Become a Member: JOIN SFPMA TODAY   LogIn / Register: LOGIN/REGISTER

SFPMA Industry Articles | news, legal updates, events & education! 

Find Blog Articles for Florida’s Condo, HOA and the Management Industry. 

DON’T LET THIRD PARTIES OFF THE HOOK! MAKE SURE YOUR GOVERNING DOCS DON’T THROW AWAY MONEY.

DON’T LET THIRD PARTIES OFF THE HOOK! MAKE SURE YOUR GOVERNING DOCS DON’T THROW AWAY MONEY.

  • Posted: Aug 14, 2023
  • By:
  • Comments: Comments Off on DON’T LET THIRD PARTIES OFF THE HOOK! MAKE SURE YOUR GOVERNING DOCS DON’T THROW AWAY MONEY.

DON’T LET THIRD PARTIES OFF THE HOOK!

MAKE SURE YOUR GOVERNING DOCS DON’T THROW AWAY MONEY.

Last week was a primer on how foreclosures generally work and how banks get off the hook when they get back a unit when they foreclose on an owner’s unit or home.  We learned that the banks are protected by the law because they only owe a few bucks to the association when they get title to the unit or home despite the fact that the owner owes a fortune to the association. That’s called a “safe harbor” and it’s provided to the banks because the banks claim that if you make them responsible for paying unpaid assessments, they simply won’t loan money to buy a condo or a home in an HOA.

But there is some good news……….suppose the bank does not buy the unit at their foreclosure sale and a third party winds up becoming the successful bidder and the owner?  What does that new owner owe the association if that unit owes thousands to the association in unpaid assessments?  And the answer under the law is EVERYTHING!  They owe it all.  Florida Statute 718.116 states:

Additionally, a unit owner is jointly and severally liable with the previous owner for all unpaid assessments that came due up to the time of transfer of title.

So, when a bank forecloses on a unit, or when the association forecloses on a unit, the association hopes and prays that a third party purchases the property at foreclosure sale because that guy owes everything to the association.  UNLESS………………….

Remember last week that I said that some of you have language in your governing documents that allows the bank to get off the hook even though they would owe money to the association if they wind up foreclosing and owning the property?  Well…..some of you have language in your governing documents that allow third party purchasers off the hook if they buy the property at a foreclosure sale.  So…..even though the association gets lucky and a third party purchases the property at foreclosure sale, your own docs kill you and lets the third party purchaser off the hook.  They owe nothing.  Disaster.

So……over the past two weeks we learned that it is vital for the board to check their governing documents to make sure that neither the bank nor a third party purchaser is let off the hook should they purchase a unit or home in your community.  Make sure your docs don’t kill you.  If they do, amend them immediately!!!!!!

MAKE SURE YOUR DOCS DON’T COST YOU MONEY By Eric Glazer, Esq.

MAKE SURE YOUR DOCS DON’T COST YOU MONEY By Eric Glazer, Esq.

  • Posted: Aug 01, 2023
  • By:
  • Comments: Comments Off on MAKE SURE YOUR DOCS DON’T COST YOU MONEY By Eric Glazer, Esq.

MAKE SURE YOUR DOCS DON’T COST YOU MONEY

By Eric Glazer, Esq.

Let’s start with what some of you already know……..foreclosures are on the rise.  Incredibly, this is happening before huge special assessments are kicking in for many of you and before mandatory reserves go into effect.  If foreclosures are already on the rise, what’s going to happen when special assessments and reserves take hold of most communities?

If a bank forecloses on either a home in an HOA or on a unit in a condominium, the association is likely to take a huge financial hit if that home or unit is also delinquent to the association.  When a bank forecloses on a property, most of the time that bank winds up becoming the owner of that property because nobody bids against the bank at a foreclosure sale.  For example, if an owner fails to pay the mortgage, the bank eventually forecloses and gets a final judgment against the owner for the amount of the delinquency plus interest and attorney’s fees.  The judge sets an auction date.  At the auction, the bank usually bids the amount of their final judgment, there are no other bids and the bank winds up owning the property.

Now that the bank owns the property, do they have to pay all of the assessments that are owed to the association on that home or condominium unit?  Not even close.  The law states that the bank would only have to pay the lesser of:

  • One year of assessments or;
  • One percent of the original mortgage debt;

So, let’s say the bank is foreclosing on a $300,000.00 mortgage.  One percent of that mortgage is $3,000.00.  Let’s say the assessments are $600.00 per month.  One year of assessments is $7,200.00.  Therefore, at most the bank is responsible for $3,000.00 and not $7,200.00 and this is even if the prior owner has not paid for several years.  There can be $15,000.00 in delinquent assessments owed on the unit —the bank would still only have to pay $3,000.00 at most.

