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Find Blog Articles for Florida’s Condo, HOA and the Management Industry.
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Robert L. Kaye, Esq., BCS | Legal Morsels
A large percentage of Florida residential property owners are subject to restrictive covenants on their property, be it by a declaration of condominium or declaration of covenants. In addition to these restrictions, Florida Statutes contain additional restrictions that apply to these properties, some of which involve use restrictions. For condominiums, the provisions of the statutes are of a heightened significance because but for the statutes, condominium ownership of property does not exist. However, for homeowners’ associations, restrictive covenants have been in use for centuries, well in advance of the existence of such statutes. As a result, certain statutory provisions may not apply to every homeowners’ association in Florida.
There is a restriction within both the U.S. and Florida Constitutions that limit the ability of the state to enact a law that will impair an existing contract or vested contractual right. Use restrictions contained in declarations of covenants have been identified by Florida courts as existing contracts between the property owner and the entity that operates the community under the governing documents (the association). There is also case law in Florida that addresses whether a change in the statute applies to the community based upon if a particular phrase is included in the governing documents (commonly referred to as Kaufman language).
If the governing documents include Kaufman language, any changes made by the legislature in a given year will automatically be incorporated into the governing documents and apply to that community. Conversely, if there is no Kaufman language, only what is referred to as “procedural” changes made by the legislature will apply to that community. An example of a procedural change would be a change in a notice requirement for elections. Statutory changes that are “substantive” would not apply in that instance to that community. An example of a substantive change would be requiring the association to take on all exterior maintenance of the residential dwellings (presuming the documents do not already provide for that obligation). Without the Kaufman language in the governing documents, this latter statutory change would not apply to that community, as such change would likely be considered unconstitutional.
During the legislative session in 2021, Section 720.306 of the Florida Statutes was amended to add subsection (h), which provides, in pertinent part, that any amendment to a governing document after July 1, 2021 that prohibits or regulates rental agreements applies only to a parcel owner who acquires title to the parcel after the effective date of the amendment or to a parcel owner who consents to the amendment (with specific exceptions relative to short term rentals and limiting rentals to up to 3 times a year). However, under the analysis discussed above, rental restrictions and the ability to amend governing documents are generally considered substantive vested rights. As such, this new statute appears to impair the existing contractual rights of many property owners in homeowner association communities.
The first step in considering whether this new rental restriction change applies to a particular homeowner association community is to check the governing documents for Kaufman language (this also assumes that the documents were not initially created on or after July 1, 2021). Typically, Kaufman language is not included in original documents by developers of communities, but many associations have added it by amendment after the developer was no longer involved. If the Kaufman language is in the documents, the new statutory rental restriction provisions apply. If, however, there is no Kaufman language, the new rental restriction statute would not be applicable to the community. In this instance, the membership could still amend the governing documents to prohibit or regulate rentals within the community, which should be enforceable against all current owners, regardless of whether or not they voted in favor of the amendment.
The issue of whether or not this new statutory change regarding rental restrictions violates the Federal and State Constitutions has not been tested in the Florida or Federal courts as of this writing. Before considering amending the governing document in a homeowner association community to create rental restrictions, it is recommended to consult with the association attorney as to the limitations that may apply.
The age of a CommunityAssociation opting not to fund reserves is coming to an end, and some homeowners could be facing a steep rise in assessments. Becker Shareholder Howard Perl surveys the landscape and offers a few suggestions of how to prepare.
After the Surfside tragedy, everyone wanted to know how such a tragedy could happen and what steps could be taken to avoid similar incidents in the future. What caused the collapse? Could it have been avoided? Why were repairs not made? Why did local governments allow repairs to drag on? Why were repairs not made in a timely fashion? Unfortunately, none of these questions can be answered quickly, and proper answers will require years of study and analysis.
The above questions, and attempts to enact legislative reform to address some of these questions, were a hot topic for the Florida legislature this year. Several counties and the Florida Bar convened task forces in the aftermath of the Surfside tragedy. Primary among the suggested legislative changes for multifamily buildings were periodic engineering inspections, reserve studies, and reserve funding mandates. While all agreed generally in regard to these reforms, at the end of the day, the Senate and House could not agree on the reserve funding issue and, as a result, nothing passed. Currently Florida law can allow for owners to opt to fund less than required reserves, or no reserves. Most legislative proposals included mandatory reserve funding of one type or another. The sticking point was how quickly to implement such mandatory reserves, without the option of owners being able to waive such requirements. Whether to implement immediately, effective in 2022, or over the next three or five years, to allow a gradual implementation, is ultimately what led to nothing being passed. Rather than compromise, which seems to be a forgotten word in Tallahassee these days, legislators could not, or refused, to come to an agreement for the benefit of all condominium and cooperative residents in Florida.
