Become a Member: JOIN SFPMA TODAY   LogIn / Register: LOGIN/REGISTER

SFPMA Industry Articles | news, legal updates, events & education! 

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

HOA Parking Lot Flooded? Now is the time to give Allstate Resource Management a call!

HOA Parking Lot Flooded? Now is the time to give Allstate Resource Management a call!

Our schedule is filling up fast for storm drain cleanings, the rain that occurred this weekend was a preview of what most summers will look like for your HOA community.

Contact us to talk to a Stormwater Specialist today!

Contact us at 954-382-9766 or info@allstatemanagement.com

“Why does our HOA need a lake management company?”
Sometimes, aquatic management is viewed as a frivolous or unnecessary expense for a community. “My lake looks fine, why should I pay to have someone take care of it?”
Most people that live on lakes also see them differently than someone who maintains them. The difference is homeowners tend to look “at” the water, where as waterway managers look “in” the water. Too often people put off lake maintenance until they see a problem and weed populations have already become established.
As a property owner or property manager, it’s valuable to have a company that will respond to these unexpected outbreaks. Every lake matures differently, and it takes a combination of experience and expertise to maintain a healthy balance as changes occur.
Allstate Resource Management’s staff is always there to answer your questions and works to ensure excellent results in any lake management situation.

 

Tags: ,
Join us on Tuesday, November 12th at 12:00 PM for our Community Roundtable: Technology and Community Governance!

Join us on Tuesday, November 12th at 12:00 PM for our Community Roundtable: Technology and Community Governance!

Join us on Tuesday, November 12th at 12:00 PM for our Community Roundtable: Technology and Community Governance!

During this discussion, our panel of professionals consisting of Kerstin Henze, Esq. (KBR Legal), Frank Valdes (GetQuorum), and Dianne Skinner (Artemis Lifestyle Services) will cover various topics, including:

  • The importance of updating governing documents
  • Association Record and new Florida Statute requirements
  • How communities can leverage technology, like virtual meetings and electronic voting, for more efficient governance and more!

Enroll for the November 12th Discussion.

 

Join us on Tuesday, November 12th at 12:00 PM for our Community Roundtable: Technology and Community Governance!

During this discussion, our panel of experts consisting of Kerstin Henze (KBR Legal), Frank Valdes (GetQuorum), and Dianne Skinner (Artemis Lifestyle Services) will cover various topics, including:

  • The importance of updating governing documents

  • Association Record and new Florida Statute requirements

  • How communities can leverage technology, like virtual meetings and electronic voting, for more efficient governance and more!

Don’t miss out; register today!

 

Tags: , , , , ,
S2E38 – A Tribute, Tough Truths, and Condo Realities (Aired 11/3/24)

S2E38 – A Tribute, Tough Truths, and Condo Realities (Aired 11/3/24)

578 views Streamed live on Nov 3, 2024

This week’s show is dedicated to Eric’s late mother-in-law, Linda, honoring her courageous five-year battle with cancer. We also dive into essential updates on Florida’s mandatory condo laws, and discuss the challenges of selling units amidst an oversupply. Plus, we spotlight PD Concrete’s impressive work and touch on the critical importance of voting in the upcoming election.

As always, we’ll be taking your calls on whatever topic you need answers to or whatever you need to get off your chest.

Call in with your questions & comments or ask them in the live YouTube chat! (717) 452-9378

 

Keep up to date with new topics for Condo and HOA Communities each week on Condo Craze & HOAs every Thursday on YouTube 

The next show:

Condo and HOA Elections: Are You Making These Costly Mistakes?

This Sunday on Condo Craze and HOAs, Eric and Karen dive into a critical topic for every Florida association: election season! With the national elections behind us, it’s time to focus on your community’s elections and ensure the process runs smoothly. We’ll cover the essential steps, from sending out the first notice 60 days in advance to handling candidate information sheets and voting certificates. Eric will highlight common mistakes—like incorrect deadlines, missing documents, and improper ballots—that could force costly do-overs.

As always, we’ll take your calls on any topic you need answers to, or anything you need to get off your chest live in the chat or call in at 717-GLAZER8. Don’t miss it.

 

Tags:
DOS AND DON’TS OF ELECTION CHALLENGES by Rembaum’s Association Roundup

DOS AND DON’TS OF ELECTION CHALLENGES by Rembaum’s Association Roundup

  • Posted: Nov 04, 2024
  • By:
  • Comments: Comments Off on DOS AND DON’TS OF ELECTION CHALLENGES by Rembaum’s Association Roundup

DOS AND DON’TS OF ELECTION CHALLENGES

Rembaum’s Association Roundup

Pursuant to their relevant statutory provisions, election disputes that take place in condominium, homeowners’, and cooperative associations are subject to mandatory nonbinding arbitration before the Division of Florida Condominiums, Timeshares, and Mobile Homes (the “Division,” for short). It is referred to as “nonbinding” because the arbitrator’s order is not final until 30 days after its issuance, which provides time for either party in the dispute to challenge the decision to their local circuit court, which hears the case de novo (anew).

