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ARE CONDO FEES BAD?

ARE CONDO FEES BAD?

  • Posted: Oct 29, 2021
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ARE CONDO FEES BAD?

by Steven J. Weil, Ph.D., EA, LCAM, President

Royale Management Services, Inc.

 

Your maintenance fees cover many of the same things you would need to pay for as a homeowner.

What’s included?   As a condo owner, it’s useful to know how your maintenance fees are determined. No one is profiting from these fees. They are determined by the board of directors who are elected by the owners and charged with responsibility for operating the association. They represent your share of the common expenses as agreed to in the governing documents.

What you pay is determined by estimating the costs for operation and maintenance for the budget year. These costs include controllable costs — those over which the board can exercise control, e.g., wages of association employees, improvements, along with the cost services offered to owners and residents — as well as non-controllable costs, e.g. insurance, water, garbage collection, electricity, repairs, and existing long-term contracts such as bulk cable agreements.

Each year the board and management review the prior year’s costs and do everything in their power to project the cost for the coming year. These costs become the budget’s expense line items; and once they are calculated, any income from other sources (such as laundry and outside rental income) is taken into account. The total projected expenses are then reduced by the outside income, and whatever is left becomes the maintenance for the coming year. After that, it’s a simple matter of calculating each unit owner’s share of this amount based on the formula set forth in the governing documents.

 

In many associations, non-controllable expenses make up the majority of the expenses, with insurance often being more than a quarter of the total expenses. Add to this, utilities (which varies), long-term contracts, and required repairs and upkeep, and you can see that the expenses the board can control can be limited often to less than 20% of the total expenses.

The board must also fully fund reserves based on the current replacement cost of reserve items. Reserves may not be waived or reduced by the board. They can, however, be reduced or waived by a vote of the owners. Reserve funding is added to the cost of the maintenance fees already calculated and becomes part of the regular maintenance payment.  Reserves cover the wear and tear on items with a useful life of more than one year, such as roofs, painting, and paving, along with other major items that will wear out over time.

Each association’s budget is different. Accordingly, maintenance fees generally reflect things that are unique to each association. For example, associations with 24-hour security personnel, bulk cable contracts that include the internet, and expensive-to-maintain lobbies will have higher maintenance fees than those that provide fewer services and amenities.

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The association suddenly needs a lot of money. How do you get it? Which way makes sense?

The association suddenly needs a lot of money. How do you get it? Which way makes sense?

  • Posted: Oct 29, 2021
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The association suddenly needs a lot of money. How do you get it? Which way makes sense?

So many of our buildings are approaching the 40 year mark, requiring recertification in electrical and structural.  Many buildings are younger yet still need major repairs to the concrete, balconies, pool decks and other portions of the common elements.  The board is going to need a lot of money.  Assuming you don’t have enough in reserves, how do you get it?

Of course, one way is to simply pass a special assessment.  In effect, that means that you will have all the money necessary to pay for all the repairs, before the repairs are done.  The problem with a special assessment…………. Everyone has to come up with a lot of money relatively quickly, if not immediately.  Some people simply don’t have it.  If they don’t they face possible foreclosure by the association.

What is certainly becoming the more common way of coming up with money to make repairs to the common elements is for the association to borrow the money from a bank.  Rates are still very low and money is very cheap right now.  Typically, the bank gives the association a line of credit for one year that the association may draw upon to pay for the cost of repairs.  After one year, the funds borrowed from the line of credit are converted to a term loan, usually anywhere from three to seven years.

There are of course many advantages to borrowing rather than assessing.  First and foremost, the owners need not come up with their entire share of the special assessment immediately.  Instead, they get to pay off the bank loan over several years.  In addition, the board can establish payment schedules that would allow the owners to have a choice of paying their share of the loan off immediately and without interest.  Or, the board can allow the owners to pay off their share of the loan over time, with interest.

Before signing for the loan, the bank will always ask association’s counsel to review the governing documents and write an “opinion  of counsel” as to whether or not the association has the right to borrow money.  Under the Florida not for profit statutes, the association has the right to borrow.  However, the governing documents should be read carefully because sometimes it clearly states that the association cannot borrow money without a vote of the community.

In terms of collateral, the association is not signing a mortgage encumbering the common elements.  Remember, the common elements are owned by the owners and not the association.  Instead, the association will be signing a Collateral Assignment of Lien Rights which authorizes the bank to demand the monthly assessments directly from each unit owner, should the association default in its payment obligations to the bank.

If you have any additional questions about how the process works, give us a call.  By Eric Glazer, Esq  http://condocrazeandhoas.com/

 

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Electronic Board of Directors and Membership Meetings in a Post-Covid-19 World

Electronic Board of Directors and Membership Meetings in a Post-Covid-19 World

  • Posted: Oct 26, 2021
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Electronic Board of Directors and Membership Meetings in a Post-Covid-19 World

 

Well, it is not quite a post-COVID-19 world yet, but hopefully, it will be one day soon. We are, however, living in a post-governor-ordered-state-of-emergency world, meaning that the emergency powers granted to condominium, cooperative, and homeowners’ associations’ boards of directors by virtue of the governor’s emergency orders have come to an end, with this caveat: The emergency authority granted to community association boards of directors after the expiration of the governor’s emergency orders is, generally speaking, “limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the owners and their family members, tenants, guests, agents, or invitees, and to mitigate further damage and make emergency repairs.” As such, each passing day diminishes the arguments supporting a board’s reasonable reliance on the utilization of these emergency powers. However, given the recent uptick in Covid cases plus ever evolving CDC guidance issued towards the end of July, 2021, some community associations may consider relying on the continuance of the emergency powers provision. If so, it is strongly recommended that such a community association receive proper guidance from its legal counsel.

