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Mandatory Condominium & Cooperative Building Inspections and Non-Waivable Reserve Requirements | SENATE BILL 4-D

Mandatory Condominium & Cooperative Building Inspections and Non-Waivable Reserve Requirements | SENATE BILL 4-D

  • Posted: Mar 28, 2024
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Mandatory Condominium & Cooperative Building Inspections and Non-Waivable Reserve Requirements | SENATE BILL 4-D

brought to us by: REMBAUM’S ASSOCIATION ROUNDUP

We are getting so many calls from condo owners about inspections.  SFPMA thought why not re-post a great article about the inspections  what led up to this changes and what going forward are the requirements in Florida.  

With home insurers leaving Florida in droves, and following pressure from members of both political parties in the legislature to actually do something about it, in May 2022, the governor called a special legislative session to address the problem. A very real concern to the insurers is the effect of both time and inclement weather on Florida’s aging high-rise buildings. Until now, and for the most part, Florida law largely ignored these concerns. Enter Senate Bill 4-D (SB 4-D) which already became effective upon being signed into law by Governor DeSantis on May 26, 2022. This new piece of legislation addresses condominium and cooperative building inspections and reserve requirements (while this article primarily addresses these new laws in the context of condominium association application, they are equally applicable to cooperative associations).

By way of background, during the regular legislative session, there were several bills introduced in the Florida House of Representatives (House) and in the Florida Senate (Senate) addressing building safety issues, but none of them were passed into law due to the inability to match the language of the bills in both the House and the Senate which is a requirement for legislation to pass and go to the governor for consideration. As such, it was a little surprising to many observers that the legislature was able to approve SB 4-D in essentially a 48-hour window during the special session in May. The language used in SB 4-D was initially drafted into a proposed bill in November 2021. At that time, and during the most recent legislative session, input was provided by many industry professional groups including engineers, reserve study providers, and association attorneys. Many of these industry professionals indicated that there were challenges with some of the language and concepts being proposed in SB 4-D during session.

Notwithstanding these challenges, and in an effort to ensure some form of life safety legislation was passed this year, SB 4-D was unanimously approved in both the House and Senate and signed by the governor. A plain reading of this well intended, but in some instances not completely thought-out, legislation evidences these challenges. Some will say it is a good start that will need significant tweaking, which is expected during the 2023 Legislative Session. Others praise it, and yet others say it is an overreach of governmental authority, such as an inability to waive or reduce certain categories of reserves. You be the judge. We begin by examining the mandatory inspection and reserve requirements of SB 4-D.

I. MILESTONE INSPECTIONS: MANDATORY STRUCTURAL INSPECTIONS FOR CONDOMINIUM AND COOPERATIVE BUILDINGS. (§553.899, Fla. Stat.)

You will not find these new milestone inspection requirements in Chapters 718 or 719 of the Florida Statutes, but rather in Chapter 553, Florida Statutes, as cited above.

MILESTONE INSPECTIONS:

The term “milestone inspection” means a structural inspection of a building, including an inspection of load-bearing walls and the primary structural members and primary structural systems as those terms are defined in section 627.706, Florida Statutes, by a licensed architect or engineer authorized to practice in this state for the purposes of attesting to the life safety and adequacy of the structural components of the building and, to the extent reasonably possible, determining the general structural condition of the building as it affects the safety of such building, including a determination of any necessary maintenance, repair, or replacement of any structural component of the building. The purpose of such inspection is not to determine if the condition of an existing building is in compliance with the Florida Building Code or the fire safety code.

SUBSTANTIAL STRUCTURAL DETERIORATION:

The term “substantial structural deterioration” means substantial structural distress that negatively affects a building’s general structural condition and integrity. The term does not include surface imperfections such as cracks, distortion, sagging, deflections, misalignment, signs of leakage, or peeling of finishes unless the licensed engineer or architect performing the phase one or phase two inspection determines that such surface imperfections are a sign of substantial structural deterioration.

MILESTONE INSPECTIONS FOR BUILDINGS THREE STORIES OR MORE IN HEIGHT:

A condominium association under chapter 718 and a cooperative association under chapter 719 must have a milestone inspection performed for each building that is three stories or more in height by December 31 of the year in which the building reaches 30 years of age, based on the date the certificate of occupancy for the building was issued, and every 10 years thereafter.

WITHIN THREE MILES OF COASTLINE:

If the building is three or more stories in height and is located within three miles of a coastline, the condominium association or cooperative association must have a milestone inspection performed by December 31 of the year in which the building reaches 25 years of age, based on the date the certificate of occupancy for the building was issued, and every 10 years thereafter.

The condominium association or cooperative association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance.

The condominium association or cooperative association is responsible for all costs associated with the inspection.

IF THE CERTIFICATE OF OCCUPANCY WAS ISSUED BEFORE JULY 1, 1992:

If a milestone inspection is required under this statute and the building’s certificate of occupancy was issued on or before July 1, 1992, the building’s initial milestone inspection must be performed before December 31, 2024. If the date of issuance for the certificate of occupancy is not available, the date of issuance of the building’s certificate of occupancy shall be the date of occupancy evidenced in any record of the local building official.

