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FIDUCIARY DUTY: What it Means to Your Community Association. by REMBAUM’S ASSOCIATION ROUNDUP

FIDUCIARY DUTY: What it Means to Your Community Association. by REMBAUM’S ASSOCIATION ROUNDUP

  • Posted: Mar 03, 2025
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What duty does a community association board member owe to their association? What happens if that duty is breached? During the legislative session, legislation was proposed that would have made directors criminally liable for failure to timely respond to official record requests, among other provisions.

The legislation in House Bill 919 was proposed by Representative Porras in response to the alleged $3.4 million dollar embezzlement scheme that took place at the Hammocks Community Association, located in Miami-Dade County. Parts of this proposed bill were well-intentioned; however, several provisions were commonly viewed as too broad and expansive.

On November 15, 2022, the Miami-Dade State Attorney’s Office announced charges related to the Hammocks’ criminal case, including racketeering, organized scheme to defraud, money laundering, grand theft, and fabricating physical evidence against five board members. These board members have been accused of the following:

i) running a scheme in which they used HOA checks and HOA credit cards from 55 bank accounts to pay for “no-show” work by shell companies or vendors, who would funnel money back to the directors for their personal use;

ii) withholding official records from members; and,

iii) failure to hold valid elections, among other bad acts.

If found guilty these board members overtly breached their fiduciary duty to their association.

During the 2023 legislative session, House Bill 919 initially contained significant criminal penalties to punish board members who failed to provide official records when they otherwise should have, criminal penalties for kickbacks, and criminal penalties for improper election interference, among other provisions. Such laws, while well intended, went overboard as evidenced by the creation of criminal penalties for failure to provide official records, as such severe criminal penalties for operational matters would likely only deter good people from running for the board. Recognizing this potential issue, parts of HB 919 were tempered a bit prior to it becoming law. That said, in the opinion of this author, new laws with new criminal penalties are not the answer. Bad people do bad things, and no amount of laws will likely significantly change that. So, what is the answer?

One answer is to shore up the educational and certification requirements for board members. At present, there are two ways to be certified as a board member. One method is to take a State-approved class, which provides an overview of the voluminous information board members need to know in order to perform their duties. The other method is to sign a piece of paper that the board member has read the governing documents, will abide by them, and will faithfully discharge their duties. This second method should be eliminated as there is no method to confirm compliance, and this method does not have any educational component. In addition, continuing education requirements should be required for any board member serving consecutive years.

During a board certification class, time should be spent discussing the term “fiduciary duty.” While the term is repeatedly used in Chapters 718 and 720 of the Florida Statutes, it is not expressly defined in these statutes. Section 718.111, Florida Statutes, makes reference to Section 617.0830, Florida Statutes, which provides for general standards for directors of not-for-profit corporations, such as community associations.

Section 617.0830, Florida Statutes, provides the following:

      1. A director shall discharge his or her duties as a director, including his or her duties as a member of a committee i) in good faith; ii) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and iii) in a manner he or she reasonably believes to be in the best interests of the corporation.
      2. In discharging his or her duties, a director may rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: i) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented; ii) legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the persons’ professional or expert competence; or iii) a committee of the board of directors of which he or she is not a member if the director reasonably believes the committee merits confidence.
      3. A director is not acting in good faith if he or she has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) unwarranted.
      4. A director is not liable for any action taken as a director, or any failure to take any action, if he or she performed the duties of his or her office in compliance with this section.

Still, though, there is no express definition of the term “fiduciary duty.” The purpose of studying fiduciary relationships is to identify the areas where it exists and gain an insight into the duties of a fiduciary. After all, every board member is a fiduciary for their community association. Common definitions of the term “fiduciary” include:

      • A fiduciary relationship is a relation between two parties wherein one party (fiduciary) has the duty to act in the best interest of the other party (beneficiary or principal).
      • A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Typically, a fiduciary prudently takes care of money or other assets for another person.
      • A fiduciary duty is a relationship in which one party places special trust, confidence, and reliance in and is influenced by another who has a fiduciary duty to act for the benefit of the party.
      • Most importantly, and germane to this discussion, a fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interests ahead of their own, with a duty to preserve good faith and trust.

In other words, a good community association board member puts the interest of their association above their own personal interests. Thus, while we may not be able to stop bad people from doing bad things, through continuing education we can help good people do better.

