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With all the Rent, Evictions issues we are facing we thought you should remember the Foreclosure Act of 2009 and the Florida Residential Landlord and Tenant Act. by Kaye Bender Rembaum

With all the Rent, Evictions issues we are facing we thought you should remember the Foreclosure Act of 2009 and the Florida Residential Landlord and Tenant Act. by Kaye Bender Rembaum

  • Posted: Dec 31, 2020
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Protecting Tenants at Foreclosure Act of 2009 – Resurrected and Here to Stay

Posted

On May 20 2009, just after the peak of the national foreclosure crisis, a federal statute was enacted to help protect a residential tenant who was renting a unit subject to foreclosure from being evicted without being afforded a reasonable amount of time to find alternative housing.

The federal law was known as Protecting Tenants at Foreclosure Act of 2009. It generally provided that a bona fide tenant was authorized to remain in a residential unit that was acquired by a new party through foreclosure for the balance of the unexpired term of the lease, unless the unit was acquired by a party that intended to occupy the unit, in which case the tenant was authorized to remain in the unit for ninety days after receiving a notice to vacate.

For purposes of the federal law, a “bona fide tenant” was a tenant who was not the mortgagor or the parent, spouse, or child of the mortgagor and who was under a lease that was the result of an arms-length transaction where rent was not substantially lower than fair market value.

The federal law assured that residential tenants would have a reasonable amount of time to plan and find alternative housing after the unit they were renting was foreclosed and acquired by a new party. However, it also assisted community associations in finding desirable tenants to rent units they owned through the foreclosure of the association’s assessment lien for a fair market value, which then helped the association recoup unpaid assessments and bad debt otherwise attributable to the unit.

The protections of the federal law were intended to “sunset”, which is a term meaning ”to expire”, on December 31, 2012. However, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) later extended the sunset date to December 31, 2014. Once the federal law finally expired on January 1, 2015, tenants of residential property in Florida no longer had any special protection from eviction by parties acquiring such units by foreclosure.

Then, approximately six month later, the Florida legislature adopted its own version of the law as part of the Florida Residential Landlord and Tenant Act. Specifically, section 83.561, Florida Statutes, became effective on June 15, 2015, and provides that “if a tenant is occupying a residential premises that is the subject of a foreclosure sale, the purchaser named in the certificate of title is permitted to give a tenant a thirty day notice to vacate and the tenant must comply”. Therefore, as of June 15, 2015, residential tenants had a much shorter timeframe of thirty days’ notice to vacate a unit acquired by foreclosure.

Finally, on June 23, 2018, the federal Protecting Tenants at Foreclosure Act became effective again. It no longer contains any sunset or expiration date; so it is here to stay. Since a federal law will supersede a Florida law when it is more stringent, the provisions of the Federal Protecting Tenants at Foreclosure Act giving tenants more time to vacate residential property after it is acquired by a new party through foreclosure will apply to transactions in Florida despite the shorter time frame provided by state statute.

 


There is help for Landlords and Property managers: You can view the Process of Evictions where you can learn what are the Laws of Evictions in your State

Learn the Eviction Process in the State your Property is Located.

Each State has different things to do in an eviction, most all evictions start with some kind of termination of the tenancy either by the Landlord or the Tenant. Every State has Laws that make it necessary to follow that State’s Process in the event of an Eviction. Learn The Eviction Process in your State. Landlords and Tenants find information on how to evict a tenant or how to defend an eviction.

 


Jeffrey A. Rembaum, Esq., B.C.S.

Jeffrey Rembaum, Esq. is a community association lawyer with the law firm Kaye Bender Rembaum,
in its Palm Beach Gardens office. His law practice consists of representing condominium,
homeowners, and cooperative associations, developers and unit owners throughout Florida.
He can be reached by email at JRembaum@KBRLegal.com or by calling 561-241-4462

https://rembaumsassociationroundup.com/

 

 

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Florida Condominium Act, extensively regulates amendments to condominium documents. by Becker

Florida Condominium Act, extensively regulates amendments to condominium documents. by Becker

Florida Condominium Act, extensively regulates amendments to condominium documents.

