Part Two: New Condo Inspection Bill – Get your questions answered!
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We all know by now the myriad of new safety laws condos that are 3 stories or more are required to follow. They include mandatory fire sprinklers or an engineered life safety system (for buildings 75 feet or higher only), a Phase One Milestone Inspection after 30 years and every ten years thereafter (25 years if the building is on the coast), a likely Phase Two Inspection which will result in required repairs to the structure and of course structural integrity reserve studies performed by an architect or engineer and the mandatory full funding of reserve accounts.
There’s actually more to know.
OFFICIAL RECORDS TO INCLUDE AND BE POSTED ON THE ASSOCIATION’S WEBSITE:
A copy of the inspection reports for the milestone inspections and the structural integrity reserve studies and any other inspection report relating to a structural or life safety inspection of the condominium property. Such record must be maintained by the association for 15 years after receipt of the report.
NO LONGER IS THERE THE ABILITY
TO WAIVE RESERVES OR USE THEM FOR OTHER PURPOSES
It was always ridiculously easy to waive the funding of the reserve account. All it took was a lousy majority of a quorum. Those days are now over and reserve accounts must be fully funded, like it or not.
The same rule finally applies to developers. Before turnover of control of an association by a developer to unit owners other than a developer under 718.301, the developer-controlled association developer may not vote the voting interests allocated to its units to waive the reserves or reduce the funding of the reserves.
You can no longer vote to use reserves set aside for one category to be used to repair another category. Effective December 31, 2024, members of a unit-owner controlled association may not vote to use reserve funds, or any interest accruing thereon, that are reserved for items listed in paragraph (g) for any other purpose other than their intended purpose.
(g) Structural integrity reserve study.
BREACH OF FIDUCIARY DUTY – THIS IS SCARY
(h) Mandatory milestone inspections.—If an association is required to have a milestone inspection performed pursuant to s. 553.899, the association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance with the requirements of s. 553.899. The association is responsible for all costs associated with the inspection. If the officers or directors of an association willfully and knowingly fail to have a milestone inspection performed pursuant to s. 553.899, such failure is a breach of the officers’ and directors’ fiduciary relationship to the unit owners under s. 718.111(1)(a). Again, If you’re an officer or director, this new law should scare you to death. If you fail to do the milestone inspection, you have automatically breached your fiduciary duty. This could potentially result in individual liability against a director should the failure to do the reserve study result in collapse or injury.
Tags: Condo and HOA
Generic legal definition that you should IGNORE: A legal principle that bars a party from denying or alleging a certain fact owing to that party’s previous conduct, allegation, or denial.
Layman’s description (not a legal description) of what estoppel means in a condo or homeowners association: an estoppel certificate is a document which describes outstanding fees that an owner owes to his/her association as of a certain date.
When a home is sold, the new owner and the old owner are “jointly and severally liable” for any amounts owed to the association. What this means in practice, is that any debt to the association stays with the property when a title transfers. These debts include: maintenance dues, late fees, fines, interest, legal fees and special assessments outstanding at the time of the transfer.
If the new owner does not obtain an estoppel certificate they will not be aware of any amounts owed to the association by the prior owner and they may be inheriting a huge debt which they are responsible for. This is why it is necessary to make sure any outstanding debt (or acknowledgement that no money is owed) is properly disclosed, via an estoppel certificate as a protection to the new owner. Often the title company will request an estoppel certificate on the owner’s behalf and any amounts owed will be paid off at closing.
Why does it cost money to get an estoppel? Someone has to take the time to do the research and prepare the certificate for the sale to happen. It is critical that the information is correct since the estoppel is legal proof of the amount owed. The owner (not the association) has to pay for this document, which is typically prepared by the management company, association staff, association attorney or bookkeeping company.
Estoppels are rarely as simple as providing an amount owed. In addition to listing any amounts owed to the association, the estoppel often contains other critical information such as:
These are just a few of the dozens of questions that are often asked by title companies on estoppel requests, which can become very time consuming.
Here is a short article that describes the law around estoppels.
Legal disclaimer: I am not an attorney. This should not be considered legal advice.