To recap, there are three things that can be readily accomplished that would make a positive difference for Florida’s community associations.

      1. Remove the ability of a board member to be “certified” by signature alone.
      2. Require continuing education for board members serving continuous years.
      3. Amend Florida Statutes, Chapters 718 and 720, to include express definitions of fiduciary duty so that it is made patently clear that every board member must put their community association above and ahead of their own personal interests.

 

 

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A Milestone Condominium Structural Inspection is a structural inspection performed by licensed engineers like EMA Structural Forensic Engineers of a building conducted for the purposes of determining a buildings’ life safety and structural component integrity or adequacy.

A Milestone Condominium Structural Inspection is a structural inspection performed by licensed engineers like EMA Structural Forensic Engineers of a building conducted for the purposes of determining a buildings’ life safety and structural component integrity or adequacy.

 

Condominium Structural Safety Inspections

Florida Laws now require all 3 stories or taller buildings to undergo Condominium Structural Safety inspections. EMA Structural Forensic Engineers can help you fulfill your needs to comply with the new laws.

Structural Engineers

 

 

Florida Building Inspections By: Structural Engineering and Building Consulting firm – Joe DiPompeo, PE

Florida Building Inspections By: Structural Engineering and Building Consulting firm – Joe DiPompeo, PE

  • Posted: Feb 12, 2025
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Florida Building Inspections

Structural Engineering and Building Consulting firm

By: Joe DiPompeo, PE

Building inspections are a critical component of property management in the state of Florida. They help to ensure that buildings are maintained in good condition and meet building codes, which is essential for protecting both tenants and property owners.

First and foremost, building inspections are necessary to ensure that buildings are compliant with certain codes and regulations. In Florida, building codes are set by the Florida Building Code (FBC), which establishes standards for the construction, maintenance, and repair of buildings in the state. These codes cover everything from electrical and plumbing systems to fire safety and structural integrity. While most codes are applicable to the construction of the building, Florida has significant codes and requirements throughout the life of the building, such as structural and electrical recertification inspections. Failure to comply with these codes can result in fines, legal action, and even the closure of the building.

By conducting regular inspections, property managers can identify any issues that may be in violation of these codes and requirements and take corrective action before they become serious problems. For example, an inspector may find deteriorating structural concrete or issues with the electrical wiring. These issues can be addressed before they put the safety of tenants and the property at risk or become a larger, more expensive problem to fix.

In some places, such as Florida, there are mandatory ordinances which enforce regular building inspections. These inspections should be conducted by a certified Professional Engineer and then file a report with the local building department or and/or state. If these requirements are not met, the property owner or manager will receive a fine.

Furthermore, building inspections can also help property managers identify maintenance needs. Over time, buildings can experience wear and tear, and components can break down. By conducting regular inspections, property managers can identify these issues and take corrective action before they become more serious and costly to repair. This can help to extend the lifespan of the building and save money in the long run.

Moreover, building inspections are essential for protecting property values. Properties that are well-maintained and free of hazards are more attractive to tenants and can command higher rents and sale prices. Regular inspections can help to identify issues that may be causing damage to the building, such as water leaks or structural issues. By addressing these issues early, property managers can prevent further damage and ensure that the building maintains its value.

Finally, building inspections can also provide peace of mind for property owners and tenants alike. By knowing that the building is being regularly inspected and maintained, owners can be confident that their investment is being protected. Tenants, on the other hand, can feel reassured that they are living in a safe and well-maintained environment.

In conclusion, building inspections are a crucial part of property management in Florida. They help to ensure compliance with building codes and regulations, identify potential hazards, identify maintenance needs, protect property values, and provide peace of mind for owners and tenants. By conducting regular inspections, property managers can prevent serious problems from occurring and ensure that their buildings are safe and well-maintained and compliant with state and local requirements.

Structural Workshop

Structural Engineering and Building Consulting firm

754-277-4245

info@structuralworkshop.com

Contact us for an Inspection. 

 

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Need a few reasons to digitize your paper-based engineering and architectural drawings? How about these?

Need a few reasons to digitize your paper-based engineering and architectural drawings? How about these?

