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Medications for Community Association Corruption

The 2017 Spring Legislative Session: Medications for Community Association Corruption (May Have Serious Side Effects)

Consumer protection for community association members from board or management corruption is the most dominant theme of the pending legislative session. The following is an overview of proposed legislation as of March 29, 2017.

Liability for Directors, Officers, and Management Companies (SB 1682, HB 1237, SB 1258, and HB 1001)

This proposed legislation was prompted by a Grand Jury Report issued after Miami-Dade County State Attorney Katherine Fernandez Rundle investigated complaints of alleged widespread corruption and fraud in condominiums. The controversial Report, released on February 6, 2017, was in response to a multitude of owner complaints of fraud and disenfranchisement. The Report diagnosed the following issues: (1) inaccessible records; (2) association management issues; (3) director conflicts of interests; (4) ineffective enforcement by the Department of Business and Professional Regulation (“DBPR”) Division of Condominiums, Time Shares, and Mobile Homes (the “Division”); and, (5) fraud in Board Elections. Consequently, the Report seeks legislative changes to curtail these issues.

The Report argues that the DBPR is ill-equipped to prevent the recurring problems afflicting associations. Consequently, it seeks a more active role for an already over-worked judiciary and criminal justice system. The Report proposed introducing financial and/or criminal liability for wrongdoing directors, officers, and/or management companies. The resulting outcry from industry professionals and associations includes commentary that the Report is somewhat one-sided, does not give due consideration to DBPR funding issues that impact its enforcement abilities, and makes overly harsh recommendations attacking volunteer directors, which will increase operating costs and dissuade board service. The Report counters that those individuals you want running boards would never engage in criminalized conduct.

SB 1682 and HB 1237 attempt to address the concerns raised by the Report. The main legislative proposals are as follows:

Directors can’t serve four (4) consecutive two (2) year terms absent a two-thirds (2/3rds) membership vote approving lengthier service;
Expediting recall procedures;
Prohibiting dual legal representation of an association and its management company;
Prohibiting directors and managers from acquiring foreclosed real estate at a foreclosure sale or through deed in lieu and prohibiting managers from acquiring more than 50 percent of the units or any unit subject to an association lien;
Introducing conflict of interest disclosure requirements and preventing associations from dealing with companies owned, operated, or associated with directors or any person with a financial relationship to them;
Criminalizing knowing and willful prevention of access to the association’s records and defacement or failure to maintain association accounting records by directors or management companies;
Criminalizing knowing and willful fraudulent voting activities in elections;
Modifying voting suspension rights for delinquencies by requiring at least $1,000 to be owed and thirty days of notice;
Requiring the digital posting of certain records for associations with more than 500 units;
Allowing for private sector Division Arbitrators;
Bids for materials, equipment, or services are added to the list of records; and,
Providing official record access to tenants.

The criminal penalties range from misdemeanors (first to third degree) for repeat failures to provide association records upon authorized request to third degree felonies for election fraud. Regarding conflicts of interest, the proposed legislation overlooks protections already in place for interested director transactions under a theory that permitting any interested director transactions creates a moral hazard—a slippery slope towards corruption.

SB 1258 and HB 1001 (on no committee agendas at present) proposed to establish personal financial liability for directors or officers where the board or the Division determines that the director or officer knowingly violated governing documents or Chapter 718. The director or officer would be personally liable for increasing civil penalties based on the number of offenses. SB 1258 and HB 1001 emphasize deterrents and a Division role, but threaten liability and abuse through board overreach.

In effect, the bills seek to prevent directors from delaying or undermining rights to transparency and self-determination, which protect against abuse. While the bills reflect a positive intention by the legislature to curb abuses, critics assert that these legislative proposals go too far.

Protections for Homeowners’ Association Members and Buyers (HB 295)

In the case of HOAs, HB 295 (also not on any agenda) provides that a member denied access to records would be entitled to minimum damages of $500 per day for up to 30 days—a significant increase. This amount was troublesome considering that some members use records requests as a tool to harass. If a community association manager is responsible, the member could maintain a cause of action against the manager; however, manager indemnification of associations is excluded.

