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Checklist to help you with Insurance, Things Change in your Family life! | SFPMA

Checklist to help you with Insurance, Things Change in your Family life! | SFPMA

  • Posted: Sep 13, 2021
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Checklist to help you with Insurance, Things Change in your Family life!

Changes in your life or lifestyle mean you should update your auto, home and umbrella insurance coverage. You may find you can save money by dropping unneeded coverage (say, for a child who has left for college) or that you need extra insurance (say, for heirloom jewelry you’ve just inherited)

Renovations to your main home or a new building on your property (say, a gazebo) can mean you’re underinsured and need to increase the value of the structures coverage on your home policy. This is especially important if you’ve put in a lot of money into renovation, or expanded your square footage

You need a policy review if you’ve bought (or inherited) any jewelry, fine arts, furs or collectibles such as wines, instruments, coins, guns or cameras. These are items you may want to list separately, or it may be cheaper to include them under a “collectibles rider.” You also need revisions if your collectibles have appreciated in value.

It’s hard to believe, but people forget to take old cars off their policies when they trade in one car for another. If you have any motorized toys, such as all-terrain vehicles, boats, or jet skis, make sure that your underlying auto or home policies, as well as your umbrella, cover your use of these.

If your teenager starts driving or you let an au pair or nanny drive your car, you must add him or her to your policy. Before you buy a car specifically for this new driver’s use, check the impact on your premiums. Some carriers will let you assign a young driver to a clunker, while others assume a young driver is using most valuable car in your garage, making it cheaper not to add another car.

 

Your Kids Are Leaving Home

If your kids go to college out of town, call your auto insurer–they’ll still be on your policy, but the policy’s cost should go down. If they move out permanently, make sure to take them off your auto policy.

If you transfer ownership of your house, artwork, a car or any other asset into the name of a trust, limited liability company or family limited partnership, you need to add the entity as an additional insured on your policy. If you’ve transferred the home you live in to a trust for estate planning purposes, you want both your name and the name of the trust on the policy.

No matter what’s going on in your life, you should review your insurance coverage at least once a year. The easiest time to do this is when the renewal notices come. Your insurer (or agent) will notify you of changes or “amendments” to your policies, for better or worse. Read that new fine print, as it may mean you need to take action.

 

  • Check for loose or leaky gutters. Improper drainage can lead to water in the basement or crawl space. Make sure downspouts drain away from the foundation and are clear and free of debris.
  • Low areas in the yard or next to the foundation should be filled with compacted soil. Spring rains can cause yard flooding, which can lead to foundation flooding and damage. Also, when water pools in these low areas in summer, it creates a breeding ground for insects.
  • Use a screwdriver to probe the wood trim around windows, doors, railings and decks. Make repairs now before the spring rains do more damage to the exposed wood.
  • From the ground, examine roof shingles to see if any were lost or damaged during winter. If your home has an older roof covering, you may want to start a budget for replacement. The summer sun can really damage roof shingles. Shingles that are cracked, buckled or loose or are missing granules need to be replaced. Flashing around plumbing vents, skylights and chimneys need to be checked and repaired by a qualified roofer.
  • Examine the exterior of the chimney for signs of damage. Have the flue cleaned and inspected by a certified chimney sweep.
  • Inspect concrete slabs for signs of cracks or movement. All exterior slabs except pool decks should drain away from the home’s foundation. Fill cracks with a concrete crack filler or silicone caulk. When weather permits, power-wash and then seal the concrete.
  • Remove firewood stored near the home. Firewood should be stored at least 18 inches off the ground at least 2 feet from the structure.
  • Check outside hose faucets for freeze damage. Turn the water on and place your thumb or finger over the opening. If you can stop the flow of water, it is likely the pipe inside the home is damaged and will need to be replaced. While you’re at it, check the garden hose for dry rot.
  • Have a qualified heating and cooling contractor clean and service the outside unit of the air conditioning system. Clean coils operate more efficiently, and an annual service call will keep the system working at peak performance levels. Change interior filters on a regular basis.
  • Check your gas- and battery-powered lawn equipment to make sure it is ready for summer use. Clean equipment and sharp cutting blades will make yardwork easier.

 

 

DID YOU KNOW? Your homeowner’s insurance policy doesn’t cover flood damage. That requires a separate flood policy. Your homeowner’s policy could, however, cover other damage that is water related. 

 

You visit your doctor for a yearly checkup… why wouldn’t you do the same with your insurance agent? An annual review of your insurance policies is recommended because your financial situation can change year to year. A review doesn’t have to be time consuming like most people think. If you haven’t been getting a yearly review, it makes sense to start now. There is little to be gained by carrying the wrong types or amounts of insurance and so much, potentially, to be lost!

 

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SHOULD RESERVES BE MANDATORY?

SHOULD RESERVES BE MANDATORY?

  • Posted: Sep 10, 2021
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I hate beating around the bush, so I want to get to the point. A financial crisis is coming and it’s
going to be a big one. It’s also going to hit those that can least afford it. It’s going to result in massive
amounts of foreclosures. It’s going to result in countless cases of elderly persons being displaced
from their homes. The worst part is, it’s absolutely avoidable but I don’t believe any legislator would
ever have the courage to float a bill to save the pending disaster.
I was at a meeting last night in a 55 and over condominium. Elderly owners were complaining that the pipes are getting
old, there are leaks, and they sometimes have to come out of pocket a few hundred bucks in order to clean up the mess in their unit
and/or repair that broken pipe. They are complaining about bills for a few hundred bucks and find it difficult to pay them because
their sole income is social security.
To state the obvious, there is no reserve account. There never will be. Generally, senior citizens don’t believe in reserving
funds for repairs that may be necessary a decade or two from now because they believe they won’t be here anyway. So, year after
year goes by, decade after decade goes by and there is never a reserve fund to fall back on should a major repair become necessary.
Think of how much building has gone on in the past 50 years. It is staggering. But the buildings are getting older. As the buildings
start to approach the 40 year mark or more, things start to break down and repairs become unavoidable. Concrete restoration is
incredibly expensive, and unavoidable. Replacement of pipes is incredibly expensive, and unavoidable. And the same goes for
electrical renovations and roof replacements. All unavoidable. Yet, so many people, especially seniors, are rolling the dice thinking
that none of these repairs will be necessary while they own the property. That may be true for now, but eventually, everyone rolls
a 7.
Like it or not, some form of reserves should be mandatory
and not subject to being waived. There, I said it. Let’s get rid of the
“life expectancy” formula the state says you should follow but nobody
does. It’s a joke anyway. We all know the truth that the life
expectancy of the roof somehow gets longer, the closer you get to the
original estimate of how long it was going to last. Five years ago it
had a five year life expectancy. Money is tight, so today it has a new
10 year life expectancy. Somehow, like fine wine, the roof got better
with age. We all know that happens, and it happens every day. So
how about we make things simple. Let’s just say every condominium
must contribute 10% of its annual budget to reserves for roof,
plumbing, electrical, structural and painting. It all goes into one pot
and it can be used for any repair necessary for those categories. It
can’t be waived. If however an association wants to contribute more,
they can.
If we implemented this, I’m guessing the average monthly
increase for most condominiums that are not already reserving funds
would be anywhere from $25.00 to $75.00 per month per unit. I know
that for some that increase is not easy. However, it’s going to be a lot
more expensive if any one of these inevitable repairs become
necessary and it’s time to pass a special assessment in the thousands
or tens of thousands of dollars. What do you think?