As you will read, not every election dispute will be heard by the Division. As a threshold matter of importance, the Division will not hear election disputes within 60 days prior to an election or 60 days after the election has taken place. In order to bring an election challenge, Florida Statutes require prior written notice to the other party of the dispute, where a reasonable opportunity to correct the alleged error is provided, and it is clearly expressed that if the alleged error is not cured, an arbitration action will take place. In a prior arbitration case, it was held that providing only 10 days to cure the alleged defect in a pre-arbitration notice was insufficient. Therefore, it is suggested to provide more than 10 days opportunity to cure the alleged election defect prior to filing an action for arbitration.

Interestingly, the general rule is that to have standing to challenge election results, arbitration action must be brought by a candidate or an individual who was prevented from being a candidate.  The Division has even held that a member who was not a candidate did not have standing to challenge the election results that other persons should have been declared the winning candidates. While these arbitration decisions are not binding precedent, they are instructive and, if nothing else, useful in evaluating the best course of action.

In the context of condominium election challenges, there are three flaws that are typically “fatal” to the association, if committed. They are i) a substantive or serious defect in the first notice of election, ii) the failure to include a timely submitted candidate information sheet in the second notice of election, and iii) failure to include the name of each eligible candidate on the election ballot. While each of these can potentially be timely cured in advance of the election, if not, then they likely lead to a successful election challenge.

For example, failing to mail the notice of election to one or more owners or the failure of the first or second notice of election to accurately state the street address of the meeting have been considered as “fatal” flaws. Also, the failure to include a timely submitted candidate information sheet or failure to include the name of a candidate on the ballot have also been considered as  “fatal” flaws. However, so long as the election is re-noticed from the second notice of election, including all of the candidate and information sheets and/or also including the name of all of the candidates on the ballot, then such fatal flaws can be cured in advance of the election. In these instances there would be no further solicitation of candidates, but rather a rescheduling of the night of the election itself by sending a revised and corrected second notice of election at least 14 days prior to the election which would cure that defect. This amended second notice should clearly state the reason(s) for having to send the corrected notice.

It is important to note that while condominium association elections are strictly construed in accordance with relevant Florida Statutes, homeowners’ association elections occur in accordance with their governing documents. Therefore, whether the above fatal flaws have applicability to a homeowners’ association fully depends upon the style of election set out within the governing documents.

Arbitrators with the Division have held that a new election will have to be scheduled if  in the governing documents there is included a requirement that candidates be full-time residents of the state of Florida or even reside in their unit full time and such requirements were enforced during the election. Therefore, there cannot be a residency requirement of any kind for board members. Similarly, arbitrators have held that associations cannot require candidates to complete a criminal background check or even execute an acknowledgment that they are not a felon.

Contrary to popular belief, the relevant Florida Statutes do not require candidates to be members of a community association in order to run for the board of directors (often, “membership” is defined in the governing documents as being an owner of a parcel within the community). However, such requirements can be set out in the governing documents; but if such a requirement is not in the governing documents, then the board cannot disqualify a potential candidate because he or she is not an owner or member. This means that without such requirements specifically set forth in the governing documents of the association, any non-member, including tenants and occupants, are qualified to run for the board of directors. Therefore, if you desire to avoid such a circumstance, you should consult with legal counsel for your association regarding whether such requirements exist in the governing documents; if not, then you should consider preparing an amendment for the community to approve to ensure that only members who are actual members/owners of the association are qualified to run and serve on the board.

As to the first notice of election, notwithstanding any strict requirements set out in the first notice of election regarding where potential candidates must submit their notice of candidacy, it is not sufficient to exclude a candidate on the basis of the candidate  delivering his or her intent to be a candidate elsewhere so long as it is reasonable to conclude the association actually received notice of such candidate’s intent to run for the board. For example, a specific address could be required to mail the intent to run form, but the fact that a candidate hand-delivered such notice to a board member or manager would likely not be sufficient grounds to exclude the candidate.

Through a variety of arbitration decisions, the arbitrators have made clear that if the violation at hand would not have changed the results of the election, then the challenge will fail. For example, an association that improperly excluded several ballots due to perceived flaws with the outer envelope, which in fact were later held not to be flaws at all and which if counted would not have overturned the otherwise valid election results if the ballots were later included in the total count, would not have changed the result.

In other instances where numerous violations combine to clearly affect the reliability of the election results, then an election challenge may be valid. For example, where unit owners are permitted to cast ballots without inner envelopes, at least one owner was permitted to retrieve his ballot and change it, and nobody verified signatures on the outer ballot envelopes and where at least one unit owner was allowed to cast a ballot after the polls had already closed, then cumulatively the election results were determined to be  no longer reliable and a new election was required.

While the Division has promulgated condominium election rules in the Florida Administrative Code, it has not yet done so for homeowners’ associations. Therefore, the body of condominium arbitration decisions can provide some guidance; but for the most part, when examining homeowners’ association election challenges, the arbitrators are required to consider the significance and totality of violations in their decision-making as to whether to void an election, or not.