Upon determining that a building must have a milestone inspection, the local enforcement agency must provide written notice of such required inspection to the condominium association or cooperative association by certified mail, return receipt requested.

Within 180 days after receiving the written notice the condominium association or cooperative association must complete phase one of the milestone inspection. For purposes of this section, completion of phase one of the milestone inspection means the licensed engineer or architect who performed the phase one inspection submitted the inspection report by e-mail, United States Postal Service, or commercial delivery service to the local enforcement agency.

A MILESTONE INSPECTION CONSISTS OF TWO PHASES:

    (a) PHASE 1: For phase one of the milestone inspection, a licensed architect or engineer authorized to practice in this state must perform a visual examination of habitable and non-habitable areas of a building, including the major structural components of a building, and provide a qualitative assessment of the structural conditions of the building. If the architect or engineer finds no signs of substantial structural deterioration to any building components under visual examination, phase two of the inspection (discussed below) is not required. An architect or engineer who completes a phase one milestone inspection shall prepare and submit an inspection report.

    (b) PHASE 2: A phase two of the milestone inspection must be performed if any substantial structural deterioration is identified during phase one. A phase two inspection may involve destructive or nondestructive testing at the inspector’s direction. The inspection may be as extensive or as limited as necessary to fully assess areas of structural distress in order to confirm that the building is structurally sound and safe for its intended use and to recommend a program for fully assessing and repairing distressed and damaged portions of the building. When determining testing locations, the inspector must give preference to locations that are the least disruptive and most easily repairable while still being representative of the structure. An inspector who completes a phase two milestone inspection must prepare and submit an inspection report.

POST-MILESTONE INSPECTION REQUIREMENTS:

Upon completion of a phase one or phase two milestone inspection, the architect or engineer who performed the inspection must submit a sealed copy of the inspection report with a separate summary of, at minimum, the material findings and recommendations in the inspection report to the condominium association or cooperative association, and to the building official of the local government which has jurisdiction. The inspection report must, at a minimum, meet all of the following criteria:

(a) Bear the seal and signature, or the electronic signature, of the licensed engineer or architect who performed the inspection.

(b) Indicate the manner and type of inspection forming the basis for the inspection report.

(c) Identify any substantial structural deterioration within a reasonable professional probability based on the scope of the inspection, describe the extent of such deterioration, and identify any recommended repairs for such deterioration.

(d) State whether unsafe or dangerous conditions, as those terms are defined in the Florida Building Code, were observed

(e) Recommend any remedial or preventive repair for any items that are damaged but are not substantial structural deterioration

(f) Identify and describe any items requiring further inspection.

LOCAL GOVERNMENT ENFORCEMENT:

A local enforcement agency may prescribe time lines and penalties with respect to compliance with the milestone inspection requirements.

A board of county commissioners may adopt an ordinance requiring that a condominium or cooperative association schedule or commence repairs for substantial structural deterioration within a specified time frame after the local enforcement agency receives a phase two inspection report; however, such repairs must be commenced within 365 days after receiving such report. If an association fails to submit proof to the local enforcement agency that repairs have been scheduled or have commenced for substantial structural deterioration identified in a phase two inspection report within the required time frame, the local enforcement agency must review and determine if the building is unsafe for human occupancy.

BOARD’S DUTY AFTER OBTAINING THE MILESTONE REPORT:

Upon completion of a phase one or phase two milestone inspection and receipt of the inspector-prepared summary of the inspection report from the architect or engineer who performed the inspection, the association must distribute a copy of the inspector-prepared summary of the inspection report to each unit owner, regardless of the findings or recommendations in the report, by United States mail or personal delivery and by electronic transmission to unit owners who previously consented to receive notice by electronic transmission; must post a copy of the inspector-prepared summary in a conspicuous place on the condominium or cooperative property; and must publish the full report and inspector-prepared summary on the association’s website, if the association is required to have a website.

WHO PAYS FOR THE MILESTONE INSPECTION:

Pursuant to section 718.112, Florida Statutes, if an association is required to have a milestone inspection performed, the association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance with all of the requirements thereof. The association is responsible for all costs associated with the inspection.

FAILURE TO OBTAIN THE MILESTONE INSPECTION:

If the officers or directors of an association willfully and knowingly fail to have a milestone inspection performed pursuant to section 553.899, Florida Statutes, such failure is a breach of the officers’ and directors’ fiduciary relationship to the unit owners.

MANAGER’S DUTY:

If a community association manager or a community association management firm has a contract with a community association that has a building on the association’s property that is subject to milestone inspection, the community association manager or the community association management firm must comply with the requirements of performing such inspection as directed by the board.

EXEMPTIONS:

For clarity, the otherwise required milestone inspection does not apply to a single family, two-family, or three-family dwelling with three or fewer habitable stories above ground.

