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

What is your policy for handling records inspections by owners?  Do you have written rules?  Where are the records inspections held?  How many hours does the owner have to review the requested records?  Does anyone help facilitate the inspection?

If you are a condo or HOA board member and cannot answer these questions, its time to consider rules governing owner record inspections.  Association leaders must understand their obligation to allow member access to records to avoid costly disputes that may increase tension in the community.

The Division handles numerous complaints from condo owners claiming that associations fail to allow access to the Official Records.  Sometimes those complaints, and arbitration cases, result in fines against the association.  Other times the association clearly shows that the owner was wrong in one way or another.   The Division publishes a very comprehensive practical guide for use by community leaders (board members) and homeowners.  While the Condominium Act forms the basis for the guide, HOA leaders and owners should find it useful as well as the laws are similar (but not the same so please consult with counsel).  You can download the guide HERE. 

There are some records that are not accessible to owners. Those records include:

1. Any record protected by the lawyer-client privilege as described in s. 90.502 and any record protected by the work-product privilege, including records reflecting mental impressions, conclusions, litigation strategy, or legal theory of the attorney or the association prepared in connection with pending or anticipated litigation/adversarial proceedings.
2. Information obtained by an association in connection with the approval of the lease, sale, or other transfer of a unit.
3. Personnel records of association or management company employees, including, but not limited to, disciplinary, payroll, health, and insurance records.  However written employment agreements or budgetary/financial records showing compensation is still open to the owners.
4. Medical records of unit owners.
5. Social security numbers, driver’s license numbers, credit card numbers, e-mail addresses, telephone numbers, facsimile numbers, emergency contact information, addresses of a unit owner other than as provided to fulfill the association’s notice requirements. An owner may agree to allow the association to disclose contact information. The association is not liable for the inadvertent disclosure of information if it is included in an official record of the association and is voluntarily provided by an owner as opposed to being requested by the association.
6. Electronic security measures that are used by the association to safeguard data, including passwords.
7. The software and operating system used by the association which allow the manipulation of data, even if the owner owns a copy of the same software used by the association. Only the data is part of the official records of the association.

 What rules are valid and what rules are unreasonable when it comes to record inspections?  Some of the Division rulings may surprise you - we will provide some examples in a future post.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Miami-Herald reported a story about the widow of the Nova Southeastern University professor that was attacked and killed in his Plantation home.   She filed a civil lawsuit Friday alleging negligence by the management company and condominium association - she claims those entities were supposed to conduct background checks on tenants.

The article quotes the attorney for the widow who said ``They certainly did not meet up to their obligations concerning a proper background check as well as an approval of Randy W. Tundidor,'' Williams said. ``A very simple check would show evictions and the like.'' 

Tenant background checks are not required by state condominium law.  In fact, an association can only perform a background check if such action is authorized by the governing documents.  In this particular matter, the tenants resided in a townhome condominium owned by the slain professor.  The professor and his family did not reside in the same complex, so its hard to understand how the condominium association (or its management company) would have been able to prevent these individuals from allegedly driving over to his house, allegedly entering his house and engaging in the alleged attack. 

Even if the "simple" background check did show past evictions and the like, the condominium association and its management company are specifically prohibited from sharing that information with the landlord/owner.  Section 718.111(12), Florida Statutes prohibits the association from sharing any information obtained in connection with its investigation of a proposed tenant.  That statute also prohibits the board from sharing social security numbers, credit card numbers, credit history reports or "any personal identifying information" with the members.  Federal laws likewise prohibit disclosure of credit and other background information.

What happened to the professor is a tragedy.  How anyone could commit such a heinous crime is beyond me, especially if what has been alleged is true and the whole dispute involves payment or non-payment of a security deposit and/or maintenance of the rented property.

That being said - was this murder the condominium association's fault?  Was it the management company's fault?  I hope you agree that the condominium association and management company should not be held liable for this tragic loss.

"Take-aways" for community leaders and managers:

1. Make sure the governing documents of the community specify that any information obtained in a background investigation cannot be shared;
2. Make sure the governing documents advise the owners that any investigation or background checks are solely for the benefit of the association (as the association cannot act as a guarantor);
3. If the community does engage in background checks, make sure those documents are safeguarded and the governing documents authorize the board of directors to reject certain applications for tenancy approval based upon articulated justifications; and
4. Review transfer approval procedures with association counsel - you may be surprised to learn your community does not have many options, even if the applicant does not seem 'suitable' for one reason or another.

Finally, speak to your legal counsel and perhaps insurance professional if crimes have been committed within the community.  You may have options to improve community safety while limiting the association's exposure to liability - all at the same time.

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

Loose Lips Sink Ships - Board Discussion of Obtaining Legal Advice Results in Waiver of Privilege.