Joseph E. Adams / Becker
BlogPublication Florida Condo & HOA Law Blog

 

Q: After the unit owners in a condominium association vote to approve an amendment, is there a time limit or deadline by which the amendment must be recorded with the county? (M.A. via e-mail)

A: Chapter 718 of the Florida Statutes, known as the Florida Condominium Act, extensively regulates amendments to condominium documents. However, the Act does not contain a specific deadline for when properly adopted amendments to the condominium documents must be recorded.

Section 718.110(3) of the Act states that amendments to the declaration are effective when properly recorded in the public records of the county where the declaration is recorded. Similarly, Section 718.112(1)(b) of the Act states that amendments to the articles of incorporation or bylaws are not valid unless recorded in the public records of the county where the declaration of condominium is recorded. Further, Chapter 617, the Florida Not For Profit Corporation Act, provides that amendments to the articles of incorporation must be filed in the office of the Department of State.

In my opinion, the recording of such amendments is a ministerial act that the board would be required to undertake within a reasonable time of the approval of the amendment. While there is room debate what is reasonable, I would say absent unusual circumstances (such as an intervening legal challenge or some after-discovered error), 30 days from approval would be a reasonable time frame.

However, there is also no specific prohibition in the statute preventing an association from recording an amendment long after the owner vote. I occasionally see situations where an association failed to record an amendment due to changes in the board or management or other circumstances, and records an amendment a year or longer after its approval. This is obviously not an ideal situation since you might have new owners who did not get a chance to vote on the amendment and who could claim that they bought there unit based on what was in the public records.

 

Q: Can you explain what a “material alteration” is? We have a constant argument in our condominium association, usually driven by one particular owner, over what the board can and cannot do. (J.F., via e-mail)

A: This is one of the most common areas of disputes in condominiums. As you probably know, Section 718.113(2) of the Florida Condominium Act provides that there can be no material alterations or substantial additions to the common elements except as authorized by the declaration of condominium. If the declaration is silent, then 75 percent of all voting interests must approve the alteration or addition (there is usually one voting interest per unit).

The standard still used by the courts today comes from a decision from a Florida appeals court rendered almost 50 years ago. In ruling that a unit owner’s closing in a screened lanai with windows was a material alteration, the court stated that the term means “to palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design, or current condition, in such a manner as to appreciably affect or influence its function, use or appearance.” Using this test, appellate courts have ruled that changing the exterior color scheme of condominium buildings is a material alteration, as is changing mansard roof shingles made of cedar to tile type shingles.

As with most rules, there are exceptions, one being the so-called “necessary maintenance exception,” which originates from a series of appellate court cases from the Second District Court of Appeals (which includes southwest Florida). These cases basically say that certain changes can be made without and owner vote when necessary to comply with law or when necessary for the proper maintenance and preservation of the condominium property.

 


Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers.

Send questions to Joe Adams by e-mail to jadams@beckerlawyers.com.

Past editions may be viewed at floridacondohoalawblog.com.

 

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Is It a Limited Common Element?  By: Michael Dermody, Esq. of BECKER

Is It a Limited Common Element? By: Michael Dermody, Esq. of BECKER

  • Posted: Dec 02, 2020
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Is It a Limited Common Element?

By: Michael Dermody, Esqof Becker

Most condominium unit owners may think that limited common elements are those areas outside the condominium unit that are part of the common elements, but which are used only by a specific unit owner.  However, the Florida Condominium Act defines “limited common elements” as “those common elements which are reserved for the use of a certain unit to the exclusion of all other units, as specified in the declaration.” (FS 718.103(19), emphasis added). Thus, the determination of whether a common element (i.e., any area not included within the unit boundaries) is a “limited common element” depends solely upon the designation set forth in the property’s declaration. Brown v Rice, 716 So.2d 807 (5th DCA 1998).