FLORIDA BUILDING COMMISSION REQUIREMENTS:

The Florida Building Commission must review the milestone inspection requirements and make recommendations, if any, to the legislature to ensure inspections are sufficient to determine the structural integrity of a building. The commission must provide a written report of any recommendations to the Governor, the President of the Senate, and the Speaker of the House of Representatives by December 31, 2022.

The Florida Building Commission must consult with the State Fire Marshal to provide recommendations to the legislature for the adoption of comprehensive structural and life safety standards for maintaining and inspecting all types of buildings and structures in this state that are three stories or more in height. The commission must provide a written report of its recommendations to the Governor, the President of the Senate and the Speaker of the House of Representatives by December 31, 2023.

II.    STRUCTURAL INTEGRITY RESERVE STUDIES AND MANDATORY RESERVES:

The reserve legislation set out in section 718.112 (f)(2)(a), Florida Statutes, is, for all intents and purposes, re-written. Prior to examining these most recent revisions, it is necessary to first examine the definitions set out in section 718.103, Florida Statutes, where a brand new term is added as follows:

Structural integrity reserve study means a study of the reserve funds required for future major repairs and replacement of the common areas based on a visual inspection of the common areas applicable to all condominiums and cooperative buildings 3 stories or higher.

Hereafter, the structural integrity reserve study is referred to as “SIRS”. Now we can turn our attention to the requirements of the SIRS as set out in section 718.112 (f)(2)(a), Florida Statutes

THE STRUCTURAL INTEGRITY RESERVE STUDY (required for all condominium and cooperative buildings three stories or higher regardless of date of certificate of occupancy):

An association must have a SIRS completed at least every 10 years after the condominium’s creation for each building on the condominium property that is three stories or higher in height which includes, at a minimum, a study of the following items as related to the structural integrity and safety of the building:

a. Roof
b. Load-bearing walls or other primary structural members
c. Floor
d. Foundation
e. Fireproofing and fire protection systems
f.  Plumbing
g. Electrical systems
h. Waterproofing and exterior painting
i.  Windows
j. Any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000 and the failure to replace or maintain such item negatively affects the items listed in subparagraphs a.-i., as determined by the licensed engineer or architect performing the visual inspection portion of the structural integrity reserve study.

The SIRS may be performed by any person qualified to perform such study. However, the visual inspection portion of the structural integrity reserve study MUST be performed by an engineer licensed under chapter 471 or an architect licensed under chapter 481.

As further set out in the legislation, at a minimum, “a structural integrity reserve study must identify the common areas being visually inspected, state the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense of the common areas being visually inspected, and provide a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense of each common area being visually inspected by the end of the estimated remaining useful life of each common area.”

The amount to be reserved for an item is determined by the association’s most recent structural integrity reserve study that must be completed by December 31, 2024. If the amount to be reserved for an item is not in the association’s initial or most recent structural integrity reserve study or the association has not completed a structural integrity reserve study, the amount must be computed using a formula based upon estimated remain useful life and estimated replacement cost or deferred maintenance expense of each reserve item.

If the condominium building is less than three stories then the legislation provides that, “in addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance. These accounts must include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000.”

The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance.

If an association fails to complete a SIRS, such failure is a breach of an officer’s and director’s fiduciary relationship to the unit owners.

NON-WAIVABLE AND WAIVABLE RESERVES IN THE UNIT OWNER CONTROLLED ASSOCIATION:

As to the SIRS, the legislation is patently clear that unit owners may not vote for no reserves or lesser reserves for items set forth SIRS report. There is on-going debate amongst attorneys in regard to whether a condominium under three stories can waive or reduce reserves for any of the reserve items required to be in the SIRS that are included in the under three story condominium reserve, for example, roof and painting (For those interested, examine lines 1029 to 1033 and 1050 to 1071 in SB 4-D).

MANDATORY RESERVES IN THE DEVELOPER CONTROLLED ASSOCIATION:

Before turnover of control of an association by a developer to unit owners other than a developer pursuant to section 718.301, Florida Statutes, the developer-controlled association may not vote to waive the reserves or reduce the funding of the reserves (Previously, a developer could fully waive all reserves for the first two years, meaning this is a monumental change).

PRE-TURNOVER DEVELOPER DUTY:

Before a developer turns over control of an association to unit owners other than the developer, the developer must have a SIRS completed for each building on the condominium property that is three stories or higher in height.

III.    OFFICIAL RECORDS:

Official records of the condominium and cooperative association include structural integrity reserve studies, financial reports of the association or condominium, and a copy of the inspection reports and any other inspection report relating to a structural or life safety inspection of condominium or cooperative property.

In addition to the right to inspect and copy the declaration, bylaws and rules renters have the right to inspect the milestone inspection report and structural integrity reserve study inspection reports as well.

Structural integrity reserve studies must be maintained for at least 15 years after the study is completed. In addition, inspection reports report and any other inspection report relating to a structural or life safety inspection of condominium property must be maintained for 15 years after receipt of such report.

IV.    ASSOCIATION WEBSITES:

In addition to other positing requirements, the inspection reports described above and any other inspection report relating to a structural or life safety inspection of condominium property and the association’s most recent structural integrity reserve study must be posted to the website.