Thank You to Campbell Property Management
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Tags: Condo and HOA, Estoppel Certificate, Law and Legal, Management News
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Imagine this scenario: you are on the board of directors of your association. The association has repeatedly requested that an owner pressure wash their dirty roof to bring it into compliance with the community standards, but the owner refuses to do so. The association has already sent a number of demand letters and even levied a fine and perhaps a suspension of use rights, too, but the owner still will not comply. What is the association’s next step?
or
Assume that the association’s declaration contains both the permissive “self-help” remedy and the right to seek an injunction from the court that orders the owner to clean their roof or else be in contempt of court. Thus, it would appear the association has a decision to make: (i) go to court to seek the injunction; or (ii) enter onto the owner’s property, pressure clean the roof, and assess the costs to the owner. Not so fast! Recent case law from Florida’s Second District Court of Appeal affirmed a complication to what should be a simple decision, discussed in greater detail below.
In two cases decided 10 years apart, Florida’s Second District Court of Appeal decided that an association did not have the right to seek an injunction to compel an owner to comply with the declaration if the declaration provided the association the authority to engage in “self-help” to remedy the violation. Prior to a discussion of the cases, a brief explanation of legal and equitable remedies is necessary.
There is a general legal principle that, if a claimant has a remedy at law (e.g., the ability to recover money damages under a contract), then it lacks the legal basis to pursue a remedy in equity (e.g., an action for injunctive relief). In the association context, a legal remedy would be to exercise the “self-help” authority granted in the association’s declaration. An equitable remedy would be to bring an action seeking an injunction to compel an owner to take action to comply with the declaration (e.g., compelling the owner to pressure wash their roof). A court will typically only award an equitable remedy when a legal remedy (such as “self-help”) is unavailable, insufficient, or inadequate.
This distinction is first illustrated in Alorda v. Sutton Place Homeowners Association, Inc., 82 So. 3d 1077 (Fla. 2d DCA 2012). In Alorda, the owners failed to provide the association with proof of insurance coverage as required by the declaration. The association sent multiple demand letters to the owners, but they failed to comply. The declaration provided, in pertinent part, that “[t]he owner shall furnish proof of such insurance to the Association at the time of purchase of a lot and shall furnish proof of renewal of such insurance on each anniversary date. If the owner fails to provide such insurance the Association may obtain such insurance and shall assess the owner for the cost of the same in accordance with the provisions of this Declaration” (emphasis added). In accordance with the foregoing, the association had the option to purchase the insurance on behalf of the owners and assess them for the costs of same.
However, the association chose instead to file a complaint against the owners seeking the equitable remedy of injunctive relief, asking the court to enter a permanent mandatory injunction requiring the owners to obtain the required insurance coverage. The owners then filed a motion to dismiss the suit arguing that even though they had violated a provision of the declaration, the equitable remedy of an injunction is not available because the association had an adequate remedy at law. In other words, the owners argued that, because the association could have, pursuant to the declaration, undertaken the ”self-help” option by purchasing the required insurance and assessing it against the owners, they had an available legal remedy and, therefore, the equitable remedy sought (a mandatory injunction) was not available to the association. The court, citing to a different case, Shaw v. Tampa Electric Company, 949 So.2d 1006 (Fla. 2d DCA 2007), explained that a mandatory injunction is proper only where a clear right has been violated, irreparable harm has been threatened, and there is a lack of an adequate remedy at law. As the association had an adequate remedy at law (the authority to purchase the insurance on behalf of the owners), the third requirement was not met. Therefore, the court held that the association failed to state a cause of action and dismissed the case. (This case might be decided differently today as it appears the insurance marketplace will not permit an association to purchase insurance for a unit that it does not own, so the legal remedy presumed available to the association would be inadequate).