At times, for reasons that really do not make any practical sense, some management companies when preparing a homeowners’ association election revert back to the condominium form of election with a first notice, second notice, intent to run, etc. rather than relying on the homeowners’ association governing documents, which have a completely different election style and where voting is by proxy or in person. Also, there are no requirements to declare candidacy in advance of the annual election, meaning a candidate could actually nominate himself or herself from the floor of the meeting on the election day itself. When management companies go on autopilot and use the condominium style of election contrary to the requirements set out in the homeowners’ association governing documents, then the arbitrators will likely require a new election to take place in conformity with the governing documents of the homeowners’ association.

A successful challenge of a homeowners’ association election often rests upon whether the alleged violation affected the outcome of the election. This once again is evidence that unless the alleged violation would have changed the outcome of the election, then the election challenge likely fails even if there were serious irregularities during the election process.

A few odds and ends are worthy of discussion as well. An active board of directors should not use the association’s pulpit for campaigning. Doing so can lead to a successful election challenge. However, an existing board member can certainly campaign on his or her own time and using their own means but not through the association or its website. If the association has not enforced use of voting certificates, then to do so without providing advanced written notice and an opportunity for the owners to comply could invalidate election results. Finally, if a valid election does not occur because either a quorum was not achieved or in the condominium context at least 20 percent of the eligible voters did not cast the ballot, then there is no obligation of the association to try again.

When bringing an election challenge is under consideration, ask yourself if the irregularity would have brought about a change in the outcome of the election. If not, then, think twice about bringing the challenge. In any event, it is worthwhile for an association concerned with its election process to consult with the association’s lawyer for a detailed conversation as to how best to avoid such problems in the future.

Tags: ,
Hurricane Recovery: A rundown of lessons learned from previous storms from Becker Shareholder Joseph E. Adams

Hurricane Recovery: A rundown of lessons learned from previous storms from Becker Shareholder Joseph E. Adams

Hurricane Recovery: A rundown of lessons learned from previous storms from Becker Shareholder Joseph E. Adams

Recovery From Hurricane Ian

Unfortunately, Hurricane Ian was a historic storm and has left a wide and substantial swath of damage across Southwest Florida. As we all work to recover from the ongoing effects of Hurricane Ian, I would like to share a few pointers we have learned from past storms and some things we are experiencing with Ian:

  1. Flood Damage: A significant part of Ian’s damage resulted from rising water, which is generally and generically referred to as “flood damage”. It is very important to note that flood insurance and processing flood insurance claims is covered by federal law, not Florida law. Among the notable differences, federal law requires that a “Proof of Loss” be filed for flood claims within 60 days, and the statute of limitations under flood policies is one year.
  2. Disaster Recovery Contractors: There are a number of large national companies, as well as others, who employ large crews of “storm chasers”, and arrive at disaster sites to shore up the property, dry it in, and dry it out. This is critical work and many of these companies are reputable, but not all are. Bills for significant damage sites can quickly approach seven figures (one million dollars plus) without proper justification. Associations can understandably feel under pressure to sign these companies up quickly but there are several critical things to keep in mind:
  • Approval From Your Insurer: Most reputable companies will be known to your insurers and be able to demonstrate they have the “go ahead” from the insurer before engaging in major work.
  • “Mapping”: As Southwest Florida is a significant disaster zone, insurance adjustors are overwhelmed and one may not visit your property for weeks, or longer. It is very important that the disaster relief contractor properly document the conditions it finds and remediates, commonly known as “mapping.”
  • “Assignment of Benefits”: Historically, various participants in this field have asked for an assignment of the association’s insurance policy rights, known as an “AOB”’. AOB contracts are now strictly regulated by statute but should never be given to an outside contractor.

While getting dry-out work started quickly is critical, the association should not enter into a contract with a remediation company, or any vendor, if the association is not comfortable with the term of the agreement and confident in the company. It is always better to take a step back and make a thoughtful decision than to rush into a bad agreement.

  1. Application Of Your Community’s Governing Documents: If the association has experienced significant damage, it is critical that the association be aware of the requirements of the governing documents, especially for condominiums. For example, many documents state that if a certain percentage of the units are rendered “uninhabitable” (usually an undefined term), the condominium is automatically “terminated” (legally extinguished) if a vote to rebuild is not taken, often in a very short time frame such as 60 days after the loss. Other “gotcha” clauses in documents might include the requirement to have a bank act as “insurance trustee” for insurance proceeds.
  2. Emergency Powers: The “emergency powers” provisions of the statutes are now in effect. Among other powers conferred are the power to contract for debris removal and authorize appropriate remediation, including removal of wet drywall and cabinetry, subject to any limitations of the condominium documents. The emergency powers statute also gives associations flexibility in noticing and holding membership and board meetings. As much as is practicable, you should consult with your association’s attorney regarding use of the statutory emergency powers.

The next few months will be a trying time for everyone in Southwest Florida and practically every community association will have to deal with some consequence from Hurricane Ian. The decisions that board members and owners make at this time will, to a great degree, determine outcome for many communities.

