on behalf of insurance companies, so they know the tactics and techniques relied upon by carriers to deny or discount claims.
 

William Strop, Esq. Fort Lauderdale	Sanjay Kurian, Esq. Fort Myers	Robert I. Rubin Esq. West Palm Beach

Click below to register and you will receive a confirmation email with information on how to participate
 

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I promised an update on the Master Association Blocks Owners from Pool and Recreational Facilities post when a result became known.   A Palm Beach County Circuit Court Judge ruled yesterday that the Master Association governing the Quail Run community was not entitled to suspend use of the recreational facilities by all of the owners in one of the condominiums within the community.  The Court found that Section 718.303, Florida Statutes did not allow the Master Association to suspend the use rights of the compliant, paying owners, due to delinquencies on the part of a few.  Part of the Order says:

"The statute requires that each delinquent member be treated singularly as the Court finds that the statute does not provide that a member who is current in his or her obligations be penalized for payment failure of another member who is delinquent."

Since this is an interim Order in a Circuit Court case, it does not have precedential value, meaning it does not rule over other cases.  However, the ruling reflects one Judge's interpretation of the law.  Thus, community leaders are encouraged to discuss the authority to suspend use rights for an entire subdivision as well as the possible consequences of that action with counsel.

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Over 40% of the Home Loans Issued in Two Major Florida Cities in February are Government-Insured FHA Loans. 

The marketability of the homes in your community is highly dependent upon the availability of mortgage financing.  We've included several posts on this site regarding purchase money financing issues over the past 2 years, including reporting on the changes to federal underwriting guidelines. Since mortgage financing (or lack thereof) severely impacts community association operations, Community Associations Institute (CAI) announced it is "stepping up its Congressional and federal regulatory advocacy on behalf of American homeowners, home buyers and common-interest communities."   CAI issued a statement on behalf of its 30,000 members that included the following quote:

"The stakes for homeowners, home buyers and communities are enormous,” says CAI Chief Executive Officer Thomas M. Skiba, CAE. “Rules being developed today may likely govern mortgages for the next several decades. If you live in an association or work in the community association industry, you need to understand the magnitude of these issues, keep abreast of the latest developments and weigh in when such opportunities are available.”  

You can learn more about CAI's new initiative at Mortgage Matters.

The mortgage crisis is also evident by comparing the percentages of FHA backed home loans.  FHA project approval has proven to be a significant factor in home sales. DataQuick Information Systems reports the following increases in Florida:

The future of GSE (Government Sponsored Enterprise) financing is also up-in-the air.  However, Fannie Mae announced an incentive program it says will help stabilize communities.  Purchasers of Fannie-Mae owned HomePath properties are eligible for financial assistance to help pay up to 3.5% of the closing costs.  Fannie Mae-owned HomePath properties are listed on HomePath.com and most listings include detailed property descriptions, photographs, information about local schools and more.

Proactive community leaders have taken steps to ensure their communities are approved for favorable purchase financing.  You may want to discuss project approval or certification with your community association attorney.

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Community association leaders and managers from across the state cheered with excitement for their friends, colleagues and industry partners at the Florida Communities of Excellence Awards ceremony held last Friday at the Seminole Hard Rock Hotel in Hollywood.

Here are the winners:

Best Web Site -- Recognizes Web sites that offer access to important information and provide additional conveniences for their residents

• Large: Green Cay Village, Boynton Beach
• Small: Nova Homeowners' Association, Davie 

Energy & Water Conservation/Sustainable Practices -- Recognizes energy and water management programs that achieve cost economies while promoting environmentally friendly practices

• Large: Vanderbilt Community Association, Naples
• Small: Madeira Beach Yacht Club, Madeira Beach

Family Friendly Programs & Initiatives -- Recognizes communities in which participation and well-being are actively promoted for the entire family

• Large: Island Walk of Naples, Naples
• Small: Palm Bay Yacht Club, Miami

Safety & Security -- Recognizes programs, policies and procedures that protect and ensure the safety of residents and property