 

Interestingly, until July 1, 2021, electronic meetings of community association members and boards of directors were not specifically addressed in the legislative grant of emergency powers which could be used during a governor-declared state of emergency. Rather, the emergency powers of days gone by provided that association boards of directors could conduct board meetings and membership meetings with notice given in as practicable a manner as possible, including publication, radio, United States mail, the Internet, public service announcements, and conspicuous posting on the common property or any other means the board deems reasonable under the circumstances. Notice of board decisions may be similarly communicated. In addition, the board could cancel and reschedule any association meeting. Under certain circumstances, decisions could be made on the spot, so to speak, without the need for a noticed meeting. The legislative emergency powers can be found in §718.1265, §719.128, and §720.316 of the Florida Statutes for condominium, cooperative, and homeowners’ associations, respectively. Nowhere in the pre-July 1, 2021 version of the emergency powers legislation did these powers set forth the clear right of the association to conduct solely electronic board and membership meetings, though due to life safety reasons, such power was inferred. However, it should be noted that effective July 1, 2021 the emergency powers legislation was significantly revised to provide for the use of electronic meetings during a governor declared state of emergency.

 

BOARD MEETINGS

With this as our backdrop, without a declared state of emergency can community associations continue to hold electronic board  meetings via platforms such as zoom? Let us examine the relevant legislation that bears on this important inquiry. As to condominium board meetings,

[a] board or committee member’s participation in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication counts toward a quorum, and such member may vote as if physically present. A speaker must be used so that the conversation of such members may be heard by the board or committee members attending in person as well as by any unit owners present at a meeting… Meetings of the board of administration at which a quorum of the members is present are open to all unit owners… The right to attend such meetings includes the right to speak at such meetings with reference to all designated agenda items… [§718.112(2), Fla. Stat. (2020), Emphasis added]. Note that similar provisions are provided for cooperative associations in §719.106), Fla. Stat. (2020).]

 

As to homeowners’ association board meetings,

[a] meeting of the board of directors of an association occurs whenever a quorum of the board gathers to conduct association business. Meetings of the board must be open to all members, except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege. A meeting of the board must be held at a location that is accessible to a physically handicapped person if requested by a physically handicapped person who has a right to attend the meeting… Members have the right to attend all meetings of the board. The right to attend such meetings includes the right to speak at such meetings with reference to all designated items. [§720.303(2), Fla. Stat. (2020), Emphasis Added.]

In addition, the “Florida Not For Profit Corporation Act,” set out in Chapter 617, Florida Statutes, which applies, in large part, to condominium, cooperative, and homeowners’ associations, so long as not in conflict with Chapters 718, 719, and 720 of the Florida Statutes (and certain other exceptions not relevant to this analysis), provides that,

Unless the articles of incorporation or the bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting. [§617.0820(4), Fla. Stat. (2020).]

Mixing all of these ingredients together so that they all have meaning clearly implies that the community association board can conduct its board meetings via electronic means, like Zoom.  However, in our opinion, a more prudent approach is to also make on-site accommodations available to those who wish to attend in person. This can be easily accomplished by ensuring the meeting is noticed in a physical location where the non-board member owners can listen and participate through use of an on-site speaker phone or computer that is preferably provided or otherwise arranged for by the association. (Reminder that Zoom also has a call in feature for those who do not access to, or are not comfortable with, a computer).

 

MEMBERSHIP MEETINGS

As to all community association membership meetings, members have a right to speak at meetings of the membership. Pursuant to §718.112(2)(d)7 and §719.106(1)(d)4, Florida Statutes, members of condominium and cooperative associations, respectively, have the right to participate in meetings of the unit owners with reference to all designated agenda items. Pursuant to §720.306(6), Florida Statutes, members of a homeowners’ association have the right to speak with reference to all items opened for discussion or included on the agenda. During elections and other meetings where a vote of the membership is at issue, members should be able to observe the tallying of ballots.

 

As to condominium associations, membership meeting requirements include the following:

An annual meeting of the unit owners must be held at the location provided in the association bylaws and, if the bylaws are silent as to the location, the meeting must be held within 45 miles of the condominium property… [§718.112(2)(d)1, Fla. Stat. (2020).]

 

As to cooperative associations, membership meeting requirements include the following:

There shall be an annual meeting of the shareholders… The bylaws must provide the method for calling meetings, including annual meetings… [§719.106(1)(d), Fla. Stat. (2020).]

 

As to homeowners’ associations, membership meeting requirements include the following:

The association shall hold a meeting of its members annually for the transaction of any and all proper business at a time, date, and place stated in, or fixed in accordance with, the bylaws. The election of directors, if one is required to be held, must be held at, or in conjunction with, the annual meeting or as provided in the governing documents… [§720.306(2), Fla. Stat. (2020).]