Joseph E. Adams is a Board Certified Specialist in Condominium and Planned Development Law, and an Office Managing Shareholder with Becker & Poliakoff. Please send your community association legal questions to jadams@beckerlawyers.com. Past editions of the Q&A may be viewed at floridacondohoalawblog.com.

Tags: , ,
MANDATORY CONDOMINIUM & COOPERATIVE BUILDING INSPECTIONS & NON-WAIVABLE RESERVE REQUIREMENTS SENATE BILL 4-D

MANDATORY CONDOMINIUM & COOPERATIVE BUILDING INSPECTIONS & NON-WAIVABLE RESERVE REQUIREMENTS SENATE BILL 4-D

  • Posted: Oct 23, 2024
  • By:
  • Comments: Comments Off on MANDATORY CONDOMINIUM & COOPERATIVE BUILDING INSPECTIONS & NON-WAIVABLE RESERVE REQUIREMENTS SENATE BILL 4-D

MANDATORY CONDOMINIUM & COOPERATIVE BUILDING INSPECTIONS & NON-WAIVABLE RESERVE REQUIREMENTS

We are reposting this, for all the buildings That have not had inspections…..

SENATE BILL 4-D

With home insurers leaving Florida in droves, and following pressure from members of both political parties in the legislature to actually do something about it, in May 2022, the governor called a special legislative session to address the problem. A very real concern to the insurers is the effect of both time and inclement weather on Florida’s aging high-rise buildings. Until now, and for the most part, Florida law largely ignored these concerns. Enter Senate Bill 4-D (SB 4-D) which already became effective upon being signed into law by Governor DeSantis on May 26, 2022. This new piece of legislation addresses condominium and cooperative building inspections and reserve requirements (while this article primarily addresses these new laws in the context of condominium association application, they are equally applicable to cooperative associations).

By way of background, during the regular legislative session, there were several bills introduced in the Florida House of Representatives (House) and in the Florida Senate (Senate) addressing building safety issues, but none of them were passed into law due to the inability to match the language of the bills in both the House and the Senate which is a requirement for legislation to pass and go to the governor for consideration. As such, it was a little surprising to many observers that the legislature was able to approve SB 4-D in essentially a 48-hour window during the special session in May. The language used in SB 4-D was initially drafted into a proposed bill in November 2021. At that time, and during the most recent legislative session, input was provided by many industry professional groups including engineers, reserve study providers, and association attorneys. Many of these industry professionals indicated that there were challenges with some of the language and concepts being proposed in SB 4-D during session.

Notwithstanding these challenges, and in an effort to ensure some form of life safety legislation was passed this year, SB 4-D was unanimously approved in both the House and Senate and signed by the governor. A plain reading of this well intended, but in some instances not completely thought-out, legislation evidences these challenges. Some will say it is a good start that will need significant tweaking, which is expected during the 2023 Legislative Session. Others praise it, and yet others say it is an overreach of governmental authority, such as an inability to waive or reduce certain categories of reserves. You be the judge. We begin by examining the mandatory inspection and reserve requirements of SB 4-D.

I. MILESTONE INSPECTIONS: MANDATORY STRUCTURAL INSPECTIONS FOR CONDOMINIUM AND COOPERATIVE BUILDINGS. (§553.899, Fla. Stat.)

You will not find these new milestone inspection requirements in Chapters 718 or 719 of the Florida Statutes, but rather in Chapter 553, Florida Statutes, as cited above.

MILESTONE INSPECTIONS:

The term “milestone inspection” means a structural inspection of a building, including an inspection of load-bearing walls and the primary structural members and primary structural systems as those terms are defined in section 627.706, Florida Statutes, by a licensed architect or engineer authorized to practice in this state for the purposes of attesting to the life safety and adequacy of the structural components of the building and, to the extent reasonably possible, determining the general structural condition of the building as it affects the safety of such building, including a determination of any necessary maintenance, repair, or replacement of any structural component of the building. The purpose of such inspection is not to determine if the condition of an existing building is in compliance with the Florida Building Code or the fire safety code.

SUBSTANTIAL STRUCTURAL DETERIORATION:

The term “substantial structural deterioration” means substantial structural distress that negatively affects a building’s general structural condition and integrity. The term does not include surface imperfections such as cracks, distortion, sagging, deflections, misalignment, signs of leakage, or peeling of finishes unless the licensed engineer or architect performing the phase one or phase two inspection determines that such surface imperfections are a sign of substantial structural deterioration.

MILESTONE INSPECTIONS FOR BUILDINGS THREE STORIES OR MORE IN HEIGHT:

A condominium association under chapter 718 and a cooperative association under chapter 719 must have a milestone inspection performed for each building that is three stories or more in height by December 31 of the year in which the building reaches 30 years of age, based on the date the certificate of occupancy for the building was issued, and every 10 years thereafter.

WITHIN THREE MILES OF COASTLINE:

If the building is three or more stories in height and is located within three miles of a coastline, the condominium association or cooperative association must have a milestone inspection performed by December 31 of the year in which the building reaches 25 years of age, based on the date the certificate of occupancy for the building was issued, and every 10 years thereafter.

The condominium association or cooperative association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance.

The condominium association or cooperative association is responsible for all costs associated with the inspection.