 

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Omnibus Bill (SB 630) Brings Changes for Florida Condos, Cooperatives and HOAs

Omnibus Bill (SB 630) Brings Changes for Florida Condos, Cooperatives and HOAs

  • Posted: Sep 09, 2021
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This year’s large community association omnibus bill will likely become law. This bill, which bears an effective date of July 1, 2021, contains changes which will impact condominiums, cooperatives and HOAs. At more than 100 pages, we will discuss only some of those changes in today’s CALL Alert. This bill, along with all the others CALL has been tracking throughout the 2021 Legislative Session, will be summarized in our year-end Legislative Guidebook.

 

Several of the Condominium changes include:

  • If a condominium association’s insurance policy does not provide rights for subrogation against the unit owners in the association, an insurance policy issued to an individual unit owner may not provide rights of subrogation against the condominium association. This will help prevent the rash of unfounded negligence claims against associations we’ve seen filed by at least one insurance company operating in Florida but may unfortunately result in increased premiums if subrogation against the culpable party in a loss is no longer possible.
  • Bids for work to be performed must be maintained for at least 1 year after receipt of the bid. Previously bids had to be maintained from the inception of the association.
  • A renter would have the right to inspect and copy only the declaration of condominium and the association’s bylaws and rules. Previously, a renter was only allowed to inspect and copy the Bylaws and rules.
  • An association may not adopt rules requiring a member to demonstrate any purpose or state any reason for a record inspection.
  • For condominiums with 150 or more units, an association, in lieu of posting copies of certain required documents to a website, may make those documents available through an application that can be downloaded on a mobile device.
  • Condominium associations may extinguish a discriminatory restriction in the governing documents (e.g., a provision which restricts ownership, occupancy or use of real property on the basis of race, color, national origin, religion, gender or disability) by board vote alone.
  • Confirms that board term limits are intended to be prospective with the service start date being on or after July 1, 2018.
  • Transfer fees will be increased to not exceed $150.00 (from the current $100.00 cap) and may be adjusted every 5 years in accordance with the Consumer Price Index (CPI).
    • Petitioners in recall disputes may now choose to either go directly to court with the dispute or to arbitration.
  • Contracts with a service provider that is owned or operated by a board member (or certain relatives with a financial relationship) are no longer prohibited.
  • The board may not prohibit the installation of a natural gas fuel station, and unit owners installing such stations must comply with all federal, state, and local laws.
  • A board may make available, install, or operate an electric vehicle charging station or a natural gas fuel station on the common elements or association property and establish the charges or the manner of payments by the unit owners, residents, or guests who use such stations. The station installation, repair, or maintenance will not constitute a material alteration or substantial addition to the common elements or association property.
  • Labor performed on or materials furnished for the installation of a natural gas fuel station or electric vehicle charging station may not be the basis for filing a lien against the association.
  • A challenge to a plan of termination may be handled via arbitration or mediation of the dispute.
  • This new law would allow the parties in a condominium dispute to now choose either presuit mediation (which has been used in HOA disputes) or arbitration through the Division of Condominiums, Timeshares and Mobile Homes (“Division”).
  • For election and recall disputes, mediation will not be an option, and such disputes must be arbitrated by the Division or filed in court.
  • The board can use emergency powers in response to damage or injury caused by or anticipated in connection with any occurrence, or threat thereof, whether natural, technological, or manmade, in war or in peace, which results or may result in substantial injury or harm to the population or substantial damage to or loss of property. This language was expanded to include emergencies caused by contagion.
  • The board may exercise its emergency powers to conduct board meetings, committee meetings, elections, and membership meetings, in whole or in part by telephone, real-time videoconferencing, or similar real-time electronic or video communication with notice given as is practicable.
  • Such notice may be given in any practicable manner, including publication, radio, US mail, the internet, electronic transmission, public service announcements, and conspicuous posting on the condominium property or association property or any other means the board deems reasonable under the circumstances.
  • Based upon advice of emergency management officials or public health officials, or upon the advice of licensed professionals retained by or otherwise available to the board, determine any portion of the condominium property or association property unavailable for entry or occupancy by unit owners, family members, tenants, guests, agents, or invitees to protect the health, safety or welfare of such persons.
  • The board may mitigate further damage, injury or contagion, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus or contagion. This section may be used to justify heightened sanitation protocols.
  • The board can contract, on behalf of any unit owner or owners, for items or services which are necessary to prevent further injury, contagion, or damage, including, without limitation, sanitizing the condominium property or association property.
  • The emergency powers are limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the unit owners and the unit owners’ family members, tenants, guests, agents, or invitees and shall be reasonably necessary to mitigate further damage, injury, or contagion and make emergency repairs.
  • Most importantly, when it comes to the changes to the emergency powers provisions in 718.1265, F.S., an association may NOT prohibit owners, tenants, guests, agents, or invitees of a unit owner from accessing the unit and common elements and limited common elements appurtenant thereto for if such access is needed to facilitate the sale, lease or other transfer of title to the unit. Presumably this language was included at the urging of the real estate industry because many associations restricted open houses and other in person showings of property during the height of the COVID-19 pandemic as well as in move-ins and move-outs in some cases.
  • Specifies that fines are due 5 days after notice of the approved fine is provided to the unit owner and, if applicable, to any tenant, licensee or invitee of the unit owner. Previously, fines were due 5 days after the date of the Fining Committee meeting at which the fine was approved.
  • Multicondominium associations may adopt consolidated or combined declaration of condominium but cannot merge the condominiums or change the legal descriptions of the condominium parcels, unless accomplished in accordance with law. This change applies to associations existing on July 1, 2021.
  • Expands the Division’s jurisdiction to now investigate complaints related to the maintenance of association records.