 

This requirement that limited common elements (“LCE”) must be “specified in the declaration” can be crucial when it comes to assigning maintenance responsibility.  While maintenance of common elements (of which LCE are a subset) is statutorily the responsibility of the association, the Condominium Act provides that “the declaration may provide that certain limited common elements shall be maintained by those entitled to use the limited common elements…”  FS 718.113(1).  However, the fact that unit owners are assigned the maintenance obligation in the declaration for areas outside of their unit under their exclusive control may not mean much if the area is not designated as a limited common element in the declaration of condominium; in such case the declaration may be assigning maintenance responsibility for something that does not technically exist.  Without such specific designation the area would remain a part of the common elements, and the maintenance responsibility of the association.

 

When patios and balconies are associated with units, they are usually plainly marked as limited common elements in the unit diagrams and are thus “specified.”   But there are less obvious things external to a unit, but used exclusively by the unit owner, that may escape specification in the declaration such as external air conditioning units, air conditioner connecting lines, air conditioner condensate drain lines, or plumbing lines that serve only one unit. If the intent is to assign the unit owner the maintenance responsibility for such things, they must be specified as limited common elements in the declaration.  Conversely, the mere fact that the LCE are specified in the declaration does not automatically make the LCE the maintenance responsibility of the unit owner. LCE are, after all, a part of the common elements, and by default are an association maintenance obligation.  To properly assign the maintenance obligation to the unit owner, the declaration must both specify the item or area in question as a limited common element and designate the maintenance obligation to the unit owner.

 

If your association has portions of the common elements that serve only one unit owner, or group of units, which are not specified in the declaration as limited common elements, the Condominium Act was amended a few years ago to allow the association to reclassify these portions of the common elements as limited common elements, by amending the declaration (and amending the maintenance obligations, if necessary).  If these obligations are not clear in your condominium declaration, consult with your attorney to determine whether amendments to reclassify portions of the condominium property from common elements to limited common elements would be beneficial to your community.

 


Michael O. Dermody
Senior Attorney
tel:772.286.2990
MDERMODY@beckerlawyers.com

 

Michael Dermody concentrates his legal practice in commercial litigation, with a focus in appellate writing. He was admitted to the Florida Bar in May, 2007, and has been a member of the New Jersey Bar since 1996. Prior to coming to Florida, Michael was the principal of his own solo practice in Frenchtown, New Jersey. In 2005, he submitted an amicus curae brief in the landmark U.S. Supreme Court medical marijuana case, Ascroft v. Raich. Since 2007 he has focused on community association law with a concentration in community association litigation.


 

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Webinar: Is your Association’s website compliant with Florida Law? by KatzmanChandler & Concierge Plus

Webinar: Is your Association’s website compliant with Florida Law? by KatzmanChandler & Concierge Plus

  • Posted: Nov 23, 2020
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Webinar: Is your Association’s website compliant with Florida Law?

by KatzmanChandler & Concierge Plus

TUESDAY, NOVEMBER 24, 2020

11:00 AM IN EASTERN TIME (US AND CANADA)

Register Now

http://ow.ly/SRAw50CpukW

Florida Law has required Condominium Associations of 150 or more units to maintain websites with very specific requirements. Maintaining a generic, public website where governing documents and meeting minutes are uploaded, is simply not sufficient. Specific documents, information, and security, including access password protection, is required.
Katzman Chandler and our friends at Concierge Plus are hosting a webinar to discuss Association websites and statutory compliance.
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Association Operations During Covid-19 | Episode 13 | Focus on Phase 3 by Kaye Bender Rembaum

Association Operations During Covid-19 | Episode 13 | Focus on Phase 3 by Kaye Bender Rembaum

  • Posted: Oct 22, 2020
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Association Operations During Covid-19 | Episode 13 | Focus on Phase 3

by Kaye Bender Rembaum

Watch the Video Listen and Learn! <Click the Link!