IF THE CERTIFICATE OF OCCUPANCY WAS ISSUED BEFORE JULY 1, 1992:

If a milestone inspection is required under this statute and the building’s certificate of occupancy was issued on or before July 1, 1992, the building’s initial milestone inspection must be performed before December 31, 2024. If the date of issuance for the certificate of occupancy is not available, the date of issuance of the building’s certificate of occupancy shall be the date of occupancy evidenced in any record of the local building official.

Upon determining that a building must have a milestone inspection, the local enforcement agency must provide written notice of such required inspection to the condominium association or cooperative association by certified mail, return receipt requested.

Within 180 days after receiving the written notice the condominium association or cooperative association must complete phase one of the milestone inspection. For purposes of this section, completion of phase one of the milestone inspection means the licensed engineer or architect who performed the phase one inspection submitted the inspection report by e-mail, United States Postal Service, or commercial delivery service to the local enforcement agency.

A MILESTONE INSPECTION CONSISTS OF TWO PHASES:

    (a) PHASE 1: For phase one of the milestone inspection, a licensed architect or engineer authorized to practice in this state must perform a visual examination of habitable and non-habitable areas of a building, including the major structural components of a building, and provide a qualitative assessment of the structural conditions of the building. If the architect or engineer finds no signs of substantial structural deterioration to any building components under visual examination, phase two of the inspection (discussed below) is not required. An architect or engineer who completes a phase one milestone inspection shall prepare and submit an inspection report.

    (b) PHASE 2: A phase two of the milestone inspection must be performed if any substantial structural deterioration is identified during phase one. A phase two inspection may involve destructive or nondestructive testing at the inspector’s direction. The inspection may be as extensive or as limited as necessary to fully assess areas of structural distress in order to confirm that the building is structurally sound and safe for its intended use and to recommend a program for fully assessing and repairing distressed and damaged portions of the building. When determining testing locations, the inspector must give preference to locations that are the least disruptive and most easily repairable while still being representative of the structure. An inspector who completes a phase two milestone inspection must prepare and submit an inspection report.

POST-MILESTONE INSPECTION REQUIREMENTS:

Upon completion of a phase one or phase two milestone inspection, the architect or engineer who performed the inspection must submit a sealed copy of the inspection report with a separate summary of, at minimum, the material findings and recommendations in the inspection report to the condominium association or cooperative association, and to the building official of the local government which has jurisdiction. The inspection report must, at a minimum, meet all of the following criteria:

    (a) Bear the seal and signature, or the electronic signature, of the licensed engineer or architect who performed the inspection.

    (b) Indicate the manner and type of inspection forming the basis for the inspection report.

    (c) Identify any substantial structural deterioration within a reasonable professional probability based on the scope of the inspection, describe the extent of such deterioration, and identify any recommended repairs for such deterioration.

    (d) State whether unsafe or dangerous conditions, as those terms are defined in the Florida Building Code, were observed.

    (e) Recommend any remedial or preventive repair for any items that are damaged but are not substantial structural deterioration.

(f) Identify and describe any items requiring further inspection.

LOCAL GOVERNMENT ENFORCEMENT:

A local enforcement agency may prescribe time lines and penalties with respect to compliance with the milestone inspection requirements.

A board of county commissioners may adopt an ordinance requiring that a condominium or cooperative association schedule or commence repairs for substantial structural deterioration within a specified time frame after the local enforcement agency receives a phase two inspection report; however, such repairs must be commenced within 365 days after receiving such report. If an association fails to submit proof to the local enforcement agency that repairs have been scheduled or have commenced for substantial structural deterioration identified in a phase two inspection report within the required time frame, the local enforcement agency must review and determine if the building is unsafe for human occupancy.

BOARD’S DUTY AFTER OBTAINING THE MILESTONE REPORT:

Upon completion of a phase one or phase two milestone inspection and receipt of the inspector-prepared summary of the inspection report from the architect or engineer who performed the inspection, the association must distribute a copy of the inspector-prepared summary of the inspection report to each unit owner, regardless of the findings or recommendations in the report, by United States mail or personal delivery and by electronic transmission to unit owners who previously consented to receive notice by electronic transmission; must post a copy of the inspector-prepared summary in a conspicuous place on the condominium or cooperative property; and must publish the full report and inspector-prepared summary on the association’s website, if the association is required to have a website.

WHO PAYS FOR THE MILESTONE INSPECTION:

Pursuant to section 718.112, Florida Statutes, if an association is required to have a milestone inspection performed, the association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance with all of the requirements thereof. The association is responsible for all costs associated with the inspection.

FAILURE TO OBTAIN THE MILESTONE INSPECTION:

If the officers or directors of an association willfully and knowingly fail to have a milestone inspection performed pursuant to section 553.899, Florida Statutes, such failure is a breach of the officers’ and directors’ fiduciary relationship to the unit owners.

MANAGER’S DUTY:

If a community association manager or a community association management firm has a contract with a community association that has a building on the association’s property that is subject to milestone inspection, the community association manager or the community association management firm must comply with the requirements of performing such inspection as directed by the board.

