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

Several months ago, I posted an entry that discussed repair responsibilities after a casualty (see “What Happens when the Hot Water Heater Bursts?”). A similar (and equally important) topic involves incidental damages. That is, what happens when, during the course of performing its maintenance obligations, the association damages part of a unit that the unit owner is otherwise obligated to maintain?

Certainly, if the association is negligent in performing its maintenance and such negligence causes damage to the owner’s unit or personal property, the association is liable for the damage. But, what about situations where the association must cut into unit ceilings, floors or walls to repair common element pipes? The resulting damage to wood flooring, carpeting, tiling, paint or wallpaper is not the result of negligence in these instances. But is it fair for the unit owners to pay for the repairs when they had nothing to do with causing the damage?

Typically, a Declaration of Condominium (“Declaration”) will contain an “incidental damage” clause that provides the association must repair damages to a unit caused during the association’s repair of the common elements. However, not all Declarations have this language. In the absence of such language, unit owners are indeed responsible to repair damages to their unit and/or personal property caused by the association during the course of the association performing maintenance to the common elements. In fact, even with an “incidental damage” clause in the Declaration, absent negligence, the association is not responsible to repair or pay for damages it causes (during the performance of its maintenance responsibilities) to unit owner improvements or upgrades.

Presently, there are no appellate case decisions in Florida on this issue. However, there are several arbitration decisions on point. The Condominium Act requires that most condominium disputes go through the state’s mandatory non-binding arbitration program.  Arbitration decisions are not “law” and a court is free to accept or reject their holdings. Still, arbitration decisions are persuasive authority and many Florida courts do follow them.

For example, in Salamone v. Golden Horn Condominium Association, Inc., Case No. 96-0370, the arbitrator did not require the association to replace owner improvements or modifications to the balconies, even though they were considered a part of the unit, and even where the association’s declaration contained an incidental damage clause, where the damages are occasioned by the association’s maintenance function. Similarly, in Harrison v. Land's End Condominium Association, Inc., Case No. 94-0298, a unit owner argued that the association was obligated to restore the balcony floor covering (i.e. tiling) after the same was destroyed during a condominium restoration project. In ruling that the association did not have to repair or replace the balcony tiling, the arbitrator concluded that the association would not have granted permission for improving the balcony floors if it was understood that all other unit owners would have to pay to replace the covering after proper work by the association.

The general tenor of these and other reported arbitration decisions appears to be that the unit owner is responsible to repair improvements or “upgrades” to the unit damaged by the association’s maintenance of the common elements. However, with respect to those items in a unit originally installed by the developer (e.g. original paint, wallpaper, carpeting and tiling), it appears that the Association would be responsible to repair them (as a common expense) if they are damaged during the process of association maintenance to the common elements.

Remember, this post deals strictly with normal maintenance and repair and has absolutely nothing to do with casualty repairs. Casualty repairs are governed by an entirely different set of rules in the Florida statutes.

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The Florida Consumer Collection Practices Act Prohibits Associations From Posting Delinquency Lists and Taking Other Actions to Collect Assessments and Maintenance Fees.

 There have been a number of newspaper articles explaining actions taken by community association boards and managers to collect delinquent assessments.  The Miami Herald reported that some associations post lists of the names of the owners behind on their fees and others deny security access devices to tenants of delinquent owners.  

The Wall Street Journal reported that some associations were taking control of the unoccupied units and renting them on a short term basis until the bank foreclosed.  

While we are all familiar with the idiom "drastic times call for drastic measures",  community leaders and property managers should understand that Florida law prohibits unfair or abusive tactics with regard to debt collection, including the collection of assessments.   Although the prohibitions in the Federal Fair Debt Collection Practices Act do not apply to the person or entity owed the debt (the 'creditor', which in this case is the Association), both community associations and their managing agents are responsible for compliance with the Florida Laws.