V.    JURISDICTION OF DIVISION OF CONDOMINIUMS, TIMESHARES, AND MOBILE HOMES:

Pre-turnover, the Division of Florida Condominiums, Timeshares, and Mobile Homes (Division) may enforce and ensure compliance with rules relating to the development, construction, sale, lease, ownership, operation, and management of residential condominium units, and complaints related to the procedural completion of milestone inspections. After turnover has occurred, the Division has jurisdiction to investigate complaints related only to financial issues, elections, and the maintenance of and unit owner access to association records, and the procedural completion of structural integrity reserve studies.

VI. NEW REPORTING REQUIREMENTS FOR ALL CONDOMINIUM AND COOPERATIVE ASSOCIATIONS:

On or before January 1, 2023, condominium associations existing on or before July 1, 2022, must provide the following information to the Division in writing, by e-mail, United States Postal Service, commercial delivery service, or hand delivery, at a physical address or e-mail address provided by the division and on a form posted on the division’s website:

    1. The number of buildings on the condominium property that are three stories or higher in height.
    2. The total number of units in all such buildings.
    3. The addresses of all such buildings.
    4. The counties in which all such buildings are located.

An association must provide an update in writing to the division if there are any changes to the information in the list within six months after the change.

VII.    APPLICABLE TO ALL SELLERS OF UNITS:

As a part of the sales process, the seller of a condominium or cooperative unit and developers must provide to potential purchasers a copy of the inspector-prepared summary of the milestone inspection report and a copy of the association’s most recent structural integrity reserve study or a statement that the association has not completed a structural integrity reserve study.

VIII.    GLITCHES:

As with any new legislation of such a substantial nature, there often follow in subsequent years what are referred to as “glitch bills” which help provide additional clarity, remove ambiguity, and fix unintended errors. To name a few: (i) the term “common areas” is used in the legislation when in fact the correct term is “common element;” (ii) clarity needs to be provided regarding whether reserve items that are required to be in SIRS, but show up in the under three story reserves, such as paint and paving, can be waived or reduced by the membership; and (iii) for those buildings that are within three miles of the coastline, additional clarity could be provided to provide better guidance as to how to perform the measurement.

 

 

 

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DOS AND DON’TS OF ELECTION CHALLENGES by Rembaum’s Association Roundup

DOS AND DON’TS OF ELECTION CHALLENGES by Rembaum’s Association Roundup

  • Posted: Mar 27, 2024
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DOS AND DON’TS OF ELECTION CHALLENGES

Rembaum’s Association Roundup

Pursuant to their relevant statutory provisions, election disputes that take place in condominium, homeowners’, and cooperative associations are subject to mandatory nonbinding arbitration before the Division of Florida Condominiums, Timeshares, and Mobile Homes (the “Division,” for short). It is referred to as “nonbinding” because the arbitrator’s order is not final until 30 days after its issuance, which provides time for either party in the dispute to challenge the decision to their local circuit court, which hears the case de novo (anew).

As you will read, not every election dispute will be heard by the Division. As a threshold matter of importance, the Division will not hear election disputes within 60 days prior to an election or 60 days after the election has taken place. In order to bring an election challenge, Florida Statutes require prior written notice to the other party of the dispute, where a reasonable opportunity to correct the alleged error is provided, and it is clearly expressed that if the alleged error is not cured, an arbitration action will take place. In a prior arbitration case, it was held that providing only 10 days to cure the alleged defect in a pre-arbitration notice was insufficient. Therefore, it is suggested to provide more than 10 days opportunity to cure the alleged election defect prior to filing an action for arbitration.

Interestingly, the general rule is that to have standing to challenge election results, arbitration action must be brought by a candidate or an individual who was prevented from being a candidate.  The Division has even held that a member who was not a candidate did not have standing to challenge the election results that other persons should have been declared the winning candidates. While these arbitration decisions are not binding precedent, they are instructive and, if nothing else, useful in evaluating the best course of action.

In the context of condominium election challenges, there are three flaws that are typically “fatal” to the association, if committed. They are i) a substantive or serious defect in the first notice of election, ii) the failure to include a timely submitted candidate information sheet in the second notice of election, and iii) failure to include the name of each eligible candidate on the election ballot. While each of these can potentially be timely cured in advance of the election, if not, then they likely lead to a successful election challenge.

For example, failing to mail the notice of election to one or more owners or the failure of the first or second notice of election to accurately state the street address of the meeting have been considered as “fatal” flaws. Also, the failure to include a timely submitted candidate information sheet or failure to include the name of a candidate on the ballot have also been considered as  “fatal” flaws. However, so long as the election is re-noticed from the second notice of election, including all of the candidate and information sheets and/or also including the name of all of the candidates on the ballot, then such fatal flaws can be cured in advance of the election. In these instances there would be no further solicitation of candidates, but rather a rescheduling of the night of the election itself by sending a revised and corrected second notice of election at least 14 days prior to the election which would cure that defect. This amended second notice should clearly state the reason(s) for having to send the corrected notice.

