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HOA Architectural Committees Required Statutory Procedures Requirement For Published Standards Required Self Help

HOA Architectural Committees Required Statutory Procedures Requirement For Published Standards Required Self Help

HOA Architectural Committees

Required Statutory Procedures, Requirement For Published Standards and Required Self Help.




REQUIREMENT OF FORMAL PROCEDURES

There are strict legal requirements that a homeowners’ association’s (HOA) architectural review committee (ARC) must follow, most especially if the ARC intends to deny an owner’s request. As this author has witnessed countless times, it is likely that many ARCs do not conduct their activities in conformity with Florida law such that an ARC denial may not withstand judicial scrutiny. If these legal requirements are not followed, and the ARC denies the owner’s architectural request, then it would be quite easy for the owner to challenge the ARC’s decision and prevail. Upon prevailing, the owner would be entitled to their prevailing party attorney’s fees and costs, as well. It is so easy to avoid this outcome, yet so few associations take the time to do it right.

Pursuant to §720.303(2), Florida Statutes, a meeting of the ARC is required to be open and noticed in the same manner as a meeting of the association’s board of directors. Notice of the ARC meeting must be posted in a conspicuous place in the community at least 48 hours in advance of the meeting, and the meeting must be open for all members to attend. Further, pursuant to §720.303(2)(c)(3), Florida Statutes, members of the ARC are not permitted to vote by proxy or secret ballot. Also, bare bone minutes should be taken to create a record of ARC decisions—especially denials.

We often hear from many HOAs that the ARC does not meet openly and does not notice their meetings. This leaves decisions made by the ARC vulnerable to challenge. If the ARC denies an application but fails to do so at a properly noticed board meeting, the owner can challenge the denial, claiming that it is not valid because the ARC did not follow proper procedure. In such cases, the ARC’s denial of an application is not valid because the ARC failed to comply with the procedural requirements for the meeting even if an application violates the declaration or other association-adopted architectural standards. However, by complying with the provisions of Chapter 720, Florida Statutes, your HOA can work to avoid this debacle.

PUBLISHED STANDARDS

Often a top priority for an HOA is ensuring that homes in the community maintain a harmonious architectural scheme in conformity with community standards and guidelines, and because the ARC is at the frontline of owners’ alterations and improvements to their homes, it is instrumental in ensuring that the community standards and guidelines are met. Pursuant to §720.3035(1), Florida Statutes, an HOA, or the ARC, “has the authority to review and approve plans and specifications only to the extent that the authority is specifically stated or reasonably inferred as to location, size, type, or appearance in the declaration or other published guidelines and standards.” But not every owner request is typically addressed in the declaration or other published guidelines and standards. If not, then the association may not be in a good position for proper denial. Therefore, the ARC is only as effective as the objective guidelines and standards (set forth in the declaration and other published guidelines and standards) are inclusive. So, what is the association to do when the ARC receives an owner’s application for an alteration to the home, but the association does not have any architectural guidelines or standards regulating the requested alteration?

While not court tested yet, a possible solution for this conundrum is to include a “catch-all” provision in the declaration to proactively address those ARC applications where a member may request a modification that is not directly addressed by the governing documents. Such a “catch-all” provision stands for the proposition that, if such a request is made, then the existing state of the community is the applicable standard by which the ARC application is to be judged. For example, imagine if an owner applies to the ARC to paint the owner’s house pink. If there are no architectural guidelines or standards that address what color a house must be, and there are no pink houses in the community, then the existing state of the community may provide a lawful basis for the ARC to deny the request because there are no existing pink houses in the community.




THE TROUBLE WITH SELF-HELP PROVISIONS

What if an owner refuses to maintain the owner’s property, such as pressure washing a dirty roof, despite the HOA sending demand letters, levying a fine, and perhaps even suspending the owner’s right to use the HOA’s recreational facilities? What is the HOA’s next step? Is it time to file a lawsuit to compel compliance? Well, Chapter 718 (governing condominiums), Chapter 719 (governing cooperatives), and Chapter 720 (governing HOAs) of the Florida Statutes authorize the association to bring an action at law or in equity to enforce the provisions of the declaration against the owner. Additionally, many declarations contain “self-help” language that authorizes the association to cure a violation on behalf of the owner and even, at times, assess the owner for the costs of doing so. These “self-help” provisions generally contain permissive language, meaning the association, may, but is not obligated to, cure the violation. Sadly, in this instance the word “may” means “shall,” and to find out why, read on.

There is a general legal principal that, if a claimant has a remedy at law (e.g., the ability to recover money damages under a contract), then it lacks the legal basis to pursue a remedy in equity (e.g., an action for injunctive relief). Remember, too, that an association’s declaration is a contract. In the context of an association, the legal remedy would be exercising the “self-help” authority granted in the declaration. An equitable remedy would be bringing an action seeking an injunction to compel an owner to take action to comply with the declaration. Generally, a court will only award an equitable remedy when the legal remedy is unavailable, insufficient, or inadequate.