These issues are certain to be re-examined next year. As such, your association should begin recognizing what is most likely coming down the pike and preparing the association and its residents now. Most likely the days are gone when owners will have an opportunity to fully waive reserves. I anticipate mandatory reserve funding of some type will be implemented. Whatever version is implemented, the result will be an increase in annual maintenance assessments. Depending on what is implemented and your association’s current reserve funding situation, some owners may be looking at a significant increase in your 2024 assessments (as the laws I am discussing would be passed in 2023, and most likely effective for the 2024 association budget).
The association should be anticipating and working on these items now. For example, some sort of reserve study requirement is most likely coming. Budget for one now. Get proposals now. Have the study done now. Once mandated by statute, demand will go up, availability will go down, and of course prices will go up. We are seeing exactly that scenario now in regard to structural engineers and 40/50-year recertifications.
In regard to reserve funding, take a good look at your reserve schedules. Get updated estimates of repair costs. Factor in inflation when projecting 10 and 20 year replacement items such as painting, roofing, etc. Any effort to increase your 2023 reserve balances will help lessen any blow of 2024 mandated reserves. Explain these issues to your residents now. Many associations are understandably involved with 40/50-year recertification requirements and other life-safety related issues. Obviously these issues need to be addressed immediately and on an expedited basis. But associations and their members should keep their eye on long-term remedial requirements as well. More oversight; more required inspections; more required repairs; and more required reserves. All of these are good things for 40–50-year-old buildings in a saltwater environment in Florida.
The outcome of the 2022 legislative session once again underscores the inherent problem when all community association ideas are placed in only one omnibus bill. Until our legislators acknowledge this problem and start using stand-alone bills for important proposals, there is always the risk that needed reforms will not pass.
Contact your legislators, tell them you welcome these types of reforms, but they need to be addressed as needed, not all under one take it or leave it omnibus bill. Work with your association leaders on the above discussed items. Don’t be surprised by increased annual assessments, special assessments, and other upcoming expenses. They are coming. Prepare now.
Howard Perl is a Shareholder in Becker’s Community Association practice and has been involved in all aspects of community association law, including transactional, collections, mediation, arbitration, construction defects and litigation. He is also Florida Bar Board Certified in Condominium & Planned Development Law.
Governor DeSantis signed SB 518 into law May 18. The bill further amends Section 163.045, F.S. to provide that a local government may not require a notice, application, approval, permit, fee, or mitigation for the pruning, trimming, or removal of a tree on a residential property if the property owner has documentation from an arborist or landscape architect that the tree poses an unacceptable risk. The earlier version of this statute required the tree to present a danger to persons or property.
This new law, which takes effect on July 1, states that a tree poses an unacceptable risk if removal is the only means of practically mitigating its risk below moderate, as determined by the tree risk assessment procedures outlined in Best Management Practices – Tree Risk Assessment, Second Edition (2017).
So what does this mean for your community association?
This law does not mean that owners in your community may remove trees in violation of your architectural and other requirements although some may wish to interpret the new law in that manner. This new (untested) law seems to apply to local government requirements and not to association requirements. This new law also does not automatically mean that your association may remove “dangerous” trees from common areas without obtaining the proper approval under your documents, the statute, and local ordinance.
The wording of this new law certainly could have been clearer in terms of tree removal inside mandatory community associations. Please be sure to work with your Becker attorney when the issue of tree removal and this new law arises to be sure that you are properly interpreting and applying the law.
Anyone trying to buy a home right now knows that the market is a mess and that investors are their only real competition. The Washington Post determined that outside investors purchased a record share of sold homes across 40 major metropolitan areas in the US last year (1 in 7 homes sold!) But this isn’t just hurting home buyers. That’s a huge number of absentee homeowners renting out space in condos and HOAs. A few long-term renters in your HOA or condo association aren’t a problem in the grand scheme of things, but rentals can get very out of hand very quickly if left unchecked.
Keeping investors out isn’t a simple, or even always desired task. Because investors are not inherently bad. Especially in coveted vacation destinations, everyday people want to own a sweet little slice of heaven that they can use as they please and then rent out for the other half of the year. But too many investor-owned properties in your condo or HOA can alter the nature and even purpose of a community association.
The problem with investment properties becoming a significant percentage of your community association’s roster boils down to a potential lack of accountability. It’s kind of like one of those word problems you used to have in math class:
Let’s say you inherit a large garden space, and you are a watermelon lover. You share 500 garden plots with friends and neighbors so you can all grow watermelons to enjoy this summer. In the first year, you all grow delicious, beautiful watermelons, and life is good. But if the following year, 300 of the plot owners start letting people come in and use their soil however they like, the remaining 200 are stuck dealing with the potential consequences. One guy went and planted thistle, and the guy two plots away is planting lavender, and someone else planted cotton which would probably have been fine but now there’s a bull weevil infestation. Now the entire garden is suffering. If all 500 original gardeners were collectively responsible, it wouldn’t be such a challenge to face. But contacting absent gardeners to resolve the messes made by their amateur gardening buddies grows slimmer as the numbers climb– it’s just too much work for too few people.
In the story, your community is the garden, and the 200 who got stuck are the homeowners who are living in their own homes in the community. They are the ones left holding the bag when absentee investors do not respect the rules or engage with their community.
Homeowner apathy has long been a thorn in the backside of HOAs and condo associations. From dismal meeting attendance to push-back on necessary assessment increases, condos and HOAs struggle when it comes to engaging with their residents. Now imagine half or more of your community’s homes aren’t owner-occupied or even human-owned if a business or conglomerate has bought them as an investment! Getting the votes to amend community documents, raising assessments, implementing special assessments–all of it becomes much harder, if not impossible, to accomplish. If homeowner delinquency reaches dangerous levels, coming back from those losses will be even more difficult to do successfully.
Especially when dealing with large, well-funded corporate investment entities, keeping your community, well, a community, becomes increasingly difficult. To a company, your community is a stream of revenue–it’s business! And that isn’t a bad thing on its own, but it can deeply impact everything that goes into creating a harmonious living space. Now it isn’t just about the maintenances that can’t get approved or the special assessments that are needed. Any changes to the community that help improve general camaraderie or success are likely to be shot down by those who are more concerned about their bottom lines than the welfare of families.
This is not a scare tactic or an “only in the right circumstances” situation we’re talking about–certain state laws, like Arizona’s Condo Act, include language that allows for Termination of Condominium in the event that a specified percentage of the units (80% in AZ) agree to terminate the community association. For investors, this means they could dissolve a community and force the remaining homeowners to sell their homes at “fair market value,” to be determined by an appraiser hired by the 80% calling for dissolution.
Keeping your community healthy is a necessity. Sometimes the best option is to stop potential nonsense before it has a chance to get out of hand. HOAs and condos have some options when it comes to weeding out the bad-faith investors and identifying the good ones that will contribute to your healthy community.
Implementing rental minimums can be a huge help in staving off corporate investors. One popular option is imposing a minimum length for a lease. Dictating that leases must be over a certain number of days (30, for example) keeps away anyone trying to make a quick buck on pricey weekender rentals. You could also set a restriction on WHEN a tenant is allowed to begin leasing their units. Seven months is a common bar–it’s not so long that it turns away owners looking to have a winter or summer vacation property, but it’s longer than many corporate investors are willing to wait to begin renting a unit, especially when flips these days take so little time.
Setting a bar on the maximum rental occupancy for the whole community is a brilliant way to stop investor encroachment. Limiting the rental percentage well below that 80% threshold we talked about is the simplest way to avoid investors taking over and dissolving your community out from underneath you and your homeowners. By setting a realistic, healthy rental percentage (which will vary by community size and location), boards can minimize the number of investors interested in buying property in the community.
Your authority as the trustees of the community is likely the strongest asset you have when it comes to combatting absentee homeownership. Requiring board approval of all future tenants are one way of slowing short-term rentals. Requiring background checks on potential renters is another tool to utilize. They help protect the community, but also cost the landlord a nominal fee that really starts to add up the more tenants they bring in. And proper enforcement of your CC&Rs, like trash cans being left out too long or damages to community property, will make investors think twice about bringing in a high volume of unpredictable tenants.
Outside investors are here to stay, for better or for worse. Sooner or later, they will have a space in your community, and when that happens, it’s important to consider what that means, and have plans in place to keep them in check. That includes a plan for community collections because even major corporate entities can fall behind on monthly assessments. Axela Technologies can help with any collections efforts your HOA or condo association has, including collecting from corporate investors. Call us today for your no-risk, no-cost consultation.
The Jansen Family have been serving the homeowner and construction industry of the Florida Gulf Coast from Fort Meyers to North Tampa, Tarpon Springs and the Islands since 1973. In 2002, Phillip Jansen and his son Travis opened Jansen Shutters & Windows with the intention of providing the best hurricane protection necessary to ensure the safety of your family and business.
As our company grew we expanded out product line to include, Out Door Living Products. Which includes our exclusive “Jansen Vista” Motorized Insect Screens, Fabrication, Louver, Pergolas and more. We are proud to say everything we manufacture is American Made. Our work does not stop at installation, we believe it is necessary to educate our customers about the products we provide. So you can pick the best products that fits your lifestyle and budget.
Providing Hurricane Protection, Storm Protection Products, Hurricane Windows and Entry Doors in Sarasota, Venice, Englewood, Boca Grande, Punta Gorda, Port Charlotte, Osprey, Nokomis, Long Boat Key, Bird Key, The Keys, Siesta Key, Casey Key, Manasota Key, Bradenton, Pinellas, Tampa, Odessa, Parrish, St. Petersburg, Clearwater, Anna Maria Island, City of Sarasota, Cape Coral, Tarpon Springs, and all surrounding areas.
On this home we installed rolling screens along with a large retractable awning to provide shade whenever needed.
Rolling shutters provides the ultimate security and protection for your home.
Jansen Shutters & Specialties manufactures two types of rolling shutters for your storm shutter needs. Give us a call to schedule your free estimate. West coast of Florida call (941) 484-4700 or east coast call (407) 686-4117.
If you are looking for a screen to install on your garage door opening, give us a call. In addition to replacing your garage door, we can also provide a custom insect screen that will allow you to use your space in your garage without worrying about pesky flying pests.
Give us a call on the west coast of Florida at (941) 484-4700 or on the east coast at (407) 686-4117.
While each state must follow the FDCPA, most have additional laws that regulate how debt collectors interact with consumers. Use the map below to learn how your state regulates these laws.
Don’t see your state? Axela Technologies is licensed to do collections in every state. We are taking care to build out a comprehensive guide outlining collection laws for each state. Keep watching this space!
Axela Technologies provides no cost and no risk collections for community associations using best practice collections strategies, advanced proprietary technology, and highly trained customer service representatives. We are licensed in across the United States and compliant with the Fair Debt Collections Practices Act (FDCPA).
The FDCPA is a federal law that prevents debt collectors from harassing or misleading consumers. It covers debt collection for mortgages, credit cards, personal loans, medical debt and other types of debt for personal use. Many states have their own fair debt collection laws as well. Some of these laws mirror the FDCPA. However, some offer more protection to consumers by, for example, covering creditors as well as collectors, specifying additional types of behavior that violate state law, or providing for additional types of damages. Below you can learn about the fair debt collection laws in various states.
We are a specialized collections service which means a great deal in the community association industry. Understanding the nuances of how people fall behind in their maintenance fee payments and how to resolve their issues is a science and an art. At Axela Technologies we have what it takes to “move the needle” and recover 100% of what is owed to the association and the best part is that we are totally merit based. IF WE DON’T RECOVER YOUR MONEY WE DON’T GET PAID. A pretty simple concept but a bold promise at the same time.
Our proprietary software is second to none and we have the ability to keep the management and board of directors informed in real time 24/7. Our system never sleeps. The technology is fantastic and is only equaled by the people who will service your delinquent members and work with them to resolve their delinquency issues.
I like to re-publish this article every few years because it is so important. As we get closer to summer we are simultaneously getting closer to lots and lots of empty condominium units because many owners are returning up north for a few months. Just because you leave your Florida condominium for a few months however does not mean that your responsibility to maintain your unit stops once you hit the Georgia border.
Every declaration of condominium has a general clause that requires the owner of the unit to maintain his or her unit in good condition. In fact, arbitration decisions have held that “where an owner does not reside in the unit, it is incumbent on the owner to routinely and periodically examine and inspect the unit to ensure the absence of leaks and conditions that would otherwise lead to damage to the building and its occupants. In recognition of the fact that where multiple owners occupy a single building, a problem that develops in one unit may well affect other units and the common element components of the building.” See: Los Prados Condominium Association v. Lemley Case No. 03-6092; May 25, 2004, Arbitrator, Scheuerman.
So, if you’re headed up north for a few months, and you know that a friendly neighbor is going to remain in Florida, make sure to leave that neighbor a key to your unit and ask him or her to check the place every now and then. And…..if your association governing documents require that you leave the association with a key, you BETTER DO THAT! There is virtually no excuse for failing to do so, but that’s for another column. If you don’t leave a key, remember that the law provides:
(5) RIGHT OF ACCESS TO UNITS.—
(a) The association has the irrevocable right of access to each unit during reasonable hours, when necessary for the maintenance, repair, or replacement of any common elements or of any portion of a unit to be maintained by the association pursuant to the declaration or as necessary to prevent damage to the common elements or to a unit.
If the association thinks a leak is coming from your unit, if they don’t have a key, they’re using a locksmith and/or breaking your lock or door to get in. And, they’re entitled to do it, if they have no other reasonable means to get in. And…….. it’s the unit owner who is going to pay for the lock and door repair if there really was a leak. Bottom line…be smart….plan ahead and make sure that when Florida gets in your rear view mirror this year, someone is still left behind watching your unit.
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.
