View this month’s Becker Lawyers Community Updates…..March 2022
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Find Blog Articles for Florida’s Condo, HOA and the Management Industry.
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Annual Fish Stocking Day! Our staff arrives at 5:00am to load up over 500,000 fingerling fish to stock in lakes in Miami, Broward and Palm Beach Counties!
We will be going Facebook Live around 5:30 am, we hope you join us to watch this fun event!
Allstate Resource Management has over 25 years of experience in maintaining the health of lakes, ponds, wetlands, and stormwater systems. We have continued since our inception to be the leader in resource management. Our services include lake management, wetland management, stormwater drain cleaning and maintenance, erosion control, fish stocking, native plantings, debris removal, water quality, aquatic pest control, and upland management. All of our technicians are thoroughly trained and certified in order to meet the strict standards imposed by governmental agencies. This ensures that your property will be treated by only the most competent individuals who are proud of the services we render.
In addition to providing a healthy habitat, we specialize in the installation and maintenance of beautiful color lit fountains, bringing beauty and enjoyment to any lake or pond.
We also offer support services for property managers and HOA’s including educational presentations and CEU programs. Our approved courses offer continuing education credit to CAMs.
Another parking lot sealed and striped by our Atlantic Southern Paving and Sealcoating Crew in Fort Myers, Florida!
Choose to #PaveWithASP today for any and all of your parking lot and pavement needs by calling 1-833-PAVE-ASP or head to www.PaveWithASP.com
We self-perform the entire state of Florida as well as manage parking lots across the country!
Southeast Florida: 954-518-4315
6301 W Sunrise Blvd, Fort Lauderdale, FL 33313
Southwest Florida: 239-234-2155
9039 High Cotton Ln, Fort Myers, FL 33905, Fort Myers, FL 33905
Central Florida: 407-502-0040
37 N Orange, Ave 420, Orlando, FL
Space Coast: 321-408-5010
460 Cox Road, Cocoa, FL 32926
Tags: Asphalt and BlackTop Articles
BY JOHN STRATTON / of Becker
The attorney-client privilege is one of the oldest and most respected privileges in the law. The purpose underlying this fundamental privilege is to ensure that clients receive accurate and competent legal advice by encouraging full disclosure to their lawyer without fear that the information will be revealed to others. The privilege covers written and oral communications and protects both individual and institutional clients including community associations.
However, the attorney-client privilege does not apply to every communication with an attorney and in certain circumstances can even be waived. For the privilege to exist, three requirements must be met: there must be a communication; the communication must have been intended to remain confidential; and the communication must have been made in the context of obtaining legal advice.
Pursuant to Florida’s Evidence Code, a communication between lawyer and client is “confidential” if it is not intended to be disclosed to third persons other than:
Florida courts have stated that the second exception (i.e. those reasonably necessary for the transmission of the communication) applies to agents of the client. This is so because in Florida, all corporate powers are exercised by, or under the authority of, the association’s board of directors. Further, as an inanimate entity an association cannot speak directly to its lawyers and must instead act through agents.
A management company and its personnel are generally responsible for the day-to-day operations of the community, implementing directives of the board, and serving as a liaison between an association and its counsel. Although a reasonable interpretation of the Florida Evidence Code and case law implies that a property management company is likely an agent of the association, such a determination is not guaranteed.
However, there are steps that can be taken by the association and its counsel to support an assertion of privilege such as including language in their management contracts that expressly extends the attorney-client privilege from the association to include the manager. The association’s counsel can also prepare a general Board Resolution authorizing the management company and its employees to act as agents of the association where necessary to further communications with legal counsel.
Evidentiary privileges (such as the attorney-client privilege) are sacred protections in a court of law. It is imperative that proper measures are taken to ensure that said privileges are not compromised. If your association finds itself involved in a potential or pending litigation, the board needs to work closely with the association’s attorney to protect the privileges the law provides to keep confidential communications out of the hands of the wrong people.