 

Furthermore, and of great importance, there is the following provision from the Florida Not For Profit Corporation Act, a/k/a Chapter 617, Florida Statutes:

If authorized by the board of directors, and subject to such guidelines and procedures as the board of directors may adopt, members and proxy holders who are not physically present at a meeting may, by means of remote communication participate in the meeting and be deemed to be present in person and vote at the meeting if:

1)    the corporation implements reasonable means to verify that each person deemed present and authorized to vote by means of remote communication is a member or proxy holder; and

2)    the corporation implements reasonable measures to provide such members or proxy holders with a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members, including an opportunity to communicate and to read or hear the proceedings of the meeting substantially concurrent with the proceedings, and

3)    if any member or proxy holder votes or takes other action by means of remote communication, a record of that member’s participation in the meeting must be maintained by the corporation in accordance with §617.1601.

[§617.0721(3), Fla. Stat. (2020); internal numbering, punctuation, capitalization, and formatting removed; emphasis added.]

 

Therefore, the members at a membership meeting can participate electronically so long as the board has authorized it and has adopted appropriate procedures. Consultation with the association’s attorney is strongly encouraged, most especially if there will be any “live” voting at the membership meeting.

 

How members vote at an electronic membership meeting when the member attends virtually is an interesting question. Presently, there is no definitive procedure set out in the law for the member to cast their vote “live” during a zoom meeting. Rather, §617.0721(3) Fla. Stat. (2020), places the burden on the board of directors to adopt procedures in this regard.   Obviously, if your association has 400 members who all appear virtually at the membership meeting, live voting for all 400 members will prove to be logistically difficult, if not impossible. It may be far easier to have the members  vote i) in advance by proxy, limited proxy, absentee ballot as the case may be, or, ii)  if adopted by the association, vote electronically pursuant to the procedures as set out in §718.128, §719.129, or §720.317 (Fla. Stat. 2020). A hybrid approach could also be utilized where the association provides for electronic voting and proxy voting prior to the meeting and then only the remaining few voters who have yet to cast their ballot could cast their vote “live” during the meeting, subject to the requirements of §617.0721(3).

Practice tip 1: Remember, electronic voting can be used whenever a membership vote is needed, even if the meeting does not have a zoom type option for attendance so long as the association has followed the requirements to provide for electronic voting.

Practice tip 2 (For Homeowners’ Associations): If your association’s governing documents require or otherwise allow nominations from the floor of the election meeting, consider amending and removing this provision from the governing documents to clear the way for an electronic membership meeting and election.

 

IN SUMMARY

Perhaps the initial questions phrased above could be better asked as follows: Absent a declared state of emergency can a community association hold board and membership meetings exclusively via an electronic platform, such as Zoom? Unfortunately, this question has not been satisfactorily addressed by the legislature or the Florida Courts. However, in our opinion, the safer approach, and the one that will avoid the potential for a successful legal challenge by an owner, is to avoid holding meetings exclusively via Zoom when there is no declared state of emergency. Consider using the hybrid approach discussed above where both a physical location is provided along with an electronic component such as Zoom and where members are strongly encouraged to attend and participate electronically.

Can community association board meetings and membership meetings be both electronically and at a physical location for those that want to attend in person even if the business is primarily conducted electronically? The answer is “yes”, so long as certain procedural safeguards are put into place. e.g., the ability of the membership watching via Zoom to fully observe the counting of ballots.

Another approach is to consider amending the association’s bylaws to provide for electronic only board and membership meetings. However, doing so has not yet been legally tested in the Florida courts. Also, remember, too, that a homeowners’ association must provide for a physical location for its board meeting, if requested by a handicapped individual. Also, as these matters are not fully settled in the law, your association’s lawyer may have a different opinion and advise that the association may have electronic board and membership meetings without the need for a physical location.

This journey into the foray of electronic meetings demonstrates a clear need for the Florida Legislature to adopt legislation to make clear that both board and membership meetings may take place electronically without the need to also simultaneously provide for a physical location, most especially so long as the association provides a communal device on association property for not-so-tech-savvy members to observe and participate in the meeting. After all we are blessed to be living in the 21st century. Let’s take advantage of it and add a few tech savvy legislative provisions to our laws governing community associations.

It is recommended you consult with your association legal counsel on the adoption of reasonable rules to ensure your virtual/electronic meetings run smoothly while also ensuring that they are in compliance with the association’s governing documents and Florida Statutes, and for further discussion regarding amending the governing documents of the association to provide clear authorization for electronic board and membership meetings.

The Kaye Bender Rembaum Team Remains Available To You and Your Community Association

Visit KBRLegal.com for awesome free resources, including 2021 Legislation, news with Legal Morsels and Rembaum’s Association Roundup, and our Event Calendar, including upcoming free classes.

 

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The more trouble your condo is in, the more developers may be interested in buying you out.

The more trouble your condo is in, the more developers may be interested in buying you out.

  • Posted: Oct 26, 2021
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The more trouble your condo is in, the more developers may be interested in buying you out.

 

DEVELOPERS ARE ON THE PROWL

By Eric Glazer, Esq.

I got a call this week from The Miami Herald.  They asked if I had heard about the prominent developer who approached the owners of the other Champlain Towers buildings that are still standing, offering to buy out all of their units.  I had not, but I’m not surprised in the least about it.  In fact, it’s going to be happening more and more.  Developers are going to be approaching lots of owners in condominiums that are distressed.