EXEMPTIONS:

For clarity, the otherwise required milestone inspection does not apply to a single family, two-family, or three-family dwelling with three or fewer habitable stories above ground.

FLORIDA BUILDING COMMISSION REQUIREMENTS:

The Florida Building Commission must review the milestone inspection requirements and make recommendations, if any, to the legislature to ensure inspections are sufficient to determine the structural integrity of a building. The commission must provide a written report of any recommendations to the Governor, the President of the Senate, and the Speaker of the House of Representatives by December 31, 2022.

The Florida Building Commission must consult with the State Fire Marshal to provide recommendations to the legislature for the adoption of comprehensive structural and life safety standards for maintaining and inspecting all types of buildings and structures in this state that are three stories or more in height. The commission must provide a written report of its recommendations to the Governor, the President of the Senate and the Speaker of the House of Representatives by December 31, 2023.

II.    STRUCTURAL INTEGRITY RESERVE STUDIES AND MANDATORY RESERVES:

The reserve legislation set out in section 718.112 (f)(2)(a), Florida Statutes, is, for all intents and purposes, re-written. Prior to examining these most recent revisions, it is necessary to first examine the definitions set out in section 718.103, Florida Statutes, where a brand new term is added as follows:

    Structural integrity reserve study means a study of the reserve funds required for future major repairs and replacement of the common areas based on a visual inspection of the common areas applicable to all condominiums and cooperative buildings 3 stories or higher.

Hereafter, the structural integrity reserve study is referred to as “SIRS”. Now we can turn our attention to the requirements of the SIRS as set out in section 718.112 (f)(2)(a), Florida Statutes

THE STRUCTURAL INTEGRITY RESERVE STUDY (required for all condominium and cooperative buildings three stories or higher regardless of date of certificate of occupancy):

An association must have a SIRS completed at least every 10 years after the condominium’s creation for each building on the condominium property that is three stories or higher in height which includes, at a minimum, a study of the following items as related to the structural integrity and safety of the building:

a.     Roof.

b. Load-bearing walls or other primary structural members.

c. Floor.

d. Foundation.

e. Fireproofing and fire protection systems.

f. Plumbing.

g. Electrical systems.

h. Waterproofing and exterior painting.

i.  Windows.

j. Any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000 and the failure to replace or maintain such item negatively affects the items listed in subparagraphs a.-i., as determined by the licensed engineer or architect performing the visual inspection portion of the structural integrity reserve study.

The SIRS may be performed by any person qualified to perform such study. However, the visual inspection portion of the structural integrity reserve study MUST be performed by an engineer licensed under chapter 471 or an architect licensed under chapter 481.

As further set out in the legislation, at a minimum, “a structural integrity reserve study must identify the common areas being visually inspected, state the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense of the common areas being visually inspected, and provide a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense of each common area being visually inspected by the end of the estimated remaining useful life of each common area.”

The amount to be reserved for an item is determined by the association’s most recent structural integrity reserve study that must be completed by December 31, 2024. If the amount to be reserved for an item is not in the association’s initial or most recent structural integrity reserve study or the association has not completed a structural integrity reserve study, the amount must be computed using a formula based upon estimated remain useful life and estimated replacement cost or deferred maintenance expense of each reserve item.

If the condominium building is less than three stories then the legislation provides 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 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.

If an association fails to complete a SIRS, such failure is a breach of an officer’s and director’s fiduciary relationship to the unit owners.

NON-WAIVABLE AND WAIVABLE RESERVES IN THE UNIT OWNER CONTROLLED ASSOCIATION:

As to the SIRS, the legislation is patently clear that unit owners may not vote for no reserves or lesser reserves for items set forth SIRS report. There is on-going debate amongst attorneys in regard to whether a condominium under three stories can waive or reduce reserves for any of the reserve items required to be in the SIRS that are included in the under three story condominium reserve, for example, roof and painting (For those interested, examine lines 1029 to 1033 and 1050 to 1071 in SB 4-D).

MANDATORY RESERVES IN THE DEVELOPER CONTROLLED ASSOCIATION:

Before turnover of control of an association by a developer to unit owners other than a developer pursuant to section 718.301, Florida Statutes, the developer-controlled association may not vote to waive the reserves or reduce the funding of the reserves (Previously, a developer could fully waive all reserves for the first two years, meaning this is a monumental change).

PRE-TURNOVER DEVELOPER DUTY:

Before a developer turns over control of an association to unit owners other than the developer, the developer must have a SIRS completed for each building on the condominium property that is three stories or higher in height.

III.    OFFICIAL RECORDS:

Official records of the condominium and cooperative association include structural integrity reserve studies, financial reports of the association or condominium, and a copy of the inspection reports and any other inspection report relating to a structural or life safety inspection of condominium or cooperative property.

In addition to the right to inspect and copy the declaration, bylaws and rules renters have the right to inspect the milestone inspection report and structural integrity reserve study inspection reports as well.

Structural integrity reserve studies must be maintained for at least 15 years after the study is completed. In addition, inspection reports report and any other inspection report relating to a structural or life safety inspection of condominium property must be maintained for 15 years after receipt of such report.