Kaye Bender Rembaum is a full service commercial law firm devoted to the representation of more 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.
The associates of Kaye Bender Rembaum establish relationships with clients to understand their needs and goals. Kaye Bender Rembaum assists clients in all matters of Association representation including, but not limited to, collection of assessments, contract negotiation, covenant review and amendment, covenant enforcement and construction defect claims. Kaye Bender Rembaum also keeps clients up-to-date on new developments in the law and how they are personally affected by them.Kaye Bender Rembaum provides prompt, effective, high quality, cost-efficient and understandable legal advice and services to a diverse client base. Associates strive to help clients operate and administer their communities better and to educate them on their responsibilities and duties under Florida law and their governing community documents. Robert Kaye, Michael Bender and Jeff Rembaum are industry leaders who are often sought out by public policy makers and the media for advice and commentary on community association law.The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Thank you for your interest in Kaye Bender Rembaum

 

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Can Political Flags Be Flown? Q&A by DAVID G. MULLER / Becker

Can Political Flags Be Flown? Q&A by DAVID G. MULLER / Becker

  • Posted: Oct 22, 2020
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Can Political Flags Be Flown? Q&A

by DAVID G. MULLER / Becker

Q: I went on a walk in my community and saw at least 8 homes flying either Trump or Biden flags.  Is it legal to fly a political flag on a home located in a homeowners association? I.B.

A: Sections 720.304(2)(a) and 720.3075(3) of the Florida Homeowners Association Act specifically permit the flying of the US flag and other types of governmental flags, including flags of the various military branches.  These statutes do not address other types of flags, such as political flags.

The governing documents for some communities prohibit owners from flying non-exempt flags, such as political flags or flags with sports team logos.  There is an open and rather complicated legal issue as to whether it is an infringement of a homeowner’s First Amendment free speech rights to restrict political speech.

The First Amendment only applies by its terms to Congress, and, by virtue of the Fourteenth Amendment to the Constitution, to the states and their local governments. In legal jargon, “state action” is required before constitutional rights come into play.  There are several Florida cases which have held that a community association is not a state actor.

Your association’s attorney should be able to determine if these political flags are indeed regulated by the governing documents, and if so, guide you through the constitutional law analysis that is part of deciding your options.

 

Q: Your February 2020 column addresses the cap on transfer fees for condominium associations.  Is there a similar cap for homeowners associations? D.P.

A: No.  My February 2020 column referenced Section 718.112(2)(i) of the Florida Condominium Act, which states that no charge shall be made by a condominium association in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless the association is required to approve such transfer and unless a fee for such approval is provided for in the declaration, articles, or bylaws. Any such fee (in the condominium association context) may be preset but may not exceed $100 per applicant other than husband/wife or parent/dependent child, who are considered one applicant.  There is no similar provision found in Chapter 720 of the Florida Statutes, the Florida Homeowners Association Act.

 

Q: I am considering purchasing a home in a community with a homeowners association, but I have been told that there is a “capital contribution” fee of $1,500 charged to all purchasers.  Is such a fee legal? T.F.

A: Sometimes referred to as a “flip tax”, these charges are not uncommon in the homeowner association context. There is neither authority for nor prohibition on this type of fee in the law applicable to homeowners’ associations (the condominium law does address this issue).  If the authority to charge the capital contribution fee is contained in the appropriate governing documents, the prevailing view in the legal community is that such charges are legally valid.

 

 

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2020 Florida Constitutional Amendments by KBR Legal

2020 Florida Constitutional Amendments by KBR Legal

  • Posted: Oct 15, 2020
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2020 Florida Constitutional Amendments

What You Need To Know Before Voting 

When voters go to the polls on November 3, 2020, there will be six constitutional amendment proposals on the ballot. This article contains a brief discussion of the amendments. In order to adopt each amendment, it must be approved by 60% of voters casting a ballot. We take no position on any of the amendments, and simply wish to provide our readers with a summary of each proposed amendment. The ballot title and summary of each amendment, as same will be listed on the ballot, is provided, and a brief explanation follows.

 

 

Amendment 1Citizenship Requirement to Vote in Florida Elections

This amendment provides that only United States Citizens who are at least eighteen years of age, a permanent resident of Florida, and registered to vote, as provided by law, shall be qualified to vote in a Florida election. Because the proposed amendment is not expected to result in any changes to the voter registration process in Florida, it will have no impact on state or local government costs or revenue. Further, it will have no effect on the state’s economy.