Several of the Cooperative changes include:

  • The definition of “Unit” is amended to state that “an interest in a unit is an interest in real property”.
  • The association may not require a member to demonstrate any purpose or state any reason in order to inspect the official records.
  • A board or committee member participating in a meeting via telephone, real-time video conferencing, or similar real-time electronic or video communication counts towards a quorum and such member may vote as if physically present.
  • The Petitioner in a recall dispute may choose to either go directly to court or to pursue arbitration with the Division.
  • Cooperative associations may extinguish a discriminatory restriction in their governing documents by Board vote alone. See the definition of a discriminatory restriction in the Condominium section above.
  • The same changes to the emergency powers language discussed above in Chapter 718 are also set forth in Chapter 719, F.S.

Several of the HOA changes include:

  • The definition of Governing Documents will no longer include Rules and Regulations.
  • In addition to the authorized means of providing notice of a board meeting, the association may also adopt a rule for posting the meeting notice and agenda on the association’s website or an application and must send an electronic notice including the hyperlink to the website or application to members whose e-mail addresses are included in the association’s official records.
  • The association must maintain for at least 1 year after the date of the election, vote, or meeting the ballots, sign-in sheets, voting proxies, and all other papers and electronic records relating to the parcel owners’ voting.
  • Information obtained in a gated community in connection with guests’ visits to parcel owners or community residents are records not accessible to members or parcel owners.
  • Reserves will only be considered mandatory if they are approved by a majority of the total voting interests or if the declaration, articles or bylaws obligate the developer to create reserves.
  • If the budget does not provide for reserve accounts under Section 720.303(6)(d), or the declaration, articles or bylaws do not obligate the developer to create reserves, and the association is responsible for the repair and maintenance of capital improvements that may result in a special assessment if reserves are not provided or are not fully funded, each financial report for the preceding year must contain certain disclosure language in conspicuous type.
  • The Petitioner in a recall dispute may choose to go directly to court or pursue arbitration with the Division.
  • Specifies that fines are due 5 days after notice of the approved fine is provided to the parcel owner and, if applicable, to any tenant, licensee or invitee of the parcel owner.
  • Removes the requirement that notices required by Section 720.306, Florida Statutes, be sent to the address on property appraiser’s website-notices only have to be sent to the mailing addresses found in the official records of the association.
  • Transports over the grandfathering of rental rights which has been in the Condominium Act for many years to the HOA Act. Any governing documents or amendments that prohibit or regulate rental agreements will apply only to owners who acquire title to the parcel after the effective date of the governing document or amendment, or to a parcel owner who consents, individually or through a representative, to the governing document or amendment. Existing owners who vote “no” or don’t vote on the rental restriction will not be governed by same. This restriction, however, does NOT apply to amendments or governing documents which seek to prohibit or regulate rentals for terms of less than six (6) months or to limit parcel rentals to no more than three (3) times per year. It will be important for HOAs with more than 15 parcels (this grandfathering of rental rights does not apply to associations with 15 or fewer parcels) who wish to impose other rental restrictions to do so before July 1 if they wish those restrictions to apply to all members.
  • For purposes of determining the applicability of a rental amendment or rental restriction, a change in ownership does not occur when a parcel owner conveys the parcel to an affiliated entity, when beneficial ownership of the parcel does not change, or when an heir becomes the parcel owner.
  • The Petitioner in an election or recall dispute now has the option to file for arbitration or file in court. These disputes are not eligible for presuit mediation.
  • Clarifies that turnover of control of an HOA will be triggered three months after 90 percent of the parcels in all phase of the community that will ultimately be operated by the homeowners’ association have been conveyed to members other than the developer.
  • HOA boards may extinguish a discriminatory restriction in their governing documents by board vote alone. See the definition of a discriminatory restriction in the Condominium section above.
  • The same changes to the emergency powers language discussed above in Chapters 718 and 719 are also being added to Chapter 720, F.S.

The foregoing are just some of the changes this bill creates for your association operations. Florida’s Legislative Session is scheduled to end on April 30th. Stay tuned for additional CALL Alerts and as promised, our comprehensive Legislative Guidebook.

 

DONNA DIMAGGIO BERGER

Contact: dberger@beckerlawyers.com

Donna DiMaggio Berger is a member of the College of Community Association Lawyers (CCAL), a prestigious national organization that acknowledges community association attorneys who have distinguished themselves through contributions to the evolution or practice of community association law and who have committed themselves to high standards of professional and ethical conduct in the practice of community association law. Ms. Berger is also one of only 129 attorneys statewide who is a Board Certified Specialist in Condominium and Planned Development Law.

 

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The Champlain Towers South Condominium Collapse: Initial Interim Lessons Learned From This Tragedy

The Champlain Towers South Condominium Collapse: Initial Interim Lessons Learned From This Tragedy

  • Posted: Sep 08, 2021
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The Champlain Towers South Condominium Collapse:

Initial Interim Lessons Learned From This Tragedy

Author’s note: The devastating tragedy in Surfside shocked and saddened all of us at Kaye Bender Rembaum. The following article was initially written in late June, shortly after the tragic Champlain Towers collapse occurred, for initial publication in the August edition of the Florida Communtiy Association Journal. Since that time, and just the other day, the City of Boca Raton has promulgated required building re-certifications similar to those in effect for Broward and Miami-Dade Counties. Other cities and counties are similarly preparing to do so. In addition, the Florida state legislature will likely be considering amendments to Chapter 718, the Condominimium Act, during its 2022 legislative session an effort to help prevent similar tragedies. 