1- Accessibility and Sharing. Digital files are easy to search, copy and share, saving valuable time and improving collaboration.
2- Storage and Document Integrity. Digital drawings are much less expensive to store than paper copies and are not subject to degradation over time.
3- Flexibility. Digital drawings are easy to rework or update, streamlining change processes and speeding renovations.
4- Details. Digital designs allow for the addition of audio or video to individual elements, providing an extra level of detail (e.g., materials, site layout, construction processes).
At the end of the day, digitization is a huge time and cost saver.
Call Us—561.372.1290
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Don’t let a natural disaster catch your community off guard! Take charge and be prepared!

Don’t let a natural disaster catch your community off guard! Take charge and be prepared!

The coastal Northeast is experiencing a concerning trend of heating at a faster rate compared to other regions in North America. Researchers have identified a strong correlation between the accelerated warming and the rapidly increasing temperatures in the North Atlantic Ocean and increasing storm intensity. Natural disasters such as hurricanes, tornadoes and coastal flooding can strike at any moment, leaving communities devastated and in need of immediate assistance. It is crucial for communities to be prepared in order to minimize the impact of these disasters and ensure the safety of their residents.

Preparing your community for a natural disaster is crucial to minimize damage, save lives, and facilitate a swift recovery. Here are a few steps to assist with your preparation:

Assessment and Planning:

  • Identify the types of natural disasters that are common in your area, such as earthquakes, hurricanes, floods, wildfires, or tornadoes.
  • Conduct a thorough risk assessment to understand the potential impact of these disasters on infrastructure, buildings, and residents.
  • Collaborate with professionals to create a comprehensive disaster preparedness plan.
  • Make sure that the community has backed up records of their site plans, architectural and structural drawings, as this can greatly assist in the post disaster assessment and recovery process.

Initial building evaluation performed based on the severity of the storm/event:

  • The degree of safety & habitability of the subject building is not always obvious. If there is any doubt or question that there may be structural or building envelope damage to a building, call you Professional Engineer or Architect and have an evaluation performed.
  • In some instances, you may be required by your local municipality to have your professional assist with stabilizing the structure before parties can enter the structure to collect personal belonging that may remain.

Communication and Engagement:

  • Establish a reliable communication system to disseminate information before, during, and after a disaster. This can include email, social media, or text alerts.
  • Designate community leaders or volunteers responsible for communicating updates and instructions.

Contact Insurance:

  • It can take a while to get adjusters to scene following an event. Be sure to take before, during and after photos of any damage that occurred.

Post-Disaster Recovery:

  • Establish a recovery plan that includes damage assessment, debris removal, and restoration of essential services.
  • Plans and specifications may be required to repair or reconstruct the building, depending on severity.
  • Code requirements can impact the work based on if it is classified as repair vs reconstruction. This needs to be carefully reviewed and considered as insurance carriers may try to exclude some of the necessary work, so the Architect or Engineer needs to be well versed on preparing plans for this type of work.

Remember, disaster preparedness is an ongoing effort. Regularly review and update your plans based on new information, changing community demographics, and emerging technologies. By taking proactive steps, you can help your community minimize the impact of natural disasters and ensure a more resilient future.

Contact our team for more information how to be proactive! 

The Falcon Group
Miami
15405 NW 7th Avenue in Miami, FL 33169
ph: 305.663.1970 x509
info@falconengineering.com
WEST PALM BEACH, FLORIDA
5651 Corporate Way, Suite 4, West Palm Beach, Florida 33407
Phone: 561-290-0504
info@falconengineering.com
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Local Condos Failing to Comply with New Milestone Inspections Law

Local Condos Failing to Comply with New Milestone Inspections Law

Recent reporting by the Sun Sentinel chronicled how 124 condominium buildings, representing approximately 25,000 residences in unincorporated Palm Beach County, failed to submit their milestone inspection reports by the end of 2024 as required under the new Florida law. The circumstances described in the article are possibly playing out in other jurisdictions throughout the state in light of the recent passing of the December 31, 2024, deadline by which many residential condominium and cooperative buildings of three stories or more throughout the state were required to have completed their milestone inspections and reports. The article indicated that Palm Beach County officials are now strongly urging the representatives of those communities to submit the required inspection paperwork as soon as possible.