 

Discussion:

Amendment 1 amends the language of Article VI of the Florida Constitution. Currently, Article VI provides that “Every citizen of the United States who is at least eighteen years of age and who is a permanent resident of the state, if registered as provided by law, shall be an elector of the county where registered.” This amendment revises the language of Article VI to provide that “Only a citizen of the United States…” can vote. As currently drafted, the language of Article VI bars non-citizens from voting.

  • Proponents argue that the language change is necessary to clarify who is not permitted to vote, and to stimy any efforts to give voting rights to non-citizens in local elections.
  • Opponents argue that the amendment is unnecessary as the language of Article VI of the Florida Constitution already limits voting to citizens.

 


Amendment 2: Raising Florida’s Minimum Wage

Raises minimum wage to $10.00 per hour effective September 30th, 2021. Each September 30th thereafter, minimum wage shall increase by $1.00 per hour until the minimum wage reaches $15.00 per hour on September 30th, 2026. From that point forward, future minimum wage increases shall revert to being adjusted annually for inflation starting September 30th, 2027. State and local government costs will increase to comply with the new minimum wage levels. Additional annual wage costs will be approximately $16 million in 2022, increasing to about $540 million in 2027 and thereafter. Government actions to mitigate these costs are unlikely to produce material savings. Other government costs and revenue impacts, both positive and negative, are not quantifiable.

 

THIS PROPOSED CONSTITUTIONAL AMENDMENT IS ESTIMATED TO HAVE A NET NEGATIVE IMPACT ON THE STATE BUDGET. THIS IMPACT MAY RESULT IN HIGHER TAXES OR A LOSS OF GOVERNMENT SERVICES IN ORDER TO MAINTAIN A BALANCED STATE BUDGET AS REQUIRED BY THE CONSTITUTION.

 

Discussion:

Amendment 2 would increase Florida’s minimum wage to $15.00 per hour by September 2026. Currently, Florida’s minimum wage is $8.56 per hour. The amendment proposes to increase the minimum wage to $10.00 per hour in September 2021 with an increase of $1.00 per hour each year until the minimum wage becomes $15.00 per hour in September 2026. Thereafter, the minimum wage will be adjusted annually for inflation.

  • Proponents argue that the increased minimum wage will allow minimum wage workers to earn enough to afford basic household necessities, and help to reduce race and gender income inequality. They also point to a potential increase in economic activity by increased household spending.
  • Opponents argue that an increase in labor costs would likely be passed on to the customers which would lead to an increase in the cost of living. They argue that a minimum wage increase would impact state and local governments with increased wage costs of $16 million in 20212 and $540 million in 2027. They point to a 2019 Congressional Budget Office analysis looking at the potential impact of raising the federal minimum wage which predicted a .8% drop in employment and reduced business income.

 


Amendment 3: All Voters Vote in Primary Elections for State Legislature, Governor, and Cabinet

Allows all registered voters to vote in primaries for state legislature, governor, and cabinet regardless of political party affiliation. All candidates for an office, including party nominated candidates, appear on the same primary ballot. Two highest vote getters advance to general election. If only two candidates qualify, no primary is held and winner is determined in general election. Candidate’s party affiliation may appear on ballot as provided by law. Effective January 1, 2024. It is probable that the proposed amendment will result in additional local government costs to conduct elections in Florida. The Financial Impact Estimating Conference projects that the combined costs across counties will range from $5.2 million to $5.8 million for each of the first three election cycles occurring in even-numbered years after the amendment’s effective date, with the costs for each of the intervening years dropping to less than $450,000. With respect to state costs for oversight, the additional costs for administering elections are expected to be minimal. Further, there are no revenues linked to voting in Florida. Since there is no impact on state costs or revenues, there will be no impact on the state’s budget. While the proposed amendment will result in an increase in local expenditures, this change is expected to be below the threshold that would produce a statewide economic impact.

 

Discussion:

Currently, Florida is a closed primary state, meaning that voters can only vote in the primary of the party with which they are affiliated. Amendment 3 would replace closed primaries with open primaries for the following elections: Governor, State Cabinet, and Florida Legislature. In an open primary all voters vote for all candidates on a single ballot. The top two vote getters, regardless of party affiliation, would advance to the general election. This change would only apply to the enumerated elections, and would not apply to local or federal races.