Communications between an attorney and his or her client have been privileged and confidential for basically as long as there has been a legal system.  Some say the attorney-client privilege has its roots in ancient Rome. Early English common law recognized the privilege as important to encourage disclosure of information that may be necessary for the attorney to provide effective counsel without fear of the information becoming public.   Its no surprise that Florida's legislators recognized the value of the privilege and excluded attorney-client privileged documents from member inspection rights in Section 718.111(12), Florida Statutes. 

Community association board members may not understand the privilege or how to protect the confidentiality of advice received from the association's attorney.  Now and then I receive a copy of my letter to one client from another client asking whether the issue applies to them.   I cringe when a contractor's attorney calls after receiving a copy of my letter identifying weaknesses in my client's position.  The association is the client and has the right to voluntarily waive its privilege - but was there a discussion of the consequences of the waiver or was the disclosure by one board member who "was just trying to help"?  Unfortunately, once the cat is out of the bag its very difficult, and in some cases impossible, to prevent further disclosure.

A recent Summary Final Order from the Arbitration Section of the Division of Florida Condominiums, Time Shares and Mobile Homes demonstrates that the privilege may be waived unintentionally, simply by discussing whether to obtain legal advice on a particular issue in an open forum. 

In this case the board proposed increasing the budget by more than 35%.  Owners questioned the board's authority to adopt such a large increase without the affirmative vote of the members.  The discussion of whether the board should adopt the budget or obtain legal advice first was at a duly-noticed board meeting.  Ultimately one of the board members made a motion to seek legal advice and the majority of directors voted in favor.

Later, one of the owners requested access to the official records, including the legal opinion analyzing the governing documents with respect to the budget increase.  The association allowed access to all the requested records other than the legal opinion.  The arbitrator ruled that since the board discussed the issue at an open board meeting there was no intent to keep its subsequent communications with or advice from the attorney confidential.  The board was ordered to make the legal opinion available for inspection. 

There is a lesson here - community associations may need to have policies in place to safeguard confidential information.  Board members should understand this valuable privilege and think twice before discussing any sensitive legal issues in an open forum or with any third parties. 

• Email This
• Print
• Comments (9)
• Trackbacks
• Share Link

Community association leaders and managers should become aware of changes to record inspection obligations now that SB 1196 has been signed into law.

Roster List (Condo):

The roster list is an important document.  Telephone numbers have traditionally been included in the roster list, despite objections over the years.  The roster list also includes email addresses of the members if they have consented (or requested) to receive notices and other association information by email.  SB 1196 says that the email addresses and telephone numbers of the members must be removed from the association's records if the owner revokes consent to receive notice by electronic transmission.  Please discuss modifications to the roster or creating a procedure for owner consent to include this information with association counsel, as many owners have come to rely upon the roster or directory to remain in contact with friends and neighbors.

Civil Penalties (Condo):

Last year the act was amended to authorize civil penalties against anyone (individuals - i.e. board members, manager, etc.) that knowingly or intentionally defaced or destroyed accounting records.  It also authorized civil penalties for knowingly or intentionally failing to create or maintain the accounting records.  SB 1196 now limits the civil penalties to the time period the records are required to be maintained.  Penalties are likewise not appropriate for failing to create or maintain these records unless there is a finding of intent to harm the association or one or more of its members.

Misuse of Information (Condo):

We know the association cannot publish debtor lists or use the delinquency records to embarrass or harass its members, but the board (or management) has little to no control over what happens to records once they are in the possession of a unit owner.  SB 1196 says the association is not responsible for misuse of records properly obtained in connection with an owner's rights to inspect and copy.

Personnel Records (Condo & HOA):

Personnel records for association employees such as payroll, disciplinary actions, health and insurance records are no longer accessible to members.  I know a few managers that are happy with this change.

Owner Information (Condo & HOA):

Private information such as email addresses, telephone numbers, emergency contact information, social security numbers, driver's license and credit card numbers of the owners are not accessible to members.

Condo and HOA owners are not entitled to obtain the association's passwords, electronic security records, software or operating systems that manipulate data.

Presumption (HOA):

In HOAs the presumption that the association willfully failed to make records available if the records were not available within 10 business days only arises if the request was sent via certified mail, return receipt requested.

Inspection Costs (HOA):

If the association does not have a copy machine at the record site, or the owner requests more than 25 pages of records, copies may be made by an outside vendor or management company personnel - in that case the association may charge for the actual costs of the copies and hourly charges for vendor or employee time to cover the administrative costs to the vendor or the association.

You may need to change your association's record retention and/or inspection policies in light of these changes.

• Email This
• Print
• Comments (21)
• Trackbacks
• Share Link