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Becker’s Lawyers are members of sfpma, can be found on our Directory, Sponsors many events and is one of the top firms for Condo, Hoa and Management professionals for our industry.
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by KBR Legal / RembaumsAssociationRoundup
Buying a bundle of home loans to later sell on the secondary market can be risky business. A lot can go wrong in the process. For example, the economy could tank, causing massive defaults; or even worse, as occurred recently in the case of Champlain Towers South, the building could collapse—where not only did many residents die, but also insurance proceeds are unlikely to be sufficient to satisfy all of the outstanding mortgage debt. This reality has a ripple effect on the mortgage-backed security, ultimately causing financial harm to the investors buying the bundled mortgages.
The Federal Home Loan Mortgage Corporation, commonly referred to as “Freddie Mac,” and the Federal National Mortgage Association, commonly referred to as “Fannie Mae,” both compete on the secondary mortgage market, which is the market for the sale of securities or bonds collateralized by the value of mortgage loans. In short, they both package mortgages into mortgage-backed securities for sale to investors on the secondary mortgage market. Both Fannie Mae and Freddie Mac have requirements which must be met before they will buy a mortgage from a local lender, which they appropriately refer to as the “seller.” The Fannie Mae and Freddie Mac requirements placed on the seller (meaning, the local lender) trickle down to and then must be met by the association. The association’s compliance with these requirements is then analyzed by the local lender and likely further analyzed by Fannie Mae or Freddie Mac as a part of its bundled loan purchase.
The mortgages they purchase help ensure that home buyers and investors who purchase property have a steady and stable supply of mortgage money. They broaden the likelihood of funds being made available for housing by attracting new secondary mortgage market investors through offering packaged mortgage-backed securities and guaranteeing the timely payment of principal and interest on the underlying mortgages. This makes secondary mortgage markets more liquid and can help lower interest rates paid by the actual mortgage borrowers (i.e., the property purchasers). It is reported that at times, together they finance up to 90 percent of all residential mortgages. Without Freddie Mac and Fannie Mae buying mortgages from lenders, the lenders would not be in a position to continue to offer loans. They need the funds from the Freddie Mac or Fannie Mae purchase to have available funds to make new loans. The bottom line is that if you expect purchasers in your condominium to be able to obtain a loan, then ultimately your association will have to abide by their requirements, including their demand for information about your condominium building’s condition and the condominium association’s finances, which are set out in their similar questionnaires.
Congress created Fannie Mae in 1938 to provide accessible funding and more affordable housing. Freddie Mac, alternatively, started in 1970 as a public enterprise to further expand the secondary mortgage market. While there are many similarities between Fannie Mae and Freddie Mac, there are some key distinctions. The significant difference between Freddie Mac and Fannie Mae is where they acquire their mortgages. Fannie Mae purchases mortgages from larger, commercial banks, while Freddie Mac buys them from much smaller banks. While Fannie Mae and Freddie Mac programs have some differences in lending requirements, these requirements also appear more similar than different in so far as they assure the lender they will buy the loan.
As a result of the Champlain Towers South collapse, Fannie Mae and Freddie Mac have imposed new temporary, additional requirements for mortgages obtained for condominiums and cooperative residential units. These new additional requirements will make it harder for existing condominium unit owners to refinance and for new buyers of condominium units to obtain mortgages.
On October 13, 2021, Fannie Mae issued Lender Letter LL-2021-14 entitled “Temporary Requirements for Condo and Co-op Projects,” resulting with a new questionnaire effective January 1, 2022. In so doing, Fannie Mae suspended flexibility that allowed a lender to obtain a reserve study in lieu of meeting the 10 percent budget reserve requirement. Simply put, this means that if an association does not reserve at least 10 percent of its total annual budget for reserves, then any lender working with Fannie Mae will not be in a position to issue a loan to anyone purchasing a unit in that association’s condominium because doing so would make that loan ineligible for purchase by Fannie Mae, which ultimately hurts the local lender because it will have less funds to loan.