Similarly, in the recent case of Mauriello v. The Property Owners Association of Lake Parker Estates, Inc., Case No. 2D21-500 (Fla. 2d DCA 2022), Florida’s Second District Court of Appeal considered the award of attorneys’ fees after the dismissal of the association’s action for an injunction. Ultimately, the court held that the owners were the prevailing party as the association could not seek an injunction because the association had an adequate remedy at law. In Mauriello, the owners failed to maintain their lawn and landscaping in good condition as required by the declaration. As such, the association filed a complaint seeking a mandatory injunction ordering the owners to maintain the lawn and landscaping in a “neat condition.” The association’s declaration contained similar language to the declaration at issue in Alorda. The declaration provided that, if an owner failed to perform any maintenance required by the declaration, the association, after written notice, “may have such work performed, and the cost thereof shall be specifically assessed against such Lot which assessment shall be secured by the lien set forth in Section 9 of this Article VI” (emphasis added). In other words, the association had the permissive “self-help” authority pursuant to the declaration.
The facts of this case were complicated by the sale of the home in the middle of the suit. The new owners voluntarily brought the home into compliance with the declaration, and the case became moot. However, the parties continued to fight over who was entitled to prevailing party attorneys’ fees. The association argued it was entitled to prevailing party attorneys’ fees because the voluntary compliance was only obtained after the association was forced to commence legal action. The owners, citing Alorda, argued that they were entitled to prevailing party attorneys’ fees as the association’s complaint never stated a cause of action in the first place. They argued that the complaint should have been dismissed at the outset because the association sought an equitable remedy (mandatory injunction) when a legal remedy was available to the association (exercise of “self-help” authority).
Florida’s Second District Court of Appeal agreed with the owners that Alorda was controlling. The Court explained that, as in Alorda, “the association’s declaration gave it the option of remedying the alleged violation itself, assessing the owner for the cost, and if the owner failed to pay, placing a lien on the property and foreclosing if it remained unpaid.” As such, the association had an adequate remedy at law and could not seek the equitable remedy of an injunction, which was initially sought by the association. Because the mandatory injunction was not available to the association, the association’s complaint failed to state a proper cause of action and, thus, should have been dismissed by the trial court at the outset. Therefore, the association was not entitled to its sought-after prevailing party attorneys’ fee award, which is otherwise granted if a party comes into compliance after the lawsuit is served.
Sections 718.303 (as to condominiums), 719.303 (as to cooperatives), and 720.305 (as to homeowners associations), Florida Statutes, contain similar language that specifically authorizes the association to bring actions at law or in equity, or both, in the event an owner fails to comply with the governing documents of the association. However, neither the Court in Alorda nor the Court in Mauriello addressed the association’s statutory authority to bring an injunction against an owner who fails to comply with the requirements of the declaration, but rather found that the association must use the “self-help” remedy since it was available to cure the violation.
Notwithstanding the Alorda and Mauriello decisions rendered by Florida’s Second District Court of Appeal, past appellate court decisions from other appellate jurisdictions in Florida have permitted community associations to pursue claims for injunctive relief against violating owners so long as a violation of the restrictive covenant is alleged in the complaint. As such, the Alorda and Mauriello cases appear to be departures from the established principle. Additionally, as both decisions came from Florida’s Second District Court of Appeal, the decisions are certainly binding on those associations within the jurisdiction of the Second District, but there has been no indication that other districts will follow suit. However, there is risk that other appellate district courts may be persuaded by the holdings of Alorda and Mauriello.
As such, if your association’s declaration contains a “self-help” provision, and your association chooses to seek an injunction against an owner rather than pursue “self-help,” the board should definitely discuss the issue in greater detail with the association’s legal counsel prior to proceeding.
Find out more about KBR Legal – If your community is looking for representation give us a call.
Kaye Bender Rembaum is a full service commercial law firm devoted to the representation of community associations throughout Florida. Under the direction of attorneys Robert L. Kaye, Esq., Michael S. Bender, Esq., and Jeffrey A. Rembaum, Esq. Kaye Bender Rembaum is dedicated to providing clients with an unparalleled level of personalized and professional service regardless of their size and takes into account their individual needs and financial concerns. Most of our attorneys are Board Certified in Condominium and Planned Development Law.
Tags: Law and Legal, Management News, SFPMA Articles
By Eric Glazer, Esq.