The Florida law, which was enacted in response to the 2021 tragedy of the building collapse in Surfside, required associations for many residential condominium and cooperative buildings 30 years or older and with three or more stories to have filed an inspection report detailing necessary structural building maintenance and required repairs by December 31, 2024 (with the balance of such buildings having to do so by December 31, 2025, depending upon when they reached 30 years of age). During the first phase of the required milestone inspection, a state-licensed architect or engineer must examine the building to assess the condition of its main structural elements. If no repairs are needed and the building passes, the next milestone inspection is due in 10 years.  For buildings in which deterioration is detected, a second phase of inspections is subsequently required to take place within the ensuing 180 days, but that timeframe can be extended if extra time is deemed necessary.

Unfortunately, some condominium and cooperative associations required to have complied failed to do so, citing factors which include a lack of funds to perform such inspections, unavailability of qualified professionals to timely perform the inspections and reports, or a general misunderstanding as to the need to comply with the required inspections. Elected and other governmental officials seem to be struggling with the best approach to compel compliance, given that stakeholders in many communities are complaining about the burdens being imposed upon them due to the inspection requirements as well as the newly enacted structural integrity reserve funding obligations, installation or upgrades of bi-directional amplification systems for emergency responders, and the need to fund costly property insurance premiums also required by state law.

The newspaper quotes Palm Beach County officials illustrating that their objective is to make sure buildings are maintained and repaired, and indicating they are neither looking to “kick people out of their houses” nor “to basically knock down buildings.”

The story indicates that in unincorporated Palm Beach County, more than 500 buildings were supposed to have filed their milestone inspection, but almost a quarter of them failed to do so. The recent reporting found that more than 100 buildings in the county have entered into the second phase of inspections, and more than 200 remain under review under the first phase.  For the 124 properties that have not yet provided any milestone-inspection information, county officials say they remain in the dark about the state of those buildings.

As we continue to move past the inspection and reporting deadline, and approach the deadline for the remainder of buildings required to comply, local governmental officials will wrestle with the best approaches to enforce compliance with the requirements.  Some authorities may opt to begin enforcement with a notice being sent out to remind association registered agents and directors that they are not yet in compliance, steering clear of immediately imposing fines or other penalties. However, other authorities may feel that optimal compliance with the inspection and reporting requirements may not be likely to be achieved without the threat of fines or similar measures.

The recent article further mentioned that along with potential fines, the commissioners and other officials also discussed the use of new signage to be posted at the buildings alerting residents to the fact that the structure has not yet been inspected, as well as the issuance of noncompliance notices to be distributed to all the board members.

For residential condominiums and cooperatives that do not undergo the required inspection, the potential consequences could include difficulty in obtaining insurance renewals along with increased premiums. They could also face potential legal action from their owners, who could find themselves unable to sell their residences and seeking remedies for any decreases in property values that may ensue. Ultimately, the associations for such communities may be forced to increase their assessments in response to these repercussions and any fines that may be imposed.

Our firm strongly recommends that all the associations for residential condominium and cooperative communities that have not already complied with these new requirements for milestone inspections make them an immediate priority and take all reasonable actions necessary to complete the initial phase and file the necessary report to their corresponding building department as soon as possible.

by ROBERTO BLANCH, SIEGFRIED RIVERA


Find engineers for your Inspections.

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Budget preparation time is upon us! We strongly encourage, that every year around this time, association managers and Boards review and ensure that your capital reserve study is accurate and up-to-date.

Budget preparation time is upon us! We strongly encourage, that every year around this time, association managers and Boards review and ensure that your capital reserve study is accurate and up-to-date.

Budget preparation time is upon us! We strongly encourage, that every year around this time, association managers and Boards review and ensure that your capital reserve study is accurate and up-to-date.

This is one of the most important decisions a board will make for the future of their association. It is an easy and effective way to ensure your community’s capital replacement items are being properly funded with minimal impact on the individual homeowners. 

With the recent update to the Capital Reserve Study Standards, the impact of inflation and supply chain issues over the past few years (in some cases resulting in costs as much as 50% higher for some typical components), it is even more critical to have an updated reserve study to ensure the financial health of your community.

To stay on track for a healthy financial future, it is recommended that your Reserve Study be updated every three (3) years.

The Falcon Group Capital Reserves team consists of 6 CAI Certified Reserve Specialists (RS) as well as a Professional Reserve Analyst (PRA) designation awarded by the Association of Professional Analysts.

Contact our Reserve Specialists today for a new or updated reserve study!