Moreover, Fannie Mae will no longer issue project eligibility waivers for significant deferred maintenance or for projects subject to large special assessments. In other words, if the condominium association is not contributing at least 10 percent of its annual budget into the reserves, then Fannie Mae will not buy the loan from the local lender, meaning that the local lender will most likely not issue the loan to the buyer. In addition, and as part of its 10 percent reserve requirement, Fannie Mae no longer allows a borrower to rely on a reserve contribution provided in a reserve study in lieu of meeting the requirement that 10 percent of the annual assessments be contributed to reserves. Therefore, Freddie Mac-backed loans will become even more important to purchasers of condominium units and the developers who build them.
Then, on December 15, 2021, Freddie Mac issued Bulletin 2021–38 entitled “Temporary Condominium and Cooperative Project Requirements and Topic 5600 Reorganization,” effective February 28, 2022 (the “Bulletin”). While Freddie Mac has strict requirements, too, it is not strictly requiring that 10 percent of the association’s budget be allocated to the association’s reserves. The Bulletin begins with the following statement of fact:
In the aftermath of the collapse of the Champlain Towers South in Surfside, Florida, the risks of residential buildings with aging infrastructure and in need of Critical Repairs have been brought to the forefront of discussion throughout the nation.
Regarding reserves, local lenders may continue to rely on a working capital fund for new condominium projects or a reserve study for both established and new condominium projects when the project’s budget provides less than 10 percent replacement reserves. In other words, as so succinctly explained by a regular reader of Rembaum’s Association Roundup, Barry Subkow, Esq.,
Unlike Fannie Mae, if the contribution to reserves is less than 10% of the total annual assessments (e.g., 8%) and is based on the reserve contribution amount that is provided in a reserve study, Freddie Mac will allow the loan.
These newest Freddie Mac temporary requirements apply to all mortgages secured by units in projects with five or more attached units and are in addition to, and do not supersede, any of the other existing current applicable requirements. As such, there are terms which every board member and manager should become familiar with as they are needed to complete the required questionnaires. For example, a loan given by a local lender to a buyer for a project in need of “critical repairs” (as defined below) is not eligible for sale to Freddie Mac. As a result, the local lender will not be inclined to make the loan if a governmental program entity, such as Freddie Mac, is not willing to buy the loan.
Because Freddie Mac secured mortgages are likely to become even more important in today’s economy, there are four terms with which every board member and manager should be familiar:
The term “critical repairs” refers to repairs and replacements that significantly impact the safety, soundness, structural integrity, or habitability of the project’s building(s) and/or that impact unit values, financial viability, or marketability of the project. These repairs and replacements include the following:
The term “material deficiencies” is defined as unresolved problems that cannot reasonably be addressed by normal operation or routine maintenance and which include the following:
The term “significant deferred maintenance” is defined as the postponement of normal maintenance, which cannot reasonably be resolved by normal operations or routine maintenance, and which may result in any of the following:
The term “routine repairs and maintenance” is defined as repairs and maintenance that are expected to be completed by the project in the normal course of business and are nominal in cost. These repairs are not considered to be critical and include the following types of work:
Any documentation used by the local lender to determine the eligibility of projects in need of critical repairs must be retained and provided to Freddie Mac upon request. Violations of state or local law, ordinance, or code, as referenced in the critical repairs definition, include failure by the association to schedule an inspection required by the applicable jurisdiction and any directive from a regulatory authority or inspection agency to make critical repairs. Projects in need of critical repairs remain ineligible until the required repairs and/or inspection report have been completed and documented. Sellers of the proposed loan (i.e., the local lender) must review an engineer’s report, or substantially similar document, to determine that the repairs resolved the building’s safety, soundness, structural integrity, or habitability concerns. Acceptable sources of documentation to determine if a project is in need of critical repairs may include but are not limited to the following:
The Freddie Mac restrictions on the purchase of loans from lenders does not apply to the following:
When determining if a repair is a routine repair or maintenance, Freddie Mac reminds the local lender that its condominium project budget requirements include determining that appropriate assessments are established to manage the project and that there are appropriate allocations for line items pertinent to the type and status of the condominium project. Sellers (meaning, the local lender) should evaluate the line items on the budget, especially those for repairs and maintenance, and the amounts associated with those line items as part of the seller’s project review process.