  • Proponents argue that open primaries would help increase voter participation by allowing registered voters not affiliated with a major political party to participate in primary elections. They also argue it could help produce more competitive races and attract more moderate candidate to run for state offices.
  • Opponents argue that open primaries could result in two members of a major political party being on the general ballot. Additionally, opponents argue that closed primaries ensure that candidates conform more closely and consistently with positions held by the two major political parties.

 


Amendment 4: Voter Approval of Constitutional Amendments

Requires all proposed amendments or revisions to the State Constitution to be approved by the voters in two elections, instead of one, in order to take effect. The proposal applies the current thresholds for passage to each of the two elections. It is probable that the proposed amendment will result in additional state and local government costs to conduct elections in Florida. Overall, these costs will vary from election cycle to election cycle depending on the unique circumstances of each ballot and cannot be estimated at this time. The key factors determining cost include the number of amendments appearing for the second time on each ballot and the length of those amendments. Since the maximum state cost is likely less than $1 million per cycle but the impact cannot be discretely quantified, the change to the state’s budget is unknown. Similarly, the economic impact cannot be modelled, although the spending increase is expected to be below the threshold that would produce a statewide economic impact. Because there are no revenues linked to voting in Florida, there will be no impact on government taxes or fees.

 

THE FINANCIAL IMPACT OF THIS AMENDMENT CANNOT BE DETERMINED DUE TO AMBIGUITIES AND UNCERTAINTIES SURROUNDING THE AMENDMENT’S IMPACT.

 

Discussion:

Amendment 4 would change the requirements to approve a constitutional amendment. Currently, a constitutional amendment is adopted if it is approved by 60% of the voters casting a ballot. Amendment 4 would require an amendment to be approved by at least 60% of the voters in two consecutive election cycles. In other words, a proposed amendment would have to be approved twice.

  • Proponents argue that requiring double approval would limit “legislating” by constitutional amendment by making it harder to adopt amendments to the Florida Constitution.
  • Opponents argue that it will limit voters’ ability to amend the constitution and to act as a check on the Florida Legislature when it fails to pass laws that are important to citizens.

 


Amendment 5: Limitations on Homestead Property Tax Assessments; increase portability period to transfer accrued benefit

Proposing an amendment to the State Constitution, effective January 1, 2021, to increase, from 2 years to 3 years, the period of time during which accrued Save-Our-Homes benefits may be transferred from a prior homestead to a new homestead.

 

Discussion:

Amendment 5 increases the amount of time property owners have to transfer the “Save Our Homes” property tax exemption when they move. Currently, property owners have two years to transfer their tax exemption when they move. Amendment 5 would extend that to three years effective January 1, 2021.

  • Proponents argue that, as the tax year starts on January 1, owners who sell later in the year end up with less time to transfer their tax benefit than owners who sell earlier in the year. They argue that extending the exemption to three years allows more Floridians to take advantage of the transfer.
  • Opponents argue that the amendment would reduce local property taxes, including a reduction of $1.8 million in fiscal year 2021-2022.

 


Amendment 6: Ad Velorem Tax Discount for Spouses of Certain Deceased Veterans Who Had Permanent, Combat-Related Disabilities

Provides that the homestead property tax discount for certain veterans with permanent combat-related disabilities carries over to such veteran’s surviving spouse who holds legal or beneficial title to, and who permanently resides on, the homestead property, until he or she remarries or sells or otherwise disposes of the property. The discount may be transferred to a new homestead property of the surviving spouse under certain conditions. The amendment takes effect January 1, 2021.

 

Discussion:

Under current law, honorably discharged, combat disabled veterans who are over 65 are eligible for a homestead property tax discount. However, the discount expires upon the death of the veteran. Amendment 6 would allow the homestead property discount to be transferred to the veteran’s surviving spouse who is on the title and lives in the home.

  • Proponents argue that the amendment would extend additional tax relief to assist surviving spouses who often live on fixed incomes.
  • Opponents argue that the tax discount will lead to a reduction in tax revenue including a reduction in school tax revenue by $1.6 million annually and non-school property tax revenue by $2.4 million annually.