The bill eliminates liens for fines in excess of $1,000, modifies triggers for HOA turnover from the developer, and requires sellers to provide governing documents and budgets to prospective buyers at least seven days before closing—coupled with termination rights within three days after receipt, and also would create a cause of action against developers for enumerated grounds.

Lastly, HB 295 would expand the jurisdiction of the DBPR over homeowners’ associations, including the Division arbitration program’s applicability to HOAs, would require DBPR training programs, and would grant the DBPR the authority to enforce compliance with Chapter 720. Given the Report’s perceived funding and enforcement issues with the DBPR, it was interesting that proposed legislation seeks to expand its role while other legislation attempts to increase the role of the criminal justice system in lieu of more robust DBPR enforcement. SB 1650 also would expand Division arbitration for HOAs, bypassing presuit mediation.

Regarding Marketable Record Title Act (“MRTA”) Issues (SB 1046 and HB 735)

SB 1046 and HB 735 require mandatory consideration of MRTA preservation issues, mandatory periodic public records disclosures, and provides for a new MRTA preservation procedure.

Amendments and Estate Protections (SB 1186 and SB 950)

SB 1186 intends to change procedures for HOA amendments and incorporate a restriction on the applicability of rental restriction amendments to pre-existing owners who do not consent. SB 950would have protected the estate of a deceased owner from fines, interest, and late fees for certain specified periods.

Regarding Condominium Termination (SB 1520 and HB 7055)

SB 1520 and HB 7055 both enable all homestead owners who reject a plan to receive their original purchase price for their terminated condominium, not just direct purchasers from a developer, and adopt similar changes to the approval / rejection termination thresholds, making termination more difficult.

Estoppel Letters (SB 398 and HB 483)

Both would cap and categorize estoppel letter fees under varying circumstances and require a response to a request for an estoppel certificate within ten business days. They provide for certain mandatory estoppel disclosures, as well as publication of the name and contact information of a designated recipient for requests.

Operational Issues, Including Financial Reporting, Fire Safety Retrofitting, Among Others (SB 744, HB 653, and HB 6027)

Each would require associations with less than 50 units to submit more comprehensive annual financial reports and would eliminate language preventing condominium associations from reducing their financial reporting requirements for more than three consecutive years.

SB 744 and HB 653 have other wide-ranging changes. For condominiums: (1) includes electronic voting records in association official records; (2) clarifies that associations under 75 feet high are exempt from fire sprinkler/life safety retrofitting; (3) extends deadlines to opt out or perform fire sprinkler/life safety retrofitting to December 31, 2018; and, (4) allows meeting notice posting on websites. For HOAs specifically: (1) directors may communicate but not vote on matters via e-mail; (2) overhauls mandatory reserve requirements and voting procedures; (3) allows a developer to waive reserves for an association’s first two fiscal years but prevents waiver thereafter without a member vote; (4) adds language preventing accord and satisfaction in statutorily compliant allocation of payments; and, (5) prohibits write-in nominations where there is no election, unless the by-laws requires them.

Conclusion

Whether ultimately enacted or not, it is clear that the legislature is attempting to curb association abuses of power, create stronger penalties and disincentives to wrongful conduct, and in several cases, to address concerns in the Grand Jury Report. Whether the legislature will fund the criminal justice system or the DBPR to address these abuses is an entirely different story. Without proper funding for enforcement, the legislature may simply be doling out a placebo.

David B. Haber is the founding partner with Haber Slade P.A. Haber’s practice includes community association law, real estate, construction, and commercial litigation, and aviation law. His e-mail is dhaber@dhaberlaw.com. Jonathan S. Goldstein is a senior associate attorney with Haber Slade P.A. Goldstein’s practice includes community association law, real estate, construction, and commercial litigation. His e-mail is jgoldstein@dhaberlaw.com. Alexander G. Leon is an associate attorney with Haber Slade P.A. Leon’s practice includes community association law, real estate, construction, and commercial litigation. His e-mail is aleon@dhaberlaw.com. This article is for informational purposes and should not be taken as legal advice.