In a word — YES. Are all these new laws really necessary? In a word –YES. This is all happening due to a complete lack of foresight and planning by The Florida Legislature. Mandatory Reserves and Mandatory Inspections should always have been the law. I urged The Florida Legislature in May of 2018 to make reserves mandatory. Instead they waited for a building to collapse and for 98 people to die before making these common sense laws. Of course a building should require an inspection after 25 or 30 years. Of course a building should be required to make necessary repairs to prevent a potential collapse. Of course a building should be required to put away money each month for future repairs. Of course that amount should be determined by a professional architect or engineer and not an unqualified board member who has a financial interest in the outcome of the reserve study. These laws should have been required thirty years ago, as building started to boom. Instead however, The Florida Legislature always caved to the developer lobby in order to keep the cost of living in a condominium artificially cheap, and the sale of units flowing. Now, because these laws were not in place thirty years ago, current condominium owners have a lot of catching up to do financially to pay for the sins of the past.
The days of a couple or a widower from up north retiring to a high rise condominium in Florida if their sole income is social security are done and over. That cannot happen anymore. They need to look for a condominium less than three stories in height that has some reserves put away.
If your condominium is at least 30 years old and is 6 stories or higher, has no fire sprinklers or Engineered life safety system, has not yet undergone a Mandatory Phase One and Phase Two Inspection, has not made the repairs required by those inspections and has no reserves in the bank, you are now forced to either sell your condominium unit immediately or pay massive special assessments that you may not be able to afford, or even come close to affording it.
On the flip side, if your condominium is at least 30 years old and is 6 stories or higher, and already has fire sprinklers or an Engineered life safety system, has already undergone a Mandatory Phase One and Phase Two Inspection, has already made the necessary repairs, and is fully funding reserves, you have little to nothing to worry about. Your monthly assessments should remain where they are, give or take the increases in insurance that are simply astronomical.
Developers are waiting to pounce. They are focusing their attention on those condominium at least 30 years old and are 6 stories or higher, but has no fire sprinklers or Engineered life safety system, has not yet undergone a Mandatory Phase One and Phase Two Inspection, and has not made the repairs that will be required by those inspections and has no reserves in the bank. Developers will be approaching the Boards of these condominiums with offers to buy everyone’s unit for a certain price. You will either consent to selling or have to pay the costs for all these inspections, repairs and funding of reserves. For many there will be no choice at all. They will have to sell and somehow find housing elsewhere.
Like everything else, the poor people or even the average workers who had saved up enough money for a down payment on their condo and proudly purchased their unit, they will get hit the hardest. In reality, in upper class buildings, they were either putting reserve money aside all along, or worse comes to worse they can stroke a check for these increased costs. They’re OK.
This will take years to sort out. Some condos simply won’t be able to comply with the new laws and the owners will sell out to a developer. Some condominiums will opt not to sell and pass massive special assessments and/or borrow the money from a bank. Either way their expenses are going up. Many associations will be foreclosing on many of their owners who can’t afford these special assessments. I can tell you that even before these massive changes go into effect, foreclosures are already on the rise, simply due to nearly $6.00 per gallon of gasoline and out of control food prices. These new laws will start what I believe will be a tremendous increase in foreclosures, perhaps as bad as 2007 and 2008. Yet, all of it is necessary. You can’t allow buildings not to get inspected, you can’t allow building not to get fixed, you can’t allow buildings not to have fire safety measures and you can’t allow buildings to deliberately waive a requirement to put funds away each month for future structural repairs.
The Band Aid was ripped off in one shot. As a result, Florida condominiums and their owners will have some tough financial times ahead. There will definitely be gentrification in some neighborhoods. The look, feel and face of Florida will change going forward. If only these measures were passed when these buildings were being built so people would not be forced out of their homes today. There simply was no foresight and now the change won’t be smooth and gradual, but will be difficult and immediate. And yet, there’s no other way to go. A collapse like Champlain Towers can never happen again.