 

A special Thank You to attorney Olivia Cato of our firm for preparing this article

 

 

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Association Publication of Deadbeat List & Third-Party Purchaser Assessment Liability: by KBRLegal.com

Association Publication of Deadbeat List & Third-Party Purchaser Assessment Liability: by KBRLegal.com

Association Publication of Deadbeat List & Third-Party Purchaser Assessment Liability: 

by KBRLegal.com

 

Association Publication of Deadbeat List & Third-Party Purchaser Assessment Liability: 

Two New Cases Board Members and Managers Need to Know About


 

CASE No. 1: On June 12, 2020, the Florida’s Fifth District Court of Appeal (“5th DCA”) entered its opinion in Latheresa Williams, On Behalf Of Herself And All Others Similarly Situated v. Salt Springs Resort Association, Inc., and Bosshardt Property Management, LLC., Case No. 5D18-3913 (Fla. 5th DCA 2020), The holding of this case echoes advice I have all too often provided to board members and managers to NOT publish what is commonly referred to as a “deadbeat list.” This type of list is posted in the community and identifies each debtor’s name and sometimes the assessment balance past due, too. No good ever comes from publication of such a list. In fact, the Florida Consumer Collection Practices Act (the “FCCPA”) forbids it if such publication of the deadbeat list is to harass and/or annoy the debtor.

 

More specifically, section 559.72, Florida Statutes, provides in relevant part that “[i]n collecting consumer debts, no person shall… [p]ublish or post, threaten to publish or post, or cause to be published or posted before the general public individual names or any list of names of debtors, commonly known as a deadbeat list, for the purpose of enforcing or attempting to enforce collection of consumer debts.”

 

In this case, the plaintiff was seeking class action status for all others similarly treated. This could lead to tremendous liability should discovery later evidence that the association and/or its management company regularly published deadbeat lists. At trial, the court had granted a motion to dismiss filed by the association based on a prior case, Bryan v. Clayton, also a 5th DCA case dating back to 1977 where the Court held that maintenance assessments were not “debts” for purposes of the FCCPA. In order to re-consider the prior Bryan decision, all of the 5th DCA sitting appellate judges participated in the Williams case, a process legally known as an “En Banc” style of review.

 

The Court in Williams took note that the FCCPA is designed to protect consumers and does not limit unlawful activities only to “debt collectors,” but rather to “all persons” involved in the collection of a debt. By way of contrast, the Federal Fair Debt Collection Practices Act (FFDCPA) applies only to debt collectors, which excludes the association and arguably its management company, and not to “all persons” involved in the collection of a debt, as in the FCCPA.

 

Under the prior Bryan holding, a past due assessment obligation was not even considered a “debt” for purposes of the FCCPA and the FFDCPA. In the recent Williams case, the Court went to great lengths to explain that, in fact, an association assessment obligation “is a debt which arose out of an obligation by a consumer out of a money, property, insurance or services transaction which is primarily for personal, family, or household purposes” and is therefore subject to FCCPA.

 

Thus, the Court remanded the case back to the trial court for further proceedings. While, its unknown how the plaintiff’s attempt for a class action certification will resolve, it is extremely likely that one or more defendants will be found to have violated the FCCPA for having published the “deadbeat list.” The takeaway from the Williams case is to never, ever publish a list of association debtors. This does not at all mean that the board cannot be provided a list of those members delinquent in their assessment obligations. However, it does mean such a list should not be made readily available to the membership by posting or mailing, etc.

 

 

CASE No. 2: On May 20, 2020, Florida’s Third District Court of Appeal entered its opinion in Old Cutler Lakes by the Bay Community Association, Inc. v. SRP SUB, LLC, Case No. 3D19-528 (Fla. 3d DCA 2020) regarding the liability of a third-party purchaser at a mortgage foreclosure sale for assessments that came due prior to the third-party acquiring title to the property. The Court’s holding in this case is in line with its prior holding in the case of Beacon Hill Homeowners Association, Inc. v. Colfin Ah-Florida 7, LLC, 221 So. 3d 710 (Fla. 3d DCA 2017), which based its decision on the landmark case decided by Florida’s Fourth District Court of Appeal in Pudlit 2 Joint Venture, LLP v. Westwood Gardens Homeowners Association, Inc., 169 So.3d 145 (Fla. 4th DCA 2015).