Improper Hard Flooring

Improper Hard Flooring Not Protected by Selective Enforcement or Waiver of Defenses

It is not uncommon for an association to have flooring restrictions to protect downstairs unit owners from excessive noise. Can a unit owner claim selective enforcement if an association only seeks to enforce the rules against the upstairs unit owners? What if the association’s president says it is “ok?” Maybe the flooring will still have to be ripped up!

In a case hot off the presses, a Florida appellate court just concluded that an association did not selectively enforce or waive its flooring restriction. In Laguna Tropical v. Barnave, No. 3D16-1531 (Fla. 3rd DCA, January 25, 2017), a unit owner replaced her carpeting with laminate flooring. The following year, the resident below the owners’ second story unit complained about noise and asked the association to enforce the Declaration, which prohibited an owner from altering, modifying, or replacing the interior of a unit without the consent of the association and to enforce a rule providing that only carpeting shall be installed in the units.

Following an unsuccessful arbitration effort, the association filed suit against the owner to enforce the flooring restrictions. The trial court agreed with the owner’s defense of selective enforcement and granted judgment for the owner.

The Florida appellate court reversed the judgment and returned the case to the trial court for enforcement of the Declaration against the owner. The court noted that of the condominium’s 94 units, 11 were only upstairs units, 11 were downstairs units, and the remaining 72 units included first and second floor space within the same unit. The configuration was important to the selective enforcement defense because owners of two story units who installed hard flooring upstairs would not have complained about their own flooring.

Although the owner argued that the association only enforced the flooring restriction against 11 of the units, the appellate court noted that these 11 units were exclusively upstairs units. There was no evidence that occupants of the 72 upstairs-downstairs units ever complained to the association about the noise. There were only a “handful” of noise complaints by downstairs-only owners that led to successful enforcement by the association, which included either replacing the tile or wood flooring. Additionally, the court commented that there was no evidence that the association refused to enforce a noise complaint regarding a downstairs-only unit.

“In the present case, the prohibition on floor coverings other than padded carpet is plainly intended to avoid noise complaints,” the court stated. The court concluded that no selective enforcement was proven since there were no complaints regarding any units except for units like the owner’s second-floor unit.

In a second issue, the owner alleged that the association’s president e-mailed that it was ok to install the flooring. The court determined that the owner could not reasonably rely on the president’s e-mails. Why? Because the Declaration required alterations to be approved by the board of directors, no one officer could provide the approval.

This decision should help Florida community associations. To begin with, the case reinforces that owners have to prove their defenses. Second, it appears that for restrictions that protect neighboring owners from nuisances such as noise, if there is no complaint, then the association may not have to enforce the rule. Third, at least under these facts, there is a limit to owner reliance on unauthorized e-mails. However, it would appear that the selective enforcement holding is limited to those rules that protect others and may not apply to general restrictions that impact the community at large such as those rules regarding uniform appearance.

Death Liability in Suit Despite Employer’s Workers’ Compensation Coverage

Taking inconsistent positions or even making unclear statements after a claim was filed, may curtail a Florida association’s defense in a lawsuit. The facts in Gil v. Tenet Healthsystem North Shore, Inc., 41 Fla. L. Weekly D 2567 (Fla. 4th DCA, November 2016) arose in a hospital but could just have easily occurred in a Florida community association.

Rafael Gil apparently was exposed to hazardous materials while working as a carpenter for North Shore Medical Center. After Gil died, his wife filed a claim with the hospital for workers’ compensation benefits. The hospital denied her claim on the basis that Mr. Gil’s employment was not the “major contributing cause for his death.”

Mr. Gil’s wife then filed a wrongful death action against his employer, the hospital. The hospital maintained that no lawsuit could be filed because Mr. Gil’s wife’s exclusive remedy was through the workers’ compensation process. The lower court agreed and granted summary judgment for the hospital.

The Florida appellate court disagreed, reversing the decision of the trial court. The appellate court explained that if an employer claims that an employee is not entitled to workers’ compensation benefits because “the injury did not occur in the course and scope of employment, or that there was no employment relationship” the employer cannot claim immunity on the grounds that “the worker’s exclusive remedy was workers’ compensation.” The issue in this case was whether the hospital took inconsistent positions.