Regarding any current special assessment, even if paid in full for the subject unit, such special assessment must be reviewed to determine eligibility. This includes any special assessment that the board approved and, if required, owners approved, but the board has not initiated collection yet (e.g., a planned special assessment). The local lender must determine the following:
To determine that the amount budgeted to be collected year-to-date (YTD) has been collected, the following criteria apply:
Any documentation used to determine the eligibility of the special assessment, such as the income statement referenced above, must be retained by the local lender and provided to Freddie Mac upon request. In addition, special assessments with more than 10 monthly payments remaining must be included in the calculation of the monthly housing expense-to-income ratio and must be documented.
If a seller (the local lender) relies on a reserve study, then the seller must ensure the reserve study meets certain requirements, which include, but are not limited to the following:
Freddie Mac advises its sellers (the local lender) to evaluate the reserve study’s financial analysis. Sellers should compare, for the current fiscal year, the estimated beginning of the year (BOY) reserve fund balance in the reserve study to the actual BOY reserve fund balance. The reserve study’s recommended reserve allocation for the current fiscal year correlates to the project starting the year with that estimated reserve fund balance. If the project started the year with significantly less than what was estimated, then the project has likely failed to appropriately allocate the recommended reserve funds to provide the condominium project with sufficient financial protection.
If your association is not Freddie Mac eligible under these terms, then a local lender can submit a project waiver request (PWR), which, however, has many other strict requirements that are not further discussed herein.
The Freddie Mac Bulletin can be found at:
https://guide.freddiemac.com/app/guide/bulletin/2021-38
The Fannie Mae Bulletin can be found at:
https://singlefamily.fanniemae.com/media/29411/display
Each association will need to coordinate completion of the Freddie Mac and Fannie Mae questionnaires with its board members, manager, and, importantly, the association’s attorney. Practically speaking, the questionnaires will need to be updated as the scenario at your association changes. Just because an association is not eligible this year does not mean circumstances will not change leading to a later acceptance. As to the costs associated with the completion of the questionnaires (and while arguments may exist for the buyer who caused the need for the completion of the questionnaire to pay for it), since the questionnaire benefits the entire association by providing for a viable market for all new purchasers to acquire loans to purchase a unit, the expense should be deemed a common expense shared by all members of the association.
Be sure to reach out to your association’s attorney to answer any questions you may have regarding Fannie Mae and Freddie Mac questionnaires and their local lender requirements because, remember, if Fannie Mae or Freddie Mac will not buy the loan from the local lender, the lender is not likely to make the loan.
Reprinted with permission from KBR Legal members of SFPMA.
Tags: Condo and HOA Law, Management News
We are encouraging all members, Property Managers, Board Members for Condo and HOA’s and the industry in general to follow:
We understand that everyone has questions:
It is important to recognize we are not health care professionals. We have been looking to the experts. The CDC and other qualified health officials should continue to be the primary source of current information and guidance. Were offering general, precautionary guidance from officials and adding some common-sense guidelines for our industry.
Mask Mandates are changing!
Many States have already set as requirements for businesses, schools and Offices all over the US. The reversal of wearing Masks. This is great news for many, now you do not have to put on the masks if you dont wish to. As we go forward some that are at risk still will protect themselves, while others wont put them on. Dont get mad at them or start a problem…. You dont know what they are doing in Their Live! they might have a lower immune system in their bodies? they might take the stand that masks dont work? they even may believe in the Science or lack of?
Every person has the right to keep wearing a mask or not! so work with your group, community and management to find a solution you can adapt to keep everyone in your buildings safe. this could mean, in the common areas, with visitors and guests inside and outside your buildings. its best to have an open discussion with a group. find out what they think? and put in place rules to keep everyone safe.
Thank You, Be Safe. SFPMA
We know it’s a balancing act for community association leaders— and the desire to keep residents and guests safe as the face mask debate continues— even for the fully vaccinated. ( Part of this article copied from: Covid Masks) We are all working together for the safety for all.