 

Contact Us:

Tampa Bay

1211 1st Avenue, N.
Suite 106
St. Petersburg, FL 33705

P (813) 438-3568

West Palm Beach

5651 Corporate Way
Suite 4
West Palm Beach, FL 33407

P (561) 290-0504

Miami

15405 NW 7th Avenue
Miami, FL 33169

P (305) 663-1970


Capital Reserve Study ( what is involved )

The primary purpose of a Reserve Study is to offer recommendations as to the amount of money a community, building or other organization should set aside on a yearly basis for the future replacement or major refurbishment of their commonly owned elements.

The Falcon Group believes that a properly funded capital reserve program is the right formula for keeping a community’s physical assets in prime condition while providing some key benefits to residents. We strongly recommend updating your Capital Reserve Study Every 3 years.

A regularly updated Reserve Study can provide the following benefits:

  • Maintaining and/or increasing property values by maintaining exterior appearances through timely repair or replacement of common elements.
  • Facilitating project efficiency and cost effectiveness, as well as, minimizing disruptions and unit owner inconvenience by allowing the association to secure contractors to complete an entire project during a finite and desired schedule.
  • Reducing the likelihood of member dissatisfaction associated with the passage of large or sudden assessments.

All of our Capital Reserve Studies are prepared under the direction of a Reserve Specialist (RS) and/or a Professional Reserve Analyst (PRA).

The Falcon Group has prepared over 3,500 Capital Reserve Studies. Each Capital Reserve Study we perform is a customized analysis, prepared in coordination with our Reserve Specialist (RS) and our client, and is based on a “real-world” methodology for each item in regards to:

  • Inspection

  • Evaluation for repair or replacement

  • Evaluation for anticipated “Useful Life”

  • Integrated into a repair or replacement plan and budget

 

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Community Association Software Solutions for Condo, Co-Op, and HOA Management

Community Association Software Solutions for Condo, Co-Op, and HOA Management

Trusted by over 6,500 communities throughout the U.S. and worldwide, BuildingLink is the premier provider of  community management software solutions. BuildingLink leverages over two decades of innovation and experience,  offering 60+ intuitive modules to manage documents, maintenance, vehicle, keys, packages, amenity reservations, community communications and more! Managers love the functionality and service while residents love the convenience of our mobile app!

FULLY EQUIPPED WITH DOZENS OF TIMESAVING, AND INNOVATIVE FEATURES.

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Maintenance

BuildingLink’s suite of maintenance solutions ensures your property is running efficiently.

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Resident Experience

Elevate your resident experience with BuildingLink’s mobile, portal, and smart home features.

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Record-Keeping & Administration

Streamlined record-keeping, administrative tasks, and building details at your fingertips.

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Concierge & Front Office

From hyper-efficient package tracking to formatted incident reports and key management, all seamlessly managed with BuildingLink.

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Communications

Strong communication tools mean more informed, cohesive, engaged, and organized communities.

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BuildingLink Payments

Our payments solution seamlessly integrates with many accounting platforms, ensuring a smooth resident payment experience. Residents can pay monthly account balances securely online with single sign-on.

 

Start Running a Better Community Today!

BuildingLink is the market’s undisputed leader in property management solutions, empowering customers through industry-leading technologies, extraordinary support and training programs, and the ability to tailor our solutions to fit their unique needs.

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Event:  January 23rd from 2-4pm, get updated on ‘2025 Legal Update’ byKBR Legal’s – Lisa Magill, Esq. BCS

Event: January 23rd from 2-4pm, get updated on ‘2025 Legal Update’ byKBR Legal’s – Lisa Magill, Esq. BCS

On January 23rd from 2-4pm Est (via Zoom), get updated on the most recent legislative changes and discuss the statutory changes made by the Florida Legislature and how they directly affect managers, board members, and their communities.

Lisa Magill, Esq. BCS will lead the ‘2025 Legal Update’. Complimentary for all; just click below to enroll.

Date & Time
Jan 23, 2025 02:00 PM
Course 9633017 | Provider 0005092 | 2 CE in Legal for CAMS Instructor: Lisa A. Magill, Esq. BCS | Kaye Bender Rembaum, P.L. Get updated on the most recent legislative changes and discuss the statutory changes made by the Florida Legislature and how they directly affect managers, board members, and their communities.
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