• Large: Ibis Property Owners Association, West Palm Beach
• Small: Turnberry Ocean Colony, Sunny Isles Beach

Florida-Friendly Landscaping™ -- Recognizes environmentally sound landscape, wetland, preserve and lake management policies

• Large: Pelican Cove Condominium, Sarasota
• Small: Heather Hill One Condominium, Dunedin

Disaster Preparedness -- Recognizes comprehensive planning for protecting lives and property and for restoration in the event of a disaster

• Large: Ibis Property Owners Association, West Palm Beach
• Small: Parkshore Plaza Condominium, St. Petersburg

Civic Volunteerism & Advocacy -- Recognizes associations that contribute to improving society through volunteerism and support of non-profit and charitable causes

• Large: Village Walk of Sarasota, Sarasota
• Small: Turnberry Ocean Colony, Sunny Isles Beach

Financial Innovation -- Honors innovative solutions to ease financial burdens while maintaining the quality of amenities and services

• Large: Village Walk of Sarasota, Sarasota
• Small: Jade Residences at Brickell Bay, Miami

Congratulations to all the finalists!  Florida Community Association Journal will, of course, feature in-depth articles over the next several months. Please check back to this site to hear about some of the really progressive and innovative ideas community leaders implemented over the last year.

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The Firm recently published its last community association newsletter for the year.  For the past few years Volume XII of Community Update is a Year In Review. We take this opportunity to re-visit the articles that appeared in our publication during the past year and hope you find it useful as a reference to the important issues that impact your daily operations. You can access the Community Update archives through the Links section on the right-hand side of this site.

2010 Webinars Available On-Demand

Funding Owner Delinquencies: Collecting Rent From Tenants

Moderated by Lisa Magill, Presented by Scott Petersen and Guest Seth Heller.

Analysis of an Insurance Coverage Lawsuit

Moderated by Ken Direktor, Presented by Robert I. Rubin and Guest Andrea C. Northrop.

As one year ends another begins and so does another series of events intended to benefit our clients, industry contacts and friends. Condominium Board Member Certification classes are scheduled throughout the State and many of you already registered to attend the Annual Community Association Leadership Conference in your area.

Because the goodwill of those we serve is the foundation of our success, it's a real pleasure to say "Thank You" as we wish you a full year of health, happiness and prosperity.

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It is not unusual for non-compliant tenants or tenancies to create dissension in a community.  Sometimes the tenants haven't been screened, there may be too many occupants or too many vehicles, the tenants make noise and don't care if they disturb the neighbors, the tenants use so much water it seems like the shower is on all day, the tenants don't recycle, don't clean up after their pets (or bring pets on the property where prohibited) and litter, leaving association personnel (or volunteers) to clean up - the list can go on and on...

Residents complain to the board and the board asks counsel "Can't we just evict them?"

Well, there are specific procedures that must be followed in order to evict or otherwise remove a disruptive tenant and the person or entity seeking such eviction or removal must have the legal authority to do so.   Eviction is a remedy specifically tailored to termination of tenancies pursuant to landlord-tenant laws.  The Association is not the owner of the property and not the landlord - therefore a traditional eviction action is usually not an option.* 

However, the Association has the legal authority to enforce the governing documents (including rules and regulations).  Section 718.303, Florida Statutes specifically requires tenants (and other occupants) to comply with those rules as well as the Condominium Act.  Section 720.305, Florida Statutes says the same for HOAs.  Additionally, the governing documents usually impose an obligation on the owner to control and bear responsibility for the conduct of any tenants, guests or occupants.*  The Association may file a lawsuit* (or Petition for Arbitration depending upon the relief sought) asking the Court for relief from the problems caused by problematic tenants.  The Association can even ask the the Court for an Order requiring the tenants to vacate the premises which is what the Association asked in the Briarwinds Condominium Association v. Rigsby and Wood, No. 3D10-329, case.  The Third District allowed the Association to continue its case for injunctive relief against the owner and tenant.