 

Just after midnight on Thursday, June 24, 2021, tragedy struck Surfside, Florida, when 55 of 136 units of the 12-story Champlain Towers South Condominium tragically crumbled to the ground. Just prior, a sleepless sixth floor owner notices a two-finger-wide separation in her drywall and, fearing the worst, scrambles downstairs as the building begins to collapse around her. Miraculously, she barely escapes. So many others were not as fortunate. Today, as this article is being written on June 27, 2021, sadly there are nine confirmed dead and over 150 persons still listed as unaccounted for. (Author’s note: it was later confirmed that this tragedy was responsible for 98 deaths)

 

By way of background, a prior building collapse in 1973 led Miami-Dade and Broward Counties to institute a city ordinance requiring a 40-year residential building recertification. The 40-year-recertification requirement is the absolute maximum period of time for the association to inspect the building for structural, electrical, and other critical component failure posing a threat to life safety. Champlain Towers South, built in 1981, was in the process of complying with its building recertification when disaster struck. Likely, months from now the cause will be identified. Do not be surprised if it is discovered that there were multiple causes leading to a perfect storm type of event.

 

When concrete is subjected to moisture, it causes the steel rebar to rust, which causes further expansion of the concrete surrounding the rebar, which ultimately, if not treated, leads to failure. This is commonly referred to as “spalling.” In addition, when concrete is exposed to moisture, it causes the concrete to separate into its constituent parts, and it will leach lime [calcium-containing inorganics]. Many condominium balconies experience concrete spalling and require repair. So, too, do the support columns and other parts of the foundation responsible to bear and pass the building load on to other structural components. What we know so far, from multiple sources, follows:

 

An engineering report issued on October 8, 2018, by Morabito Consultants to Champlain Towers South Condominium Association, Inc., concluded in its Structural Field Survey Report that:

 

“[T]he waterproofing below the pool deck and entrance drive… is beyond its useful life and therefore it must be completely removed and replaced. The failed waterproofing is causing major structural damage to the concrete structural slab below these areas. Failure to replace the waterproofing in the near future will cause the extent of the concrete deterioration to expand exponentially… The main issue in this building structure is that the entrance drive, pool deck and planter waterproofing is laid on a flat surface. Since the reinforced concrete slab is not sloped to drain, the water sits on the waterproofing until it evaporates. This is a major error in the development of the original contract documents prepared by the [initial architects and engineers]… It is important to note that the replacement of the existing deck waterproofing will be extremely expensive as removal of the concrete topping slab to gain access to the waterproofing membrane will take time, be disruptive, and create a major disturbance to the occupants of this condominium building. Please note that the installation of deck waterproofing on a flat structure is a systemic issue for this building structure… Regarding the parking garage consultant’s review revealed signs of distress/fatigue as described below: abundant cracking and spalling of varying degrees was observed in the concrete columns, beams, and walls. Several sizable spalls were noted in both the top side of the entrance drive ramp and the underside of the pool/entrance drive/planter slabs, which included instances with exposed deteriorating rebar. Though some of the damage is minor, most of the concrete deterioration needs to be repaired in a timely fashion… Morabito Consultants is convinced that previously installed epoxy injection repairs were ineffective in properly repairing the existing cracked and spalled concrete slabs.”

 

(The entire 2018 Morabito Consultants report can be found at kbrlegal.com. Click “resources” at top of the page, then click “links” from the dropdown menu.)

 

Reports from local and national news indicated the following information. The swimming pool built atop a parking garage was leaking for an unknown period of time into the garage area below. Ocean water often intruded into the below-grade parking structure. At least one owner on the ninth floor was experiencing repeated pipe leaks. A report from the 1990s indicated the building was sinking approximately two millimeters per year. Significant roof repairs were underway for at least one month prior to the collapse. Lime was leaching out of the concrete deck causing damage to the cars in the parking garage below. Just south of the Champlain Towers South Condominium, a new building was being constructed that caused residents of the Champlain Towers South Condominium to complain about the constant shaking of their condominium building caused by blasting and digging activity. The concrete waterproofing associated with the foundation was failing as noted in the 2018 engineering report. Naturally, all of this combined could eventually lead to a weakened overall support structure.

 

Based on this information, ask yourself this important question: Was the Champlain Towers South Condominium collapse foreseeable? While some people, most especially with the benefit of hindsight, may believe that to be the case, bear in mind that there are also reports that the board had meetings with City of Surfside officials after the 2018 Morabito Consultants report was issued. If so, this may be very telling and bear on the board’s decision-making process. Details of such meetings are not presently known.  Are there other engineering reports not yet discovered that bear on this issue? All of this may be very telling and bear on the board’s decision-making process. In any event, it is too early to reach conclusions.

 

Notwithstanding this horrible tragedy, there are interim lessons that can be gleaned from this disaster that every board member and manager of a high-rise condominium should heed, as follows:

 

 

  1. If your county does not have a 40-year-recertification requirement, and even if it does, obtain a recertification engineering report every 25 to 40 years, anyway. Remember that the 40-year requirement set out in the Miami-Dade and Broward ordinances is a maximum period that the association can go without having complied with the re-certification process. The 40 years is not a minimum, meaning an association can certainly have the recertification-type studies performed as often as reasonably necessary under the circumstances.
  2. When it comes to building maintenance and repairs that are life-safety recommendations, should the association’s retained engineering expert make recommendations regarding the building’s foundation, implement them in a timely manner. Do not consider making temporary patch repairs in lieu of proper repair. In other words, do not be penny wise and pound foolish. Do not let the need to obtain unit owner votes to either approve the work and/or the needed assessments or loans to fund the project be a factor in any way. There is a long line of Florida appellate case law that supports the board’s right to effectuate repairs and take out loans when necessary for protection of life and property. Your association’s attorney will be a necessary component of this process to provide legal opinions based on the controlling appellate cases.
  3. Fund the reserves appropriately and make sure the association has a specific reserve for concrete repair and restoration. If the association is pooling reserves, be sure to include concrete repairs in the pooled reserve. Do not even consider waiving or reducing reserves until a considerable nest egg is saved up.
  4. Update the association’s reserve schedules at least every five years. It should be based on empirical and objective evidence.
  5. Do not be afraid or otherwise hesitant to special assess the membership for required maintenance and repairs. Remember, the units have more financial value when the building is properly maintained.