Assume that the association’s declaration contains both the permissive “self-help” remedy and the right to seek an injunction from the court. Accordingly, it would appear the association has a decision to make—go to court to seek the injunction or enter onto the owner’s property, cure the violation, and assess the costs of same to the owner. However, recent Florida case law affirmed a complication to what should be a simple decision. In two cases decided ten years apart, Alorda v. Sutton Place Homeowners Association, Inc., 82 So.3d 1077 (Fla. 2nd DCA 2012) and Mauriello v. Property Owners Association of Lake Parker Estates, Inc., 337 So.3d 484 (Fla. 2nd DCA 2022), Florida’s Second District Court of Appeal decided that an association did not have the right to seek an injunction to compel an owner to comply with the declaration if the declaration provided the association the authority, but not the obligation, to engage in “self-help” to remedy the violation. Expressed simply, this is because the legal contractually based “self-help” remedy must be employed before one can rely upon equitable remedy of an injunction. Therefore, even though the declaration provided for an optional remedy of “self-help,” it must be used before seeking the equitable remedy of an injunction.

In Alorda, the owners failed to provide the association with proof of insurance required by the declaration. Although the declaration allowed the association to obtain the required insurance, the association filed a complaint against the owners seeking injunctive relief, asking the court to enter a permanent mandatory injunction requiring the owners to obtain the requested insurance. The owners successfully argued that even though they violated the declaration, the equitable remedy of an injunction was not available because the association already had an adequate legal remedy—the “self-help” option of purchasing the required insurance and assessing them for same. The Court agreed.

In Mauriello, the declaration contained similar language as in Alorda but involved the issue of the owners failing to keep their lawn and landscaping in good condition as required by the declaration. The association filed a complaint seeking a mandatory injunction ordering the owners to keep their lawn and landscaping in a neat condition. However, the facts were complicated by the sale of the home in the middle of the suit when the new owners voluntarily brought the home into compliance with the declaration. The parties continued to fight over who was entitled to prevailing party attorney’s fees with the association arguing it was entitled to same because the voluntary compliance was only obtained after the association was forced to commence legal action. The owners, citing Alorda, argued that the complaint should have been dismissed at the onset because the association sought an equitable remedy (injunction) when a legal remedy was already available—the exercise of its “self-help” authority. The Court considered the award of attorney’s fees after the dismissal of the association’s action for an injunction. Ultimately, the Court held that the owners were the prevailing party as the association could not seek the injunction because it already had an adequate remedy at law.

Accordingly, if your association’s declaration contains a “self-help” provision, and your association desires to seek an injunction against an owner rather than pursue “self-help,” the board should discuss the issue in greater detail with the association’s legal counsel prior to proceeding. Also, remember that if the association wants to enforce architectural standards, then they must be published to the membership; and always remember to notice ARC meetings and take minutes.

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RECOGNITION OF PRESIDENTS? By Jan Bergemann on Condo and HOA Blog

RECOGNITION OF PRESIDENTS? By Jan Bergemann on Condo and HOA Blog

RECOGNITION OF PRESIDENTS?

By Jan Bergemann on Condo HOA Blog




I know that there are many good presidents who are working hard for the good of the community, keep open books and openly communicate with the members of the association.

But then there are lots of presidents, drunk with power and full of themselves. You wouldn’t believe the many ugly stories I’m hearing daily about presidents behaving like Joseph Stalin, Adolf Hitler or Fidel Castro. With the help of greedy attorneys and community association managers they create dictatorships that make living in community associations a living nightmare. They are even willing to ignore arbitration and court rulings and continue their evil doings even after being officially removed by elections or recalls. They are even willing to waste the association’s money on ridiculous appeals court filings.




The real reason why this can even happen in a so-called “civilized” country like the USA: The unwillingness of our government to enforce the many laws legislators create every year.

Many of these laws turn out to be just a waste of paper because too many of the so-called “specialized” community association attorneys are willing to help these dictatorial presidents to circumvent these laws, telling owners, who stand up at meetings to challenge actions of the board that violate the laws, to “sit down and shut up since they don’t have the money to sue the board anyway”!

Living in a community association isn’t something you can just enjoy by not participating, willing to ignore to happenings in the neighborhood until it’s too late. Apathy of owners allows these dictatorships to be created in the first place. Don’t let apathy destroy your community.

REMEMBER: EVEN THE BEST COMMUNITY IS ONLY ONE ELECTION AWAY FROM DICTATORSHIP.

Jan Bergemann

Jan Bergemann is president of Cyber Citizens For Justice, Florida ‘s largest state-wide property owners’ advocacy group. CCFJ works on legislation to help owners living in community  associations. He moved to Florida in 1995 – hoping to retire. He moved into a HOA, where the developer cheated the homeowners and used the association dues for his own purposes. End of retirement!

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FOUR STEPS TO A BETTER COMMUNITY By Rafael Aquino

FOUR STEPS TO A BETTER COMMUNITY By Rafael Aquino

FOUR STEPS TO A BETTER COMMUNITY

By Rafael Aquino

Community associations often face challenges and issues requiring prompt attention and resolution. Whether it’s handling maintenance and repair needs, managing common areas, or addressing resident concerns, community associations need to work with the right partners to ensure that matters are resolved promptly and effectively.