What if you have a bad owner? Under Florida law, owners and tenants have different property rights. The Florida Statutes provide condominium and homeowner association owners with an exclusive right to possess their property. In Kittel-Glass v. Oceans Four Condominium Association, 648 So.2d 827 (Fla. 5th DCA 1995), the Court held that an association could not permanently enjoin an owner from entering their own unit.   Not to worry though - Associations have several options when faced with owner non-compliance, some of which are explained in other posts.

• * In some cases a tri-party agreement or other contractual relationship may provide the basis for use of the eviction process.
• * If they don't, consider proposing amendments.
•  *An HOA may be required to send a pre-suit demand for mediation.

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SB 1196 made significant changes to the statutes regarding year-end financial reporting requirements for condominium and homeowners' associations. 

Condominium Associations

Condominium associations must provide their members with a year-end financial report (or notice that a report is available, free of charge) within 120 days of the end of the fiscal year. The level of required financial report depends upon the association’s annual revenues.

• Associations with revenues of more than $400,000.00 must produce an audit.
• Associations with revenues of $200,000.00 to $400,000.00 must produce a review.
• Associations with revenues of $100,000.00 to $200,000.00 must produce a compilation.
• Associations with revenues of less than $100,000.00 must produce a report of cash receipts and expenditures. 

However, if the condominium has less than 75 units, the law merely requires a report of cash receipts and expenditures, regardless of the association's annual revenue.  While the unit owners may vote to reduce the level of financial reporting, it is worthwhile to discuss the benefits of each level of review with your accountant.

Section 718.111(13), Florida Statutes directs the Division of Florida Condominiums, Timeshares and Mobile Homes to adopt rules setting forth uniform accounting principles and standards.  The 2010 changes require those rules to set standards for reporting a summary of association reserves.  Communities that reserve on a line-item basis (straight line method) will need to include a good faith estimate disclosing the annual amount of reserve funds that would be necessary for full funding once the Division adopts rules.  Condominium associations should therefore engage in some due diligence when preparing reserve schedules.  A reserve study is always a good idea as it not only provides the basis for the annual reserve schedule, but will also identify the projects requiring priority attention.

Homeowners' Associations

Section 720.303(6), Florida Statutes, part of the Florida Homeowners’ Association Act,  has been amended regarding budgets and reserves, but those changes likewise impact the year-end financial reports.   The 2010 changes distinguish between "statutory" and "non-statutory" reserves.  There are different disclosures required, depending on the type of reserves established.

HOAs that do not include "statutory"  reserve schedules and funding for those reserves in their annual budgets must include the following disclosure in the year-end financial statements:

THE BUDGET OF THE ASSOCIATION DOES NOT PROVIDE FOR RESERVE ACCOUNTS FOR CAPITAL EXPENDITURES AND DEFERRED MAINTENANCE THAT MAY RESULT IN SPECIAL ASSESSMENTS. OWNERS MAY ELECT TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6), FLORIDA STATUTES, UPON OBTAINING THE APPROVAL OF A MAJORITY OF THE TOTAL VOTING INTERESTS OF THE ASSOCIATION BY VOTE OF THE MEMBERS AT A MEETING OR BY WRITTEN CONSENT.

HOAs that include "non-statutory" reserve funding in their annual budgets must include the following disclosure in the year-end financial statements:

THE BUDGET OF THE ASSOCIATION PROVIDES FOR LIMITED VOLUNTARY DEFERRED EXPENDITURE ACCOUNTS, INCLUDING CAPITAL EXPENDITURES AND DEFERRED MAINTENANCE, SUBJECT TO LIMITS ON FUNDING CONTAINED IN OUR GOVERNING DOCUMENTS. BECAUSE THE OWNERS HAVE NOT ELECTED TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6), FLORIDA STATUTES, THESE FUNDS ARE NOT SUBJECT TO THE RESTRICTIONS ON USE OF SUCH FUNDS SET FORTH IN THAT STATUTE, NOR ARE RESERVES CALCULATED IN ACCORDANCE WITH THAT STATUTE.