John handles business litigation and appellate matters representing individuals and corporations across an array of industries. He has significant and successful litigation experience in complex commercial, corporate, land use, and condominium litigation, contract disputes, commercial loan workouts, and civil appellate proceedings in both state and federal appellate courts.
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As a result of the 2022 Florida legislative session, there will be no new statutes requiring mandated building/engineering inspections, no statutory changes to budgeting procedures, no mandated reserve study requirements, and no statutory changes to required disclosures. While only a very few Florida counties have mandated in their code of ordinances that older condominium buildings have life-safety inspections, that does not mean required maintenance and proper planning can be otherwise avoided elsewhere. Board members must exercise their fiduciary duties with due care and due diligence. Voluntary engineering inspections and professional reserve studies should be considered to take place on a regular schedule. Maintenance, repairs, and replacements should be budgeted and funding sources properly identified. As often explained by Board Certified attorney Lisa Magill, “is the law the only reason you stop at a red light? Probably not. You stop because there’s a likelihood a truck will smash into you from the side.” In other words, common sense should prevail. All condominium unit owners know that one day the roof, air conditioners, and water and cooling towers will need to replaced, the building will need to painted to ensure a water tight seal remains intact, the pool will need re-surfacing, and the parking areas and asphalt will need attention, too. Perhaps one of most expensive repairs, which is rarely discussed, let alone planned for and budgeted in advance, that even the Florida Statutes do not specifically mention it by name, is concrete restoration, which can cost tens of thousands of dollars, and often such repairs cost millions of dollars depending on the extent of the repairs. But, such repairs are a given. It is not a matter of “if” but rather only a matter of “when” these repairs will be required. The only way to avoid a revolt of the membership when explaining the upcoming multi-million dollar assessment is to lessen the blow by having some, if not all, of the needed monies already saved in a reserve account. Section 718. 112(1)(f)(2)(a) provides that, “[i]n 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 amount to be reserved must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. 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.” While a majority of the quorum of the membership can vote to waive or reduce reserves, this can only occur if the board of directors provides the membership such opportunity. For example, when voting to reduce reserves the percentage by which the required reserve can be reduced is decided in advance by the board and then presented to the membership for the vote. In light of the Champlain Towers South disaster, boards of directors should put considerable thought into these decisions. On March 12, Ann Greggis of Florida Politics reported that “the Legislature’s inability to pass any legislation updating condo regulations in the wake of last summer’s disaster that killed 98 people stunned observers…For this Session, nine bills sought to change rules regarding condominium associations…An estimated two million people live in 912,000 Florida condo units that are 30-years or older. Another 131,773 units are 20 to 30 years old, according to the Florida Engineering Society & American Council of Engineering Companies of Florida….The executive director of the engineering society and council called the failure to pass any legislation this year a ‘missed opportunity,’ according to a news release.” |
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On March 11, Jon Schuppe and Phil Prazan, NBC 6 South Florida reported that, “[i]n the nine months since 98 people died in the collapse of a Surfside, Florida, condominium, state lawmakers have pledged to pass measures that could help avoid a similar disaster. On Friday, they failed. Negotiations between the Florida Senate and House of Representatives, both controlled by Republicans, broke down, with the two sides unable to agree on a bill that would require inspections of aging condo buildings and mandate that condo boards conduct studies to determine how much they need to set aside for repairs. The talks were undone by a disagreement over how much flexibility to give condo owners in the funding of those reserves.” |
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Never has the term “sausage factory” been more appropriate to describe the 2022 team of Florida legislators who failed to pass meaningful legislation that could have helped thwart another Champlain Towers South disaster. But, just because the legislature failed in doing so (for this year), that does not mean, as a board member, that you can fail, too. Make a commitment to your condominium community to plan for the future. Adopt a board resolution, or even amend the condominium declaration, to have required building inspections and reserve studies. In addition, if your association is waiving reserves year after year, stop it and start saving for the future. You will be glad you did. |
Tags: Condo and HOA Law
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Find out how Association members can help you with the management of your buildings?
Managing properties can quickly become overwhelming, even for experienced investors. There is always something going on that requires attention and it takes very little time for things to get out of hand. Hiring a Property Manager can provide an opportunity to regain control and restore stability to both your properties and possibly life in general.