 

Why approach the owners in the remaining Champlain Towers condominiums?  I’m sure the developer is thinking that these owners may now have a hard time selling their condo units on the open market because there may not be many buyers interested in purchasing a unit in a condominium by that name.  The Champlain Towers will forever be remembered as the building that collapsed and where nearly a hundred innocent people died.  I think the developer is right.  It will be tough to sell your units in the remaining Champlain Towers condominiums.

 

The truth is……if that’s the case…and it is next to impossible to now sell your condo unit in these buildings, the developer can look like a knight in shining armor, if the price they offer is fair and reasonable.  It may very well make sense for the owners to seriously consider the developer’s offer.  At the remaining Champlain Towers buildings, the developer’s offer is contingent upon 95% of the owners agreeing to sell to the developer.  If less than 95% of the owners agree to sell, the deal is off the table.  That’s because if at least 5% of the owners vote against a plan of “termination” the developer’s plan to “terminate” the condominium, knock it down and build a more expensive one fails.  So, the developer needs to acquire at least 95% to ensure their plan succeeds.

 

We know that it’s about to get more expensive to live in a condominium because it looks like it will become more difficult to waive reserves and buildings will be undergoing more frequent inspections.  Repairs will be needed more than ever before which means money will be needed like never before.  When unit owners don’t have the money or don’t want to spend the money on a building that’s already old, rest assured that developers will be there ready to make an offer to everyone so that the property can be bought, knocked down, rebuilt and sold.

 

Over the last few years the law has made it more difficult to terminate a condominium.  As a result of the tragedy at The Champlain Towers I certainly expect the pendulum to swing back the other way.  Terminations will become easier.  Developers will use their eyes and airs searching for the most vulnerable properties, meaning the ones that will require the greatest cost to repair.  The laws regarding termination continue to evolve, but if I am a developer I may want to be cautious about buying units in a condominium that requires 100% of the owners to agree to termination and that does not have Kaufman language or “as amended from time to time” language.  In these types of condominiums, one owner who refuses to sell may wind up screwing up the developer’s grand plans.

 

 

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Lighting of Tomorrow is a full-service electrician company, we specialize in all commercial, industrial, HOA & Condo services.

Lighting of Tomorrow is a full-service electrician company, we specialize in all commercial, industrial, HOA & Condo services.

  • Posted: Oct 22, 2021
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LED Lighting , Energy Savings and Electrical Services for Commercial , HOA & Condo Properties

Lighting of Tomorrow is a full-service electrician company for the South Florida Area. We specialize in all commercial, industrial, HOA & Condo services and are guaranteed to leave you satisfied with our electrical work.

Our team consists of certified electricians who know the ins and outs of superior service and unbeatable customer care. We also specialize on renewable and energy-efficient product and services that facilitates the switch from outdated, inefficient lighting to state-of-the-art LED technology. We offer lighting design, inspections, installation, & maintenance.

 

Electrical Areas Of Expertise

  • Electric vehicle charging stations
  • Turnkey Lighting Installations
  • Lighting and Energy Audits
  • New Lighting Installations
  • Surge Protection Systems
  • New Construction
  • New electrical installations
  • Transformer Maintenance & Repair
  • Existing electrical repairs.
  • Installation of UPS/Generator Systems
  • Bulbs and ballast replacements
  • PLC Installations
  • Fuse replacements
  • Preventive Maintenance on Switchgear
  • Surge protector installations
  • Panel upgrades
  • Flat Rate Service Fees
  • Expert troubleshooting
  • 24 Hour Emergency Service
  • Commercial electric
  • New Commercial, and Industrial wiring
  • Solar energy panel installations
  • Rewiring and Remodeling
  • Generator backup systems
  • Electric Circuit Testing
  • Design and permits.
  • Indoor & Outdoor Accent & Security Lighting
  • Energy Analysis Audit
  • Control Wiring

 

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Top 4 Things to Consider When Budgeting for Lake Management by SOLitude

Top 4 Things to Consider When Budgeting for Lake Management by SOLitude

  • Posted: Oct 22, 2021
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Top 4 Things to Consider When Budgeting for Lake Management

by SOLitude Lake Management

 

Lakes and ponds are multifaceted ecosystems with a wide array of uses, benefits, and challenges. If you oversee waterbodies for a community association, golf course, municipality, or any other entity, you know that many factors must be examined when making decisions about the property. As the number of stakeholders increases, so does the number of opinions.

Lake management professionals often encounter these situations. To help decision-makers choose lake management solutions and maintenance strategies that satisfy as many stakeholders as possible, it’s advantageous to start by considering four overarching factors:

 

Stakeholder goals - on the job- team picture - meeting with clients - event - solution

#1: Stakeholder Goals

A decorative pond is very distinct from an aquatic preserve, and both of these are vastly different from a productive trophy fishery or a large drinking water reservoir. Likewise, each of these waterbodies may serve multiple purposes. A community pond, for example, is aesthetically pleasing, but may also contain important equipment for stormwater collection. A reservoir sustains our communities and also likely functions as an exciting spot for boating and recreation. Making simple choices about the removal of aquatic plant species or adjusting water chemistry can require overwhelming input with dozens of goals in mind.

How do you meet in the middle? This is where it’s important to confer with a lake manager who specializes in the “human dimension” of goal setting. It’s unlikely that polar opposite goals can be achieved, but by collecting diverse input, thoroughly evaluating goals, and educating stakeholders about the various paths to achieve them, it is possible to find areas of unforeseen compromise and greater potential for success.

Waterbody characteristics - water testing water quality on the job team photo smiling colleague - scenic lake

#2: Waterbody Characteristics

All lakes and ponds are different, whether they are located in separate states or right next to one another. Like a snowflake, a multitude of details come together to create a one-of-a-kind entity. These include the waterbody’s location, size, depth, age, the presence of invasive species, land use, and the level of surrounding pollution – and can go far beyond that.

Before moving forward with any kind of lake or pond maintenance strategy, it’s vital to collect data that reveals both the visible and unseen characteristics of the water resource. Laboratory testing, bathymetric mapping, surveillance, and other data gathering techniques can be used to inform the creation of a customized management program that maps out the path to success. Some goals may be simple to achieve while others require a more rigorous approach, but this can only be determined when accurate data is available.

lake and pond maintenance timing - hydro-raking and dredging

#3: Timing

Just as physical factors can influence a waterbody, so can elements like weather, temperature, rainfall, and even the season. These conditions can have dramatic, almost immediate effects on a waterbody by altering water chemistry, expediting erosion, causing fish kills, and more. The time of year may also exacerbate existing problems or create new ones without warning.

No matter your goal, timing will be a large factor in the planning and implementation process. For instance, lakes and ponds that require muck removal will often wait until the cooler months to complete hydro-raking or dredging projects in order to minimize down-time. And, nuisance algae and toxic cyanobacteria can be more effectively thwarted with proactive nutrient remediation projects before summer weather is in full swing. By understanding the importance of well-timed management projects, you can better budget for them.

scenic lake and pond, looking out at lake, clients enjoying waterbody, team on the job budget

#4: Budget

Budget is often a limiting factor for stakeholders and it can be even more difficult to get all decision-makers on board with the prioritization of lake and pond management. It’s beneficial to create a comprehensive road map built on the aquatic characteristics, the timing of necessary services, and the long-term goals and expectations for the waterbody. With a clear, well-informed plan on hand, the benefits and upfront costs can be more accurately evaluated and conveyed.

On paper, smaller upfront maintenance costs seem more appealing, but they can also be extremely misleading. Though safe and effective, EPA-registered pesticides do not make algae or weeds disappear forever; they simply mask a problem that will continue to exist without intervention. Stakeholders looking to maximize their budget while maintaining their long-term goals will find the most success in an annual management program. By proactively investing in the future of your waterbody, you can spend and worry less over time.

 

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THANK YOU SENATOR ANNA MARIA RODRIGUEZ! By Eric Glazer, Esq.

THANK YOU SENATOR ANNA MARIA RODRIGUEZ! By Eric Glazer, Esq.

  • Posted: Oct 22, 2021
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THANK YOU SENATOR ANNA MARIA RODRIGUEZ!

By Eric Glazer, Esq.

A few weeks ago, I wrote a blog called  It’s Time To Stop A True Florida Farce.  The blog spoke about the fact that members of community association boards of directors can still get certified without taking an educational class.  Instead, they can sign a rather silly piece of paper that states they have read their governing documents and promise to enforce them.  What a joke.

I sent the column by e-mail to all Florida legislators, urging them to change the law and make certification through education mandatory.  Senator Anna Maria Rodriguez asked me to send her my proposed legislation.  I did.  I am happy and so proud to report that Senator Rodriguez filed Senate Bill 394 mirroring my proposed legislation.

 

There is no doubt that mandatory education will save the lives, properties and money of the millions of people who live in condominiums throughout the state.  Florida would be the first and only state to require a board member to take an educational course.  That would be an amazing bright spot for our state and no doubt would lead other states to eventually adopt similar requirements.

 

I had the pleasure of teaching my Condo Craze and HOAs Board Certification class last week in Miami and Palm Beach to so many people.  I taught the importance of having reserve accounts, having reserve studies done by qualified people and the danger in completely waiving the funding of reserve accounts year after year after year.  Interestingly enough, when I asked the crowd if the law should be changed to requiring at least some form of reserves and having the reserve study done by experts, EVERYONE RAISED THEIR HAND.  People want to be safe.  We learned a lot after the Champlain Towers disaster.

 

Think about this.  The Florida Legislature will no doubt make some massive changes to Florida law in this regard.  But if members of the Board are not required to attend an educational class, how in the world can they be expected to learn the new laws.  And by the way….I don’t want to hear the excused that these classes are burdensome.  They are offered on-line and they are offered for free.  Anyone who won’t devote a few hours a year to learning the new condo laws does not deserve to be on the board in the first place.

 

In any event, we owe a debt of gratitude to Senator Rodriguez for her efforts in taking this matter seriously.  Keep track of Senate Bill 394 and urge your local House Member and Senator to please support it.  If I never get another piece of legislation passed, this is the one that is nearest and dearest to my heart.  Education is the key to running a safe community.

 

Over a decade ago The Florida Legislature thought it was a good idea for members of condo and HOA boards to become “certified.”  Sounds like a good idea.  The problem is that the legislators  allowed for two ways to become certified. One way is by going over to your computer and printing a form that is on the DBPR’s website that basically says I read my governing documents and promise to enforce them.  You sign the form and you are now certified.  That’s it.  That’s all you have to do.  If you are a director of a condo, the form does not require you to acknowledge the existence of Florida Statute 718.  If you are a member of an HOA board the form does not require you to acknowledge the existence of Florida Statute 720.  The form is a joke.  The procedure is a joke and an embarrassment to The State of Florida.  In fact, many associations still have illegal provisions in their governing documents.  The current law actually allows you to become certified if you promise to enforce the illegal provisions in your governing documents.

 

As my kids go back to school today, I’m proud to say that the second way of becoming certified is by taking a course approved by the DBPR.  As so many of you now, I am most proud of the fact that I have certified over 20,000 board members throughout the state. Better yet, the attendees love it.  They learn about the requirement to fund reserves, Kaufman language, access to records, mandatory financial reporting, the role of the community association manager, legal ways for the board members to vote and hold meetings, preparation of budgets, the importance and hierarchy of your governing documents, rule making, actions of board members that constitute criminal conduct, ways directors can be removed from the board, the Marketable Record Title Act and the importance of preserving your governing documents in an HOA, obligations to maintain insurance, mandatory websites, material alterations, screening, approval and denial of occupants AND SO MUCH MORE.

 

It is an insult to every director who has been certified by taking a course to allow other directors the ability to get certified by signing a stupid self-serving form.  We are now repeatedly learning the hard way throughout our state that lack of knowledge can lead to catastrophic consequences in our communities.

 

MANDATORY EDUCATION FOR BOARD MEMBERS CAN SAVE LIVES. Florida has always led the way when it came to making community association laws that the rest of the country follows.  The State of Florida has the opportunity to become the first state in the country to require that directors become educated before assuming the incredible responsibilities that come with being in charge of our communities.  There is no excuse any longer for a Board member not to take an educational class.  Many law firms, like mine, teach the class on-line.  A board member never even has to leave his or her home in order to become certified.

 

I urge the members of The Florida Legislature to amend the condominium, co-op and HOA statutes to remove the ability to become “certified” by signing a form and instead require attendance at an educational course.  I already drafted the proposed legislation and it’s ready to be filed.  With all my heart, I believe lives can be saved, financial disasters can be avoided and it is in the best interest of the millions of Floridians who live in a community association.  Readers: please contact your legislators if you agree.

 

 

 

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The Florida Bar task force said Florida Condo Associations Need Reserves in Place for Major Safety Repairs!

The Florida Bar task force said Florida Condo Associations Need Reserves in Place for Major Safety Repairs!

  • Posted: Oct 19, 2021
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The Florida Bar task force said Florida Condo Associations Need Reserves in Place for Major Safety Repairs!

 

Here are seven findings of the 179 page report of the Surfside task force:

1- The absence of uniform maintenance standards outside of boards should be established.

2- Efforts to make condo repairs of life safety issues should no longer require a full vote of the association membership.

3- Thorough and consistent inspections should be required.

4- Boards should be empowered to borrow money to pay for life safety repairs.

5- Local governments can no longer rely upon sovereign immunity to protect themselves from civil claims.

6- The Florida legislature can no longer raid the $4 door tax trust fund by diverting that money to the general fund.

7- Thirty percent of that money should go towards educating boards and owners about repairs to make buildings safe

 

 

A task force report prepared by a section of the Florida Bar recommended that lawmakers overhaul the state’s condominium laws following the Surfside building tragedy that killed 98 people, urging a process to address inspections and ensure proper reserves are in place to make major safety repairs, among other issues.

The task force was formed by The Real Property, Probate and Trust Law Section of the bar, convening lawyers who deal with condominium and association laws. Its purpose was to recommend ways to prevent future failures, not to investigate or place blame for the 12-story building collapse.

“The lack of uniform maintenance standards or protocols, and the unguided discretion given to boards of directors to determine when, how, and if life safety inspections should be performed, requires legislative intervention,” concluded the 179-page report that was released earlier this week.

 

Champlain Towers was 40 years old and in need of major repairs when it collapsed on June 24. It’s led to officials looking at the need to ensure other aging structures are safe. The task force said 912,376 Florida condo units housing more than 2 million people are at least 30 years old, including more than 105,000 older than 50 years and nearly 328,000 built between 40 and 50 years ago.

Overall, Florida has more than 1.5 million condo units operated by 27,599 condo associations, the report said.

 

Among recommendations are giving association boards the right to make special assessments for major repairs to protect resident safety without a full association vote. It also requires associations to build up reserves for such projects as recommended by engineers in order to be able to pay for repairs. Those would be in addition to accounts in place for routine maintenance.

While the report said the vast majority of condominium associations are operating in a reasonably safe manner, there needs to be more consistency with inspections and the information provided in them needs to be available to residents.

“Unit owners and boards may also resist such maintenance because of cost, lack of reserves, disruption and inconvenience,” the report said.

The report also recommended allowing condominium boards to borrow money to pay for life safety repairs so the cost could be spread out over years.

Local governments should also have a higher level of accountability for inspection reports, including stripping them of sovereign immunity protections, which limit civil claims against government agencies to $200,000.

 

“Condominium residents should be entitled to rely on the inspections and reports performed by or on behalf of local governments, and local governments should not be able to avoid responsibility for the content and conclusion of building inspection reports,” it said.

Current law has limitations on associations and unit owners to take civil action against developers for design and construction flaws. Those limitations should be lifted, the report said.

The state division that oversees condominium education and compliance is largely funded by a trust fund built on a $4 per unit fee. The task force recommends the Legislature not be able to “sweep” the trust fund for other state budget purposes.

It also recommends that 30 percent of the trust fund be used to educate association boards and residents about obligations to make repairs to ensure buildings are safe.

 

Thank You, for the Article:  MARY ELLEN CAGNASSOLA 

 

 

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What happens when a board member who is in attendance at a board meeting fails to cast a vote on a matter brought before the board for a vote?

What happens when a board member who is in attendance at a board meeting fails to cast a vote on a matter brought before the board for a vote?

  • Posted: Oct 18, 2021
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What happens when a board member who is in attendance at a board meeting fails to cast a vote on a matter brought before the board for a vote?

by 

A director of the association who is present at a board meeting at which action on any corporate matter is taken is presumed to have assented to the action taken unless he or she votes against such action or abstains from voting. A director who abstains from voting on any action taken on any corporate matter is presumed to have taken no position with regard to the action. A vote or abstention for each member present must be recorded in the minutes of the meeting. Condominium: Section 718.111(1)(b), Florida Statutes Cooperative: Section 719.104(8)(b), Florida Statutes

 

Owners and the Board of Directors

Every association board I know want’s the owners in the community they serve to be informed and involved.  That is why we send out notices of board meetings and offer owners the ability to take part in those meetings by Zoom or in person.

The association’s board represents the owners of your association and has the important job of making decisions on behalf of the association. The board has a duty to protect the property value of the association’s owners along with the safety of visitors and residents to the association. They have a responsibility for oversite of association funds and association management.

The board is also charged with complying with and enforcing the associations governing documents, to do this they have the ability to hire professionals and advisors, including; managers, engineers accountants, attorneys and contractors and while in some cases the law requires then association to seek bids, it never requires the association to hire the low bidder. Instead, it is the board’s responsibility to choose the vendor and bid they feel fits the needs of the association best.

In many cases owners only take notice of board’s action when it effects their pocketbook; for example, when they receive a notice of special assessment, or their maintenance fees are increased. By that time the vote has most certainly been cast, as the meeting to discuss and approve the project or budget have already been held. The best time to get involved, so that you understand why an increase or assessment is necessary, and have a chance to provide input, is early. Attend board meetings, especially those to discuss projects, review contractor recommendations, and make decisions about what needs to be done.

The recent events at Surfside serve to point out what happens when important projects and/or maintenance are delayed due to unit owner objections to costs or project necessity.  These delays are often caused by a small group of very vocal unit owners that think they speak for the owners, when in fact it is the board that speaks for the owners, as they are the sole elected representatives of the owners.

At best the delays caused by these small vocal groups cost additional time and money, at worst they can be catastrophic. It’s important for owners to support the board when the time comes to proceed and that they participate early in the process, providing input and asking the questions they feel should be addressed before decisions are made and not after.

Royale Management Services, Inc. has been serving South Florida since 1984. The company was founded to provide high quality management and accounting services for business and individuals, Royale Management Services, Inc. expanded to the Community Association and Home Owner’s Association Management business in 2000.

Our team members are highly trained in all aspects of community association management and customer service. We take pride in delivering property management services that work!

Royale Management Services, Inc.
2319 N Andrews Avenue
Fort Lauderdale, FL 33311

Phone: (954) 563-1269
Toll Free: (800) 382-1040

Email: cam@rmsaccounting.com

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3 Common Lake & Pond Management Misconceptions by SOLitude Lake Management

3 Common Lake & Pond Management Misconceptions by SOLitude Lake Management

  • Posted: Oct 17, 2021
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3 Common Lake & Pond Management Misconceptions
Trent Nelson, Aquatic Specialist at SOLitude Lake Management

 

 

As an Aquatic Specialist with more than a decade of experience, I’ve assisted hundreds of property managers with their lake and stormwater pond management needs over the years. Despite the diverse types of lakes and ponds they oversee, I’ve noticed that many clients have the same set of concerns or misconceptions about their waterbodies. These often come to light as we work together to design a freshwater management program. Let’s take an in-depth look at some of these common assumptions. 

  • Lakes and ponds are permanent fixtures in the landscape

While lakes and ponds can be long-lasting features in our communities, they are not permanent. They fill with sediment that erodes from the shoreline or flows in during rainstorms. Weed growth and decomposition may lead to the development of muck. And trash, tree branches, and other pollutants can build up over time. 

The aging of a lake or pond is a natural phenomenon, but can be highly accelerated through human activity and industry, reducing a waterbody’s life by decades. If left unmanaged over the years, your waterbody could eventually fill up until it becomes a marsh or puddle. This is a process called lake and pond succession. 

The best way to prevent this inevitable decline is through proactive, ongoing management aimed at reducing erosion, nutrient pollution, muck development, and nuisance aquatic vegetation. These benefits are two-fold. In addition to prolonging the depth and overall lifespan of your lake or pond, you’ll also help prevent problems like algae, toxic cyanobacteria growth, bad odors, murkiness, invasive species infestations, fish kills, and more.