Oddly, Florida Statutes have three significant failures that could help prevent a residential building collapse similar to the Champlain Towers South Condominium.

 

 

  1. The relevant statutes do not specifically require condominium associations to have a concrete restoration reserve though it should be easily included as a required reserve pursuant to “catch all” language set out in §718.112 (2)(f)(2), Florida Statutes (see below).
  2. Despite what you may hear on the news, there is not a statewide mandatory residential building recertification required after a certain number of years.
  3. There is no statutory requirement to have a reserve study or engineering study performed on a regular basis.

Regarding reserves, §718.112 (2)(f)(2), Florida Statutes (2020), provides, in relevant part, that:

 

In addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance. These accounts must include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000. The amount to be reserved must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance. [Emphasis added.]

 

Remember, too, the board is absolutely required to pass the budget each year with reserves fully funded. Only then can the board decide to present to the owners the opportunity to waive or reduce reserves. Ask yourself, are our condominium association’s reserves properly funded?

 

As a result of this horrific tragedy, the 2022 Florida Legislature should consider requiring  a recertification engineering report  for all high-rise residential condominiums  every 30 years or so and should require all community associations to update the reserve schedules at least once every five years.

 

Also remember that each board member should exercise his or her own individual reasonable business judgment when rendering decisions, except for the purchase of insurance, where the much higher standard of “best efforts” is applied as required by §718.111(11), Florida Statutes (2020). With the reasonable business judgment standard in mind, ignoring advice of engineers and other requisite professionals could be considered by others to be negligent or even rise to a reckless act or an omission conducted with bad faith, with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property, any one of which can lead to exposure to liability. But, if the association received two different reports where the opinions drastically differ, then in that situation, each board member should use his or her reasonable business judgment to decide which report should be relied upon. The fact the board chose to follow one expert’s guidance over the other, whose guidance turned out in the end to be wrong, is not too likely to result in an award for damages as a result of legal challenge.

 

If you live in a high-rise condominium and are fearful of collapse due to the Champlain Towers South Condominium tragedy, please remember that this building’s failure was certainly not an everyday occurrence and is best described, for the time being, as a tragic anomaly.

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AND WHILE YOU’RE AT IT…. PLEASE FIX THE INSURANCE STATUTE

AND WHILE YOU’RE AT IT…. PLEASE FIX THE INSURANCE STATUTE

  • Posted: Sep 08, 2021
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No doubt some changes are on the way for condominiums as a result of the Surfside tragedy. The changes are long overdue. Here’s another long overdue change that is necessary..the condominium insurance statutes.

Suppose I told you that under Florida law, there is no absolute requirement that your condominium association insure the building(s). Sounds crazy right? Yet, here is what the law actually says:
d) An association controlled by unit owners operating as a residential condominium shall use its best efforts to obtain and maintain adequate property insurance to protect the association, the association property, the common elements, and the condominium property that must be insured by the association pursuant to this subsection.

What in the world does “best efforts” mean? Does it mean that “We made a few calls…..the premiums were too high…..so we forgot about getting insurance?” Is that using best efforts? Have you ever read such a contradictory statute? On the one hand it says the board must use its best efforts. On the other hand, the same statute says that the condominium property “must be insured.” Which is it?
Think for a second if Champlain Towers was not insured? The very thought of it sounds impossible, but it isn’t.
But wait…..it gets worse. Even if the property is insured the statute says:
The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.

So, let’s say your condominium property is insured, but you did not purchase a separate HO-6 policy for your unit. All you get back is your four walls. That’s right, basically a shell.
What about flood insurance? Is that mandatory in Florida for your condominium? No, it isn’t. The association “may” purchase it.
Just to make things crystal clear for our esteemed legislators, at the moment there is absolutely no requirement to fund reserve accounts so that the money is there should major life threatening repairs become necessary. And to make matters worse, if a tragedy does befall the property and the owners, there’s not even a requirement that the building was to be insured.

This would almost be comical if it weren’t so sad. We live in a state that:
1. Every year gets hit with tropical storms and hurricanes;
2. Suffers sinkhole collapses;
3. Has thousands of buildings lining our coasts and the buildings take a beating from the salt water;
4. Does not require unit owners in a condominium to put away reserve funds should major repairs be necessary
5. Does not require associations to purchase insurance, but only use their “best efforts” which is undefined;
6. Is home to more senior citizens on fixed incomes than almost any other state in the country.

You do the math. When the special assessments start coming as a result of massive repairs that are required on our aging buildings, associations will look to save money elsewhere. Yes, many boards believe it or not will take the position that insurance is not necessary, or that despite their “best efforts” it is simply unaffordable. I have met boards like that already.
In the upcoming legislative session, The Florida Legislature has a real tough job on their hands. Passing laws that reflect the true cost of actually living in a condominium, and no longer giving unit owners and board members enough rope to hang themselves with.

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Exclusive Savings On Fountains & Aeration Labor Day is over but the deals aren’t! Purchase a new fountain or aeration system and receive FREE installation.

Exclusive Savings On Fountains & Aeration Labor Day is over but the deals aren’t! Purchase a new fountain or aeration system and receive FREE installation.

  • Posted: Sep 08, 2021
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We believe balanced, healthy waterbodies help create meaningful experiences on and around the water. That’s why we are excited to extend this exciting offer that will help enhance your waterbody (and save you money)…

You read that right… Save up to $700 with this exciting offer! Purchase any new fountain or aeration system and receive FREE installation services*. Set your lake or pond up for success in the new year with a beneficial fountain or aeration system. Enhance your waterbody while saving money!

 

Deal expires October 31. Maximize your savings NOW.

*Free basic installation, or $700 off installation, with purchase of new fountain or aeration system. Offer valid for contracts signed after 09/07/21. Installation must be prior to 12/31/21.

 

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Can Remote Meetings Be Held Now That the State of Emergency Has Expired?

Can Remote Meetings Be Held Now That the State of Emergency Has Expired?

  • Posted: Sep 08, 2021
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Can Remote Meetings Be Held Now That the State of Emergency Has Expired?

