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

Should Condominium Associations Be Permitted to Invest Operating & Reserve Funds? SB 1490 Says Yes!

Should Condominium Associations Be Permitted to Invest Operating & Reserve Funds? SB 1490 Says Yes!

  • Posted: Sep 27, 2021
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Should Condominium Associations Be Permitted to Invest Operating & Reserve Funds? SB 1490 Says Yes!

For years there have been significant legal constraints on a condominium association’s ability to use reserve funds. In addition to the statutory requirement to obtain membership approval for non-designated reserve usage, the prevailing school of thought was that association funds could not be invested since investments can and do fail.

A newly filed bill by Senator Jason Pizzo, SB 1490, could create a significant change in terms of an association’s ability to invest the community’s operating and reserve funds in depositories other than a traditional bank or savings and loan.

The bill provides as follows:

“Unless otherwise prohibited in the declaration, and in accordance with s. 718.112(2)(f), an association, including a multicondominium association, may invest any funds in one or any combination of investment products described in this subsection.”

If this bill passes and an association invests funds in any type of investment product other than a depository account, the association must meet all of the following requirements:

The board shall annually develop and adopt a written investment policy statement and select an investment adviser who is registered under s. 517.12, F.S. and who is not related by affinity or consanguinity to any board member or unit owner. Any investment fees and commissions may be paid from the invested reserve funds or operating funds.

The investment adviser selected by the board shall invest any funds not deposited into a depository account in compliance with the prudent investor rule in s. 518.11, F.S. It is important to note that the statutory prudent investor rule is a test of conduct and not resulting performance. Under this statute, no specific investment or course of action is, taken alone, considered prudent or imprudent. Instead, the investment adviser is deemed to be acting as a fiduciary and he or she may invest in every kind of property and type of investment, subject to that statute.

The fiduciary’s investment decisions are evaluated on the basis of whether he or she exercised reasonable business judgment regarding the anticipated effect on the investment portfolio as a whole under the facts and circumstances prevailing at the time of the decision or action. Although the proposed statute requires that funds invested be subject to insurance under the Securities Investor Protection Corporation, it is important to note that this insurance is only there if the brokerage firm fails, not if the investment turns out to be ill-advised and loses the association’s money.

The investment adviser shall act as a fiduciary to the association in compliance with the standards set forth in the Employee Retirement Income Security Act of 1974 at 29 U.S.C. s. 1104(a)(1)(A)-(C).

At least once each calendar year, the association shall provide the investment adviser with the association’s investment policy statement, the most recent reserve study report or a good faith estimate disclosing the annual amount of reserve funds which would be necessary for the association to fully fund reserves for each reserve item, and the financial reports.

The investment adviser shall annually review these documents and provide the association with a portfolio allocation model that is suitably structured to match projected reserve fund and liability liquidity requirements. There must be at least thirty-six (36) months of projected reserves in cash or cash equivalents available to the association at all times.

Portfolios managed by the investment adviser may contain any type of investment necessary to meet the objectives in the investment policy statement; however, portfolios may not contain stocks, securities, or other obligations that the State Board of Administration is prohibited from investing in under ss. 215.471, 215.4725, and 215.473, F.S. or that state agencies are prohibited from investing in under s. 215.472.

Lastly, the bill would exempt registered investment advisors from having their bids subjected to the competitive bidding requirements found in Section 718.3026, F.S. The companion bill to SB 1490 is HB 1005 (Killebrew/Fine).

As more associations change their old habits and begin to fund reserves, the allure of more aggressive investment vehicles for these funds, which can be substantial amounts, is undeniable. However, the risk is also undeniable. As such, if this bill becomes law and the investment of reserves becomes available, boards are strongly encouraged to take an extremely cautious, measured approach with reserves.

While investment of your association’s operating and reserve funds might result in a substantially better return than a savings account, you might also see significant losses. The investment of association funds must be done with careful consideration of the demographic in your community, the age of your buildings and facilities, the required liquidity of your funds and, most importantly, the sensitivities and risk tolerance of your membership all taken into account. If your members fuss about your board’s landscaping decisions imagine the potential fallout if you make the wrong investment decisions!