The court pointed out that the language used by the hospital in its notice to Mr. Gil’s wife regarding the denial of benefits was ambiguous. Therefore, there was a factual issue of whether the hospital was prevented from claiming immunity from a lawsuit.

“In the present case, if the hospital merely intended to allege the medical causation defense, it did not do so clearly,” the court explained. “Here, the notice of denial did not indicate there was a compensable injury, and instead generally provided that the entire claim [was] denied because claimant’s ‘employment’ was not the major contributing cause for his death”

The lesson to be learned is that in trying to avoid responsibility for insurance claims in the short run may not work in the long run. As soon as an association receives a claim, you should contact your association’s attorney and if there is an employee claim of injury then normally also contact your worker’s compensation carrier. This case also serves to remind associations to take care drafting contracts to properly address insurance requirements, not just assuming coverage exists “because it should.”

Get Ready, Get Set, Do Not Go!

The Florida Legislature Readies for 2017

It is time to gird for battle! Legislators and lobbyists are flooding into Tallahassee. The state is in a state!

At this time of year Florida community associations and their members warily watch for new legislative initiatives. It is too early to anticipate what, if any proposals that affect community associations will become law. Nevertheless, in advance of the March call to order for the Florida legislative session, legislative committees are scheduling and holding hearings.

Issues of all types are being pursued—HOA regulation, confirming condominium sprinkler retrofit requirements and providing for some extensions, and setting requirements for estoppel letters.

Bills that could affect Florida community associations if they become law include the following (“HB” means House Bill; “SB” means Senate Bill):

Homeowners Associations. HB135. For communities containing 7,500 or more parcels, election procedures are sought to be changed.

Homeowners Associations. HB137 would require disputes concerning many homeowners’ association issues to be sent to the Division of Condominiums pre-suit binding arbitration program.

Vacation Rentals. SB188, HB425, HB603 seek to prevent counties and municipalities from regulating “vacation rental.”

HOA Regulation. HB295 seeks to extend the Division of Condominiums, Time Shares, and Mobile Homes jurisdiction to include homeowners’ associations for arbitration of administrative issues including records inspections and allowing the levy of damages for delays in production.

MRTA. SB318 seeks to revise the Marketable Record Title Act to except

homeowners’ associations from the law extinguishing covenants.

Estoppel Letters. SB318, SB398, and HB433 seek to address the timing to provide, the effectiveness of, and charges for estoppel letters, including requiring letters being issued within ten days of the receipt of a request, and allowing requests by e-mail.

Claims. HB377 and SB 204 seek to limit the statute of limitations, the time period in which claims can be brought, against architects and professional engineers.

Community and Cooperative Associations [bill number pending] seeks to clarify retention of official records, limiting the requirement to hold bids to one year, expanding election records to be obtained to include electronic records and for condominiums to clarify that records are to be provided within ten working days, rather than five. For condominiums extending the time for sprinkler retrofit opt-out and to reinforce that buildings under 75 feet or less are not required to take an opt-out vote. Bulk buyer exemptions are extended indefinitely.

Construction. It is rumored that two bills are in drafting to clarify and improve the process for notifying contractors of construction information to reduce the potential of contractor liens.

Keep “tuned in” for more information as it arrives.

Michael J. Gelfand, Esq., Senior Partner of Gelfand & Apre, P.A.

Michael J. Gelfand, the Senior Partner of Gelfand & Arpe, P.A., emphasizes a community association law practice, counseling associations and owners how to set legitimate goals and effectively achieve those goals. Gelfand is a Florida Bar Board-Certified Real Estate Lawyer, Certified Circuit and County Civil Court Mediator, Homeowners Association Mediator, an Arbitrator, and Parliamentarian. He is the Chair of the Real Property Division of the Florida Bar’s Real Property, Probate & Trust Law Section, and a Fellow of the American College of Real Estate Lawyers. Contact him at michael@flcaj.com or (561) 655-6224.

Property Insurance

Gotta have it…Sooo $$$ expensive but terrified to use it: Property Insurance

Most board of directors know they must have property insurance. Most associations buy property insurance. However, most communities don’t know what their “policy” covers. Even though property insurance is purchased to insure and protect us in the event of damage, most boards (and most people) are terrified of making even a single insurance claim. There is a fear that the insurance company will triple our premiums or even drop us from coverage. These are myths our insurance companies want us all to believe.

This article addresses fact from fiction and makes a complicated process a little easier to understand. It is important to ensure your association receives all the money it is legally entitled to receive when something unexpected happens to your association’s property and your association is left with the bill.

Will Our Rates Increase? Will My Condominium or HOA be Dropped from Coverage if We Make an Insurance Claim?

My clients over the last 28 years have repeatedly told me they are petrified of making an insurance claim for fear of rate increases or being dropped. Condominium and HOA insurance claims are different. First, in the event of a named storm (the 2017 hurricane season starts again next month!) insurance companies cannot discriminate against you, raising premiums or dropping coverage, for making an insurance claim. Rates are determined on geography and other factors, not whether you made a claim to have your roof replaced! Further, if they drop you, they are pulling out of the area whether you made a claim or not.

It is purposeful that insurance companies want you to believe they determine your car insurance premiums the same way as your condominium, HOA, townhome, or cooperative. It’s not! Don’t fear repercussions from insurance companies. It’s an urban myth. Florida law protects us from unfair insurance practices.

An insurance company does not determine your rates based upon a single claim. Instead, an insurance company takes into consideration numerous factors in determining rates: age of building, type of construction, cost to rebuild, proximity to the ocean, location within the state, etc. All of these factors come into play, not just whether you made a claim. Further, in the event of a hurricane or when a state of emergency is declared additional community association property insurance protections are mandated.

Keep in mind that a property insurance policy is purchased to provide a sense of security to the insured. In the event of a covered claim, the insurance company must pay for the resulting damages. If a community has property insurance, the members of the association should absolutely not bear the cost to repair property damage which should be covered by insurance. If you are unsure whether the property damage may be covered under a property insurance policy, you should consider contacting an experienced first-party property lawyer.

What is Covered under a Property Insurance Policy?

A community association property insurance policy (“policy” is a friendly way to say insurance contract”) typically covers damages as a result of unexpected events. The coverage available under property insurance policies depends upon the language in your insurance contract. Mostly, association insurance contracts are divided into two categories: (1) named perils and (2) all-risks.

As the name indicates, a “named perils” policy provides coverage only for those perils or causes of loss listed in the policy. Examples of covered perils include fire, lightning, windstorm, hail, and smoke. In contrast to a “named perils” policy, an “all-risks” policy covers all perils or causes of loss not specifically excluded or limited by the policy. Do you know what type of policy your community has?

“First-party” property claims.

You may have heard others use the term “first-party” property claim. This simply refers to a claim by an insured for property damage under its property insurance policy. Common insurance claims include damages caused by hurricanes, tornadoes, rain, high winds, hail, flood, storm surges, fire, water bursts, and many others.

Do I have a “first-party” property claim?

For the most part, your community will know or learn when they have property damage. For instance, in October last year, many condominium associations on the east coast were smashed by Hurricane Matthew. My personal house was significantly damaged. I made an insurance claim. They paid, my premiums were not raised, and my coverage was not dropped.

There may also be damage that was unknown for some period of time; that does not mean insurance will not cover those damages. An experienced first-party property damage lawyer or public adjuster are best suited to conduct an investigation of the damages, determine the covered cause of the damages, and present the claim to the insurance company. Please do not simply rely upon the insurance company’s “Independent Adjuster”, they are almost exclusively hired by the insurance company. “Independent.” No way. Please get a second opinion on the amount and cause of your damages.

Whose insurance applies?

Another issue an association faces when there is property damage is whose property insurance policy applies? This is where association’s declarations come into play. The declarations dictate what coverage the association must buy versus what an owner should have.

For instance, a condominium’s declaration may require the association to buy a property insurance policy which covers only the common elements. Common elements include the drywall inside the unit but not the wall coverings (e.g., paint, wallpaper, etc.). So, if there is a covered loss which causes damage to the interior of a unit, the covered damages under the condominium’s property insurance policy will differ from a unit-owner’s property policy.

Delay, denial, or underpayment – an Insurance company’s “Bad Faith”.

Insurance companies want to be perceived as having your interests as paramount. “You’re in good hands with Allstate.” “Nationwide is on your side.” “Like a good neighbor, State Farm is there.”

Yet, the reality is insurance companies are businesses, and all businesses are concerned about profits. As such, insurance companies may instruct their adjusters to deny claims even though the claim may be covered, pay as little as possible for covered claims, or even deny paying claims all together.

The Florida Legislature has recognized this conflict of interest between insurance companies and insureds and has set forth standards for an insurance company to act in “good faith.” For instance, an insurance company must adequately and timely adjust a claim and must settle claims in “good faith.”

Instead of quickly resolving a “first-party” claim, all too often insurance companies delay their investigation only to later issue a denial or underpay the claim. These “bad faith” tactics are what the Florida Legislature sought to abolish, but insurance companies still act this way in the name of corporate greed and profits. Please consult with your lawyer or obtain a qualified independent second opinion to protecting the interests of your community.

Fearing your insurance rates will be tripled or dropped is simply not true. Buckle up, batten down the hatches, and have your community association lawyer on speed dial.

Alan Garfinkel has counseled homeowners, townhomes, condominium associations, and individuals throughout Florida from his same Central Florida office for 25 years. He continues to passionately work for those living in and working for community associations. Garfinkel received the highest ethics rating (AV) for more than a dozen consecutive years. Attorney peer review ratings provide objective grades based on confidential evaluations by attorneys and judges measuring a lawyer’s ethical standards and legal ability. Garfinkel Whynot only represents community associations, not big corporations like developers, banks, and insurance companies that can develop conflicts with communities. For more information, visit www.MyGWLaw.com.

Condominium and HOA Q & A

Q Our HOA board has solicited a vote of the membership to amend our covenants to add the following provision: “Meetings or gatherings of six or more people may not occur in a house more than one time in a 30-day period.” Additional ‘meetings’ would require board approval. The board said we need to pass this amendment to prevent a house in the community from being used as a sober home, but, it sounds like they want to dissuade lawful assembly. Would the above be legal?

A I can think of a number of problems with the proposed amendment. First, it is unlikely to be effective for its intended purpose. Courts have ruled that the rights of persons to live in group homes may be protected by the Fair Housing Act’s prohibition against discriminating against disabled persons. The fact that the rule or covenant is not expressly directed against group homes is not going to save it from the Fair Housing Act. Disabled persons are entitled to accommodations of housing provider covenants, and your “meeting” rule would be no different. So called “sober” homes have become a significant concern in HOA communities throughout Florida, and I have seen a number of creative attempts to protect communities from them, but all of the options are currently speculative at best.

Second, I wonder if the covenant, as broadly as it is worded, would survive judicial review in the first place. It’s true that amendments to covenants are afforded a broad presumption of validity, and are rarely invalidated—but in this case, I agree with you that the covenant bumps up against not only your basic right to freely associate, but also conflicts with other easements that likely already exist in your covenants (such as the rights of owners to have guests, and to have their guests cross the common area roads). Further, your board has already strongly suggested that it intends to arbitrarily enforce the rule by offering owners an exception to the limitation with board approval. Obviously, this is intended to allow them to prohibit sober homes while offering owners exceptions so that they can maintain normal guest access. If the covenant isn’t invalidated outright as being arbitrary in its application, the actual arbitrary exceptions are going to create a selective enforcement defense that will prevent the HOA from enforcing the rule against sober homes.

Also, what about homes where six or more people are permanent residents? Why would that not be considered a meeting that would violate the rule? I suspect that you are paraphrasing the rule a bit, but if it’s as simple as you’ve made it out to be, I don’t see it having very much effect. Your owners should also consider whether the fear of sober homes is worth approving a very significant restriction on the rights of all owners to have guests visit their home.

Q We were planning on remodeling our kitchen in our condominium unit in March. However, we were told by the condominium president that this work can’t be done in season. Unfortunately, all my condominium documents, including the bylaws, are in my house up north. I have borrowed someone in the building’s documents, and I can’t find anything in them regarding when you can do improvements to your unit. The only thing I found is the hours work can be done.

I have addressed this with the president of the association, and he said his bylaws are in his home up north, but he insisted that you can’t do work in season. He suggested that I do the work in the summer or fall. But, I only spend about four months here, and I do not come back in the summer or fall. I want to be respectful of condominium rules, and if this is indeed a rule I just want to see a copy. I’ve asked a few of the condominium owners and no one seems to have a copy of this rule.

A The president and others have referred to this rule as being part of the bylaws, but that is unlikely. Bylaws usually deal with corporate governance, whereas a rule restricting the use of your unit is more likely to be found in the declaration of covenants, or in the rules and regulations passed by the board of directors. Either way, though, I do think a covenant or rule restricting when you can remodel your unit is likely to be enforceable (covenants are afforded a broad presumption of validity, whereas board-made rules must pass a reasonableness test). These rules are fairly common in condominiums populated by snowbirds, particularly because people only spend a few months in their units, and they want to be free of construction noise during their vacations.

As for seeing a copy of the rule, every condominium in Florida, even smaller ones, are required to maintain certain official records, including a copy of the governing documents. If you make a written request to see these documents, the board is obligated to allow you to inspect them within ten business days. If they do not, you can file a complaint with the Division of Condominiums, which has the authority to order the association to provide the records, and to award you up to $500 in damages.

Ryan D. Poliakoff is a Partner of Backer Aboud Poliakoff & Foelster and serves as general counsel to condominiums, homeowners associations, and country clubs throughout South Florida. He is the co-author of New Neighborhoods—The Consumer’s Guide to Condominium, Co-Op, and HOA Living. In addition to representing associations, he is a frequent contributor at seminars and workshops for attorneys and board members, and he has written hundreds of articles for magazines and newspapers throughout the United States. He can be reached at rpoliakoff@bapflaw.com. For more information about his firm, visit www.bapflaw.com.

Outdoor Patio Furniture: Replace or Restore?

Whenever outdoor patio furniture becomes worn or outdated looking, people usually assume that they have one option, which is to buy new furniture. Many people are not aware that restoring their existing patio furniture is not only possible, but it also offers many benefits. It is a green process, which will save you money while also saving the environment. If your existing furniture is in good structural condition, it can be refinished to a like-new condition.

One great reason to keep your current patio furniture is because purchasing new furniture of the same quality is much more expensive than simply refinishing it. By refinishing your current chairs, lounges, and tables, you are able to keep your current outdoor patio furniture, save lots of money, and customize your patio furniture with a large selection of fabric and color choices. This allows the customer to customize their restoration to fit with their existing décor to create an overall coordinated look. The flexibility and performance of powder coating makes it a great choice for any metal restoration project. The following is a description of the methods used in the furniture restoration process.

What Is Powder Coating?

Powder coating is an advanced method of applying a decorative and protective finish to a wide range of materials and products that are used by various industries and consumers. The powder used for the process is a mixture of finely ground particles of pigment (color) and resin (protective finish), which is sprayed onto the surface to be coated. The materials to be coated are electronically grounded to attract the charged particles that adhere to the surface. After being heated in a curing oven, the powder fuses into a durable and protective coating. The result is a uniform, high quality, and attractive finish. Powder coating is the fastest growing technology in North America, providing numerous industrial applications in all form of materials and products. Powder coating is extremely beneficial when applied to outdoor furniture because of its excellent exterior performance.

The Process—Restoring Outdoor Patio Furniture

Patio furniture restoration involves re-slinging, re-strapping, and refinishing the furniture’s frames. The restoration process includes completely stripping off the old, dull finish by sandblasting with aluminum oxide. The metal surface is then pre-treated with a five-stage chemical pretreatment process. This properly prepares the patio furniture for the powder coating application. The powder is sprayed onto the metal surface of the furniture that is then baked in an industrial oven to cure the powder to a beautiful, long-lasting, final finish.