Here are a few reasons why Florida community associations need to work with the right partners:

  1. Ensuring Quality Work

One of the most important reasons to work with the right partners is to ensure that the work performed is high quality. Whether hiring a landscaper or a maintenance technician, working with reliable and experienced professionals will help ensure that the work is done properly and to the association’s satisfaction.

  1. Saving Time and Money

Another reason to work with the right partners is to save time and money. By working with partners with a proven track record of delivering quality work, community associations can avoid hiring additional contractors or redoing work incorrectly done the first time. This can save the association time and money in the long run.

  1. Minimizing Risk and Liability

Working with the right partners can minimize risk and liability. This is especially important for community associations, as they maintain and manage common areas that all residents use. By working with licensed, insured, and experienced partners, associations can minimize the risk of accidents, injuries, and other liabilities arising from improper maintenance or repairs.

  1. Improving Communication

Working with the right partners can also help to improve Communication within the community. When community associations work with reliable partners, residents can be assured that their concerns and needs are being addressed in a timely and effective manner. This can improve resident satisfaction and create a more harmonious community.

In conclusion, working with the right partners is essential for Florida community associations to ensure that their needs and the needs of their residents are met. By providing quality work, saving time and money, minimizing risk and liability, and improving Communication, community associations can create a safe, attractive, and enjoyable community for all residents. So, it’s important to take the time to research and choose the right partners to work with for the success of the community.

As the Co-Founder and CEO of Affinity Management Services, Rafael P. Aquino leads his team to redefine excellence. They serve community associations efficiently and effectively with dedication and passion.

 

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Lake Experts Answer Top 10 FAQs by SOLitude

Lake Experts Answer Top 10 FAQs by SOLitude

Our top 10 FAQs blog breaks down common questions about lakes and management practices, including:

 

🐟 If a bunch of fish die, should I assume the water was poisoned?
❔ What is causing the lake’s shoreline to erode?
🌾 Why do the specialists spray some plants and not spray others?

Read all the answers from our experts…

Common Questions About Lake & Pond Management

10 FAQs About Lake Management

Lakes and ponds play a central role in our communities by collecting stormwater, creating recreational opportunities, providing drinking water, and allowing us to nurture our biological desire to spend time around the water. You deserve to have beautiful, clean water to enjoy, but achieving it can be difficult – where should you begin? When you have a better understanding of these complex ecosystems, you’re able to make more informed decisions about how yours is managed. Here are some frequently asked questions to help you get started.

1. Why is my pond turning green? Is it normal for my lake or pond to have algae?

Green can be an alarming color when it comes to any body of water, but it doesn’t always reflect unhealthy conditions; plants and algae are natural features in lakes and ponds that provide essential food and habitat to native beneficial species. However, they can get out of control when the aquatic environment becomes imbalanced.

The best way to detect imbalances and identify the plants and algae that are present is through professional water quality testing. The results can help inform your management choices.

2. Why does the pond across the street always look better than mine?

It’s crucial to remember that no two waterbodies are the same. There can be vast physical and chemical characteristics based on hundreds of surprising factors, including water depth, gardening and landscaping practices, the presence of pets or livestock, how the waterbody is used, and even the level of sunlight that penetrates the aquatic ecosystem each day. The contours of the surrounding land may allow pollutants to flow into one waterbody during rainstorms without impacting the other.

While it’s tempting to replicate the maintenance strategies used by the neighbor with the beautiful pond, this underscores the importance of customized management programs. A one-size-fits-all approach will rarely yield the long-term results you desire.

3. How is the pond behind my Florida home different from one in Michigan?

As you know, all aquatic ecosystems are unique, but the reasons can extend far beyond water depth or landscaping. Seasonal weather patterns, climate, rainfall, and other regional factors will have a powerful impact.

For instance, many lakes and ponds in Florida are exposed to brackish water, especially during flooding and hurricanes. The higher salinity (accumulation of salt) can significantly alter the chemical composition of the waterbody. Likewise, Florida waterbodies are now home to many invasive plants and animals, which pose unique challenges that require different solutions. Undesirable plant growth is further accelerated by the intense humidity in Florida, which leads to more frequent maintenance.

This is not to say that waterbodies are healthier in one state versus the other; they all face similar obstacles, but the strategies and management styles may differ dramatically.

4. If a bunch of fish die, should I assume the water was poisoned?

Fish kills are rare and are sometimes connected to poisoning, but many fish kills occur naturally due to insufficient dissolved oxygen levels. Oxygen can be impacted by the level of sunlight, recent rain storms or forceful weather events, excess vegetation growth, or the transition of the seasons. However, they are preventable.

Many aquatic experts recommend fountains and aeration systems to keep dissolved oxygen levels balanced throughout the entire water column through consistent mixing. Preventing the growth of aquatic weeds and filamentous algae will also free up the water column to maximize the benefits of circulation.