Tags: Condo and HOA Law
The Florida insurance marketplace is in complete disarray. Associations need to be prepared for what the next 18-24 months of a continued hard market will do for their budgets.
as they discuss the status of the insurance marketplace as it relates to property, liability, directors and officers, and umbrella/excess policies. #Webinar
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ORLANDO, Fla. – On Friday, dozens of new laws will take effect in Florida kicking off the month of July. The laws cover a range of topics from school safety to smoking on the beach.
Here are a few of the laws that take effect July 1:
This means smoking will no longer be allowed on Florida beaches. Local governments can restrict smoking on public beaches and in parks. That also goes for littering: You could face a strict fine for tossing a cigarette butt on the beach.
Environmental experts say this will help not only the health of people but sea life too.
Widely dubbed the “Don’t Say Gay” bill by critics, the law bans teachers from giving classroom instruction on “sexual orientation” or “gender identity” in kindergarten through third grade.
A new K through 12 law concerning controversial books also goes into effect on Friday.
The law requires school districts to have a procedure in place that allows parents to see all of the books in the library and classroom. The law also gives parents the opportunity to review all books and set curriculum standards.
Besides books, the law creates a 12-year term limit for school board members.
The new law will require apartment landlords to conduct background checks on employees, a response to the September murder of a Valencia College student. Criminal and sexual-offender background checks will be required for apartment-complex employees. Also, tenants will have to be given 24 hours’ notice before workers can enter apartments.
The measure was crafted after the death of 19-year-old Miya Marcano, who was found dead a week after she went missing from her Orlando apartment.
This will make it possible for low-income mothers to have access to free donated breast milk. The bill authorizes the Agency for Health Care Administration to pay for donor milk to distribute to families on Medicaid if they want it.
HB 1435 will allow officers to give a ticket to drivers who are playing music so loud that it can be heard 25-feet from the vehicle. The bill specifically mentions car music playing too loudly near churches, schools, or hospitals.
The battle over dessert will finally be over! On Friday, strawberry shortcake will be the official Florida state dessert. That’s leaving a sour taste in the mouths of people who have loved key lime pie all these years. However, key lime is the state’s official pie.
This law requires a more detailed security plan. It requires that schools have a guide to reunite students with family in the event of an emergency. The law sets rules for emergency drills requiring law enforcement officers who will be responding to the emergency to be there and participate.
It even addresses student mental health. At least 80 percent of school personnel will be required to be certified in youth health awareness training, beginning July 1 of next year.
Just in time for the July Fourth weekend, this is allowing the courts to impose a fine for boating collisions and accidents.
The law requires certain boating safety education courses or temporary certificate exams to include items like dangers associated with passenger safety, operating a boat or jet ski near a person who is in the water, and proper use of engine cutoff switches. It also mentions companies that rent and provide water sport activities and instruction must use a working engine cutoff switch.
Stock up on those diapers! This is the opportunity to buy certain items, including diapers, without paying Florida state sales tax. A tax holiday for children’s diapers, books, clothing and shoes will be in effect for one year.
School supplies including clothing, wallets, and bags will have tax exemptions starting July 25 and lasting until August 7. Now that hurricane season is here, you may want to consider buying impact-resistant windows and doors, which will remain tax-free for the next two years.
The new law aims to change how Florida cares for these individuals by recognizing certified peer specialists as a support role in recovery. These are typically people who have recovered from substance abuse and mental illness and are helping others get through similar situations.
Under the new law, family members and caregivers will also be eligible for certification. Specialists must undergo background checks and pass a competency exam before being certified.
This new law allows Floridians easier access to those cards in cases of financial hardship or failing a driver’s test. If someone can’t afford a new card, they can get one for free as long as they have a valid voter’s registration card.
The same goes for anyone 80 years and older who cannot get a new driver’s license because they failed the vision test.
The Florida Standards Assessments (FSA) will be eliminated and the State Academic Standards will take effect.
The law removes standardized testing in schools and replaces it with three different tests throughout the year to monitor progress. Those tests will take place at the start, middle, and end of the school year.
Florida high school students will be required to take a financial literacy course as a condition for graduation.
The financial literacy course would have to include instruction on types of bank accounts and how to open and manage accounts, completing loan applications and computing federal income taxes.
Tags: Legal and Lobbing, SFPMA Articles
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