Among other practices, Section 559.72, Florida Statutes, prohibits the following:

• Use of profane, obscene, vulgar, or willfully abusive language in communicating with a debtor or any member of his or her family;
   
• Communication with a debtor under the guise of an attorney by using the stationary of an attorney or forms or instruments which only attorneys are authorized to prepare;
   
• Orally communicating with a debtor in such a manner as to give the false impression or appearance that such person is associated with an attorney;
   
• Publishing or posting, threatening to publish or post, or causing to be published or posted before the general public individual names or any list of names of debtors, commonly know as a deadbeat list, for the purpose of enforcing or attempting to enforce collection of consumer debts;
   
• Mailing any communication to a debtor in an envelope or postcard with words typed, written, or printed n the outside of the envelope or postcard calculated to embarrass the debtor. An example of this would be an envelope addressed to “Deadbeat, Jane Doe” or “Deadbeat, John Doe”;
   
• Communicating with the debtor between the hours of 9 p.m. and 8 a.m. without the prior written consent of the debtor.

While every association must be diligent with its collection efforts, those efforts must be in compliance with legal and ethical standards.

On the other hand, the Florida Courts are cognizant of the problem and have allowed Associations to have receivers appointed for the purposes of collecting rent from tenants when the owners of those units are facing foreclosure as a result of non-payment of assessments.  Remember to check this site in the future for more information about proactive methods to collect assessments.

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Question: I live in a development that is governed by a homeowners’ association. More and more, we are seeing owners “walk away” from properties they can no longer afford due to the poor economy.

This leaves a void as to who is to care for their properties in their absence. Many times, the properties fall into disrepair, which causes potential buyers to think twice about purchasing in our community. Other owners are generally careful to maintain their properties, but it is those few abandoned properties that are scaring away potential buyers, and as a result, property values within our community have plummeted. Our association is considering taking on the task of fixing some of these abandoned properties to preserve property values and to make the community more attractive to potential buyers. Can we do that? M.D. (via e-mail)

Answer: You indicate that your community is a homeowners’ association, presumably governed by Chapter 720 of the Florida Statutes, also commonly (although not officially) referred to as the Florida Homeowners’ Association Act. If that is the case, then the answer to your question will depend on what your governing documents say.

Unlike the Florida Condominium Act, Chapter 718 of the Florida Statutes, which grants a condominium association the irrevocable right of access to each unit during reasonable hours for maintenance purposes, the Florida Homeowners’ Association Act does not expressly authorize a homeowners association to access an owner’s lot, let alone to make repairs where the owner fails to do so. Thus, the authority to do so must be contained in the governing documents.

Especially with more modern, well drafted documents, you will often find a clause in your documents which says that when the homeowners fail to maintain their property, the association is authorized to enter the premises and make repairs at the owner’s expense, after reasonable notice has been provided to the owner. Of course, what is “reasonable” will depend on the circumstances.

Unfortunately, your situation is far from unique in today’s economic climate. Owners in dire financial straits often do not make their mortgage payments. The bank will eventually initiate foreclosure proceedings. Under these circumstances, the owner may feel there is no way to salvage their interest in the property, or it is just not worth it for them, and they simply “disappear.”

In many cases, it is difficult for the association to ascertain the whereabouts of owners who have abandoned their properties, and thus notify the owner of the association’s intent to access the property and make repairs. Still, the association must make a reasonable effort to fulfill the notice requirement.

Where there is a mortgage and the bank has initiated foreclosure proceedings, it may also be appropriate to notify the bank of the situation. Banks are often unaware of the circumstances and upon being notified, may send someone out to maintain the property, since they have a substantial economic interest in it, and are usually conferred the right to do so by their mortgage agreement, or may seek court permission to do so. Other times, the banks are not equipped to have someone look after foreclosed properties, or they just do not believe it is worth the investment. If your association is considering the task of caring for “abandoned” properties (if authorized by your governing documents), please be aware that there may not be a way to recover the expenses incurred. A property owner who is unable to make mortgage payments, or carry out any other financial obligations (such as paying assessments to the association), is also likely unable to pay the cost of repairs on their “abandoned” property.

I would recommend consulting with the association’s legal counsel to verify whether the association has the authority to enter the property and make necessary repairs. Your attorney should also advise whether this is a proper expenditure of association funds, especially if the prospects of ultimately recovering the money spent are dim. Entering else’s property without proper legal authority may give rise to a trespass claim, notwithstanding the laudable intention of preserving the property values in your community.

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