Here’s where the association can really get stung.  If the governing documents let the bank off the hook and state that the bank does not have to pay anything if they wind up foreclosing and owning the property.  Even though the law would require the bank to pay $3,000.00 in the above example, the association’s governing documents may allow the bank to pay zero!  SO……………MAKE SURE YOUR GOVERNING DOCUMENTS DO NOT CONTAIN SUCH A PROVISION AND IF THEY DO – AMEND IT IMMEDIATELY BEFORE FORECLOSURES IN YOUR COMMUNITY POSSIBLY BECOME ROUTINE!  DON’T LET THE BANKS OFF THE HOOK!

Next week we’ll talk about what happens when a third party buys the property at a foreclosure sale and not the bank.  You definitely will want to find out the good and the potential for disaster.

 

You can read more articles from Eric Glazer on his Blog. 

 

Tags: , ,
NEW LAW MAKES IT CLEAR THE ASSOCIATION MUST MAKE THE REPAIRS. BUT SUPPOSE MONEY IS TIGHT AND THE DOCS ARE RESTRICTIVE?

NEW LAW MAKES IT CLEAR THE ASSOCIATION MUST MAKE THE REPAIRS. BUT SUPPOSE MONEY IS TIGHT AND THE DOCS ARE RESTRICTIVE?

  • Posted: Jul 27, 2023
  • By:
  • Comments: Comments Off on NEW LAW MAKES IT CLEAR THE ASSOCIATION MUST MAKE THE REPAIRS. BUT SUPPOSE MONEY IS TIGHT AND THE DOCS ARE RESTRICTIVE?

NEW LAW MAKES IT CLEAR THE ASSOCIATION MUST MAKE THE REPAIRS. BUT SUPPOSE MONEY IS TIGHT AND THE DOCS ARE RESTRICTIVE?

NEW CONDO LAW MAKES IT CLEAR THAT THE CONDO MUST MAKE THE REPAIR

By Eric Glazer, Esq.

I get so many calls and e-mails each week about whether the condominium or the unit owner is responsible to fix something that’s broken.  Florida Statute 718.113 was recently amended and here’s what it says:

 

(1)   Maintenance of the common elements is the responsibility of the association, except for any maintenance responsibility for limited common elements assigned to the unit owner by the declaration. The association shall provide for the maintenance, repair, and replacement of the condominium property for which it bears responsibility pursuant to the declaration of condominium.

 

That kind of clarifies it, doesn’t it?  The association shall provide for the maintenance, repair, and replacement of the condominium property for which it bears responsibility pursuant to the declaration of condominium.  Notice the word shall is used.  In simple terms, shall means must.  So there is no argument……if the declaration says the association is responsible, the association must repair it.

But suppose the association does not have money to make the repair?  Now what?  The association can certainly special assess right?  But suppose the docs place a limit on the amount of the special assessment or require a unit owner vote to approve a special assessment and the unit owners won’t vote in favor of it?  Now what can you do?

Of course you may be able to borrow money.  Florida’s not for profit statute allows condominiums to borrow money.  So, the condo is in the clear right?  Not so fast.  Suppose the condo docs require a vote of the owners in order for the condo to borrow money and the owners won’t vote in favor of a loan?

 

How can the condominium make the repairs it is required by law to make if it can’t assess or borrow?

So here is this attorney’s opinion.  I don’t care about any language in a declaration that prevents an association from passing an assessment in order to make mandatory repairs.  The board can and must pass the assessment in order to comply with their statutory obligation to repair and maintain the common property.

On the other hand, if the governing documents do not prevent an association from borrowing money, the association certainly can.  However……if the governing documents will not allow the association to borrow money unless a certain number of the owners approve, the association cannot borrow unless the owners vote to approve.  No bank will approve a loan if the governing documents require the owners to vote in order to borrow, and the vote has not been obtained.  Get legal advice if you need money and you feel tied up by your docs.

 

Tags: ,
ANOTHER NEW LAW:  HB 437 — FLAGS, TURFS AND BOATS

ANOTHER NEW LAW:  HB 437 — FLAGS, TURFS AND BOATS

  • Posted: Jun 30, 2023
  • By:
  • Comments: Comments Off on ANOTHER NEW LAW:  HB 437 — FLAGS, TURFS AND BOATS

ANOTHER NEW LAW:  HB 437

By Eric Glazer, Esq.