The importance of having income real estate to you and your family? We are here to help you with the selection process for hiring the right company for the management of your buildings. Your Property Manager will make critical decisions on your behalf making it extremely important that you do your homework during the hiring process, your decision to hire or not hire a management company should hinge on whether or not it is a good fit with your lifestyle and makes sense financially. Individual investors will have to assess the opportunity cost of both options based on their unique circumstances.
1. How far do you live from your rental property and how frequently can you visit the property?
If you are close you may be able to make the regular visits required for maintenance, inspections, collections, etc., otherwise the further you live the higher your travel time and expenses will be. The larger the distance the more temptation there is to not keep a close eye on things, and that can be a recipe for disaster. You should plan making monthly scheduled visits and there is always the potential for a middle of the night emergency call that requires your immediate attention. In the long run, is this feasible for you?
2. How do you deal with the of day to day operations yourself?
This is a tough one. we all like to think of ourselves as level-headed and even-keeled, but at the end of the day it takes a special kind of person to deal with the ups and downs of property management. Behind the seemingly simple task of collecting rent every month lie a number of unpredictable problems can push people to their limits. Ask yourself how you would react in the unfortunate event that tenants:
3. How many rental properties or units do you have?
As your portfolio grows so do the management challenges, and it becomes easier for things to fall through the cracks. Investors with large portfolios stand to reap significant benefit by leveraging the efficiencies a property manager can provide. Size can also constrain investors’ ability to consider purchasing new properties if they’re already maxed out managing their current holdings.
4. Do you do all the maintenance and repairs yourself?
If you can’t do it yourself, do you know who to call? Finding reliable handymen and contractors can take a while and in the mean time you may unknowingly hire people that are unethical, uninsured, do poor quality work, over charge etc. maintenance and repairs are a significant component of land lording and if you question your ability to ensure the work is done well and in a timely manner, you might want to consider hiring a property management company.
5. How quickly are you able to get your unit ready to be rented?
Advertising, fielding calls, and showing the unit can take a considerable amount of time, but are critical tasks as vacancies will quickly eat into your profit margins. If you question whether you have the skills or the time to make this happen, or if you have historically had an unacceptably high vacancy rate, you may want to consider hiring a property management company.
6. Are you capable of handling the paperwork nightmare.?
From profit and loss statements to tax deductions, this area needs special attention and becomes an increasingly larger burden for larger portfolios. some owners (especially those with a back ground in finance) will do just fine, others may opt to hire an accountant to help with the book keeping. If you feel like this might be a weak point you might want to consider hiring a Community Association Management Company.
7. Are you willing to be on call 24/7/365?
Its important to answer this question honestly, because when an emergency happens at your property you can’t ignore it. Your special event, important meeting, vacation, or personal crisis doesn’t relieve you of your obligation to your tenant. These emergencies don’t happen all the time, but when they do you have to be willing to handle them immediately. can you handle being called at 2 in the morning to fix someone’s overflowing toilet?
8. Are you willing to confront tenants about late payments and if need be evict them from the property?
Many new owners dislike feeling like the bad guy and try to be understanding by making exceptions. The problem is that this only invites additional abuses and excuses by tenants. Late payments must be dealt with immediately, and while sometimes a friendly reminder is all that’s needed, other times, it can be a very confrontational process ending in eviction. Unlike running a charity, running a successful rental business means enforcing the rules even it means evicting a single mother who lost her job and won’t be able to pay rent anytime soon.
9. How well do you understand the laws governing Community Association Management?
Ensuring the property is run in accordance with the law is critical in both preventing lawsuits and shielding yourself from liability if you are sued. Familiarity with contracts is also very important as your rental agreement is the only binding agreement between you and the tenant.
SFPMA works throughout the State of Florida, we are a multi-member organization for the Condo, HOA and Property Management industry. Through knowledge based Articles, Events and our Members Directory, Clients find the right information to make an informed decisions for their Florida properties.