 

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GreenTeam is an organization dedicated to providing the highest quality of service, to Class-A office buildings, industrial properties and healthcare facilities throughout South Florida

GreenTeam is an organization dedicated to providing the highest quality of service, to Class-A office buildings, industrial properties and healthcare facilities throughout South Florida

  • Posted: Sep 27, 2021
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SOUTH FLORIDA
COMMERCIAL PLUMBING CONTRACTORS

  (954) 210-4100        (954) 990-8738

 

GreenTeam Service Corp. is a professional and reliable commercial plumbing contractor, providing timely service for commercial buildings including Class-A office buildings, industrial properties and healthcare facilities throughout South Florida. GreenTeam’s number one focus is customer experience.

GreenTeam Services

  • Water heaters/boilers
  • Piping installation and repairs
  • High speed sewer jetting
  • Grease trap service
  • Storm drain cleaning and pumping
  • Stoppages
  • Fixture installations
  • Line locates
  • Pump Outs
  • Backflow certification, repair, and replacement
  • Sewer Camera Inspection
  • Domestic booster pumps
  • Variable frequency drive service and installation
  • Lift station maintenance and repair

 

GreenTeam was established in 2009 by James Terry, a third generation plumber and now services over 250 commercial properties in  Broward, Miami-Dade and Palm Beach counties.

Every team member operates with one mission in mind:

Exceptional Service. No Exceptions.

 

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Condominium and Homeowners Associations in distress often cannot turn to their local bank for financing

Condominium and Homeowners Associations in distress often cannot turn to their local bank for financing

  • Posted: Sep 27, 2021
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Condominium and Homeowners Associations in distress often cannot turn to their local bank for financing

by  Gelt Financial, LLC we have been a provider of financing to Condominium and Homeowners Associations

 

Condominium and Homeowners Associations in distress often cannot turn to their local bank for financing, at Gelt Financial, LLC we have been a provider of financing to Condominium and Homeowners Associations in distress and in bankruptcy.

We have found that sometimes Condominium associations are in distress and need our short-term financing of up to 5 years interest only payments to allow them to get over the challenges they are facing.  They need time to Stabilize and then seek traditional bank financing.

We have worked with associations in chapter 11 Bankruptcy that needed financing to exit the Bankruptcy or settle lawsuits, from vendors, neighbors, or previous lenders. When an association needs cash, often it stops doing the routine preventative maintenance and capital improvements to the property, so things can spiral out of control very fast.

Gelt Financial, LLC has been working with business, investors, and condo associations in distress for years, providing the capital they need to solve their problems. We can provide financing and structure it to meet the cash flow needs of our borrowers quickly.

 

When your bank says No, we say Yes.

For more information contact info@Geltfinancial.com

Gelt Financial is here to help you with
your Commercial Mortgage needs.

 

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Online voting system option for your members, those members consenting to vote online will be invited to register and vote using BeckerBALLOT.

Online voting system option for your members, those members consenting to vote online will be invited to register and vote using BeckerBALLOT.

  • Posted: Sep 24, 2021
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Online voting system option for your members, those members consenting to vote online will be invited to register and vote using BeckerBALLOT.

Eligible voters will be invited to activate their account online and vote!

 

The simplicity and security of our software makes BeckerBALLOT the perfect solution for you!

Use the software for board of directors votes, amendment of governing documents, waive reserves and approval of material alterations and more! Your members need to simply log in, cast their votes and be on their way.

 

 

VOTERS

If your association has joined BeckerBALLOT and you are ready to vote ONLINE, you are in the right place!

Your association has provided you with the ability to easily cast your vote and ensure that no matter where you are, you can participate in important association voting.  It’s fast, accurate and secure.  You’ll have the confidence in assuring your vote is counted, all without the necessity of filling out and mailing your paper ballot!

ADMINISTRATORS

BPBALLOT, the original electronic voting software is NOW BeckerBALLOT, a joint partnership between Becker & Poliakoff and SHYFT digital.

We offer an easy-to-use, secure electronic voting software solution that is compliant with state law. We provide the ability for members in condominiums, cooperatives and homeowner associations to cast their votes online.  You will be able to easily and seamlessly facilitate and increase member participation in important votes. All votes stay secure, anonymous and tracked for validity.

Once your Board adopts a Resolution which offers an online voting system for your members, members consenting to vote online may register and vote using BeckerBALLOT.com. Read the full electronic vote process here.