I can’t tell you how may fights I have been involved in regarding flags other than the U.S. flag flying above someone’s home and the fact that someone put down fake grass or stored a boat, that nobody can see, in their backyard.  Well, here’s a new statute that solves both of those problems:

Florida Statute 718.113

If any covenant, restriction, bylaw, rule, or requirement of an association prohibits a homeowner from displaying flags permitted under this paragraph, the homeowner may still display one portable, removable United States flag or official flag of the State of Florida in a respectful manner up to two of the following, and one portable, removable flags official flag, in a respectful manner, not 48 larger than 4 1/2 feet by 6 feet:, which represents

  1. The United States flag.
  2. The official flag of the State of Florida.
  3. A flag that represents the United States Army, Navy,  Air Force, Marine Corps, Space Force, or Coast Guard., or
  4. A POW-MIA flag.
  5. A first responder flag. A first responder flag may incorporate the design of any other flag permitted under this paragraph to form a combined flag. For purposes of this subsection, the term “first responder flag” means a flag that recognizes and honors the service of any of the following: a. Law enforcement officers as defined in s. 943.10(1).
  6. Firefighters as defined in s. 112.191(1).
  7. Paramedics or emergency medical technicians as those terms are defined in s. 112.1911(1).
  8. Correctional officers as defined in s. 943.10(2).
  9. 911 public safety telecommunicators as defined in s. 401.465(1).
  10. Advanced practice registered nurses, licensed practical nurses, or registered nurses as those terms are defined in s. 464.003.
  11. Persons participating in a statewide urban search and rescue program developed by the Division of Emergency Management under s. 252.35.
  12. Federal law enforcement officers as defined in 18 U.S.C. s. 115(c)(1), regardless of any covenants, restrictions, bylaws, rules, or requirements of the association.

In addition, in an HOA, the homeowner may erect a 20 foot flagpole on any portion of their property and fly the U.S. flag and any of the flags mentioned above.

Florida Statute 720.3045 now states:

Regardless of any covenants, restrictions, bylaws, rules, or requirements of an association, and unless prohibited by general law or local ordinance, an association may not restrict parcel  owners or their tenants from installing, displaying, or storing any items on a parcel which are not visible from the parcel’s frontage or an adjacent parcel, including, but not limited to, artificial turf, boats, flags, and recreational vehicles.

I’m getting ready for lots of fights regarding visibility of boats as boat owners will look to save the costs of monthly storage.

Tags: ,
COMMUNITY ASSOCIATION WEBSITES By Eric Glazer, Esq.

COMMUNITY ASSOCIATION WEBSITES By Eric Glazer, Esq.

  • Posted: May 03, 2023
  • By:
  • Comments: Comments Off on COMMUNITY ASSOCIATION WEBSITES By Eric Glazer, Esq.

COMMUNITY ASSOCIATION WEBSITES

By Eric Glazer, Esq.

As you all know by now, Florida condominiums having 150 or more units must have a website that only owners can access and which posts the official records of the association.  Here’s a little background as to how the law was passed.  When originally drafted, the law was only to apply to condominiums with 500 or more units.  That was ridiculous.  So, I flew up to Tallahassee and met with the then Speaker of the House and informed him that the law was a fake, inasmuch as less than one percent of all condominiums in the state contained 500 or more units.  I suggested 50 units.  The compromise was 150.

I never heard one person tell me this was a bad law.  In fact, it’s a great law.  It’s about transparency.  It takes the burden off of managers having to respond to requests for records.  It prevents lawsuits or arbitrations, as long as the website is kept up to date.

Just because the law requires condominiums of 150 units or more to have a website does not mean that condominiums of less than 150 units cannot have a website.  In fact, in this attorney’s opinion, if your condominium contains 50 units or more, you can and should have a website for the same reason that condominiums with 150 units should.

Think about how large some HOAs are.  Many contain well in excess of 500 homes and are sprawling mini cities.  You would think that those communities should be required to post their records on an official website as well.  But no.  HOAs are not required to have a website.  There is simply a hands off approach when it comes to HOAS.

Again, just because the law requires condominiums of 150 units or more to have a website does not mean that HOAs cannot have a website.  In fact, in this attorney’s opinion, if your HOA contains 50 homes or more, you can and should have a website for the same reason that condominiums with 150 units should.