It is important to note that while condominium association elections are strictly construed in accordance with relevant Florida Statutes, homeowners’ association elections occur in accordance with their governing documents. Therefore, whether the above fatal flaws have applicability to a homeowners’ association fully depends upon the style of election set out within the governing documents.

Arbitrators with the Division have held that a new election will have to be scheduled if  in the governing documents there is included a requirement that candidates be full-time residents of the state of Florida or even reside in their unit full time and such requirements were enforced during the election. Therefore, there cannot be a residency requirement of any kind for board members. Similarly, arbitrators have held that associations cannot require candidates to complete a criminal background check or even execute an acknowledgment that they are not a felon.

Contrary to popular belief, the relevant Florida Statutes do not require candidates to be members of a community association in order to run for the board of directors (often, “membership” is defined in the governing documents as being an owner of a parcel within the community). However, such requirements can be set out in the governing documents; but if such a requirement is not in the governing documents, then the board cannot disqualify a potential candidate because he or she is not an owner or member. This means that without such requirements specifically set forth in the governing documents of the association, any non-member, including tenants and occupants, are qualified to run for the board of directors. Therefore, if you desire to avoid such a circumstance, you should consult with legal counsel for your association regarding whether such requirements exist in the governing documents; if not, then you should consider preparing an amendment for the community to approve to ensure that only members who are actual members/owners of the association are qualified to run and serve on the board.

As to the first notice of election, notwithstanding any strict requirements set out in the first notice of election regarding where potential candidates must submit their notice of candidacy, it is not sufficient to exclude a candidate on the basis of the candidate  delivering his or her intent to be a candidate elsewhere so long as it is reasonable to conclude the association actually received notice of such candidate’s intent to run for the board. For example, a specific address could be required to mail the intent to run form, but the fact that a candidate hand-delivered such notice to a board member or manager would likely not be sufficient grounds to exclude the candidate.

Through a variety of arbitration decisions, the arbitrators have made clear that if the violation at hand would not have changed the results of the election, then the challenge will fail. For example, an association that improperly excluded several ballots due to perceived flaws with the outer envelope, which in fact were later held not to be flaws at all and which if counted would not have overturned the otherwise valid election results if the ballots were later included in the total count, would not have changed the result.

In other instances where numerous violations combine to clearly affect the reliability of the election results, then an election challenge may be valid. For example, where unit owners are permitted to cast ballots without inner envelopes, at least one owner was permitted to retrieve his ballot and change it, and nobody verified signatures on the outer ballot envelopes and where at least one unit owner was allowed to cast a ballot after the polls had already closed, then cumulatively the election results were determined to be  no longer reliable and a new election was required.

While the Division has promulgated condominium election rules in the Florida Administrative Code, it has not yet done so for homeowners’ associations. Therefore, the body of condominium arbitration decisions can provide some guidance; but for the most part, when examining homeowners’ association election challenges, the arbitrators are required to consider the significance and totality of violations in their decision-making as to whether to void an election, or not.

At times, for reasons that really do not make any practical sense, some management companies when preparing a homeowners’ association election revert back to the condominium form of election with a first notice, second notice, intent to run, etc. rather than relying on the homeowners’ association governing documents, which have a completely different election style and where voting is by proxy or in person. Also, there are no requirements to declare candidacy in advance of the annual election, meaning a candidate could actually nominate himself or herself from the floor of the meeting on the election day itself. When management companies go on autopilot and use the condominium style of election contrary to the requirements set out in the homeowners’ association governing documents, then the arbitrators will likely require a new election to take place in conformity with the governing documents of the homeowners’ association.

A successful challenge of a homeowners’ association election often rests upon whether the alleged violation affected the outcome of the election. This once again is evidence that unless the alleged violation would have changed the outcome of the election, then the election challenge likely fails even if there were serious irregularities during the election process.

A few odds and ends are worthy of discussion as well. An active board of directors should not use the association’s pulpit for campaigning. Doing so can lead to a successful election challenge. However, an existing board member can certainly campaign on his or her own time and using their own means but not through the association or its website. If the association has not enforced use of voting certificates, then to do so without providing advanced written notice and an opportunity for the owners to comply could invalidate election results. Finally, if a valid election does not occur because either a quorum was not achieved or in the condominium context at least 20 percent of the eligible voters did not cast the ballot, then there is no obligation of the association to try again.

When bringing an election challenge is under consideration, ask yourself if the irregularity would have brought about a change in the outcome of the election. If not, then, think twice about bringing the challenge. In any event, it is worthwhile for an association concerned with its election process to consult with the association’s lawyer for a detailed conversation as to how best to avoid such problems in the future.

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HB 1203: LOTS OF NEW PROTECTIONS FOR MEMBERS LIVING IN HOAs MAKES IT HARDER FOR CAMs

HB 1203: LOTS OF NEW PROTECTIONS FOR MEMBERS LIVING IN HOAs MAKES IT HARDER FOR CAMs

  • Posted: Mar 27, 2024
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HB 1203: LOTS OF NEW PROTECTIONS FOR MEMBERS LIVING IN HOAs MAKES IT HARDER FOR CAMs

House Bill 1203 and SB 7046 merged to eventually create a huge bill for the protection of homeowners in HOAs.  It starts by placing lots of responsibilities on community association managers.