As some local jurisdictions and/or states lift and others reinforce mask mandates, what does this mean for homeowners associations and condominium communities with shared spaces including—fitness centers, clubhouses, lobby areas, and mailrooms? We contacted CAI members, practicing common-interest law to share an update on face masks in common areas. From the outset of the pandemic, Edmund Allcock, a partner with Marcus, Errico, Emmer & Brooks in Braintree, Mass., and a fellow in CAI’s College of Community Association Lawyers (CCAL), encouraged community associations to follow recommendations from the Centers for Disease Control and Prevention, as well as state and local guidelines, to mitigate the spread of COVID-19.
“At the beginning of the pandemic, we recommended closure of (common areas),” says Allcock. “Since the development of the vaccine, everything seems to have reopened, so I do not see why the clubhouse, or the gym should be any different.”
In Washington, application of state and local health mandates to community associations have been inconsistent, notes Anthony L. Rafel, managing partner at Rafel Law Group in Seattle, and a CCAL fellow. “The governor’s proclamations and the state secretary of health’s orders requiring masks in indoor congregate spaces make no exception for community associations,” he explains. “We’ve advised our community association clients that the requirements are applicable to common areas.”
Meanwhile, the California Department of Public Health has clarified that “indoor public settings” applies to board and commission meetings, but there is some disagreement as to whether community associations have to follow the state’s mask mandate, says Nathan R. McGuire, managing partner at Adams Stirling in Northern California, and a CCAL fellow. McGuire notes that his firm is advising that community associations are not public. Therefore, the guidance does not technically apply to them.
When it comes to guidelines community associations should follow to minimize the spread of COVID-19, Rafel says to lean on the side of greater protection for residents and guests. “Masks should be worn in lobbies, hallways, gyms, clubhouses, and meeting spaces if required or recommended by federal, state, or local health officials,” he says.
McGuire also believes masks should be required in indoor common areas to mitigate the spread of the disease. “Another option is to require only those who are unvaccinated to mask indoors and allow them to self-attest to their vaccination status. Meaning that, if someone enters the indoor setting without a mask, the resident or guest is self-attesting that they are vaccinated,” he notes.
Find out more on our Industry Web Pages for Condo, HOA and Property Management.
Tags: Common Area Issues, Condo and HOA Law, Management News, SFPMA Articles
For many homeowners associations, a top priority is ensuring that the homes in the community are maintained in conformity with the “community-wide standard.” But, what is this subjective standard? How is compliance measured? What is the process to be judged when a request to the association’s architectural review committee (ARC) is made? The ARC is instrumental in ensuring that the community-wide standard is met. However, your association may run into a problem if the ARC denies a request from a homeowner if the association has not adopted specific, objective criteria and guidelines on which the ARC can rely.
Sometimes applications to the ARC are denied because the proposed modifications were not “in harmony” with the other homes in the community or did not conform with the “community-wide standard.” However, such a limitation is vague, and a denial based on whether a particular modification is “harmonious” is subjective. Thus, the members are entitled to specific guidelines regarding what is allowed and what is not allowed, and in fact, this is required by law.
The association’s ARC can only be as effective as the objective guidelines and standards drafted into the declaration and board-adopted rules. If your ARC is relying on aesthetics or other subjective criteria that are simply “personal preferences” rather than written, adopted, and published objective standards and guidelines, any disapproval is vulnerable to a successful challenge. In fact, in the seminal case regarding approval of architectural modifications, Young v. Tortoise Island Homeowner’s Ass’n, Inc., 511 So.2d 381 (Fla. 5th DCA 1987), the court held that where the governing documents were silent as to the modification at issue, a denial could not be based on the architectural control board’s opinion regarding “aesthetics, harmony and balance—admittedly very personal and vague concepts.”
In Young, the owners submitted an application to build a flat roof on their home. The homes immediately surrounding the home were all peaked roofs. Nothing in the governing documents prohibited an owner from building a flat roof, and the requested roof complied with all of the specific requirements set out in the governing documents. However, the architectural control board denied the owners’ request because there was a “very strong feeling” that the flat roof would not be “architecturally compatible with the other homes.” In the end, the Youngs built the flat roof despite the association’s disapproval, arguing that the architectural control board had no authority to impose a prohibition against flat roofs. The court agreed with the Youngs, holding that
“In the absence of an existing pattern or scheme of type of architecture which puts a prospective purchaser on notice that only one kind of style is allowed, either in the recorded restrictions or de facto from the unified building scheme built on the subdivision, such a board does not have the power or discretion to impose only one style over another based purely on ‘aesthetic concepts.’”
The flat roof violated no recorded restrictions, no objective rule adopted by the association, and no de facto common existing building style in the community. Therefore, the court held that it was beyond the power of the architectural review board to prohibit the flat roof.
The concept in Young was further codified in 2007 in §720.3035(1), Florida Statutes, which provides that an association or the ARC has the authority to review and approve plans and specifications only to the extent that the authority is specifically stated or reasonably inferred as to location, size, type, or appearance in the declaration or other published guidelines and standards. More specifically §720.3035(1), Florida Statutes, provides that the authority of an association or any architectural, construction improvement, or other such similar committee of an association to review and approve plans and specifications for the location, size, type, or appearance of any structure or other improvement on a parcel, or to enforce standards for the external appearance of any structure or improvement located on a parcel, shall be permitted only to the extent that the authority is specifically stated or reasonably inferred as to such location, size, type, or appearance in the declaration of covenants or other published guidelines and standards authorized by the declaration of covenants.
In other words, the ARC can only approve or deny requested modifications based on objective standards with specificity as to location, size, type, or appearance that are set out in the declaration or other published guidelines and standards. Without specific, objective standards to rely upon, the ARC is at risk of making arbitrary decisions regarding approval. Basing ARC denials on concepts like “aesthetics, harmony, and balance” will land the association in hot water if an owner challenges such denial. It is far safer to base approval or denial on objective standards as set out in the declaration or as adopted by the board.
Creative drafting by an association’s attorney is critical in order to capture those ARC applications where a member may request a modification that is not squarely addressed by the governing documents. In plain English, a “catchall” amendment to the declaration can be artfully drafted that stands for the proposition that, if such a request is made, then the existing state of the community is the applicable standard by which the application is to be judged. For example, if the Tortoise Island Homeowner’s Association had had such a provision in its declaration, then given that there were no flat roofs in the community, the existing state of the community may have provided a lawful basis for the ARC to deny the request, thus possibly leading to a whole different result in the case.
On a related note, there are strict procedural requirements that your association must follow, most especially if the ARC intends to deny an ARC request. It is likely many ARCs do not conduct their activities in conformity with Florida law such that a denial could withstand judicial scrutiny. Pursuant to §720.303(2), Florida Statutes, a meeting of the ARC is required to be open and noticed in the same manner as a board meeting. In other words, notice of the ARC meeting must be posted in a conspicuous place in the community at least 48 hours in advance of the meeting, and the meeting must be open for the members to attend. In addition, pursuant to §720.303(2)(c)3., members of the ARC are not permitted to vote by proxy or secret ballot. Bare bone minutes should be taken as well to create a record of ARC committee decisions, most especially denials.
We hear from many associations that the ARC does not meet openly or notice their meetings. This leaves any decision made by the ARC vulnerable to challenge. If the ARC denies an application but fails to do so at a properly noticed meeting, the owner can challenge the denial claiming that it is not valid as the ARC did not follow proper procedures. Many declarations contain language which provides that if an ARC application is not approved or denied within a certain period of time, the application is deemed approved. In that case, if the ARC’s denial of an application is not valid because the ARC failed to comply with the procedural requirements for the meeting, an application which violates the declaration or the ARC standards may be deemed approved by operation of the declaration! By complying with the provisions of Chapter 720, Florida Statues, your association can avoid that disaster.
Practice tip: Remember that notice of any board meeting at which the board will consider a rule which restricts what an owner can do on their parcel must be mailed, delivered, or electronically transmitted to the members and posted conspicuously on the property not less than 14 days before the meeting.
If your association has not adopted objective ARC standards and guidelines including the “catchall” provision discussed above, now is the time to start! We recommend that you contact your association’s counsel prior to drafting such rules to ensure that the association is in compliance with the requirements of the governing documents and Chapter 720, Florida Statutes.
by Jeffrey Rembaum, Esq. of Kaye, Bender, Rembaum attorneys at law, legal practice consists of representation of condominium, homeowner, commercial and mobile home park associations, as well as exclusive country club communities and the developers who build them. Mr. Rembaum is a Certified Specialist in Condominium and Planned Development Law. He is the creator of ‘Rembaum’s Association Roundup’, an e-magazine devoted to the education of community association board members, managers, developers and anyone involved with Florida’s community associations. His column appears monthly in the Florida Community Association Journal. Every year since 2012, Mr. Rembaum has been selected to the Florida Super Lawyers list and was also named Legal Elite by Florida Trends Magazine. He can be reached at 561-241-4462.
Tags: Condo and HOA
Many Floridians live within a community operated by an association of some kind, be it a community of single-family homes under the jurisdiction of a homeowner’s or property owner’s association, or a condominium building maintained by a condominium association. These owners should be well-aware that many aspects of life within these communities are subject to restrictions outlined in a set of governing documents, which include a declaration, articles of incorporation, bylaws, and rules and regulations. While the declaration, articles of incorporation, and bylaws are typically recorded among the public records of the county in which the community is located, the rules and regulations are typically not recorded.
Because rules and regulations are usually amendable by the approval of the board of directors only (as opposed to the additional approval of the membership), allowing rules and regulations to be unrecorded provides the board of directors with the flexibility to amend the rules and regulations as the need arises without the added expense and time required to record these rule amendments among the county’s official records. However, this option has changed for homeowner’s associations as a result of recent legislative changes which took effect on July 1, 2018.
How has this changed? Pursuant to new provisions set out in Section 720.306(1)(e) of F.S., “[a]n amendment to a governing document is effective when recorded in the public records of the county in which the community is located.” While this has certainly always been the case for a declaration, articles of incorporation, and bylaws, this is new as to rules and regulations of a homeowner’s association because they were added to the definition of the term “governing documents” as set out in Section 720.301(8), F.S. when the Statute was amended in 2015, effective on July 1st of that year.
Due to the fact that many homeowner’s associations have not recorded their rules and regulations in the public records of the county, consideration should be given to record the all of the rules and regulations, particularly if there are plans to amend them. Failing to record the rules and regulations prior to (or at the same time as) recording an amendment will possibly create what is termed a “wild” amendment, which is not connected in the public records to the document it is trying to amend. Additionally, if an amendment to the rules and regulations must be recorded in order to be effective, it is logical to conclude that the initial rules and regulations must also be recorded in order to be effective. Under Section 720.303 F.S., all governing documents are required to be recorded in the public records. Therefore, a homeowner’s association should record its rules and regulations in the public records in order to avoid this possible claim against the legal effectiveness of the rules when it becomes necessary for the association to enforce its rules against an owner.
As with any other amendment to a homeowner’s association’s governing documents, within thirty (30) days after recording an amendment to the governing documents, the homeowner’s association must provide either a copy of the recorded amendment to the members or, if a copy of the amendment was provided to the members before they approved it (for those communities with owner approval requirements for rules) and the amendment was not changed before the vote, a notice providing that the amendment was adopted, identifying the official book and page number or instrument number of the recorded amendment, and that a copy of the amendment is available at no charge to the member upon written request to the association.
While the consequences of this new legislation may have been unintended, it is the law until amended otherwise or an appellate court makes a contrary ruling. Although this will likely result in some minor additional costs to homeowner’s associations, this is a good opportunity for a board of directors to examine their existing rules and regulations and update them prior to recording them among the public records.
Board members of an association subject to Chapter 720, Florida Statutes, should discuss the implications created by this recent legislative change with their association’s lawyer. It is recommended that you have experienced association counsel review any existing rules and regulations prior to recording them to ensure that they are enforceable and do not unnecessarily expose the association to liability (e.g., Fair Housing violations). As to any proposed rules not yet adopted the same holds true. Experienced association counsel should review them to both ensure enforceability and to steer clear of unintended negative consequences.
Jeffrey Rembaum, Esq. of Kaye, Bender, Rembaum attorneys at law, legal practice consists of representation of condominium, homeowner, commercial and mobile home park associations, as well as exclusive country club communities and the developers who build them. He is a regular columnist for The Condo News, a biweekly publication and was inducted into the 2012, 2013 & 2014 Florida Super Lawyers. He can be reached at 561-241-4462.
Re Published with Permission: JR / KBR Legal
Tags: Condo and HOA Board of Directors, Condo and HOA Laws, Law and Legal, Management News
Those of who have taken the Board Certification Class know that the answer to this question is that as long as the e-mails were on the private e-mail accounts of the Board members, they are not “official records” and therefore the unit owners cannot obtain copies of them. Well….that was all changed in one full swoop.
By Eric Glazer, Esq.
Florida Statute states:
120.565 Declaratory statement by agencies.—
(1) Any substantially affected person may seek a declaratory statement regarding an agency’s opinion as to the applicability of a statutory provision, or of any rule or order of the agency, as it applies to the petitioner’s particular set of circumstances.
A man by the name of James Hanseman recently sought a declaratory statement from The Department of Business and Professional Regulation, Division of Condominiums, Timeshares, and Mobile Homes regarding whether e-mail communications between and among board members are “official records” within the meaning of Florida Statute 718.111(12), where such records relate to the Association’s operations but are sent to and/or from personal computers and devices rather than Association owned computers and devices.
Those of who have taken my Board Certification Class know that the answer to this question is that as long as the e-mails were on the private e-mail accounts of the Board members, they are not “official records” and therefore the unit owners cannot obtain copies of them. Well….that was all changed in one full swoop.
In this declaratory statement, Chevonne Christian the Division Director opined that:
The .. official records of the association” include .. all other written records of the association not specifically included in the foregoing which are related to the operation of the association.”§ 718.111 (12)(a) l8., Fla. Stat. Nothing in this provision exempts such records when created or transmitted with a board member-owned device rather than an Association owned device.
The plain meaning of the statute is always the starting point in statutory interpretation.”
GTC, Inc. v. Edgar, 961 So. 2d 781, 785 (Fla. 2007). Dictionaries can be used to determine the meaning of words. Metro. Dade County v. Milton, 707 So. 2d 913, 915 (Fla. 3d DCA 1998).
Emails constitute a form of writing. Writing, Black’s Law Dictionary (11th ed. 2019).
Consequently, emails are “written records,” and their existence as such does not depend on the ownership of the device through which the emails are transmitted.
Accordingly, emails that otherwise constitute “official records” are not excluded from thestatutory definition of “official records” merely because they are created or transmitted with board members’ personal devices.
Wow! If e-mails constitute a form of writing, no doubt text messages also constitute a form of writing. So how is this going to work? Let’s say a unit owner makes a records request for e-mails between board members during the month of February, 2022. Do all of the Board members now have an obligation to look through their e-mails and texts for the past month, print them out and hand them in to the association? Suppose each director simply says that we don’t communicate by e-mail or texts, even though they do? What remedy does the unit owner have?
While the decision is debatable as to whether or not these e-mails are “official records” it is undeniable, that it is simply unenforceable. It will be interesting to see the first arbitration case that relies on this declaratory statement. It will be even more interesting if that arbitration case gets appealed and we ultimately get a decision of the courts. Will a director ever be required to physically turn over their phone or computer by a court? Who knows? But I think we will either have a legislative fix or a court opinion within a year. In the interim, keep in mind that before you hit the SEND button on an e-mail, think about the fact that said e-mail may one day be seen by everyone in the condominium, or even a judge or jury.
SFPMA works throughout the State of Florida, we are a multi-member organization for the Condo, HOA and Property Management industry. Through knowledge based Articles, Events and our Members Directory, Clients find the right information to make an informed decisions for their Florida properties.