The “state of emergency” that had been imposed by Governor DeSantis in light of the COVID-19 pandemic expired on June 26, 2021.  As a result, the “emergency powers” given to condominium, cooperatives, and homeowners’ associations in Sections 718.1265, 719.128, and 720.316, Florida Statutes, respectively, are no longer in effect.  The emergency powers that were in effect during the COVID-19 state of emergency included conducting board meetings and membership meetings with notice given as is practicable, but did not specifically give associations the authority to conduct meetings remotely.  Nevertheless, many associations did hold meetings remotely in an effort to slow the spread of the virus and to protect its residents and employees.  (NOTE:  The emergency powers statutes were amended effective July 1, 2021, and now specifically provide that during a declared state of emergency, the association may conduct board meetings, committee meetings, elections, and membership meetings, in whole or in part, by telephone, real-time videoconferencing, or similar real-time electronic or video communication.)

Now that the state of emergency has expired, what meetings can associations hold remotely, either in whole or in part?

With regard to board meetings, the statutes specifically address the board members’ participation by telephone or videoconferencing, but do not address whether owners may participate remotely or whether the owners can be required to participate remotely.  The statutes do provide that meetings of the board must be “open” to all owners.  If your board wishes to hold remote board meetings, the board can allow owners to also participate remotely in the same manner as the board members by giving the owners the call-in number or videoconference link.  The law is unsettled as to whether a remote only meeting is valid, as some owners may not have the capability or desire to participate remotely.

With regard to owner meetings, the statute governing corporations not-for-profit, Section 617.0721(3), Florida Statutes, provides that owners and proxyholders may participate remotely and can also vote remotely if authorized by the board of directors, and subject to such guidelines and procedures as the board may adopt.  But as with Board meetings, none of the statutes indicate whether “remote only” meetings, which require the owners to participate remotely, are valid. (Note that this type of “remote voting” contemplated by Section 617.0721(3) is different than the electronic/online voting that is permitted by Sections 718.128, 719.129, and 720.317, Florida Statutes).

For owner meetings at which an election will be held, the issue is more difficult.  The Condominium and Cooperative Acts require owners to vote by “secret ballot” and many homeowners’ associations governing documents also have a secret ballot requirement.  In that case, an owner participating remotely would be unable to vote on the election of directors unless the owner voted in advance of the meeting or unless the association had authorized electronic/online voting pursuant to Sections 718.128, 719.129, and 720.317, Florida Statutes).  Further, in condominium and cooperative associations, the “election committee” that opens and counts the election ballots must be physically together, and owners are entitled to observe the ballot counting process in the owners’ “presence”.

Because of these legal issues, a “hybrid” approach where owners are given the option to participate remotely, but are not required to participate remotely, is the best approach.  Some meetings lend themselves to remote participate more than others.  For instance, board meetings and non-election owners’ meetings are the types of meetings that can be managed remotely.  However, if there is an election, there will need to be additional considerations.

Boards should discuss these issues with the association’s attorney so that all of the necessary board authorizations can be prepared and approved by the board.

 

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START YOUR INSURANCE CLAIM AT HOME WITH A FREE VIRTUAL INSPECTION

START YOUR INSURANCE CLAIM AT HOME WITH A FREE VIRTUAL INSPECTION

  • Posted: Sep 08, 2021
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START YOUR INSURANCE CLAIM AT HOME WITH A FREE VIRTUAL INSPECTION

We’re open and ready to help you get the most out of your insurance claim. As we continue to follow COVID-19 news and updates, we’re committed to being there for you when you need it. Many times, insurance claims are time-sensitive (especially when it comes to hurricane damage claims), so it’s important to begin the process as soon as possible.

As we understand that staying safe and social distancing is key during this time, we’ve introduced virtual inspections via Zoom – so you can begin the process from the comfort of your home. Our claim representative will video chat with you, and you’ll be able to discuss the details of the damage and your concerns. We’ll then put together an action plan to move forward with getting you the payout that you deserve!

You can also learn more about how we’re taking the necessary precautions by viewing our COVID-19 update.

SCHEDULE YOUR VIRTUAL INSPECTION

Please send an email over to info@stellaradjusting.com or give us a call at 877-838-6870 and we’ll get you in touch with your dedicated claim representative. We’re open 24 hours, 7 days a week, and are ready to assist you.

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Homesteading and the Homestead Exemption: 3 Things to Know for Your HOA by Mitch Drimmer

Homesteading and the Homestead Exemption: 3 Things to Know for Your HOA by Mitch Drimmer

  • Posted: Sep 08, 2021
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‘Homestead’ (or perhaps ‘homesteading’) is a word you’ve probably heard, but aren’t clear on what it is or means. So when we talk about homestead exemptions for housing, there can be some confusion. A “homestead” is defined as a house, or more specifically a farmhouse, and “homesteading” is defined as, “a lifestyle of self-sufficiency.” Homestead law allows an individual to register a portion of their primary residence (and only their primary residence) as “homestead” to reduce the taxes paid on it. The original goal was to preserve the family farm, home, or other assets in the face of severe economic conditions. See how it all connects?

Homestead exemptions exclude a portion of a home’s value from taxation

Homestead Law Today

Homestead exemptions exclude a portion of a home’s value from taxation, so they lower the taxes. For example, if a home is appraised at $100,000, and the owner qualifies for a $25,000 exemption (this is the amount mandated for school districts), they will pay school taxes on the home as if it was worth only $75,000. It also makes that portion of the individual’s estate off-limits to most creditors and protects that value from financial situations that arise due to the death of the homeowner’s spouse (to guarantee that the surviving spouse has shelter).

Now the real disconnect between the homestead exemption and homestead/homesteading is that the only requirement needed to get a homestead exemption is that the home is the owner’s primary residence–no farming necessary.

A homeowner doesn't have to have a farm to take advantage of the Homestead law

What Does This Mean For HOA Collections?

Homestead, homestead exemptions, and homesteading are all a little confusing. So at some point, you start to wonder how the exemption might impact your community funds or a future collections process. Here’s what you should know:

HOAs and Condo Associations Can Still Collect

Luckily, there are some exceptions to the homestead exemption: taxing authorities (state and federal), mortgage lenders, and the community association where the property is located (that’s you!) all have the ability to foreclose and collect if payments are missed.