A community association manager or community association management firm that is authorized by contract to provide community association management services to a homeowners’ association must do all of the following:

(a) Attend in person at least one member meeting or board meeting of the homeowners’ association annually.

(b) Provide to the members of the homeowners’ association the name and contact information for each community association manager or representative of a community association management firm assigned to the homeowners’ association, the manager’s or representative’s hours of availability, and a summary of the duties for which the manager or representative is responsible. The homeowners’ association must also post this information on the association’s website or application required under s.720.303(4)(b). The community association manager or community association management firm must update the homeowners’ association and its members within 14 business days after any change to such information.

(c) Provide to any member upon request a copy of the contract between the community association manager or community association management firm and the homeowners’ association and include such contract with association’s governing documents.

So what do you think so far of the new protections for members of an HOA?


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Should Your Condo Association Adopt Online Voting? by Becker / BECKERBALLOT

Should Your Condo Association Adopt Online Voting? by Becker / BECKERBALLOT

  • Posted: Mar 21, 2024
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Should Your Condo Association Adopt Online Voting?

by Becker / BECKERBALLOT

Many associations are considering whether to adopt online voting (or “E-Voting”). Legislation took effect enacting Section 718.128, back in July 2015.  Florida Statutes, permitting condominiums, cooperatives and homeowners’ associations to conduct elections and other owner votes through the use of “an Internet-based online voting system.” This article will discuss how to do so and what the advantages are.

The first step is for a Board to decide if they wish to offer electronic voting to their members. Florida Statutes 718.128 requires associations to adopt a board resolution approving electronic voting before they can utilize this type of voting process. The resolution must determine the manner in which online voting will be conducted such as procedures, deadlines, opportunities to consent to and participate, or opt out. The resolution must be considered at a board of directors meeting on 14 days of notice. A copy of the resolution must be provided to owners.

 

The resolution must provide that:

All unit owners receive notice of the opportunity to vote through an online voting system prior to each election or other unit owner vote in which the association authorizes online voting;
The deadline to consent, in writing, to online voting must be no less than 14 days before the election or other unit owner vote;
A method to authenticate the unit owner’s identification to the online voting system;
A method to transmit an electronic ballot to the online voting system that ensures the secrecy and integrity of each ballot; and,
A method to confirm, at least 14 days before the voting deadline, that the unit owner’s electronic device can successfully communicate with the online voting system.

The first of these requirements will ensure continual notice under circumstances in which online voting is conducted on an ongoing basis, avoiding situations where new owners are unaware of their right to opt in, and the latter prevents issues arising from last minute consents, and protects against fraud.

 

The following are other significant requirements contained in the legislation:

The e-voting system must provide the owner with a receipt, including the specific vote cast, the date and time of submission, and the user identification.
The e-voting system must also produce an official record for the association identifying the specific votes cast on each ballot and the date and time of the receipt of each electronically submitted ballot. The association must then maintain this record.
Votes in an election of directors shall not be accessible to the association prior to the scheduled election. Failure to comply will void the election.

In associations where voting participation is an issue, online voting can greatly increase participation and generate enthusiasm for the voting process. Online voting can also lessen the risk of fraudulent elections. While the costs for use of online voting software are likely to exceed mail out costs in many associations, such costs can be mitigated over time, and associations have flexibility in determining whether particular meetings will utilize online voting (i.e. – it is not an all or nothing decision).

Associations choosing to move forward must take care to confirm that they are using a vendor that understands and complies with the technical requirements. Like all other vendor contacts, it is critical to discuss the terms with legal counsel, who can also determine whether the system to be utilized is compliant. As meetings approach where online voting will be conducted, the use of online voting will require certain additional disclosures and instructions to members in relation to the process. Contact an attorney with experience in condominium and homeowners association (HOA) law with any questions.

 

Our industry has a few that we looked into: one comes out as a leader

BECKERBALLOT  

Today is the day you’ve been waiting for BeckerBALLOT.com is LIVE! We have partnered with SHYFT digital to offer an easy-to-use, secure, electronic-voting solution for community associations across the state of Florida and beyond. It’s the same great software – only better!
What you can look forward to upon signing up:

  • Increase membership participation and significantly reduce the labor involved in tallying paper votes.
  • Members can cast their votes from the convenience of their home, office, or anywhere they have access to an internet connection.
  • Admins can tally votes electronically, making the process faster, more accurate, and less prone to human error.
  • Eliminate typical errors and judgment calls associated with manual paper votes.
  • Easily solicit opinions using our survey tool to make informed decisions for your association membership.

We now offer flexible pricing, as well as a survey feature when you sign up for annual unlimited voting. The survey tool allows you to poll your community association without conducting an official vote.

Also, did you know that if you become a Becker annual retainer client, you will receive, among other benefits, a significant discount on BeckerBALLOT?

 

 

 

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Architectural Committees Formal Procedures, Published Standards, and Self Help by REMBAUM’S ASSOCIATION ROUNDUP

Architectural Committees Formal Procedures, Published Standards, and Self Help by REMBAUM’S ASSOCIATION ROUNDUP

  • Posted: Mar 13, 2024
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Architectural Committees Formal Procedures, Published Standards, and Self Help

by REMBAUM’S ASSOCIATION ROUNDUP

Formal Procedures

There are strict legal requirements that a homeowners’ association’s (HOA) architectural review committee (ARC) must follow, most especially if the ARC intends to deny an owner’s request. As this author has witnessed countless times, it is likely that many ARCs do not conduct their activities in conformity with Florida law such that an ARC denial may not withstand judicial scrutiny. If these legal requirements are not followed, and the ARC denies the owner’s architectural request, then it would be quite easy for the owner to challenge the ARC’s decision and prevail. Upon prevailing, the owner would be entitled to their prevailing party attorney’s fees and costs, as well. It is so easy to avoid this outcome, yet so few associations take the time to do it right.

Pursuant to §720.303(2), Florida Statutes, a meeting of the ARC is required to be open and noticed in the same manner as a meeting of the association’s board of directors. Notice of the ARC meeting must be posted in a conspicuous place in the community at least 48 hours in advance of the meeting, and the meeting must be open for all members to attend. Further, pursuant to §720.303(2)(c)(3), Florida Statutes, members of the ARC are not permitted to vote by proxy or secret ballot. Also, bare bone minutes should be taken to create a record of ARC decisions—especially denials.

We often hear from many HOAs that the ARC does not meet openly and does not notice their meetings. This leaves decisions made by the ARC vulnerable to challenge. If the ARC denies an application but fails to do so at a properly noticed board meeting, the owner can challenge the denial, claiming that it is not valid because the ARC did not follow proper procedure. In such cases, the ARC’s denial of an application is not valid because the ARC failed to comply with the procedural requirements for the meeting even if an application violates the declaration or other association-adopted architectural standards. However, by complying with the provisions of Chapter 720, Florida Statutes, your HOA can work to avoid this debacle.

 

 

Published Standards

Often a top priority for an HOA is ensuring that homes in the community maintain a harmonious architectural scheme in conformity with community standards and guidelines, and because the ARC is at the frontline of owners’ alterations and improvements to their homes, it is instrumental in ensuring that the community standards and guidelines are met. Pursuant to §720.3035(1), Florida Statutes, an HOA, or the ARC, “has the authority to review and approve plans and specifications only to the extent that the authority is specifically stated or reasonably inferred as to location, size, type, or appearance in the declaration or other published guidelines and standards.” But not every owner request is typically addressed in the declaration or other published guidelines and standards. If not, then the association may not be in a good position for proper denial. Therefore, the ARC is only as effective as the objective guidelines and standards (set forth in the declaration and other published guidelines and standards) are inclusive. So, what is the association to do when the ARC receives an owner’s application for an alteration to the home, but the association does not have any architectural guidelines or standards regulating the requested alteration?

While not court tested yet, a possible solution for this conundrum is to include a “catch-all” provision in the declaration to proactively address those ARC applications where a member may request a modification that is not directly addressed by the governing documents. Such a “catch-all” provision stands for the proposition that, if such a request is made, then the existing state of the community is the applicable standard by which the ARC application is to be judged. For example, imagine if an owner applies to the ARC to paint the owner’s house pink. If there are no architectural guidelines or standards that address what color a house must be, and there are no pink houses in the community, then the existing state of the community may provide a lawful basis for the ARC to deny the request because there are no existing pink houses in the community.

The Trouble With Self-Help Provisions

What if an owner refuses to maintain the owner’s property, such as pressure washing a dirty roof, despite the HOA sending demand letters, levying a fine, and perhaps even suspending the owner’s right to use the HOA’s recreational facilities? What is the HOA’s next step? Is it time to file a lawsuit to compel compliance? Well, Chapter 718 (governing condominiums), Chapter 719 (governing cooperatives), and Chapter 720 (governing HOAs) of the Florida Statutes authorize the association to bring an action at law or in equity to enforce the provisions of the declaration against the owner. Additionally, many declarations contain “self-help” language that authorizes the association to cure a violation on behalf of the owner and even, at times, assess the owner for the costs of doing so. These “self-help” provisions generally contain permissive language, meaning the association, may, but is not obligated to, cure the violation. Sadly, in this instance the word “may” means “shall,” and to find out why, read on.

There is a general legal principal that, if a claimant has a remedy at law (e.g., the ability to recover money damages under a contract), then it lacks the legal basis to pursue a remedy in equity (e.g., an action for injunctive relief). Remember, too, that an association’s declaration is a contract. In the context of an association, the legal remedy would be exercising the “self-help” authority granted in the declaration. An equitable remedy would be bringing an action seeking an injunction to compel an owner to take action to comply with the declaration. Generally, a court will only award an equitable remedy when the legal remedy is unavailable, insufficient, or inadequate.

