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Find Blog Articles for Florida’s Condo, HOA and the Management Industry.
by Steven J Weil, PhD, EA, LCAM
Royale Management Services, Inc. provides the most professional, effective, accurate and efficient condominium management service available.
We provide professional property management services only in South Florida: Broward, Dade & Palm Beach County.
Royale Management Services, Inc. is a full-service, CAM (Community Association Management) licensed, residential property management company, specializing in management, consulting and accounting for Condominium Associations and Home Owners Associations.
We are dedicated to excellent customer service and pride ourselves on providing condominium management services and home owner association management that work for you and your association.
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Tags: Condo and HOA, Home Inspection Articles, Management News
by Eric Glazer / Glazer & Sachs / Condo Craze & HOA’s
In about 25 years a crisis is coming to the condo and co-op world that will be shocking to say the least. Here is the problem. Many of you think that by purchasing your condo or co-op, you can live there forever, as long as the mortgage, taxes and assessments are paid. You may be wrong. Very wrong.
Florida condo and co-op law basically say: Leaseholds.—
(1) A condominium or co-op may be created on lands held under lease or may include recreational facilities or other common elements or commonly used facilities on a leasehold if, on the date the first unit is conveyed by the developer to a bona fide purchaser, the lease has an unexpired term of at least 50 years.
That’s right your condo could be built on land that you don’t own. Land that you are leasing and someone else owns and who is simply leasing the underlying land to the condo association for 99 years. After the 99 years are over, the lease may require that all property built on the land (meaning all of the condo units) revert back to and becomes owned by the owner of the land. In other words, after 99 years, you lose your home.
Many of these 99 year leases began in the 1960s. So, in about 40 years, lots of buildings will be faced with this fiasco if they don’t do something about it before then. As the date gets closer to the expiration of the 99 year lease term, the value of the unit keeps going down. How can you sell a unit to someone if in 5 years it reverts back to the underlying land owner? That unit is valueless.
It’s amazing how many people have no idea that this is going to happen. How many people thought that once they paid off their mortgage, they were safe and secure. They were wrong. One day, the underlying land owner will be able to make you purchase the unit all over again if you want to stay. Or, simply kick everyone out and build something new or sell to a new developer.
The law should never have allowed condos or co-ops to be built on leased land. But, this is Florida – the land where developers call the shots.
If you live in a community with such a land lease, you want to see if you can buy it out and obtain a deed to the land. That will avoid the potential disaster that awaits. The Florida Legislature better start thinking about this coming crisis and not wait for it to creep up on everyone.
On September 26, 2016, Rembaum’s Association Round Up published an extremely important article regarding a community association’s potential liability when allegations by one member accuse another member of a discriminatory practice. (Click HERE to view the 2016 article). On September 13, 2016, HUD made clear that a housing provider is responsible for discriminatory practices that may take place. In its Rules and Regulations set out in Chapter 24, Part 100 of the Code of Federal Regulations, effective which further interprets the Federal Fair Housing Act, HUD explained that it believes that, “we are long past the time when racial harassment is a tolerable price for integrated housing; a housing provider is responsible for maintaining its properties free from all discrimination prohibited by the Act.” Those regulations became effective on October 14, 2016.
In this author’s opinion, HUD went way too far by mandating that housing providers act as the investigator, police, judge and jury in cases of alleged discrimination. After all, there are countless Fair Housing offices in each state where complaints can be filed and are actively investigated, often times with only a bare inference. Community association board members are volunteers with no required special training other than to be “certified” within 90 days of taking office, which certification can be met by signing a one-page form acknowledging duties or taking a two-hour class. Neither the individual board members nor the community as a whole should have to bear liability for its board of directors not taking action in a neighbor to neighbor dispute. Afterall, the court room is the proper setting where such matters should be resolved.