So if one of your homeowners is behind on their assessment fees and all efforts to collect the debt have failed and the next step for your community is to foreclose, even if they have a homestead exemption, your community association is legally one of the only entities able to go to foreclosure.

Homesteading Not Required

Even though “homestead,” “homestead exemption,” and “homesteading” all call back to farming in some way, the homeowner doesn’t have to have a farm, product, or any other traditional ‘homestead’ good or service to take advantage of the homestead law–they just have to own the property it’s being applied to.

That said, there has been a massive resurgence of homesteading in the millennial generation–sort of. Thousands of influencers across social media document their zero-waste lives that use composting, in-home gardening, and reusable items (like fabric grocery bags, beeswax wrappings, and mason jars) to show that they can successfully and beautifully live off of only what they sustain and grow. Some even make their own products to sell like all-natural candles or deodorants.

The Homestead Exemption is Not a Homesteading Hall Pass

Depending on the location and size of your community, you may have a few homesteading homeowners yourself. Maybe they’re growing fresh habaneros and cilantro in their garden for homemade salsa, or knitting sweaters out of thread they made from their pet cat Fluffy’s fur (yes that’s a real thing–a real weird thing in my opinion but to each their own).

Whatever they’re doing, they still have to follow the HOA or condo association’s community guidelines. A homestead exemption does not give any homeowner the right to ignore community rules, even if those rules might clash with their new homesteading lifestyle. If they want to raise chickens to have fresh eggs in the morning and so they don’t have to go out and buy eggs from the grocery store, more power to them, but they probably can’t do it in an HOA, and they definitely can’t have chickens in a condo building.

Homestead exemptions may vary widely from state to state

Foreclosing in a Homestead State

It’s important to know that the homestead exemption varies widely between each state. Some states like New Jersey don’t even have the exemption at all. So for some HOA or condo associations, foreclosing on a home with a homestead exemption might ever happen. If it does happen in your community, remember that the community association has every right to foreclose and collect on a property even if it has a homestead exemption, but working with a specialized collection agency will help make the process that much smoother.

What you need is a specialized community association collection agency that will work with your owners and recover the past due amounts at no cost and no risk to the association. Give Axela Technologies a call today and receive a no-cost analysis and review of a collections process that will fit your community association delinquency problem.

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11 Questions to Ask Before Hiring a Public Adjuster in South Florida, Stellar Adjusting

11 Questions to Ask Before Hiring a Public Adjuster in South Florida, Stellar Adjusting

  • Posted: Aug 27, 2021
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11 Questions to Ask Before Hiring a Public Adjuster in South Florida

Written by admin on December 7, 2019 at 9:59 AM.

If you’re hiring a public adjuster, it’s important to keep in mind that this person is going to be working for you. You’re the boss, so you’ve got to think like a boss. That means interviewing them and asking the right questions. We’ve listed eleven questions that you should ask any public adjuster before you make the hire.

WHY HIRE A PUBLIC ADJUSTER?

Before we talk about how to hire a public adjuster, let’s talk for a second about why you would want to hire one in the first place. The short answer is that you hopefully will never need to hire one. However, if your home or business is damaged, you’ll need to fire an insurance claim, which means providing the insurance company with an estimate of the damages. If the claim is very large, or if the insurance company thinks they can get away with paying less, they will send an insurance adjuster to draw up their own estimate.

When this happens, you have a few options. You can accept the insurance company’s offer, you can sue the insurance company, or you can hire a public adjuster to make a counteroffer. Accepting the company’s offer isn’t always the best idea. In some cases, you may be asked to settle for far less than the actual cost of damages. However, suing the insurance company can get expensive. They have teams of corporate lawyers, and you’ll end up spending a lot of money on your own legal case. Meanwhile, you’ll receive no funds during the legal process, so you’ll have to repair your home or business and pay your lawyer out of pocket.

A public insurance adjuster offers a great compromise. They can get you a better settlement, and you won’t have to pay out of pocket. For more information, read our guide on when to contact a Florida public adjuster.

hiring a public adjuster

1. HOW LONG HAVE THEY BEEN IN BUSINESS?

There’s nothing wrong with being new to the business. Even the biggest, most prestigious firms once started as a single adjuster opening their own small business. But if someone is just starting out in their own business, you’d expect them to have previous experience working for another firm. If they haven’t, steer clear.

2. ARE THEY PART OF A TEAM?

A single public adjuster, even a very well-qualified one, can only be so knowledgeable. A team of adjusters can pool their knowledge and help each other out, leading to better results for their clients.

3. ARE THEY LICENSED IN FLORIDA?

If you’re in another state, this applies to your state as well. An unlicensed public adjuster isn’t just breaking the law by practicing without a license. They can also put you at risk, since there’s no guarantee that they’re even competent.

4. DO THEY HAVE EXPERIENCE WITH CLAIMS LIKE YOURS?

For any qualified public adjuster, south Florida hurricanes should be par for the course. But if you’re dealing with an unusual claim – for example, if a car ran off the road and into your living room – you’ll want to know that your public adjuster is qualified to deal with your claim’s quirkier aspects.

5. HOW DO THEY GET PAID?

A public insurance adjuster should only get paid when you get paid, taking a percentage of your claim. If your adjuster is asking for an up-front fee, don’t do business with them. What they’re doing is unethical.

6. DO THEY HAVE EXPERIENCE DEALING WITH MORTGAGE LENDERS?

Depending on your situation, you may still owe money to a mortgage lender, and they’re most likely not going to be patient with you while the insurance company handles your claim. An experienced public adjuster can oftentimes serve as an intermediary to help you deal with your mortgage lender’s demands.

7. WHO WILL PREPARE MY CLAIM?

The opposite problem of working with too small a team is working with a big firm that farms out their work to third-party contractors. So you can be paying for a prestigious name, but getting freelance service. Make sure that your public insurance adjuster will be personally involved with your claim.

8. CAN I STAY INVOLVED WITH MY CLAIM?

Some public adjusters prefer that their clients not communicate directly with the insurance company. Others are comfortable to share these responsibilities with their clients. There’s no right or wrong answer to this question, but it’s important that you and your adjuster are on the same page here.