Finally, testing dissolved oxygen levels on a recurring basis will help you identify and get ahead of oxygen imbalances before the fish population is affected. If lab reports indicate that dissolved oxygen levels are sufficient, then it may be worth consulting with your professional about the possibility of pollution or poisoning.

5. What is a stormwater retention pond?

Stormwater facilities (also known as BMPs) are structures that play a vital and multifaceted role in the preservation of our surrounding wetland and aquatic ecosystems. These systems are typically constructed in relation to residential and commercial development infrastructure that increases impervious surfaces and overland stormwater flow. They provide the essential temporary collection of stormwater in order to allow for filtration and basic improvement of water quality (removal of sediment, organic debris, animal waste, fertilizers, and other contaminants/nutrients) before entering natural wetland systems.

For this reason, it is critical that these specially designed and constructed systems remain functioning as intended and maintain pond compliance with local, state, and federal stormwater regulations.

6. What is causing the lake’s shoreline to erode?

Erosion is natural. It gradually happens as rainwater flows into lakes and ponds and when wildlife interact with the ecosystem. But recreation, landscaping, and urban development also influence the rate at which erosion occurs. Gutter downspouts and pavement concentrate and accelerate the flow of runoff over the shoreline. As sediment accumulates at the bottom, it reduces depth and volume – increasing the risk of flooding. Stormwater runoff also picks up animal waste, trash, leaves, lawn clippings, and other organic materials that promote nuisance weeds, algae, toxic cyanobacteria, and other water quality issues.

Though shoreline erosion is inevitable, it can be slowed and even reversed with the right management tools and strategies. Professionals encourage the introduction of beneficial buffer plants that are native to your region. Flowering, deep-rooted species can help hold the shoreline in place and deter people and nuisance animals like geese from venturing too close to the water’s edge. Shorelines can also be bioengineered for improved stability and aesthetics using a patented mesh technology called SOX Solutions.

7. Why does the shallow area near the shoreline have plants growing in it? Are those plants invasive?

Emergent plant species generally grow in shallow water near shorelines. Your lake management professional can help you determine if the species is native or invasive, and walk you through maintenance options if undesirable growth is identified.

Some invasive weeds are aesthetically pleasing. Purple loosestrife, for example, is known for its gorgeous purple blooms. However, invasive plants are detrimental to the ecosystems they invade by crowding out native plants and displacing the wildlife that relies on them for food and shelter. Without intervention, exotic weeds can quickly repopulate and spread to other ecosystems nearby.

It’s important to have regular inspections of your waterbody and consult with your lake management professional if you suspect an invasive plant has taken root.

8. Why do the specialists spray some plants and not spray others?

Every plant species is unique. From their physical characteristics to their growth patterns to their methods of repopulation, plants vary widely – and so do the methods used to manage them. Spraying may be the most effective management style for some. Others may respond best to cutting, burning, or physically pulling.

Stakeholders also have different goals, budgets, and priorities. Some may prefer to swiftly manage undesirable plants using herbicides while others desire a more holistic approach that targets the “root cause” of the growth. This typically means addressing shoreline erosion and balancing water quality with nutrient mitigation products like Alum, Phoslock, or EutroSORB.

9. Won’t the algae or weed products harm the fish and wildlife?

All herbicides and algaecides used by professional lake managers have gone through rigorous testing and are registered with the Environmental Protection Agency (EPA). Licensed aquatic experts also have access to advanced products that are designed to target the specific growth mechanisms in nuisance and invasive species without impacting desirable plants, wildlife, or people.

These products are considered very low risk when applied by licensed professionals. Furthermore, certain weeds and algae species can actually be detrimental to an aquatic ecosystem. Invasive plants are known to outcompete native growth and displace beneficial wildlife, threatening the biodiversity of our local ecosystems. And nuisance algae like cyanobacteria (also known as Harmful Algal Blooms or blue-green algae) can develop toxins that are fatal to fish and birds, as well as dogs, cats, horses, and livestock.

Your lake manager will be able to help you understand these intricate dynamics and weigh the management options that align best with your priorities.

10. Can’t we just let the pond take care of itself naturally?

Lakes and ponds have natural checks and balances that keep them in a healthy, functional state with a flourishing food chain. But the rise of urban development, pollution, deforestation, mass agriculture, and other human activities has created new challenges that may overwhelm the ecosystem. In unbalanced conditions, lakes and ponds are more likely to experience aquatic weeds, algae and toxic cyanobacteria, fish kills, bad odors, muck development, flooding, and other problems.

These human-caused factors will not go away, but proactive management can help reduce their influence on our aquatic ecosystems. Annual Management Programs provide ongoing, professional care to maintain a healthy waterbody and catch potential problems before they get out of hand. Over time, annual maintenance approaches are often more effective and affordable for many stakeholders.

Achieve the Water You Desire with SOLitude

You value your waterbody – and so do we. We’re committed to arming you with knowledge and resources to help you visualize your ideal lake or pond and understand how to achieve it. As your partner, we’ll guide you every step of the way, so you can have peace of mind that your waterbody is on the right track at all times.