In the January 25, 2021, edition of the Palm Beach Post reporter Mike Diamond Special to Palm Beach Post USA TODAY NETWORK, authored an article titled “Judge Won’t Dismiss HOA Religious Bias Suit.” In the article the judge was quoted as follows: ““the La-Grassos [the plaintiff’s] have plausibly alleged a claim against the association for its failure to respond to or seek to control Ms. Tannenholz’s allegedly discriminatory conduct.” Amongst other things, the allegation is that Tannenholz’s told La-Grassos, “you do not belong in a community that is 80% Jewish and that La-Grassos should “move the F… out and go to a white supremist community.”
But for HUD’s position that a housing provider can have liability for discriminatory practices of the residents it is unlikely the association would be a defendant in this lawsuit. By forcing housing providers, such as Florida’s countless condominium, homeowners’ and cooperative associations, to interject themselves into what should be private disputes amongst neighbors, HUD is providing the deepest of pockets to the plaintiff’s attorneys. At the end of the day, it is just another reason to sue the innocent community association to create liability where there should not be any in the first place.
Practical Tip no. 1: In light of this lurking danger, be sure to check in with your association’s insurance agent to be sure the association has proper liability coverage for accusations of discrimination.
Practical Tip no. 2: Also, given that there can even be personal liability in such actions, board members would be wise to speak to their own personal insurance agents too… Afterall you never know when that umbrella policy may come in handy. Remember this, too: if one board member has knowledge about an event, then such knowledge can be imputed to all board members as if they are all similarly aware. In other words, when one board member knows, then the association itself is on notice.
Practical Tip no. 3: Consider formally adopting a “no discrimination” type of rule. It could be as simple as “discrimination of any kind will not be tolerated”.
Practical Tip no. 4: If your association is made aware of an alleged discriminatory practice, then a written record of such allegation and the association’s efforts to remedy the situation should be made.
Be sure to discuss each and every alleged discriminatory practice brought to the attention of the board and/or its manager with the association’s attorney to obtain the proper guidance needed.
Board Certified Specialist in Condominium and Planned Development Law and 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.
Tags: Board of Directors, Condo and HOA, Condo and HOA Laws, Management News
Community leaders and residents have been tested by an unprecedented pandemic that created upheaval and strain worldwide.Some communities suffered multiple infections and deaths, others struggled to strike the right balance between COVID-19 safety protocols and personal freedoms but all recognized that this public health crisis presented a novel challenge for both veteran board members and newcomers alike. With COVID-19 vaccines becoming available, many communities are considering whether or not to register to become a point of distribution (POD).
Please note that becoming a POD is subject to certain requirements and not every community will be eligible or able to meet the terms of the required agreements with vaccine providers.
Please fill out the COVID-19 POD Servey
Tags: Condo and HOA, Management News
When a condominium association or HOA makes the decision to self-manage, the Board of the association often must make difficult decisions about what to do themselves and what functions to outsource to third-party entities. What you need are the tools for collections for your self-managed condo or HOA.
Collecting common fees and assessments is the only way a self-managed association can fund itself and provide the goods and services to homeowners called for the association’s governance documents. Defaulting on these provisions is not an option. Ideally, all unit owners within the association remain solvent and pay their common fees and assessments on time. But what happens when they don’t? What tools are available to a self-managed condominium or HOA?
Traditionally, collection of past-due common fees and assessments required hiring an attorney to represent the association in bringing forth a lien, and, if needed, a foreclosure action. While this approach can bring the association the title to a delinquent unit owner’s home, it isn’t always a profitable or even practical solution for the condominium or HOA.
Hiring an attorney creates additional risk in the form of legal fees that the association is bound to pay, regardless of the outcome of the legal actions. A well-intentioned association could very well spend more money than it could ever hope to receive in an attempt to collect past due monies they are owed and need to operate their associations.
Axela Technologies decided to address the problem of common fee and assessment delinquency in a different and modern manner. As a full-fledged collection agency, Axela Technologies is able to offer true assistance to condominium associations and HOAs that find their budgets in jeopardy due to deficits created by delayed or delinquent common fees and assessments.
Charging no upfront money to the condominium association or HOA, Axela Technologies takes on the risk that would have been incurred by the expense of an attorney. The cost of using Axela Technologies is minimal and is passed on through the delinquent homeowner once the account is outsourced for collections.
This is an optimal situation for the association, and, to some extent, the delinquent homeowner, who is provided an opportunity to pay his common fees and assessments without having the onerous legal fees of an attorney added to his or her outstanding balance. The association minimizes risk and does not have to pay any fees to Axela Technologies. Additionally, Axela Technologies boasts a very high rate of successful collections, with only 5% remaining delinquent and requiring the use of an attorney to bring a foreclosure action against the delinquent homeowner.
Keep in mind that a foreclosure action still doesn’t guarantee a positive outcome for the self-managed condominium association or HOA. All the foreclosure action will do is gain title to the unit or home. It still needs to generate income, either through sale or rental, before the association may see some financial relief. While the attorney may assist in the foreclosure action, Axela Technologies will keep a vigilant eye on any surplus funds or other possible recovery for the condominium association or HOA. The goal is full recovery with minimal risk for the association.
Unless a self-managed condominium association or HOA is so well-funded that financial risk is of no concern to them, they would be well advised to outsource their collection efforts. Further, unless a self-managed condominium association or HOA wishes to risk spending money on legal fees, they would be well advised to outsource their collections to Axela Technologies. Axela Technologies’ history of successful condominium and HOA delinquency collection with no upfront cost or risk make them the easy choice.
The fact that their collection costs are far less than the legal fees charged by an attorney makes Axela’s collections tools a better choice, not just for the community, but also for the delinquent homeowner, giving them a much more likely chance to pay their delinquent fees and assessments to the association. Outsourcing collections to Axela Technologies is about minimizing risk and producing a successful outcome for all involved.
Learn more about Easy Collect, Axela’s collections solution for community associations here.
A poor collections process can lead to a number of negative symptoms for a community association, from budget shortfalls to never-ending legal fees to loan denials for capital improvements. If your community is suffering, you may be looking in the wrong place for the right solution.
Axela Technologies specializes in community association collections. Our experts have years of CAM industry knowledge, combined with a deep understanding of collections processing.
Fill out the form to set up your free collections analysis now. Your analysis is completely free, and you are under no obligation to take any action.
It’s time to take a good, hard look at your collections process. Your community members, your board, and your budget will thank you!
Tags: Collections, Condo and HOA, Management News
MIAMI, January 19, 2021 (Newswire.com) – Axela Technologies, the nation’s leading provider of collection services to the Community Association Industry, announced today that it has received a minority growth equity investment from Blueprint Equity. The amount of the deal was not disclosed. In conjunction with the investment, Blueprint Equity will join the Board of Directors.
Since launching in 2018, Axela has demonstrated the effectiveness of its software solutions that manage an association’s collection files. Unlike traditional attorneys or collection agencies, Axela deploys a multi-touch, digital-first approach to engage and work with unit owners that have fallen behind on their assessments.
“Resorting to legal action and foreclosure should be the absolute last step to any collection effort,” states Martin Urruela, Axela Founder and CEO. “Yet for years, it’s been the knee-jerk reaction by community associations when a homeowner falls behind on just a few months of assessments. It doesn’t have to be so drastic and costly, and that’s where we come in.”
The financing round builds on an exceptional year for Axela, which saw its customer count grow by over 200% in 2020. The company currently works with hundreds of management companies in 21 states, and boasts a 99% success rate of resolving collection files without resorting to legal action.
“What really stuck out to us was Axela’s approach to collections, long considered an unattractive and confrontational industry,” said Sheldon Lewis, Managing Partner of Blueprint, who also joined the company’s Board.” Axela was built around a philosophy that by helping the homeowners, they help the association, and everybody wins. Powered by the right technology, the company is well-positioned to scale across this vast market and become the industry standard.”
When asked about the use of the investment funds, Urruela stated that the company would aggressively expand its sales and marketing efforts, as well as double down on product and engineering. “We have to get the word out that we have a new and innovative solution to an age-old problem. We’re extremely proud of our customer retention rate – we’ve never lost a client, or experienced a scenario where an association decides to go back to the old way of doing things after working with us.”
Axela Technologies is a collections firm that specializes in recovering delinquent assessments for the benefit of community associations. Axela reduces the cost of outreach and engagement by automating much of the standardized collections process, all while providing exceptional customer service and a centralized platform for all stakeholders to promote transparency and efficiency. To learn more about Axela, visit axela-tech.com.
Blueprint Equity provides expansion capital to rapidly growing enterprise software and technology-enabled services businesses across North America. To learn more about Blueprint Equity, visit onblueprint.com.
Tags: Collections, Condo and HOA, Management News, Members Articles
A few months back a case came before the county court in the 20th Judicial Circuit for Collier County, wherein a prospective buyer challenged the validity of a board-adopted rule which required that all prospective buyers provide two years of tax returns with their application for ownership approval. This requirement was in addition to the background check and credit check that were also required. While this is only a county court case and, therefore, has no precedential value other than to the parties themselves, there are principles addressed of which associations and managers should be aware; even though many learned attorneys would opine that the conclusions of the court are legally flawed under the facts of the case and, if appealed, would likely be overturned. Nevertheless, there are still nuggets of knowledge that can be gleaned from this case.
In this case, Mech v. Crescent Beach Condominium Association, Inc., Case No. 19-SC-3498, decided June 2020, the purchaser, who was the plaintiff, was seeking to buy a unit at Crescent Beach Condominium for $400,000, which was to be paid in cash. The purchaser purportedly had a clean background and a credit score of 800. Nonetheless, the board required that, like all other prospective purchasers at the condominium, this purchaser needed to produce his tax returns in order for the association to approve the transfer. The purchaser refused to provide his tax returns and cited his good credit score and clean background as evidence enough for approval. Eventually, an impasse was reached, and the purchaser canceled the contract. Then he brought the county court lawsuit challenging the requirement. (Generally speaking, typically under current Florida law, the purchaser would not have legal standing to even bring the claim against the association; but it does not appear that this legal infirmity was raised by the association, which allowed the case to proceed.)
The purchaser challenged the rule, arguing that the rule was not within the scope of the association’s authority to adopt, nor did it reflect reasoned decision-making. (It is noteworthy to point out that, after the initiation of the lawsuit, the association amended its declaration of condominium to provide that the association may require tax returns in an application for approval of a sale. However, this is not relevant to the conclusions of the Court in this case since it occurred after the litigation was filed.)
The association argued that the tax returns are necessary because they provide more information than a credit report and could help ensure that the potential purchaser is “a good credit risk.” The Court, however, did not agree, calling the argument “nonsensical.” The Court goes on to identify what this judge considers to be the best indicator of a person’s financial history, and as a result, it is the only information the association is allowed to seek. (We note that this conclusion is also without a stated legal basis.)
In the final judgment, some might argue that the Court goes way beyond what proper judicial consideration and conclusions typically contain and indicates that she could find “NO justification for the invasive requirement that a full, or even partial, return would be required when, in fact, the board already requires a full background check and credit check.” While no legal support for the conclusion was provided, the Court held that the request for tax returns was invasive and unnecessary and that the requirement was “shocking.”
The Court objected to the blanket requirement that applied to every applicant regardless of the results of their background and credit checks. Had the tax returns only been required when an applicant’s credit history showed a history of financial instability or delinquencies, the rule may have been upheld by the Court. How-ever, the Court held that “to take a position that ‘every person’ who applies to be a member at [the association] is patently unreasonable and shall be stricken.” Lastly, also without a legal basis or ability, the Court ordered the association to strike all reference in its condominium documents which require potential purchasers to produce tax returns unless the association can show good cause to request the information.
A brief discussion regarding the adoption of rules and regulations is necessary to highlight lessons that can be learned from this case. Generally, both condominium and homeowners association governing documents will typically provide that the board of the directors has the authority to adopt rules and regulations for the community. While some governing documents may contain restrictions requiring a membership vote to approve new rules, it is common for the governing documents to provide the board with the authority to adopt rules and regulations. (Careful review of the documentary authority for each community is recommended as some may limit the rule-making authority to common areas only and not to the residential property within the community.) Although the board is generally authorized to adopt rules and regulations, those rules and regulations must not conflict with any provision expressly set out in the governing documents or reasonably inferred from them, and they must be reasonable. (This should be contrasted with covenants recorded in the County’s official records, which may be unreasonable and still be legally enforceable under long-standing Florida case law.)
In Beachwood Villas Condominium v. Poor, et. al., a 1984 Fourth District Court of Appeal (4th DCA) case in which several owners challenged rules enacted by their association’s board of directors, the Court noted that there could be two sources of use restrictions: (i) those set out in the declaration of condominium and (ii) those adopted by the board. As to the use restrictions set out in the declaration, the court held that such restrictions are “clothed with a very strong presumption of validity,” as initially provided in Hidden Harbor Estates v. Basso (a 1981 4th DCA case).
In examining board-adopted rules, the court first must determine whether the board acted within its scope of authority—in other words, whether the board had the express authority in the documents to adopt the rule in the first place. If the answer is “yes,” the second question to determine is whether the rule conflicts with an express provision of the governing documents or one that is reasonably inferred. (If the documents are silent on an issue, the inference is that it is unrestricted. Adopting a rule to restrict a topic that the declaration is otherwise silent about would conflict with the inferred unrestricted use and therefore be unenforceable.) If these first two issues are found to exist, the court will then determine if the rule is reasonable. The board’s exercise of its reasonable business judgment in adopting a rule is generally upheld so long as the rule is not “violative of any constitutional restrictions and does not exceed any specific limitations set out in the statutes or condominium documents.”
In examining your own board-adopted rules, ask the following:
If the answer to these three questions is “yes,” then the rule should be found to be valid and enforceable by the court upon an owner challenge.
Ultimately, what can be gleaned from Mech v. Crescent Beach Condominium Association Inc. is that even if the association acts reasonably when adopting rules and even when amending the declaration, a lower court judge can reach almost any decision it wishes. Had the provision at issue only required tax returns when the background or credit checks revealed that the prospective purchaser had a history of financial irresponsibility, the provision may have withstood judicial challenge by this particular judge. Additionally, had the provision requiring tax returns been set out in the declaration before the initiation of the lawsuit, the outcome may have been different under existing, well-established case law.
Bottom line, whenever the board is considering new rules, it is recommended that the board consult with the association’s legal counsel before adopting them.
Board Certified Specialist in Condominium and Planned Development Law and 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.
Tags: Condo and HOA, Condo and HOA Laws, Management News
From full-service property management and professional accounting services to complete landscaping and property maintenance needs, Seacrest Services can tailor a specific plan for your community association or commercial property. We take great pride in the longevity of our client relationships and continued customer satisfaction. We maintain a team of experienced employees with expert knowledge on the industry, ensuring that your property is treated with the highest level of professionalism.
We have your property management needs covered – inside and out.
Property Management – All of our property management personnel are state licensed community association managers and undergo Seacrest’s extensive in-house training program. Quality service is of utmost importance and the basic expectation of the Seacrest Management Team.
Maintenance and Janitorial Services – Seacrest Services is proud to offer our customers an experienced and capable management team utilizing the latest building maintenance equipment, cleaning techniques, and commercial janitorial supplies. We aim to meet and exceed all of your standards of cleanliness and enhance your facility’s appearance.