This is one law the legislature should amend.  All communities, both condos, co-ops and HOAs with 50 or more units or homes should be required to have a community association website where the official records and notices of meetings are posted.  Bottom line…….it will make the residents less suspicious and happier.

Community associations, whether condominiums, co-ops, or HOAs, are responsible for providing transparency to their owners. One way to achieve this is through a community association website. In Florida, the state recognizes the importance of transparency in community associations and requires condominiums with 150 or more units to have an owners-only website that posts official records. However, this requirement should extend beyond just large condominiums.

Community associations of all sizes should consider having their website to give owners transparency. Even if a community does not meet the state-mandated requirement, having a website is still a good idea.

A website can provide owners with easy access to official records, notices of meetings, and other important information. It can also help reduce the burden on managers to respond to document requests. Additionally, it can prevent lawsuits or arbitrations if the website is kept up-to-date. It’s about more than just meeting legal requirements. It’s about providing owners with a sense of transparency and openness. This can build trust between the board, management, and owners and foster a happier community.

However, it’s important to note that the community association website should be more comprehensive than just the required information. It should also include commonly asked questions, how to apply to the association, how to pay fees, and other relevant information owners may need. This will help to make the website more user-friendly and informative for owners.

In conclusion, having a community association website is essential for transparency, no matter the size of the community. It can build trust and create a more positive living experience for all owners. The state of Florida has recognized the importance of transparency in condominiums, and it is time for all community associations to follow suit by establishing their websites with informative content.

I guess the Florida Legislature thought they did a great job to assure transparency in condominiums when they enacted bills in 2017 and 2018 [FS 718.111(12)(g)], that required condominium associations with more than 150 units to operate a website featuring all so-called “public documents”.

They would have done a great job — the bills were actually well intended – if there would be as well some sort of enforcement.

In the real world we are seeing lots of totally incomplete websites, only showing what board members and CAMs want the owners to see – and otherwise it’s business as usual.

The fights over record requests are keeping arbitrators and courts busy – and the attorneys are still smiling at their bank account statements.

If the legislators thought that they finally found a solution to end litigation about association records they were dead wrong.

Everybody knows that laws without enforcement are pretty useless and all these laws created each year are only laws for the rich, meaning the folks who have enough money to hire attorneys and fight for their rights, given to them by these kinds of laws, in district and appeals courts.

Wouldn’t that mean that all these laws, created year for year adding to the community association statutes, are only LAWS FOR THE  RICH?

Every other owner who might dare to mention at a board meeting that the board is violating statutes can still be told by the association attorney: “Sit down and shut up. You don’t have the money to sue the association!”

 

Read more industry articles on Florida HOA & Condo Blog – 

 

Tags: , ,
As a community association manager, you are responsible for overseeing and managing the operations of an association

As a community association manager, you are responsible for overseeing and managing the operations of an association

  • Posted: Apr 25, 2023
  • By:
  • Comments: Comments Off on As a community association manager, you are responsible for overseeing and managing the operations of an association

WHY WE CAN’T REVIEW LEGAL DOCUMENTS

By Rafael Aquino  ( see below the article )

As a community association manager, you are responsible for overseeing and managing the operations of an association. Board members rely heavily on their expertise and knowledge to ensure the smooth functioning of the association. However, there are times when board members may ask a CAM to assist them in tasks outside their job responsibilities.

One such task is reviewing legal documents for the association. While it may seem like a simple task, it is not something that community association managers are permitted to do. This is because reviewing legal documents requires legal expertise and knowledge, which only a licensed attorney can provide.

Certain ethical and legal obligations bind community association managers. We are not licensed to provide legal advice or services, and doing so could put our license and reputation at risk. It is essential to understand that giving legal advice or services without a license is illegal and could lead to severe consequences.

If a board member asks you to review legal documents, you must inform them that you are not permitted to do so. Instead, it would be best if you recommended that they consult with a licensed attorney specializing in community association law. This will protect your license and reputation and ensure that the association receives the best possible legal advice.

It is also important to note that if a community association manager recommends a particular provider for legal services, it is for a reason. When recommending a provider, they do so based on their knowledge and experience in the industry.

To put it in perspective, it would be like asking a dentist to perform brain surgery. While both are in the medical field, they require vastly different skill sets and knowledge. Just like a dentist would recommend a neurosurgeon for brain surgery, a community association manager would recommend a licensed attorney for legal services.