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Charging into the Future! Electric Vehicle Charging Stations in your Community

Charging into the Future! Electric Vehicle Charging Stations in your Community

  • Posted: Dec 28, 2022
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Charging into the Future! Electric Vehicle Charging Stations in your Community

Through innovation, electric vehicles are trending in popularity, and are becoming more commonplace in society. As more people are considering to buy electric vehicles, thought has to be also given on how to provide the means to charge them. While single family home owners install charging stations for their vehicle as part of their vehicle buying considerations, communities such as Condominium Associations that have common element parking facilities generally do not have existing car charging facilities for their residents. Associations may look to the future of their Community, and may consider the value and feasibility for installing charging stations. Having charging stations is a potential selling point for prospective residents, as some may currently use electric vehicles and would prefer residences with charging facilities. For current residents, it can also be seen as a perk, as it allows them the option to acquire an electric vehicle that they otherwise could not have practical usage of. In some situations, Associations also will need to address legislation on car charging stations that might affect the existing Association’s rules/bylaws in regards to these stations.

However, as many Communities were originally built without consideration to future charging stations, Associations will need to determine how robust their existing electrical infrastructure is to accept these new installations. The Falcon Group can help your Community with your charging station needs. We can provide an assessment of the existing site and existing electrical systems, and identify key points of the feasibility of installing new charging stations, such as:

Determination of existing electrical capacity
Quantity of charging stations based on available space and electrical capacity.
Potential locations the charging stations
Required real estate for new electrical infrastructure for the charging stations.
Recommendations of electrical system upgrades (including service upgrades) needed to meet your Community’s target.
Potential federal/state incentives for installing charging stations.

Falcon also offers full design, bidding and construction administration services for charging station installations that meets your Community’s needs.

Contact The Falcon Group today and one of our experts will focus on all of your building and association’s specific needs.

Reza Koosha-Mirsaidi

Senior Electrical Engineer

 

 

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Condo and HOA Lien Foreclosures…A National Shame by Mitch Drimmer / Axela Technologies

Condo and HOA Lien Foreclosures…A National Shame by Mitch Drimmer / Axela Technologies

  • Posted: Dec 18, 2022
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How many times have you read a story about an HOA foreclosing on some unfortunate family for a fraction of the value of the home? For example, the veteran who, upon returning from active duty, finds that his HOA has foreclosed and taken title to his house for a mere pittance? “Soldier in Iraq Loses Home Over $800 Debt” reads the story, and life goes on at the HOA.

Should the HOA have foreclosed on this person’s house? Why did they foreclose on this property? What could have been done to prevent this gross injustice from happening in the first place? Condo and HOA lien foreclosures should not be the first go-to solution when a unit becomes delinquent.

For too long, community associations have been a national disgrace, rather than a source of national pride. No HOA wants their name to be mentioned on the nightly news because we all know it is far more likely to be an exposé than a feel-good piece. But if we want the bad press to stop, we need to take a good, hard look in the mirror.

 

Communities Often Jump Straight to the Nuclear Option of Lien Foreclosure. Can They Do That?

When you buy a house or condo in a community association, most likely you’ve taken out a mortgage, and if you don’t pay your mortgage, the lender has the right to foreclose and force a public sale of the property. So too can condominiums and homeowner’s associations foreclose on your property for non-payment of maintenance fees.

In fact, per most state laws, your homeowner’s association or condominium association can potentially foreclose on your property even if you are current with your mortgage. Also, your mortgage will remain in first position and the HOA cannot sell the property with marketable title unless the first position lien has been satisfied.

All that is required is for the association to cause an attorney to file a lien, have the attorney send a notice of foreclosure, have your day in court, and before you know it you are being evicted from your home that may have equity in it because you were delinquent for a much smaller amount than what the property is worth. Not a good deal for you and certainly not a smart business move for the association.

It’s not to say that the community is in the wrong. The assessment fees are rightfully owed to the association, and they have the right to attempt to collect it. However, jumping to the nuclear option prior to attempting diplomacy (negotiating with the owner to satisfy the debt) never goes well for anyone.

 

Winrose vs Hale ‘Shocked the Conscience’ of the Court

In an appeals court decision in Supreme Court South Carolina, the association foreclosure was REVERSED and REMANDED. In the case of WINROSE HOA v. DEVERY HALE the court was shocked by this action and even stated so in their decision: “As a result, in determining whether the purchase price was grossly inadequate …. the bid shocks the conscience of the court.” The story is quite simple and may sound familiar to you as this happens every day and really should not.

The Hales were solid citizens who purchased their home twenty-one years ago for $104,250.00 and paid their mortgage and fees on time. The home is valued at $128,000.00 and the property has $60,000.00 of equity in it. After missing a $250.00 maintenance fee payment the HOA foreclosed on their $566.41 lien (to satisfy delinquent assessments and interest) and the winning bid on the house was $3,036.00. The Hales had been robbed, and the association had acted too rashly in moving to foreclose upon a house for such a pittance. The buyer was Regime Solutions, LLC who are investors that seek out and purchase properties at foreclosures.

Due to the Hales failure to file a responsive pleading to the foreclosure complaint, a huge mistake on their part, they were ultimately defaulted and were not served with any further court papers. In fact, they did not even receive a copy of the judgment of foreclosure. When they found out they were at risk of losing their property, they tried to make good to redeem their house and paid a bill to the master and in fact, the law firm representing the HOA sent the Hales a notice that the lien had been satisfied. The HOA, however, did not withdraw its suit.

Three months after, the HOA filed the affidavit of default and the master authorized a judicial sale of the property at public auction. The Hales were not notified of this order due to a rule in South Carolina, which essentially states the time to appeal doesn’t change, despite lack of notice (rule 77(d), SCRCP). Two weeks later without notice to the Hales, the property was sold and the new owner moved to evict them. This of course led to court complaints, a trial, and finally an appeal before the Supreme Court who reversed and remanded the foreclosure order saying that the sale at auction for $3,036.00 “shocked the conscience of the court,” which is quite strong language from the Supreme Court.

 

Investors Use Shady Business Practices To Take Advantage of Unsuspecting Homeowners through HOA foreclosures

It came to light that Regime’s business model was not to assume the senior mortgage to own the property but to give back the property to the original owners at a hefty fee. (Sadly, this is not an uncommon practice.)

The court decision went on to say: “While the HOA had the legal right to pursue collection of the debt owed, including foreclosure of the Property to satisfy that debt, this foreclosure action quickly morphed into a proxy to capitalize on a small debt. We are especially troubled by Regime’s participation in a foreclosure proceeding to accommodate its business model of leveraging a nominal debt to secure an exorbitant return from homeowners who fear the prospect of eviction.”

Most important the court stated: “Regime would not have had an opportunity to engage in its questionable business practices had the HOA and its attorney not chosen to pursue foreclosure in the first place. The Hales were minimally in arrears on their HOA dues, yet the HOA foreclosed on a $128,000 home in its eagerness to collect the outstanding $250—an overdue amount less than 0.2% of the fair market value of the home, notwithstanding the amount of the outstanding mortgage.”

Finally, the court opined: “A foreclosure proceeding is a last resort, not a business model to be swiftly invoked for the purpose of exploiting property owners. We do not countenance the improper use of foreclosure proceedings by the HOA, its attorney, or Regime.”

Justice ultimately prevailed in this case, and the Hales kept their house and were not evicted although there can be no doubt that they had suffered and worried throughout this entire process. Not every homeowner who goes through this process is so lucky to get away with only a terrible story to tell.

 

Communities Are Getting Bad Advice, and It’s Costing Them, in Real Dollars and in Reputation

What went wrong is an amazingly simple question to answer. The association was convinced that they should foreclose on a delinquent unit before they even tried to engage the owners to review the consequences of their situation. While it may be true that they received one notice, they were advised by an attorney that the matter had been resolved. This was a total failure of communication.

The association could have had more contact with the owners and advised them as to the course of action that was being taken against them. Nobody said anything to them – and in this industry, such a thing is not uncommon.

When a delinquent unit goes over to an attorney the object is to “enforce the security interest” and not to collect. The association’s board was not properly informed that less drastic action could be taken. Somehow the board was convinced not to recover money from the Hales but rather to take the property.

No collections activity is reported in the narrative that is presented in the case. It was a bad business decision because eventually, the association had to pay a lot of legal fees. This situation could have been resolved much more easily and cost-effectively.

 

A Lawyer Who is Just Enforcing Security Interests Is Not A Debt Collector

This matter did not have to be resolved by a “legal solution” but rather by a “collections solution.” As a matter of fact, in a case decided by the Supreme Court of The United States, DENNIS OBDUSKEY v. McCARTHY & HOLTHUS LLP the Court held, “A business engaged in no more than the enforcement of security interests is not a “debt collector” under the FDCPA, 1032*1032 except for the limited purpose of § 1692f(6). Pp. 1035-1040.” This means that the association did not even try to collect the past due debt and if they used an attorney, he/she is not even bound by the Fair Debt Collections Practices Act.

The Supreme Court in South Carolina in all its wisdom said loud and clear: “A foreclosure proceeding is a last resort”

 

Community Associations Have a Better Option to Collect Delinquent Fees

So how should a community association collect delinquent fees? In a way this question just about answers itself. The answer is that they use a collection agency that is specialized in collections for community associations. Community Associations need to COLLECT, not foreclose and evict owners from their homes. Associations need to have adequate cash flows and a minimum amount of legal cases.

Axela Technologies would be honored to be that company for your community association. We are a licensed collection agency and we only work on delinquencies from Condos and HOAs. We are different because our objective is not to foreclose on a house, which is the action of last resort.

What Axela does is engage the owner and work with them to pay their past due assessments. Axela will send demand letters, provide internet portals to delinquent owners, make outbound calls, report delinquencies to credit bureaus, receive inbound calls, work out payment plans, and notice mortgage holders that the borrower is delinquent on their maintenance fee payments as per the PUD Rider.

Now is the time for your community association management company and/or community association to put the right process into place when you are confronted with delinquencies. Foreclosing and evicting does not have to be the way. Click here to request your free, no-obligation collections analysis today.

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Want an emergency information guide you can use to uncover and list important information so that your loved ones know what to do in an emergency?

Want an emergency information guide you can use to uncover and list important information so that your loved ones know what to do in an emergency?

Want an emergency information guide you can use to uncover and list important information so that your loved ones know what to do in an emergency?

by RMS ACCOUNTING

𝐕𝐞𝐫𝐲 𝐒𝐚𝐝 𝐒𝐭𝐨𝐫𝐲 – Very old client dies leaving his wife to deal not only with his death but also with financial matters that she is unfamiliar with and not equipped to deal with. She has no where a copy of the will is or what attorney handled the will preparation. She also does not know what investment accounts in his name have TOD designation and how to deal with them as well as the house that is titled in both their names. This lady needs help and has no children or close friends to help her deal with these issues. While we can help make her get information on all the accounts that her husband had which had taxable transactions we can’t represent and handle the notification of banks and investment accounts or location of the will. The best we could do is refer her to an estate attorney we trust.
If you are wondering why I am telling your this it’s because we see the same thing over and over where an elderly person does not remember what assets they have and or know how to deal with them. We remind clients all the time that they need to make a list of their investments, bank accounts, insurance and other important information including the names of advisors and attorney and see that this list is easy for their loved ones to find when the need arises and the time comes.
Want an emergency information guide you can use to uncover and list important information so that your loved ones know what to do in an emergency just drop us an

Email at info@RMSAccounting.com with “Emergency Guide” in the subject line along with your name and mailing address and we will send you a printed copy of this important booklet, rather have a PDF copy just let us know at the same email address.

 

Learn more and contact us for all of your Accounting Needs: 

RMS Accounting

1-800-382-1040

RMS Accounting combines quality cost effective accounting and bookkeeping services with a team of tax accounting professionals to help clients make and save more money.

rms-accounting

RMS Accounting

Accounting and tax services are about more than just numbers on a page. Unlike other accounting firms, when you call us you will get a live human being not voicemail and unlike other accounting firms we will work with you on your business helping you to grow profits and cut taxes. Unlike other accounting firms we will tell you before we begin work exactly what it will cost for our help.

Our tax accounting professionals will be happy to assist you with; tax planning, tax preparation and tax representation.

Our tax accountants are EA’s (Enrolled to practice before the IRS). They know the tax laws and will make sure you don’t pay one penny more than you have to. Visit us for a free consultation with a tax accountant, who will review your tax situation, with you to determine the best course of action. The tax accountant will provide you with a free fee quotation.

 

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Federal Court Identifies Potential Collection Issue for Community Associations in Florida

Federal Court Identifies Potential Collection Issue for Community Associations in Florida

Federal Court Identifies Potential Collection Issue for Community Associations in Florida

Community association operations rely upon the timely and full payment of all assessments by all of the owners. One of the mechanisms that Florida law provides to put associations in a stronger position when an owner becomes delinquent is the “secured interest” of the association in the unpaid assessments by way of its ongoing lien against the unit or lot for the unpaid assessments. This secured interest puts the claim of the association at a higher priority than most other claims, other than a first mortgage or unpaid property taxes. However, a recent decision in the United States Bankruptcy Court for the Southern District of Florida, In re: Adam, Case No.: 22-10140-MAM, September 23, 2022, has cast a potential cloud on that secured interest.

In the In re Adam case, the Association previously obtained a judgment of foreclosure for over $76,000, which was considered as a secured interest by the Court. The Association was also claiming an additional $36,558 which came due after the judgment was entered. The owners were asking the Court to decide that the $36,000 was not secured and therefore uncollectible in the bankruptcy (or at least not fully collectible).

In deciding whether certain association claims were secured and collectible in the bankruptcy setting, the Court undertook an analysis of Florida law on the subject. The Court noted that both the Florida Condominium Act (Chapter 718 F.S.) and the Homeowner’s Association Act (Chapter 720 F.S.) currently contain express provisions that identify that the lien of the association is effective from the original recording of the declaration (with the added requirement in HOA’s that the declaration specifically expresses this lien right). However, the Court also points out that the Condominium Act was amended in 1992 to provide for this effective date. (The Homeowner’s Association Act was amended to provide for it in 2008.) Prior to these amendments, these Statutes provided for the effective date of the lien to be when it was recorded in the public records of the county. The analysis of the Court required it to consider whether the current version of the Statute applies to the situation or whether an earlier version of the Statute is the controlling authority. (This case involved a condominium so only the Condominium Act was considered in the decision.)

To make that determination, the Court applied the principles of the seminal case of Kaufman v. Shere, 347 So.2d 627 (Fla. 3d DCA 1977), which require declarations to contain the specific phrase “as amended from time to time” when identifying the Statute that governs the documents in order for the current version of the Statute to apply. This is because Statutes are not retroactive in their application unless the legislature expressly makes them so in the Statute itself. Both the U.S. and Florida Constitutions do not allow for the State to make a law that infringes upon the vested rights in an existing contract (which would be the declaration). As a result, the contract (declaration) would need to have the specific “as amended from time to time” language (often called “Kaufman” language) to automatically incorporate changes to the Statute that is not otherwise retroactive.

When the Court reviewed the governing documents, it noted that they were from 1987 and did not have the Kaufman language. As such, the Court held that the provisions of the declaration were the same as the Statute in 1987, which provided that the lien was effective only upon being recorded in the public records of the county. Since the Association did not file another lien for the amount being claimed subsequent to the foreclosure judgment, the Court concluded that this portion was not secured. In the bankruptcy setting, this meant that the Association would likely be unable to recover most, if not all of this claim from the Debtors, Mr. and Ms. Adam.

While this issue may be most relevant to associations when dealing with a case in bankruptcy, it is possible that it could also be raised in state court foreclosure cases under certain circumstances. It is also important to note that this Bankruptcy Court did not include a significant issue in the analysis regarding the Statute at issue, that being whether or not the statutory provision was “substantive” or “procedural”, as those terms apply to this situation, which could have led to a different result. (This portion of the legal analysis is quite technical and beyond the scope of this article.)

For communities whose declarations were recorded prior to the statutory changes described above, the first step in protecting the interests of the association is to review the documents to determine whether Kaufman language is already in them. If not, the board may wish to consider proposing an amendment to the owners to change the documents to include this language, if not for the entire declaration, then at least for the timing of the effectiveness of the lien of the association. Having qualified legal counsel review these issues in the documents is a strong business practice.

About Robert
Robert L. Kaye is Board Certified in Condominium and Planned Development Law. Mr. Kaye attended Michigan State University, graduating with a B.B.A. in General Business in 1976. In 1986, Mr. Kaye graduated from the Detroit College of Law, magna cum laude. Mr. Kaye initially practiced tax law for the firm of Raymond, Rupp, Weinberg, Stone & Zuckerman, P.C. in Troy, Michigan, before moving to South Florida in 1987, joining Becker & Poliakoff to concentrate in the area of community association representation. In 1991, Robert Kaye left that employ to start Kaye & Roger, P.A. He was the managing shareholder of the Firm from its inception, directing all legal operations and overseeing its growth to represent over 1,000 Communities in South Florida at the time of its name change to Robert Kaye & Associates, P.A. on January 1, 2003.
On January 1, 2009 Mr. Kaye joined with Michael Bender to form Kaye & Bender, now known as Kaye Bender Rembaum, after Jeffrey Rembaum joined in 2012. Mr. Kaye serves on the Florida Bar’s Grievance Committee, is a member of the Condominium Committee of the Real Property Section of The Florida Bar, and previously served on the Committee on the Unlicensed Practice of Law. He also lectures on Community Association law and is regularly published on the subject. Mr. Kaye hosts KBR’s appearances on the radio show, ‘Ask the Experts’, from 6pm to 7pm, the first Thursday of each month.
See his full bio HERE.

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Dorothy followed the yellow brick road after a weather related Storm carried her..to Oz

Dorothy followed the yellow brick road after a weather related Storm carried her..to Oz

  • Posted: Nov 21, 2022
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Dorothy followed the yellow brick road after a weather related Storm carried her..to Oz

In Florida during our Wicked storm season Condo’s and HOA’s need protections like those ruby slippers Dorothy wore while she went looking for a way home.

SFPMA and our Members are here to help!

STORM DAMAGE CLAIMS FOR YOUR CONDO AND HOA PROPERTIES!

Has your Home, Condo or HOA Sustained Property Damage?

SFPMA has a team of Legal Experts, adjusters, estimators and claim specialists for the benefit of the Condo and HOA’s who sustained damage from the storms and fire, water or mold.

With the know-how and experience to analyze, evaluate, and negotiate the best settlement for your Insurance Claim!

“Get the maximum settlement for your damage claim!”

 

From Roof Leaks, Windows Broken, Trees up rooted, and electric lines that snap, to the inside from pulling permits to repairing damage from broken pipes, Mold and Mitigation and restoration companies, construction repairs, to finding the right engineering company to inspect structural integrity with an understanding of leak detection and injection to prevent water intrusions. Just some of the member companies
lined up to help you during Florida’s Storm Season ready to repair your properties and completed.

SFPMA and  FloridaAdjusting.com

Is pleased to provide you with The Top Florida Adjusters, Roofing repair companies and Law Firms that fight on your behalf with the Insurance companies to get your claims paid fast.

When you dont know who to call or your insurance company will not pay the total cost of you estimated Damage when Water intrusions can destroy a building’s structural integrity, harbor mold, and become a serious hazard.

 

Use your Brain, Have some heart and with the knowledge each one of the members bring to settle your claim and fix the damage you will be way ahead of any other person who needs their home protected and repaired!

 

Find Legal firms, Public Adjusters, Roofing Companies, and general contractors that are full Members of sfpma, these professionals are ready to help get your properties ready and repaired after the storms all of these companies are working together with insurance companies and will repairs damage and fight for your rights.

 

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