Customer Service – We understand that your residents are the lifeblood of your community, providing quality customer service to each of them is our privilege. Our interactive Live Operator Customer Service Program is tailored to fit the unique needs of each association we oversee. This approach helps to promote a harmonious living environment all while reducing the need for direct Board involvement in day-to-day issues.
Accounting & Financial Services – Since no one accounting system works for everyone, we customize your system to meet the specific requirements of your association. Our state-of-the-art technology gives you the information you need at the touch of a button while our skilled accounting team provides support and assistance.
Landscape Services – With a dedicated team of experienced and knowledgeable landscape professionals, we have the expertise to create and maintain a lush, healthy landscape for your property. Our comprehensive landscape services eliminate the hassle of hiring multiple vendors and ensure you receive the highest quality services from one easy source.
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.
It’s becoming impossible to keep up with technology. Just when you think you bought the latest, greatest computer or cell phone the world may ever see, a month later there’s new technology that makes you device already seem outdated. It’s a never ending cycle. Well, one new technological advance is the RING doorbell, which is a doorbell that let’s you see who is at your front door, by simply glancing at your cell phone. I have one for my home and another for my office. It even let’s you speak to and hear the person who is at your door, even when you are not home. In fact, you can be anywhere in the world. It really is fantastic technology that everyone is taking advantage of. BUT IF YOU LIVE IN A CONDOMINIUM…..YOU CAN’T.
Let’s again review Florida Statute 718.113(2)(a):
Except as otherwise provided in this section, there shall be no material alteration or substantial additions to the common elements or to real property which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions before the material alterations or substantial additions are commenced. This paragraph is intended to clarify existing law and applies to associations existing on July 1, 2018.
So the question is…..is the installation of a RING doorbell on your condominium front door, a material alteration to the common elements that requires a vote of the owners? In Persi v. Playa Del Mar Association, Case No. 19-02-7292, March 16, 2020, Arbitrator Keith Hope held that it was and upheld the association’s right to remove it. The arbitrator first again indicated the definition of a material alteration:
“[A]s applied to buildings, the term material alteration or addition ‘means to palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design or plan, or existing conditions, in such a manner as to appreciably affect or influence its function, use or appearance
Applying this test, the Arbitrator held that Petitioners’ installation of the ring video doorbell was a material change to the appearance of the common property door, and required installation of electrical wiring within the common property walls. Moreover, it is undisputed that Petitioners’ ring video doorbell contains a security camera that captures both audio and video of persons and activities within its field of view. Installation of a security camera on or in a condominium’s common property is deemed a material alteration. Dellagrotta v. West Coast Vista Association, Inc., Arb. Case No. 2013-02-7351, Summary Final Order (October 4, 2013).
While it’s hard to say the arbitrator’s reasoning was not correct, arbitration cases have long held that when the Board wants to use the benefits of new technology, it’s suddenly not a material alteration but a wise business judgment decision.
For example:
In the arbitration case of A. N. Inc. v. Seaplace Association, Inc., Arb. Case No. 98-4251, Summary Final Order (Oct. 29, 1998), replacement of all of the windows in the condominium with an upgraded version, with a tilt-out cleaning feature, tinting and heavier glass, was held not to require a unit owner vote. The arbitrator noted that the choice of the type of window used is a decision within the board’s business judgment and that “a board in the exercise of its well-reasoned and documented judgment could and should take advantage of changes in technology, building materials, and improved designs …” See also, Kreitman v. The Decoplage Condominium Association, Inc., Arb. Case No. 98-4711, Final Order (July 30, 1999) (board’s decision to replace worn hallway carpets with longer lasting solution-dyed, woven carpet was not subject to unit owner approval).
In light of these cases, why are upgraded windows and carpets not considered a material alteration, but upgraded doorbells that take advantage of the latest technology are? Just like the Board, I don’t see the harm in owners having the right to take advantage of “changes in technology” and having the ability to install a doorbell that provides better safety, security and ease of use.
Tags: Common Area Issues, Condo and HOA, Condo and HOA Laws, Management News
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