In conclusion, as community association managers, we must understand and uphold our ethical and legal obligations. Reviewing legal documents is not within the scope of our job responsibilities, and it is important to recommend a licensed attorney for such tasks. By doing so, we are protecting our license and reputation and ensuring that the association receives the best possible legal advice.

For more information about Rafael P. Aquino and Affinity Management Services

please visit www.ManagedByAffinity.com or call 1-800-977-6279

Tags: ,
PENNY WISE POUND FOOLISH By Eric Glazer, Esq.

PENNY WISE POUND FOOLISH By Eric Glazer, Esq.

  • Posted: Apr 17, 2023
  • By:
  • Comments: Comments Off on PENNY WISE POUND FOOLISH By Eric Glazer, Esq.

PENNY WISE POUND FOOLISH

By Eric Glazer, Esq.

In light of the new laws requiring mandatory inspections, mandatory repairs and mandatory reserve studies, some associations are looking to cut back and save money. 

That’s not a bad idea; unless you’re cutting back on your legal counsel reviewing all of the contracts provided to you by those engineers, architects or general contractors who perform any of these inspections or repairs.

I’m starting to see more of this and it’s an alarming trend.  It boggles my mind that an association would spend millions of dollars on a contract for repair of their property, but won’t spend a few hours on their attorney reviewing that contract first.  No question in my mind that the failure of the Board to have that contract reviewed by counsel before signing, is a breach of their fiduciary duty to the unit owners they represent.

I teach a class called “Before You Sign That Contract.”  It talks about so many ways in which the association can suffer financial loss by having the wrong clauses in the contract or by failing to insert certain clauses into the contract.  Once sentence can potentially cost the association hundreds of thousands of dollars.  And you chose to cheap out on a few hours of attorney’s time?  Really?

Even smaller contracts need to be reviewed.  If the association does not have the proper remedies in the contract for the contractor’s breach, the situation can turn into a long lasting nightmare where the association will never be made whole.  And…….the association will have to spend its own attorney’s fees now to correct the problem with no chance of recovering them later on.

We are about to enter into a historic time here in Florida where these types of contracts will be flying off the shelves. 

They will be everywhere, in every condominium.  Be careful.  If you didn’t hear me the first time, I said BE CAREFUL AND DON’T BE CHEAP.  GET LEGAL HELP BEFORE SIGNING.

DON’T COME TO ME AFTER YOU SIGNED A CONTRACT AND SAY “HEY ERIC…OUR ASSOCIATION SIGNED THIS MULTI MILLION DOLLAR CONTRACT.  CAN YOU NOW GET US OUT OF IT?

THE ANSWER IS OFTEN TIMES……NO I CANNOT.  YOU SHOULD HAVE ASKED ME TO LOOK AT IT BEFORE SIGNING IT.

Tags: ,
A FEW BIG CHANGES IN THE LAW By Eric Glazer, Esq.

A FEW BIG CHANGES IN THE LAW By Eric Glazer, Esq.

A FEW BIG CHANGES IN THE LAW

By Eric Glazer, Esq.

Believe it or not, it’s getting harder to sue someone or to sue a business in the State of Florida.

First, it’s more risky now to sue your insurance company.  The typical case that comes to mind is the one where a condominium association sues its own insurance company for failing to pay for roof damage because the insurance company does not believe the storm caused all that damage.  Until now, there was no risk for the condominium association.  The attorney took the case on a contingency and, if the association won the case the association would be entitled to an award of attorney’s fees against the insurance company.  And, even if the association lost, the association did not have to pay attorney’s fees to the lawyers for the insurance company.  In other words, the risk of paying attorney’s fees only ran one way.  No longer.  Now the association has no right to collect attorney’s fees against their insurer even if the case is settled or won.  The association bears the risk of not having their fees paid by their carrier which should ultimately result in a smaller recovery.

Perhaps the biggest change to the law since I’m in practice went into effect last week.  The statute of limitations regarding negligence actions went from four (4) years to two (2) years.  That is a bombshell.

The law is primarily intended to go after personal injury lawyers and prevent personal injury cases from winding up in the courtroom.  From a condominium and HOA perspective the change in the law will also have major effects.  For example, all claims for damages to condominium or HOA property caused by someone else now have to be filed in two years and not four.  This could be damage caused by contractors the association hire, or unit owners who live or rent on the property.

There are some other bills of interest that may pass during the legislative session and if they do, I’ll let you know.

 

Tags: