New Requirements For Collection of Delinquent Assessments
Requirements For Collection of Delinquent Assessments
Robert L. Kaye, Esq., BCS | Legal Morsels
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Robert L. Kaye, Esq., BCS | Legal Morsels
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Few professions have more demands placed upon them than that of the Florida licensed community association manager (CAM). Depending on whom you ask, the CAM is the organizer, rules enforcer, keeper of secrets (meaning confidential and statutorily protected information not limited to the medical record of owners and attorney-client privileged information), best friend, the “bad guy” (a frequent misconstruction), and the first person in the line of fire when things go wrong; in other words, the one who takes all the blame and gets little credit when things go right.
When things at the association go wrong, what comment is most likely heard? “It’s the manager’s fault!” But, is it? Unless the manager failed to carry out a lawful directive from the board, breached a management contract provision, or violated a Florida statute, then in all likelihood, the manager has no culpability. CAMs are licensed by the State of Florida pursuant to Part VIII of Chapter 468 of the Florida Statutes, and there are statutory standards by which CAMs must conduct themselves.
Pursuant to §468.4334, Florida Statutes, “[a] community association manager or a community association management firm is deemed to act as agent on behalf of a community association as principal within the scope of authority authorized by a written contract or under this chapter. A community association manager and a community association management firm shall discharge duties performed on behalf of the association as authorized by this chapter loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees.”
As set forth herein, statutory standards provide guidance to CAMs as to how they should conduct themselves. They must discharge their duties with skill and care and in good faith. They must act with loyalty to their association employer and deal with the association both honestly and fairly. They must provide full disclosure, which can be interpreted as both keeping the board informed of current events and providing disclosures of any conflict of interests. They must be able to account for all funds, too, which means both assessment income and expenditures; in other words, they must mind the budget.
Best practices for CAMs include becoming extremely familiar with the governing documents of the association (including the declaration, articles of incorporation, bylaws, and rules and regulations) and the financials of the association, walking the physical property, engaging with their team and residents, as well as providing weekly status updates to the board regarding all ongoing association business. If you are a CAM and do these things, then you have an opportunity to shine and stand head and shoulders above your peers and competition. This weekly status report is an excellent communication tool yet seems to be a rarity. CAMs should also make themselves available to owners. However, when an owner becomes offensive or insulting, the CAM should politely and firmly request that the owner communicate respectfully and in a professional manner. A CAM should always be financially transparent and should be extremely familiar with the management contract to fully understand her obligations and authority; for example, the limitation to spend association funds. Finally, the CAM should strive to keep a written record of her activities.
The two most obvious and biggest ways to get in trouble include committing acts of gross misconduct or gross negligence in connection with the profession or contracting on behalf of an association with any entity in which the CAM has a financial interest that is not disclosed. Disciplinary actions against a CAM fall under the purview of the Florida Department of Business and Professional Regulation (DBPR). Section 455.227, Florida Statutes, governs grounds for discipline, penalties, and enforcement.
For example, the following activities constitute grounds for which disciplinary actions may be taken by the DBPR (this list is not all inclusive): (i) making misleading, deceptive, or fraudulent representations in or related to the practice of the CAM’s profession; (ii) intentionally violating any rule adopted by the DBPR; (iii) being convicted or found guilty of, or entering a plea of guilty or nolo contendere (“I do not wish to contend”) to, a crime in any jurisdiction which relates to the practice of, or the ability to practice, a CAM’s profession; (iv) having been found liable in a civil proceeding for knowingly filing a false report or complaint with the DBPR against another CAM; (v) attempting to obtain, obtaining, or renewing a license to practice a profession by bribery, by fraudulent misrepresentation, or through an error of the DBPR; (vi) failing to report to the DBPR any person who the CAM knows is in violation of the laws regulating CAMs or the rules of the DBPR; (vii) aiding, assisting, procuring, employing, or advising any unlicensed person or entity to practice a profession contrary to law; (viii) failing to perform any statutory or legal obligation; (ix) making or filing a report which the licensee knows to be false; (x) making deceptive, untrue, or fraudulent representations in or related to the practice of a profession or employing a trick or scheme in or related to the practice of a profession; and (xi) performing professional responsibilities the licensee knows, or has reason to know, the licensee is not competent to perform.
The Florida Administrative Code, in Rule 61E14-2.001, also provides standards for professional conduct which are deemed automatically incorporated as duties of all CAMs into any written or oral agreement for community association management services. A CAM must adhere to the following standards:
In addition, during the performance of community association management services pursuant to a contract with a community association, a CAM cannot withhold possession of the association’s official records or original books, records, accounts, funds, or other property of the association when requested in writing by the association to deliver the foregoing to the association upon reasonable notice. However, the CAM may retain those records necessary to complete an ending financial statement or report for up to 20 days after termination of the management contract. Additionally, a CAM cannot (i) deny or delay access to association official records to an owner, or his or her authorized representative, who is entitled to inspect and copy the association’s official records within the timeframe and under the applicable statutes governing the association; (ii) create false records or alter the official records of an association or of the CAM except in such cases where an alteration is permitted by law (e.g., the correction of minutes per direction given at a meeting at which the minutes are submitted for approval); or (iii) fail to maintain the records for a CAM, management firm, or the official records of the association as required by the applicable statutes governing the association.
How do you know if your association requires a licensed community association manager? Pursuant to §468.431, Florida Statutes, if the association has 10 or more units or has a budget of $100,000 or more and the person is conducting one or more of the following activities in exchange for payment, the person must be a licensed CAM:
However, a person who performs clerical or ministerial functions under the direct supervision and control of a CAM or who is charged only with performing the maintenance of a community association and who does not assist in any of the management services described above is not required to be licensed.
So, whose fault is it when things go awry? A CAM’s role is far different than that of a rental complex manager who often has decision-making authority. The CAM does not have that same type of decision-making authority. The CAM must take direction from the board and perform pursuant to the obligations set out in the management agreement and Florida law. It is the board of directors of the community association that actually makes the decisions. So, while the uninformed might blame the CAM, you now know that the buck stops with the board of directors. If you have further questions regarding a CAM’s responsibility, then please discuss this with your association’s lawyer.
Tags: Condo and HOA Laws, Management News
When the original bill was filed that required condominiums to have a website, the statute was only going to apply with condominiums of 500 units or more. In effect, the statute would have applied to less than one percent of all condominiums in the state. I met with the legislator who drafted the bill and suggested that the bill be revised to apply to all condominiums with 50 units or more. The compromise was 150 units.
As we know, The Florida Legislature does not like to regulate HOAs, so for whatever reason, HOAs with 150 homes or more are not required to have a website. Instead, if a homeowner wants access to records, they must make the request by certified mail, return receipt requested. If the association ignores them, the unit owner has to ask for pre-suit mediation. If that fails, the unit owner has to file a lawsuit. All because they wanted copies of some of the official records. It’s ridiculous.
Why not make your community more transparent and accessible now? Who cares if you’re an HOA and you’re not required by law to have a website? Set one up anyway, regardless of the number of homes you have. Are homeowners in a 50 home community less entitled to see the records than an owner in a 150 home community? Of course not.
If you’re in a condominium of less than 150 units, I understand that the law does not require your condominium association to have a website containing the official records. So what? Create one anyway. I can tell you that over the past two years, as least as far as the larger condominiums go, there has been less arguments between owners and the board when it comes to being able to access the official records, simply because the association is required to have these official records on an association website.
I will also warn condominium associations that the DBPR is not fooling around when making sure that condominium associations with 150 units or more comply with the law. They will investigate any complaint received from an owner who claims their association is not complying with the law. They want those records posted on-line. The association’s failure to do so can and will result in a fine for several thousand dollars.
Placing the records on-line frees up the manager’s valuable time because now they are less likely to have to respond to unit owner requests for access to records. I’m looking forward to see how Rafael feels about the law. Have you had success in your community with the association’s website? If your community doesn’t have one, would you want one?
In condominium associations throughout the state, it is common for there to be seasonal unit owners who leave their units unoccupied during portions of the year. For associations faced with periodically unoccupied units in multifamily condominium buildings, there are distinct legal issues worth considering in advance of problems arising.
Florida’s Condominium Act (the “Act”) does not require absentee unit owners to have their unoccupied units periodically inspected for damage or deterioration. To overcome the absence of a statutory requirement, associations may adopt amendments to their declaration of condominium so that such inspection requirements are enacted to avoid problems originating in unoccupied units going undetected and/or unreported for long periods. Additionally, while the Act authorizes associations to “operate” association-installed hurricane protections to guard against damage to the condominium property, it does not require such protection to be installed. Therefore, it may be prudent to require all unit owners, including but not limited to absentee owners, to install such protection. To incentivize compliance, Section 718.111(11)(j), Florida Statutes provides that the responsibility for damages not paid for by insurance proceeds is shifted from the association to unit owners when such damages result from the unit owners’ failure to comply with the association’s declaration or rules.
The Act provides associations with an irrevocable right of access to enter units when necessary to undertake maintenance of common elements, and as necessary to prevent damage to common elements or to a unit. Associations should ensure that their documents or rules require a working key to all exterior doors and/or that contact information for local persons caring for unoccupied units be provided to the association. It is not recommended for an association to wait until an emergency arises before first contemplating how it will gain access to unoccupied units.
Fortunately, this subject is one that most association law practitioners have addressed in one manner or another. Condominium associations that find themselves concerned about unoccupied units are encouraged to discuss this with legal counsel so that a strategy for dealing with such units may be developed.
Read and Learn through a wealth of Informative Articles Provided by Becker Lawyers and Partners. https://www.floridacondohoalawblog.com/category/insight/
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Tags: Condo and HOA Laws, Management News
When you purchase a condominium, townhouse or another type of property in a planned development such as a leased land property or a gated community, you are obligated to join that community’s homeowners’ association (HOA) and pay monthly or annual HOA fees for the upkeep of common areas and the building. If you are considering purchasing one of these types of properties, you should be aware of the following things about homeowners’ associations and how they work before you buy. These communities are governed by a Board that governs many aspects of the HOA, Learn the rolls of these board members and how they govern an HOA.
A homeowners association is a membership organization run by a board of directors–usually neighborhood volunteers–that regulates and manages a building, set of attached homes or a single-family neighborhood.
The HOA will set regulations governing a variety of issues, and assess HOA fees–to be paid annually, quarterly or monthly, and sometimes through special assessment–that go toward the upkeep of a neighborhood.
In many cases, an HOA is started by a real estate developer, and the company might hire a community association manager to assist the board in its duties.
If you’re looking to buy a home in a neighborhood with an HOA, make sure to review the rules and regulations as soon as possible because once you purchase the home, you will be a member.
The rules, also known as covenants, conditions and restrictions (CC&R), can range from the common to the arcane, and will often set the tone for the neighborhood.
For example, an HOA can set strict rules on the type of changes you can make to the exterior of your home. Here are some other common things an HOA may regulate:
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When you submit a request to Seacrest Services, one of our representatives will call you to set up a time to meet. We will then walk your property or the job area with you. A site walkthrough is important because no two properties are the same. A variety of variables, such as square footage, the scope of work, and condition of the property, makes each situation unique. Our representatives will work with you to design a custom-tailored solution to fit your property’s individual needs.
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I don’t envy Judge Michael Hanzman, the judge who is assigned to decide the fate of the property where The Champlain Towers South Condominium once stood. The question of what to do at this sacred site is not easy. Some families want no re-development and only a memorial. The City of Surfside needs to see residential redevelopment at that site or lose an incredible about of annual real estate tax dollars.
At present, there is an offer to buy the land for $120 million dollars. But that offer doesn’t promise to even put up a memorable plaque marking the spot of the tragedy. Suggestions of rebuilding on the site and forming a memorable tribute somewhere else in Surfside have also not progressed.
According to The Daily Business Review, Hanzman said he is sympathetic to those who want a memorial, but his job is to get the most money for all families of those who died and the approximately 35 families who survived but lost their homes. He has scheduled the auction for late February or early March and said that date is firm because many of the survivors need money to buy new homes.
Judge Hanzman is right, his job is to get the most money for the victims. And, while 120 million sounds like a lot of money, it isn’t when we consider the fact that there were 140 units. There’s another 50 million or so in insurance and this still isn’t even close to being able to compensate the victims and their families all that they are rightfully entitled to.
Then comes an even harder part. How does the court decide who gets what from the limited pot? Does the court allow the family of a 30 year victim to collect more that the family of an 80 year old victim? What about people who survived but were injured? Do they get anything? Of course, everyone needs to get reimbursed for the loss of their unit as well. These are Solomon like decisions the court will ultimately be faced with and they are not easy tasks. Of course, whatever decisions are made there will be people that agree with the court’s conclusions and method of pay-out and those who do not. There is simply no way to make everyone whole financially. And in the end……it’s only money anyway.
Tags: Condo and HOA, Management News, Members Articles