 

 

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Another seal and stripe completed by our ASPCrew in Florida!.  PaveWithASP for all of your parking lot maintenance needs by calling 1-833-PAVE-ASP

Another seal and stripe completed by our ASPCrew in Florida!. PaveWithASP for all of your parking lot maintenance needs by calling 1-833-PAVE-ASP

  • Posted: Sep 23, 2021
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Another seal and stripe completed by our ASPCrew in Florida!. PaveWithASP for all of your parking lot maintenance needs by calling 1-833-PAVE-ASP

   

Thankful for another day of making a difference in our customers’ parking lots! Another seal and stripe completed by our #ASPCrew in Fort Myers, Florida! Choose to #PaveWithASP for all of your parking lot maintenance needs by calling 1-833-PAVE-ASP or head to www.PaveWithASP.com!

Asphalt Repair Fort Lauderdale

If you’re looking to improve the appearance and safety of your asphalt pavement, it could be time to consider asphalt maintenance and repairs with Atlantic Southern Paving. Asphalt repair in Fort Lauderdale is a common service that helps to restore the integrity of asphalt surfaces across residential and commercial applications.

Atlantic Southern Paving and Sealcoating is proud to be regarded among the top paving companies in Florida and beyond. Continue reading to learn more about asphalt repairs and what sets our asphalt paving company apart from our competitors.

There are a number of different asphalt repair techniques available, many of which can both enrich the structural integrity of asphalt surfaces as well as their overall aesthetics. And when it comes time to schedule asphalt repair in Fort Lauderdale, why not depend on the experts on our team?

 

Types of Asphalt Repair in Fort Lauderdale

Asphalt Sealcoating 

Asphalt sealcoating is an important element that is recommended by most asphalt paving contractors. The sealcoating is applied on the asphalt surface, creating a protective layer that keeps out harmful elements, like water, oil, and gas.

Sealcoating also protects the asphalt from UV rays, another element known to weaken asphalt surfaces. Better still, a fresh coat of sealcoating can make the pavement look like new again, increasing its appearance while adding to its overall longevity.

 

Crack Sealing 

Asphalt crack sealing is an important application, especially for commercial asphalt settings. A crack in asphalt allows elements like water to get in, loosening up the binding and materials that the asphalt layers are made of.

Over time, this depletion will reduce the integrity of the asphalt, creating worse problems, like potholes. Crack sealing asphalt keeps the elements from entering the pavement and can be done prior to asphalt sealcoating for strong, great-looking results.

 

Asphalt Overlays 

Asphalt overlays are a great investment for businesses that have aging asphalt pavement that is still structurally strong. What asphalt overlays entail is pretty straightforward. A new layer of asphalt is applied directly over an existing asphalt surface.

In the event that the structural state of the asphalt is no longer strong, asphalt milling is recommended. Asphalt milling is done by removing the problematic layers prior to asphalt paving. Speak with a paving contractor directly if you are unsure if asphalt milling is necessary for your property.

Our up-to-date equipment, professional expertise, and commitment to excellent results have given us a reliable reputation as one of the top paving companies in Florida. Please contact our team to get a free paving estimate or to speak with an asphalt technician in more detail.

If you’re looking for the top asphalt paving contractors in Fort Lauderdale to help with asphalt repair and maintenance, keep us in mind. Atlantic Southern Paving and Sealcoating has decades of experience providing commercial asphalt services of all kinds.

 

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What are the advantages of using drones to document structural condition?

What are the advantages of using drones to document structural condition?

  • Posted: Sep 23, 2021
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What are the advantages of using drones to document structural condition?

1- Collect 1000s of high-res images from different vantage points
2- Create panoramas that show structures in full context of surroundings
3- Easily photograph areas that were previously difficult, expensive or inconvenient to reach
4- Tag images with date and GPS location
5- Provide evidence of structural condition OVER TIME
And the best part?
With SRI’s proprietary image management software, Catalogger, clients can easily store, search, access and share drone survey images like these from a recent South Florida project.
Catalogger’s simple, intuitive interface and cloud-based storage make it the perfect tool for structural condition analyses and collaboration.
Learn more about Catalogger and our work with drones @ https://www.sriconsultants.net/services/drone-survey
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The Mystery of the Missing Minutes: How Community Association Document Retention Protects Against Liability

The Mystery of the Missing Minutes: How Community Association Document Retention Protects Against Liability

  • Posted: Sep 23, 2021
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The Mystery of the Missing Minutes: How Community Association Document Retention Protects Against Liability

Who Voted for What and When…Where Did the Minutes go?

Here is a cautionary tale: Your board of directors voted for a big capital improvement project along with a special assessment. Like a well-governed association, they memorialized the motion and the vote from the meeting in the minutes. With that project, the association needs to make a special assessment because the reserves were not funded well. A few owners are not happy about the special assessment and retained a lawyer to strike it down.

Years go by before it makes it to court and in discovery, the plaintiffs request the minutes as proof that the board did their fiduciary duty when making the decision. Except, after all this time has passed, the association has changed management companies and the minutes are nowhere to be found. Nobody remembers anything: some old board members have moved on; the management companies did not keep your minutes or did not turn them over to the new management company.

Now all the association can do is pay the attorneys (a big waste of money) and start all over again. This is how, without a community association document retention policy in place, a simple capital improvement project which may have cost $50,000.00 is overshadowed by a massive and unnecessary loss of resources for your community association.

HOA Document Retention

Safeguarding Your Documents Protects You from Liability

Boards may change over time, but the safekeeping of all records does not. When a new board is elected, it is the obligation of the outgoing board to return or hand over all community records — most important of all the minutes of all their meetings. If a new management company is hired, they must obtain all the documentation and records from the previous management company. Unfortunately, it’s often a futile task, and you might as well be looking for your documents in the Bermuda Triangle.

Most state laws require that community associations keep records for five to seven years (depending on the state). If there are no statutes regarding document retention, common sense tells you that they should be retained and accessible.

A simple test to know if your community is protected

If you are a board member or an owner, ask your management company to produce records of minutes from a meeting five years ago. Ask them for the budgets for the last three years. This should not be a difficult request. This is a simple test that can be conducted by diligent board members to ensure your record-keeping obligations are being met. If they cannot find the last three years’ budgets, you have a very big problem.

Community associations are required to retain a large number of records, many more than any individual director is accustomed to in their personal lives. So naturally, the task falls on the management company. Failure can have various negative effects, particularly, as in the example above, when the association gets sued.

Improper Documentation can Lead to an Inability to Collect on Delinquencies

Here’s another example: What if a board has decided to put Mister Delinquent into collections for non-payment of assessments for the past three years (don’t be surprised, some boards will wait before moving on an issue like this). Your collection agency asks for the budgets and minutes of budget meetings to verify the debt and they are nowhere to be found. I think you can guess how this pans out. Without the budget minutes and other documents required to put a budget into play, from a legal point of view, there is no debt to collect.

Condo Association Document Retention

In the midst of chaos, You need a source of truth

Let’s face the facts and understand that community associations are volatile environments and quite dynamic. Boards of Directors change, emotions run high, management companies are dismissed frequently, as are attorneys, vendors, and whoever else gets an opportunity to work for an association. Sometimes by accident (and sometimes by design) disgruntled board members, dismissed employees (managers), or untrained office staff may feel that the round file (garbage can) is for everything that is over a year old.

The minutes are the history of all board actions and decisions and losing them is like losing your medical records…It’s unhealthy for your community’s future. Yet many associations continue to work the same way they did in 1961 and everything is committed to paper. In essence, your so-called paper trail has fallen into a deep dark abyss never to be found again.

These days you can have virtual meetings so why not digitize the minutes and keep them safe? It costs very little to set up a cloud drive for the community to store valuable documents. Association servers or cloud-based document retention services should be filled with documents and files to protect the community from liability. Time marches on and technology continues to advance: don’t let your association be left behind.

Community Association Document Retention

The solution? A Community Association Document Retention Policy

So now that a potential problem has been identified, what are the possible solutions?  First and foremost, as mentioned above, the board of directors must establish a record-keeping policy and protocol which involves voting on it and memorializing this in the minutes. Don’t lose those minutes and approve them at the next meeting. Said policy should identify all the records that an association must keep and for how long.

Figuring where to start when writing your community association document retention policy should be easy since most states, already require retention of certain documents. In addition to the documents required by the state, be sure to include any documents that support and protect the interests of the community association’s business. Because, make no mistake, helping to prevent future costly lawsuits and legal defense funds is certainly in the community’s best interest.

Community Association document retention isn’t just for minutes. Whether your state requires it or not, it behooves your board to hold on to certain items that may be needed in a future lawsuit. Those include:

  • governing documents
  • insurance policies
  • vendor contracts
  • accounting ledgers
  • audit reports
  • reserve/engineering studies
  • warranties
  • proof of meeting notices
  • all meeting minutes (public and private)
  • collection policies & payment plan agreements
  • proof of mailings
  • any other processes that can be documented or may be disputed in the future
Document Retention 4

Lock it Down… For the Future

Sloppy or lackadaisical record keeping can have disastrous effects on community associations. It is the responsibility of BOTH the boards of directors and the management companies to ensure that the community is protected from liability. The best way to do that is to lock down everything and store your important documents in the cloud.

If you have been planning to move your records to the cloud “someday” consider today that day. This is a project worth getting to work on right away because bad things can happen in the wink of an eye. Your first, and sometimes only defense against problems in the future, is documenting everything today.

If you want to learn more about community association governance please contact us for a free no obligation collections analysis and we will be glad to speak to you about all other matters that you may have questions about.

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 “2022 Legal Update” educational webinar with Michael Bender from Kaye Bender Rembaum

 “2022 Legal Update” educational webinar with Michael Bender from Kaye Bender Rembaum

  • Posted: Sep 23, 2021
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 “2022 Legal Update” educational webinar with Michael Bender from Kaye Bender Rembaum to discuss recent legislation.

The webinar covered:

  • Senate Bill 602: Business Organizations (3:33)
  • Senate Bill 56: Assessment Notices (8:04)
  • Senate Bill 630: Community Associations (22:57)
  • Senate Bill 1966: Department of Business and Professional Regulation (1:28.29)
  • and More!

Click here to watch the recorded webinar or Watch it below now.

https://www.youtube.com/watch?v=OYek0k9Per0

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Why Is Your Community Association Still Using a Lawyer for HOA Collections?

Why Is Your Community Association Still Using a Lawyer for HOA Collections?

  • Posted: Sep 21, 2021
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Why Is Your Community Association Still Using a Lawyer for HOA Collections?

Axela Technologies / Bob Gourley

Condos and HOAs Still Paying Outrageous Legal Fees for Collections

If your condominium or homeowners’ association is facing a purely legal issue – a lawsuit, construction defect, governing documents updates, and such, having an experienced and qualified community association attorney is mandatory. But should you contact your lawyer for HOA collections?

Community associations are creatures of statute and attorneys are important to maintain proper governance. These experienced legal professionals deliver the expertise and legal finesse the community association will need to stay compliant with state statutes and their own bylaws. This avoids missteps and potential future lawsuits brought on by inappropriate actions.

Since attorney fees are generally significant, condominium associations and HOA boards should be judicious when engaging an attorney as it will cost the association a good bit of money. With that in mind, there are times when the cost and risk of using an attorney are wisely avoided.

Legal Fees 1

Don’t Just Skip Ahead to Foreclosure

When home and unit owners in condominiums and HOAs fall behind in their common fees and assessments, it can feel like very few options are available to collect on those missed payments. Communities generally turn to the usual suspects — an endless string of reminders and warning letters requesting payment, or referring the delinquent owner to a lawyer for HOA collections. But those are actually steps 1 and 3 (the warning and the foreclosure) of the full collections process. Step 2 is your opportunity to recover those debts without expending any additional energy or paying outrageous fees to an attorney on retainer: a collections solution, rather than legal enforcement.

A community association foreclosure should always be a last resort. It’s like fishing with a shotgun–sometimes it’ll get the job done, but it’s more costly, less efficient, and you don’t gain as much as you could with other collection methods. Wise associations seek a non-attorney remedy.

When you retain an attorney for collections, the end game of the attorney is foreclosure on the property. This isn’t collections, but rather “a security interest enforcement” action. In the Supreme Court case, Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), the court ruled that in states that use non-judicial foreclosures, law firms are subject only to the requirements and prohibitions of one narrow section (1692f(6)) of the FDCPA.  In essence, the United States Supreme Court is advising community associations that attorneys foreclosing in non-judicial states are by no means a “collections entity.” More to the point, it’s expensive and can take years before the association sees a dime of what they’re owed, leaving communities in a lurch for funds.

Legal Fees 2

So you Foreclosed… Now What?

Let’s say you followed the legal process to its desired conclusion of foreclosure. The previous owner (as in many cases) becomes overwhelmed with the costs of legal fees and they lose their property.

The best result for a community association lien foreclosure on a property is getting an encumbered title. That means that the association takes the title, but the title is encumbered by the mortgage, which is still attached. The first mortgage can still be foreclosed upon and it will be eventually, at which time the community will lose access to that title.

…But what happens after the community takes the title? How do you monetize an association lien/foreclosure? Perhaps an investor will pick it up and now your community becomes a plaything of real estate investors. Or perhaps the association will rehabilitate the property and rent it out to recover delinquent fees and costs. Does the community association really want to get into the business of managing rentals? That’s a lot of work and liability to take on!

It’s a shame on many levels.

Legal Fees 3

The Burden of Legal Fees on Homeowners

Take a look at this example of fees charged to one delinquent homeowner:

attny fees

This is a real-world example. A condominium unit owner had fallen behind in their common fees in the amount of $1,830.00. The Board of Directors referred the matter to their attorney. As you can see, the legal fees mounted quickly, and by the time of this invoice, the association has already laid out $17,193.68 in legal fees due to the attorney. Even worse, these fees were going to be assessed to the delinquent unit owner by the association.

The total owed by the homeowner was now nearly 10 times what was owed to the association! This is completely unfair and unnecessary.

The final insult to the community is that this case is yet to be concluded and the delinquent unit owner may never be able to afford to pay for this issue, leaving the owner homeless, and the community on the hook for the legal fees. It does not have to be this way.

Legal Fees 4

The Argument for Ethical Collections

We wish we could say that is the only example of homeowner debt spiraling out of control, but it isn’t. In the community association management industry, it’s heartbreakingly common to hear of homeowners who ultimately lose their homes through foreclosure. Enormous legal fees amassed during long, drawn-out legal processes take away any chance of paying back what they owe. It can ruin lives and is why we at Axela always insist that foreclosure be viewed as a last resort.

A specialized collections process is a far simpler, cost-effective, and humane solution to attempt before considering going through a lawyer for HOA collections. From coast to coast, we hear similar stories where a collection process would have allowed the owner to remain in their home, and just as important, the association wouldn’t have had to pay an attorney only to have to “write off” the loss when no collection event occurred.

Some associations engage collection agencies that offer to buy the association’s debt, but those are also ripe for abuse of the homeowners. Collection agencies that perform at no cost or risk to the association like Axela Technologies are a preferred collection remedy because they are an effective solution that follows the collection regulations set forth in the community’s governing documents and costs the association nothing. Collection fees, which are quite modest compared to attorney fees, are passed through to the delinquent homeowner. This benefits the association as well as the delinquent homeowner because of the huge discrepancy between collection fees and legal fees charged by an attorney.

Legal Fees 5

Choose a Merit-Based Collections Agency

Axela Technologies offers a far better solution. Instead of burying the homeowner in tremendous legal fees, we work with them to figure out how best to pay off their indebtedness to their association and return them to good-paying status. Instead of charging by the hour for our work, as attorneys do, our fees are set at the onset (hard set fees with no hidden or junk fees) and passed through to the delinquent homeowner. We work diligently to explain the benefit of keeping the equity in their home and provide a solution to their problem. There is no need to put the association or the homeowner at risk of losing additional money.

In fact, since the Axela Technologies collection solution is 100% merit-based, our interests are perfectly aligned with the association. If we don’t collect from the homeowner, we don’t get paid. We collect 100% of what is owed to the association 19 out of 20 times without the need for the association to move the matter to an attorney for foreclosure.

Even when the matter does go to foreclosure, we stand with the association until the conclusion, which often yields a successful collection event for the association. If a lender forecloses on a unit we will not advise the association to write off the loss. We will follow the ownership of that unit and if the bank sells it with a surplus we will petition the court for the benefit of the association to recover that surplus. We don’t like write-offs and neither should you.

If your association gets sued, or if you need to change the language in your bylaws, you should absolutely be consulting with or employing an attorney. But, if your association is experiencing delinquency at any level, don’t get a lawyer for HOA collections. Skip the high legal fees and partner with Axela Technologies. Get in touch today and learn how Axela Technologies can help. Axela Technologies handles all collections on a merit-based system. Get your free collections analysis today.

 

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TO ARBITRATE OR MEDIATE?  By Eric Glazer, Esq.

TO ARBITRATE OR MEDIATE? By Eric Glazer, Esq.

  • Posted: Sep 21, 2021
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TO ARBITRATE OR MEDIATE?

By Eric Glazer, Esq.

Prior to July 1st, 2021 if a condominium dispute arose, the parties were forced to first arbitrate the matter before the Department of Business and Professional Regulation.  The law has now changed and reads as follows:

(a) Before the institution of court litigation, a party to a dispute, other than an election or recall dispute, shall either petition the division for nonbinding arbitration or initiate presuit mediation.

As you can see, now the plaintiff has a choice to start the matter in arbitration or mediation.  So which one do you choose?

If you decide to go to arbitration, your case will be assigned to an arbitrator in Tallahassee.  The arbitrator will read the briefs, hold hearings and ultimately enter an order.  Someone will win and someone will lose.  The loser will pay the winner’s attorney’s fees.  The loser can then file in court for a trial de novo.  In effect, it’s an appeal of the arbitrator’s order and the case starts all over again.  The winner of the trial de novo gets their attorney’s fees and costs from the loser, including the arbitration fees.

So….the risk in going to arbitration is that if you lose, you may wind up not only paying your lawyer, but the other side’s lawyer too.

The alternative is to mediate the dispute.  I have been certified since 2007 as a Circuit Court mediator.  I truly enjoy mediating cases and helping the parties resolve their disputes.  At mediation, the parties appear with their attorneys.  The mediator explains that today is a good day to settle the case on mutually agreeable terms, rather than leave your fate up to a judge or jury.  If an agreement is reached, it is enforceable in a court of law.  The mediator allows the parties to make opening statements, then separates the parties and goes back and forth trying to achieve a settlement.

There is very little risk in going to mediation.  There is no “winner” or “loser” at mediation, so neither party has to worry about paying the other side’s attorney’s fees.  The parties split the cost of the mediator.

When I act as a mediator, I explain to the parties that neither side will get everything they want today, and that if at the end of the day both parties feel a little miserable, I probably achieved a fair result.

 

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BEG, STEAL OR BORROW – OR FORECLOSURE?

BEG, STEAL OR BORROW – OR FORECLOSURE?

  • Posted: Sep 21, 2021
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BEG, STEAL OR BORROW – OR FORECLOSURE?

Many of the old condo buildings in the State of Florida are facing serious structural repairs that will cost millions of dollars. And – from what I hear from many owners – most of these buildings have no reserve funds that will cover even most of the cost of these structural repairs.

But these repairs have to be done if the building doesn’t want to face the same fate as the Champlain Towers South in Surfside. And you can be sure that building departments will now push the issue of certification requirements.

That begs the question: How are these associations are paying for these very costly repairs?

The smart associations took care of fully funded reserves, but as we have seen, most of these associations are not really “smart!”

But having reserve funds may cause another problem: Big amounts of money are very tempting – and we have seen in the past that board members and CAMs can’t resist the temptation – and the money is gone when needed.

Asking for fully funded reserves require laws that protect these reserve funds and answers any scams and/or embezzlement with harsh punishments, not just a slap on the wrist. And that should go as well for board members who buy nice palm trees with the money that was in the roof reserve fund!

The other option to pay for these repairs are bank loans, an option available to most of these associations if properly done. But don’t forget: Owners will have to pay in the future monthly quite a lot of money to service this loan. Now owners are paying the money they didn’t pay in the reserve funds earlier – but now with lots of interest added. Smart move? Definitely not!

But the only other option to pay for these repairs is to levy a special assessment. That’s the worst of all options because these special assessments can be very huge, in the tens of thousands of dollars. Amounts many families living in these condos don’t have available – and the worst scenario will happen: FORECLOSURE! Families will be losing their homes. Is that the option you want to go?

 

CAMs – a CAM has no part in a board decision regarding the use of the reserve funds.
How about the responsibility of owners to look after their investment? It’s easy to point fingers at usually well-meaning but inexperienced boards.
Rather than pointing fingers left and right, how about encouraging owners to participate in a constructive manner?
And last not least – the people coming to Florida to buy a condo with the proceeds of their home sale should be aware that you get what you pay for. You pay 500 K for a waterfront two bedroom condo built in the 60’s and expect that is all it will cost you?

 

 

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