9. CAN THEY PROVIDE LOCAL REFERENCES?

The average person may never need a public adjuster’s services or may need them once or twice at most. If their adjuster did a good job, they’re going to remember it. Ask your prospective public adjuster for references. If they’re not prepared to offer any, scratch them off your list.

10. HOW MANY CLAIMS ARE THEY HANDLING?

Sometimes, in the aftermath of a natural disaster, public adjusters can become overwhelmed with claims from a large number of people. In this case, a qualified, competent adjuster may simply be too busy to give your claim the individual attention it deserves.

11. WHAT ARE THEIR ERRORS AND OMISSIONS POLICY?

Errors and Omissions is the insurance industry’s version of malpractice insurance. It ensures that if your public adjuster makes a mistake that costs you money, they’ll be able to compensate you. Every licensed public adjuster should carry a policy. If they’re not willing to share this information with you, tell them to take a hike.

hiring a public adjuster

HOW TO FIND A CLAIMS ADJUSTER IN FLORIDA

If you’re hiring a public adjuster in Florida, consider hiring Stellar Public Adjusting. Our qualified adjusters are experienced in Florida home and business claims, and we don’t hire out our work to independent contractors. When your adjuster shows up to create your claim, you can rest assured that this is the same person who will be dealing with the insurance company on your behalf.

Use our web form to contact us today. If you have an urgent problem that requires immediate assistance, call our office at 305-570-3519.

 

 

Andria Rosendahl
Public Adjuster

2450 NE Miami Gardens Drive, Suite 200, Miami Florida 33180

Office: 305-396-9110
Cell: 305-710-7922
Fax: 305-873-8719
E: Andria@stellaradjusting.com
W: www.stellaradjusting.com

Check Out Our Blog At: www.stellaradjusting.com/blog/

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10 Tips for creating an HOA budget or Condo Budget

10 Tips for creating an HOA budget or Condo Budget

  • Posted: Aug 27, 2021
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10 Tips for creating an HOA budget or Condo Budget

 

Do a budget – I know this seems like a silly tip, but we have seen many associations fail to create a budget before proceeding to the next year. An HOA is just like any other business or organization. If you don’t have a financial plan, you will find yourself a in a mess about halfway through the year when you realize that you don’t have enough funds to make it through the entire year. Take the time to practice financial responsibility for your association.

Review budget and Financial History – You always want to review the previous two years financials to fully understand were you currently are vs. where you want your association to be . Many people review previous year’s budgets to prepare future ones. One problem we see is that many people despite reviewing past numbers, fail to make the proper budget corrections when something is way over or under budget from the previous year. Make the proper adjustments to insure an accurate budget.

Prioritize projects – We have worked with any HOA and condo associations that get overwhelmed during budget time because they have so many repairs and projects that they want to handle all at once. Any kind of future projects or repairs, need to be prioritized accordingly. This is where you must separate your associations needs vs. wants. Everyone wants the landscaping or condo exteriors to look immaculate, but no one gets excited repairing an unsafe stairwell repairing a leaking sprinkler system. You must eliminate any safety or potential liabilities before exploring any community beatification projects.

Utility Increases – We can’t recall a time in which utility costs actually went down from the previous year in our 25 years plus experience. Water, gas, and electricity costs have been increasing steadily over the last decade, especially water costs over the last 2 years. We always research our local city and municipalities to see if they have a price rate schedule available. For example the City of Austin is scheduled to increase water costs 70% over the next five years. Because we are aware of this price hikes, we obviously budget for them accordingly. If no information is available, we suggest increasing the budget on most utilities between 5% to 7% each year.

 

HOA budget

Vendor Contracts – You always want to insure the correct budgeting for all of your normal monthly service providers. Don’t be afraid to ask your landscaping company, pool contractor, and even management company, if they plan on changing their current rates. This is also a great opportunity to ask for their updated insurance information to make sure that is good standing as well. Also review current contacts to see if there are any CPI index clauses in their agreement. Nine times out of ten, if they are contractually able to increase their fees, most will do so.

 

Budget for reserves – All associations should budget for a percentage of all income to go to their reserve or savings accounts. The percentage of income will of course vary depending on your association. The more long term liabilities and obligations you have, the more you should be putting away. We have some condo associations that are putting away as much as 20% of their total income towards long term savings. Condos generally have much larger financial obligations including exterior repairs and upkeep and maintaining private streets and roads. Not budgeting for reserves can lead to be big problems and potentially big special assessments down the road.

 

Cover your Insurance deductibles – All condo associations need to pay special attention to this one. Make sure you are aware of the deductible levels for different elements of your complex. For example, if your roof replacement deductible is $500.00 per building and you have 20 buildings, then you need then or course you always need at least $10,000 in your reserves to cover that amount. If a disaster or violent storm strikes your area, you want to make sure your association is ready and that you are not hitting them up for a special assessment just to cover basic insurance claims.

 

Evaluate legal and collection costs – Legal and collections costs can escalate very quickly depending on the collection strategy that you use. Evaluate your current system and see if you can determine your return on investment. If you are on average spending $150 dollars to collect every $100, then something obviously isn’t working. We have experienced great success with providing homeowners that are behind with a payment plan with full payment schedule provided to them. When delinquent association members concentrate on affordable monthly payment and not the large amount that they owe, they tend to see the light at the end of tunnel.

 

Special Assessments are for special projects – We have heard many times suggested “Why can’t we have a special assessment instead of raising our monthly dues?” This philosophy doesn’t work in our book. If your association is having a problem meeting it expenses because of some tight cash flow, you need to raise your assessment amount or your assessment frequency. Special assessments are just that, special. They are not for paying your bills. They are intended for major improvements, or in a case of emergency repairs, not to pay the pool contractor.

 

Stay the course – It’s real easy to get distracted throughout the year with landscaping improvements, new and improved security systems, and other random projects throughout the year. Your association made a budget for a reason, so try your best to stick to it as best you can. If you do have to make an unexpected expenditure, take your time and make the best decision for your HOA or condo association.

 

Creating and maintaining an HOA budget is essential part of maintaining a fiscally responsible association. Even associations that are not as healthy financially as they need to be, with some small modifications, they too can be financially fit in just a short amount of time. If you follow some basic steps and continue to evaluate and adjust over time, your community association will thrive financially now and in the years to come.

 

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