Confused yet?  Well, if you are you'll be interested in the Community Association Officers Forum.  Broward, Miami-Dade and Palm Beach Colleges, in a partnership with Edison State College, is providing free board member training to address these and other issues. Four three-hour sessions include topics of interest to new and experienced board members and, as a bonus, each session has one hour of the newly state-mandated training.
 

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Showcase Your Excellence - Submit Your Entry for Consideration by Independent Judges in the Florida Communities of Excellence Awards! 

This independently judged program enables the top communities in the state to promote their accomplishments and raise their profiles while documenting their success and enabling others to learn from their accomplishments across numerous categories.  Publisher and sponsor Jim McMurray noted the awards "saw 100% growth in its first two years and the program will expand even further for 2011.”   Florida Community Association Journal co-founded the Awards with the law firm Becker & Poliakoff, P.A.

Communities often rely upon the advice, effort and fortitude of their managers.  Therefore, "Managers of Excellence”  will also be selected.  This award is to recognize professionals working with communities that have distinguished themselves with consistently high rankings in the initial three years of the Awards.

There are plenty of categories so every size, type and shape of community can participate.  Go to:  Florida Communities of Excellence for more information and entry forms. 

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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.

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Amendments to the Florida Rules of Civil Procedure Largely Derived From Recommendations of the Task Force on Residential Mortgage Foreclosure Cases.

Some of the changes are as follows:

Verification of Mortgage Foreclosure Complaints:  This requires the Plaintiff (lender) to attest to the truthfulness of the allegations in the complaint.  It is intended to minimize erroneous filings, conserve judicial resources by reducing the number of cases with "lost note" issues and provide the court with greater authority to sanction lenders that make false allegations.

Changes the Affidavit of Diligent Search:  When the defendants cannot be served personally, the law allows the foreclosure case to proceed after publication of a notice.  This new form requires the person that conducted the search to sign the Affidavit (instead of the lender) and to provide more information about the search.

New Form - Motion to Cancel and Reschedule Foreclosure Sale:  Associations wait and wait for a lender to foreclose and then wait for the sale to bill the new owner (whether lender or third party) for the appropriate amount.  More importantly, Associations need the property to be sold to start collecting assessments from the new owner going forward.  The number of sales canceled at the last minute seems to be on the rise.  This new form requires the lender to explain why they want to cancel the sale.  It also directs the Court to set a new sale date, rather than keeping properties in an "extended limbo between final judgment and sale". [Quote from Task Force]

There are some slight changes to the Final Judgment of Foreclosure that weren't published before so interested persons have sixty (60) days to comment before they become final.  All of the other changes are final and in effect.

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There May be no Coverage Available for Claims Against the Association for Allegations that Include Failing to Maintain & Repair the Property, Negligence, Breach of Contract and Breach of Fiduciary Duty.

Eastpointe Condominium I Association, Inc. v. Travelers Casualty and Surety Company of America, United States District Court - order entered October 14, 2010.

 This recently decided case highlights several legal maxims that should be more widely known, such as:

Tangible Property Exclusion  - the "Non-Profit Management and Organizational Liability Insurance Policy" was for the purpose of covering "any loss ... incurred by the [Association] as the result of any claim ... made against the [Association] ... for a Wrongful Act."  The term "Wrongful Act" was defined in the typical way, as any error, act, omission, misleading statement or breach of duty that caused, or is alleged to cause, damages.  However, the policy excluded coverage for claims "arising out of any damage, destruction, loss of use or deterioration of tangible property".  The definition made sure to mention that damages from construction defects, mold, toxic fungus or mildew were specifically excluded.  Thus, the insurance carrier was right when it determined there was no coverage for defense or indemnification under the policy in light of an owner's claim for damages to her unit, personal property and common elements of the condominium that forced her to use alternative accommodations.

 Duty To Defend v. Duty to Indemnify - You may have heard or been aware of this maxim. 

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