 

 

  • Herbicides pose a danger to non-targeted plants and animals

The most eco-friendly and long-lasting lake and pond management programs lean on holistic, natural solutions, but sometimes herbicides and algaecides are necessary to set your waterbody up for success. Herbicides tend to be a point of concern for property owners, but I’ve found that once they better understand the strict scientific processes surrounding the use of herbicides, their fears are alleviated. 

Herbicides used in the lake management industry are designed to exclusively target specific weed and algae species without impacting desirable plants and animals. They do so by interfering with the unique growth mechanisms identified in nuisance species that are not found in beneficial ones. Likewise, the concurrent use of eco-friendly compounds called surfactants helps confine herbicides and algaecides to the affected area without migrating elsewhere. Historically, herbicides have been applied by licensed professional ground crews, but new industry technologies like drones are making it possible to remotely apply products with more accuracy and efficiency, particularly in areas that are hard to reach or unsafe to navigate by foot. 

All herbicides must be evaluated and registered by the Environmental Protection Agency (EPA). In addition to collaborating with scientific authorities throughout the US, the EPA also carries out bilateral cooperative programs with the World Health Organization (WHO) and many other countries around the world. Once approved, all herbicides are subject to compliance monitoring and periodic reevaluation processes to ensure lasting safety and success. 

 

  1. All freshwater management programs are the same

It’s not uncommon for a property manager to assume that the solutions used on a friend or colleague’s lake or pond will work on theirs. Unfortunately, there’s no one-size-fits-all approach to lake and pond problems because no two aquatic ecosystems are the same. 

Your waterbody’s unique makeup and the way it responds to different treatments can be dictated by many factors, including water use, location, surroundings, plant and animal presence, pollution, and weather – just to name a few. Likewise, every stakeholder has different goals and budget requirements. That’s why freshwater management programs are most effective when customized for your unique aquatic environment. 

Typically, the program design process begins by establishing a baseline of your waterbody through a visual survey of the property and comprehensive water quality testing. Your Aquatic Specialist should work with you to identify the challenges your aquatic ecosystem is facing and determine the best course of action based on your needs and limitations. And because all of these factors can change over time, these conversations should continue on a regular basis. 

 

The management of lakes and ponds is truly a science and should be treated as such. When considering a management program, look for a freshwater management firm that prioritizes getting to know you and your aquatic ecosystem before implementing any services. Seek out an Aquatic Specialist who is educated about the responsible use of herbicides and is capable of sharing that knowledge with you in a clear manner. Our lakes and ponds are valued features that our communities rely on every day. If you oversee the management of these water resources, make sure you’re investing in both the present and its future.

 

 

Trent Nelson is an Aquatic Specialist at SOLitude Lake Management, the nation’s leading freshwater management firm specializing in the management of lakes, stormwater ponds, wetlands, and fisheries. Learn more about this topic at www.solitudelakemanagement.com/knowledge. 

 

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Is Your Association Prepared? Expect Supply Shortages – KBR Legal

Is Your Association Prepared? Expect Supply Shortages – KBR Legal

  • Posted: Oct 16, 2021
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Is Your Association Prepared?

Expect Supply Shortages  

There’s news once again reporting food and product supply shortages are on the horizon, if not already here, due to what can only be described as a logistics disaster. This morning’s news reported that there are thousands of shipping crates snarled in a logistical nightmare waiting to be off loaded with no relief in sight. One news source reported 250,000 crates are waiting to off load.  While no one is yelling “fire in a crowded theater,” (yet) it likely makes sense to get ahead of your association’s inventory needs. That said, hoarding is never a good idea. But, keeping extra inventory on hand may make sense until the supply chains are working correctly again.

   Sources for the following include CBS News, the Wall Street Journal and Axios:

“American families are going to face a two-pronged assault:

1. Empty shelves at toy and grocery stores
2. Inflated prices on the toys and groceries that are available

  At this very moment, there are 250,000 shipping containers stuck at sea off the east and west coasts, waiting to be unloaded and it could be months before they get to store shelves. But Biden is presiding over one of the biggest supply chain bottlenecks since WWII: [via CBS News]

  • Ships cant dock because ports are full
  • Ports are full because there aren’t enough truck drivers to take the shipping containers away
  • When truckers do arrive, the ports are poorly staffed and they can’t offload fast enough, resulting in truck drivers who used to pick up 20 loads/week, now only able to take six
  • The cost of shipping a container from China to the U.S. is now $20,000, four times higher than this time last year.

  It’s already begun: Stores across the country are already restricting supplies. Try not to have flashbacks to March 2020, but Costo and Walmart have announced they are limiting sales of toilet paper in some stores. And around the country, there are shortages of goods on shelves in Target, Costco, Home Depot, and Sears.

 Warning about your Christmas feast: Axios is reporting that food supplies will also be impacted: “Grocery stores could have limited quantities of a number of products heading into the holidays after some of the country’s biggest food manufacturers say they’re short on supply.”

The Boy Scout motto “Be Prepared” comes to mind!

 

 Rembaum’s Association Roundup

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RembaumsAssociationRoundup.com

 

Condo Board Member Certification via Zoom on October 22nd

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