IV.    ASSOCIATION WEBSITES:

In addition to other positing requirements, the inspection reports described above and any other inspection report relating to a structural or life safety inspection of condominium property and the association’s most recent structural integrity reserve study must be posted to the website.

V.    JURISDICTION OF DIVISION OF CONDOMINIUMS, TIMESHARES, AND MOBILE HOMES:

Pre-turnover, the Division of Florida Condominiums, Timeshares, and Mobile Homes (Division) may enforce and ensure compliance with rules relating to the development, construction, sale, lease, ownership, operation, and management of residential condominium units, and complaints related to the procedural completion of milestone inspections. After turnover has occurred, the Division has jurisdiction to investigate complaints related only to financial issues, elections, and the maintenance of and unit owner access to association records, and the procedural completion of structural integrity reserve studies.

VI. NEW REPORTING REQUIREMENTS FOR ALL CONDOMINIUM AND COOPERATIVE ASSOCIATIONS:

On or before January 1, 2023, condominium associations existing on or before July 1, 2022, must provide the following information to the Division in writing, by e-mail, United States Postal Service, commercial delivery service, or hand delivery, at a physical address or e-mail address provided by the division and on a form posted on the division’s website:

  1. The number of buildings on the condominium property that are three stories or higher in height.
  2. The total number of units in all such buildings.
  3. The addresses of all such buildings.
  4. The counties in which all such buildings are located.

An association must provide an update in writing to the division if there are any changes to the information in the list within six months after the change.

VII.    APPLICABLE TO ALL SELLERS OF UNITS:

As a part of the sales process, the seller of a condominium or cooperative unit and developers must provide to potential purchasers a copy of the inspector-prepared summary of the milestone inspection report and a copy of the association’s most recent structural integrity reserve study or a statement that the association has not completed a structural integrity reserve study.

VIII.    GLITCHES:

As with any new legislation of such a substantial nature, there often follow in subsequent years what are referred to as “glitch bills” which help provide additional clarity, remove ambiguity, and fix unintended errors. To name a few: (i) the term “common areas” is used in the legislation when in fact the correct term is “common element;” (ii) clarity needs to be provided regarding whether reserve items that are required to be in SIRS, but show up in the under three story reserves, such as paint and paving, can be waived or reduced by the membership; and (iii) for those buildings that are within three miles of the coastline, additional clarity could be provided to provide better guidance as to how to perform the measurement.    

Tags: , ,
Loans and Borrowing Money – What Community Associations Need to Know

Loans and Borrowing Money – What Community Associations Need to Know

Loans and Borrowing Money – What Community Associations Need to Know

The video is ready – if you missed the webinar…watch the video now.

by Becker

There is a lot of confusion when it comes to obtaining a loan as a community association. This webinar is intended to clear the confusion and provide you with the necessary tools to obtain a loan.

You will learn:

  • What is and is not collateral for a community association loan
  • What type of loan documents to avoid
  • The borrowing process from beginning to end
  • When to get your attorney involved
Becker - Mark D. Friedman
Mark D. Friedman
SHAREHOLDER
Becker
mfriedman@beckerlawyers.com

Watch the Video !

 

The latest post into “Rembaum’s Association Roundup” is here. “FIDUCIARY DUTY: What it Means to Your Community Association”.

The latest post into “Rembaum’s Association Roundup” is here. “FIDUCIARY DUTY: What it Means to Your Community Association”.

REMBAUM’S ASSOCIATION ROUNDUP | The Community Association Legal News You Can Use

What duty does a community association board member owe to their association? What happens if that duty is breached? During the legislative session, legislation was proposed that would have made directors criminally liable for failure to timely respond to official record requests, among other provisions. The legislation in House Bill 919 was proposed by Representative Porras in response to the alleged $3.4 million dollar embezzlement scheme that took place at the Hammocks Community Association, located in Miami-Dade County. Parts of this proposed bill were well-intentioned; however, several provisions were commonly viewed as too broad and expansive.

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

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

ii) withholding official records from members; and,

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

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

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

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

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

Section 617.0830, Florida Statutes, provides the following:

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

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

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

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

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

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

 

 

Tags: ,
Cohen Law Group:  We are Florida attorneys providing legal services for  Insurance Claim Disputes.

Cohen Law Group:  We are Florida attorneys providing legal services for  Insurance Claim Disputes.

Cohen Law Group:

   We are Florida attorneys providing legal services for  Insurance Claim Disputes. Whether you are a contractor, homeowner, business owner, or property manager, we are here to help you. As zealous advocates for your rights, we will listen to your story and recommend a sound legal strategy for the best opportunity to achieve success. Contact us 24/7 by calling 407-478-4878.

 

At Cohen Law Group, It’s About Justice!

“It’s About Justice” is more than a slogan. It is our firm’s mantra. The motto was developed by our founder, Harvey V. Cohen. We are aggressive, zealous advocates for our clients’ rights. Our commitment to our clients is evident by our prompt reply to all phone calls and our 24 hour availability through our phone answering service.