 

In the Old Cutler Lakes case, SRP SUB, LLC (“SRP”) was the successful bidder at a foreclosure sale on a first mortgage held by Wells Fargo. After obtaining title by a certificate of title, SRP filed an action for declaratory relief seeking a determination as to its liability for assessments that accrued prior to the issuance of the certificate of title. In relevant part, the Declaration of Covenant and Restrictions of Old Cutler Lakes by the Bay (“Declaration”) provided the following:

 

The sale or transfer of any Lot pursuant to the foreclosure or any proceeding in lieu thereof of a first mortgage meeting the above qualifications, shall extinguish the lien of such assessments as to payments which became due prior to such sale or transfer.

 

This language is similar to the language contained in the declarations in the Beacon Hill and Pudlit 2 cases. In these cases, the courts applied a constitutional principal prohibiting the impairment of contracts in deciding that the statutory safe harbor did not control over the provisions of the declarations where the statute did not require such application and the declarations did not contain “Kaufman” language, which has the effect of making amendments to the Florida Statutes automatically applicable to a declaration as they are “amended from time to time.” As the provisions of the declarations expressly created rights for third-party purchasers, the third-party purchasers are “intended third-party beneficiaries” to such provisions which rights cannot be impaired pursuant to the constitutional principal prohibiting the impairment of contracts. In following the holdings of the Beacon Hill and Pudlit 2 cases, SRP was found not liable for any of the past due assessments that accrued prior to the issuance of the certificate of title. Thus, as with many declarations which have not been amended since their creation by the community’s developer, these, as yet to be amended, declarations may provide for a complete wipe out of all assessments that accrued prior to the transfer of title as a result of a mortgage foreclosure action or by deed in lieu of foreclosure.

 

The takeaway from the cases discussed above emphasizes the importance of reviewing and updating the association’s declaration, with the guidance of your association’s legal counsel, to ensure that it provides for necessary and available protections for the association and its members, including the use of “Kaufman” language, if appropriate to collect as much overdue assessment revenue as possible.


Rembaum’s Association Roundup  The community association legal news that you can use!

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. We have offices in Broward County (Pompano Beach), Palm Beach County (Palm Beach Gardens), (Hillsborough County) Tampa, and office locations in Miami-Dade County by appointment.

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Q&A Broward County Emergency Order 20-25 – Impact on Community Associations by KBRLegal

Q&A Broward County Emergency Order 20-25 – Impact on Community Associations by KBRLegal

Q&A Broward County Emergency Order 20-25 – Impact on Community Associations

by KBRLegal

Join Campbell Property Management and Michael Bender from Kaye Bender Rembaum to learn about Broward County’s latest Emergency Order 20-25 and its impact on community associations during this brief, 30 minute webinar.

Wednesday, September 30 at 12:00 PM

Please submit a question you would like us to answer when you register. We will address as many questions as possible during the webinar.

Register Here!

 

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CALL’s COVID-19 Survey Results by CALL/Becker

CALL’s COVID-19 Survey Results by CALL/Becker

CALL’s COVID-19 Survey Results

by CALL / Becker

During the Summer of 2020, CALL’s COVID-19 Survey was open for Floridians to share their experiences during the height of the pandemic.

More than 1,000 association directors, managers and residents took the time to share what steps helped them keep their communities safe as well as the challenges they encountered along the way.

While each of us tried to keep our heads above these uncharted waters when COVID-19 changed our daily lives overnight, none of us were truly alone. Volunteer boards throughout Florida, who encounter operational challenges under ordinary circumstances, soon found themselves having to make impactful decisions about amenity closures, guest restriction and safety protocols.

We hope the results of our COVID-19 survey give your board some food for thought as you manage your safety protocols during the remainder of our statewide State of Emergency which is currently not scheduled to expire until November 3.

For full COVID-19 survey results, please click here.

 

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