Assume that the association’s declaration contains both the permissive “self-help” remedy and the right to seek an injunction from the court. Accordingly, it would appear the association has a decision to make—go to court to seek the injunction or enter onto the owner’s property, cure the violation, and assess the costs of same to the owner. However, recent Florida case law affirmed a complication to what should be a simple decision. In two cases decided ten years apart, Alorda v. Sutton Place Homeowners Association, Inc., 82 So.3d 1077 (Fla. 2nd DCA 2012) and Mauriello v. Property Owners Association of Lake Parker Estates, Inc., 337 So.3d 484 (Fla. 2nd DCA 2022), Florida’s Second District Court of Appeal decided that an association did not have the right to seek an injunction to compel an owner to comply with the declaration if the declaration provided the association the authority, but not the obligation, to engage in “self-help” to remedy the violation. Expressed simply, this is because the legal contractually based “self-help” remedy must be employed before one can rely upon equitable remedy of an injunction. Therefore, even though the declaration provided for an optional remedy of “self-help,” it must be used before seeking the equitable remedy of an injunction.

In Alorda, the owners failed to provide the association with proof of insurance required by the declaration. Although the declaration allowed the association to obtain the required insurance, the association filed a complaint against the owners seeking injunctive relief, asking the court to enter a permanent mandatory injunction requiring the owners to obtain the requested insurance. The owners successfully argued that even though they violated the declaration, the equitable remedy of an injunction was not available because the association already had an adequate legal remedy—the “self-help” option of purchasing the required insurance and assessing them for same. The Court agreed.

In Mauriello, the declaration contained similar language as in Alorda but involved the issue of the owners failing to keep their lawn and landscaping in good condition as required by the declaration. The association filed a complaint seeking a mandatory injunction ordering the owners to keep their lawn and landscaping in a neat condition. However, the facts were complicated by the sale of the home in the middle of the suit when the new owners voluntarily brought the home into compliance with the declaration. The parties continued to fight over who was entitled to prevailing party attorney’s fees with the association arguing it was entitled to same because the voluntary compliance was only obtained after the association was forced to commence legal action. The owners, citing Alorda, argued that the complaint should have been dismissed at the onset because the association sought an equitable remedy (injunction) when a legal remedy was already available—the exercise of its “self-help” authority. The Court considered the award of attorney’s fees after the dismissal of the association’s action for an injunction. Ultimately, the Court held that the owners were the prevailing party as the association could not seek the injunction because it already had an adequate remedy at law.

Accordingly, if your association’s declaration contains a “self-help” provision, and your association desires to seek an injunction against an owner rather than pursue “self-help,” the board should discuss the issue in greater detail with the association’s legal counsel prior to proceeding. Also, remember that if the association wants to enforce architectural standards, then they must be published to the membership; and always remember to notice ARC meetings and take minutes.

 

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Glazer and Sachs presents a forum for board members and owners to tell their side of the story. Hosted by Eric Glazer, a recognized authority in community association law, Condo Craze and HOAs offers valuable insights and lively discussions, attracting a diverse audience of homeowners and board members.

 

Fort Lauderdale Personal Injury Attorney at Maus Law Firm is here to support you.

Fort Lauderdale Personal Injury Attorney at Maus Law Firm is here to support you.

  • Posted: Feb 26, 2024
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Suffering a personal injury is a daunting experience, and it requires an empathetic and personal approach.

Fort Lauderdale Personal Injury Attorney at Maus Law Firm is here to support you.

We believe in fighting for your rights and ensuring you get the compensation you deserve, tailoring our approach to your unique situation.

Personal Injury Lawyer
205 West Davie Blvd, Fort Lauderdale, FL, United States, Florida
(954) 784-6310
jmaus@mauslawfirm.com
mauslawfirm.com

 

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“Condo Craze & HOA’s” on YouTube with Eric Glazer Sundays 11am-12noon.

“Condo Craze & HOA’s” on YouTube with Eric Glazer Sundays 11am-12noon.

  • Posted: Feb 14, 2024
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“Condo Craze & HOA’s” on YouTube with Eric Glazer Sundays 11am-12noon.

February 18 @ 11:00 AM – 12:00 PM

“Condo Craze & HOA’s”

on YouTube with Eric Glazer

Sundays 11am-12noon.

Eric M. Glazer

Eric Glazer graduated from the University of Miami School of Law in 1992 after receiving a B.A. from NYU. He has practiced community association law for more than 2 decades and is the owner of Glazer and Sachs, P.A. a five attorney law firm with offices in Fort Lauderdale and Orlando.

Eric is Board certified by The Florida Bar in Condominium and Planned Development Law and the first attorney in the State that designed a course that certifies both condominium and HOA residents as eligible to serve on a Board of Directors and has now certified more than 20,000 Floridians all across the state.

Mr. Glazer is certified as a Circuit Court Mediator by The Florida Supreme Court and has mediated dozens of disputes between associations and unit owners. Eric also devotes significant time to advancing legislation in the best interest of Florida community association members.

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