Effective legal representation requires experience and dedication to protect the rights of those who have entrusted us with their legal options and rights. Cohen Law Group has successfully represented many Florida residents throughout the years in various legal matters.

 

Make sure your legal rights are protected by seeking the legal advice of an experienced attorney.

Make sure your legal rights are protected – Contact Us

 

Why Should You Choose Us?

We are here to provide you with the highest standard of integrity and professionalism. We are here for you, we are your attorney, and we want to shine for you. With cases ranging from single family homes with roof damage to hurricane-damaged multi-unit apartment complexes, we are dedicated to giving you personal service. It’s all about justice here and we want to prove it to you.

OUR SERVICES

See Our: Hurricane Preparedness Page

 

Insurance Claim Attorney

Due to the state of the economy, insurance claim disputes have become increasingly more common than even just a few years ago.

The bottom line is that insurance carriers must make a profit to continue to exist. The reality is that the law does not allow insurance carriers to make their profit by disputing or denying valid insurance claims by their policy holders.

Contractor Insurance Claim Dispute

Cohen Law Group stands up to these insurance carriers in valid contractor insurance claim disputes. Contractors have a right to be paid, just as the policy holder they are working for has a right to have a valid insurance claim paid.

Homeowner Insurance Claim Attorney

Have you had an insurance claim denied, partially paid, or reduced? If so, we may be able to help. Cohen Law Group stands up to these insurance carriers in valid homeowner insurance claim disputes.

Business Owners Insurance Claims Dispute

Cohen Law Group stands up to these insurance carriers in valid business/property owner insurance claim disputes. We possesses the experience and resources necessary to effectively guide you through each and every aspect of your business/property owner insurance claim dispute.

 

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

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

  • Posted: Sep 08, 2024
  • By:
  • Comments: Comments Off on FIDUCIARY DUTY: What it Means to Your Community Association. by REMBAUM’S ASSOCIATION ROUNDUP

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

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

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

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

ii) withholding official records from members; and,

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

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

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

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

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

Section 617.0830, Florida Statutes, provides the following:

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

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

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

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

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

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

 

 

Tags: , ,
A Guide to Sending the New Notice of Late Assessment By: K. Joy Mattingly, Esq.

A Guide to Sending the New Notice of Late Assessment By: K. Joy Mattingly, Esq.

  • Posted: Jul 16, 2024
  • By:
  • Comments: Comments Off on A Guide to Sending the New Notice of Late Assessment By: K. Joy Mattingly, Esq.

A Guide to Sending the New Notice of Late Assessment

By: K. Joy Mattingly, Esq.

As of July,  associations are required to send delinquent owners a Notice of Late Assessments, giving the owners 30 days to bring the account current prior to turning the account over to the association’s legal counsel for collections.

Failure to provide the delinquent owner with this 30-day notice will preclude the association from recovering legal fees related to past due assessments, i.e., any fees incurred in a subsequent collection/foreclosure action.

The notice must be sent via first class United States mail to the owner’s last address as reflected in the association’s official records, and if the last address is not the property address, the notice must also be sent to the property address by first class United States mail. The notice is deemed delivered upon mailing and a rebuttable presumption that the notice was mailed as required can be established by a sworn affidavit executed by a board member, officer or agent of the association, or by a licensed manager.

A form for the 30-day notice, titled “Notice of Late Assessment” can be found in §§718.121, 719.108 and 720.3085, Fla. Stat.

While the statutory instructions for the Notice of Late Assessment may appear to be straight-forward and easy to follow, there are several ways that the process can go awry. These missteps can result in an association having to send out a new Notice of Late Assessment, further delaying the collections and foreclosure process and adding to the association’s workload and frustration. But fear not! An association can avoid pitfalls in the process by incorporating the following best practices when drafting and sending the Notice of Late Assessment.

First, when detailing the delinquency in the Notice, the assessments, interest and late fees owed should be broken out rather than listed as a lump sum.

If there are other amounts owed, such as fines, these should be listed separately from the monthly or quarterly assessments. Late fees (if applicable) and interest should be listed below the monthly or quarterly assessments and the annual rate of interest should be detailed as well.

Second, when sending the Notice of Late Assessment, the association should check the county property appraiser’s website and the current deed for additional mailing addresses for the owner. While the statute requires the association to send the notice to the property address and the last address “as reflected in the association’s records”, there is always the possibility that the association’s records have not been properly updated or maintained to include additional addresses. Taking a few minutes to conduct this search at the beginning of the process can eliminate the possibility of an owner subsequently arguing that the association failed to send the notice to a relevant address. If the owner is successful in this argument, the association will be precluded from collecting the subsequent legal fees incurred in the collections/foreclosure process.

Third, the association should keep a copy of each Notice of Late Assessment sent to an owner as part of the association’s records. This will enable the association to provide the copy in support of the association’s sworn affidavit that the notice was mailed to the owner, should the owner subsequently dispute that the notice was provided.

In addition to following the best practices detailed above, the association should consult with its legal counsel to confirm that the association’s collections policy, practices and procedures are in conformance with the applicable statutory requirements.

 

Tags: ,