Since all of the furniture that we restore is in South Florida, the most corrosive environment in the world, we add an additional epoxy powder primer coat. This provides an extra layer of corrosion protection and is very rarely found on an original coating. Once the powder coating process is completed, the new straps or sling materials are installed along with any protective foot glides to protect flooring. As you can see from the photos, the complete restoration process—involving sandblasting, chemical pre-treatment of the base metal, and applying a durable, baked-on, powder coat finish—can be quite amazing.

Benefits of Restoration

Powder coating finishes are available in many colors and textures that are perfect for outdoor patio furniture applications. Since the finish is a baked-on process, powder coated finishes are typically more durable than a liquid paint application and are chip- and scratch-resistant. Being that patio furniture is outside, and exposed to the sun and other weather elements, powder coated finishes are by far the best selection. New finishes can be coordinated with hundreds of sling fabric, strapping, and outdoor cushions as well. For a fraction of the cost, restoration offers you the ability to completely update your décor. Below are just a few more benefits of using powder coating for the finishing process of your patio furniture restoration:

Custom color options—high/low gloss, metallic, textured, and clear finishes
Texture selection—smooth, matte, veins, hammertones, and textures to hide surface imperfections
Durability—extends product life by providing excellent resistance to corrosion, rust, and fading
Environmentally friendly—emits no VOCs and eliminates recycling
Superior protection—compared to standard paint finishes
Save money and time—no shipping, disposal, or replacement costs of your old furniture

Is Your Property a Candidate for Restoration?

Condominiums, country clubs, and HOAs with old and worn patio furniture should consider a powder coating restoration process instead of taking on the greater expense of furniture replacement. If the finish on the frames is still in great condition, than simply re-strapping or re-slinging is also an option. If your furniture is in good structural condition and only requires some minor welding repairs, then your furniture is a great candidate for restoration. You can completely update the look of your furniture and save your property a lot of money at the same time!

by Tammy Leeman
Absolute Patio Furniture Restoration is located in Pompano Beach, Florida. For more information, call (954) 917-2715 or visit www.absolutepowdercoat.com.

Community Association Attorneys and Managers Need to Work Together

In June of 2015, The Florida Supreme Court decided what a licensed community association manager can do, without being accused of practicing law without a license. The truth is—The Florida Bar tried hard to curtail what community association managers can do without a license to practice law, while the community association managers argued that most tasks required of community association managers certainly do not require three years of law school and passage of the Bar exam.

While the attorneys and managers who work with community associations may have made themselves familiar with the opinion, many Board members remain ill advised, and as a result continue to ask their manager to perform tasks that they’re not allowed to perform. In addition, they may wrongfully believe that their attorney needs to be more involved than necessary.

Here is how The Florida Supreme Court ruled:

The Court first spoke about what generally is considered the practice of law and said:

In determining whether the giving of advice and counsel and the performance of services in legal matters for compensation constitute the practice of law it is safe to follow the rule that if the giving of the advice and performance of the services affect important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the person giving such advice possess legal skill and a knowledge of the law greater than such possessed by the average citizen, then the giving of such advice and the performance of such services by one for another as a course of conduct constitutes the practice of law.

The practice of law also includes the giving of legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments, including contracts, by which legal rights are either obtained, secured or given away, although such matters may not then or ever be the subject of proceedings in a court.

Upholding a prior 1996 decision in all respects, The Florida Supreme Court again found the following activities when performed by a CAM to constitute the unlicensed practice of law:

Completing the frequently asked question and answer sheet;
Drafting a claim of lien, satisfaction of lien, and notice of commencement;
Determining the timing, method, and form of giving notice of meetings;
Determining the votes necessary for certain actions, which would entail interpretation of certain statutes and rules; and
Answering a community association’s question about the application of law to a matter being considered or advising a community association that a course of action may not be authorized by law, rule, or the association’s governing documents.

On the other hand, the 1996 opinion found the following activities not to constitute the practice of law:

Completion of the change of registered agent form and annual report form;
Drafting certificates of assessments;
Drafting first and second notices of date of election;
Drafting ballots;
Drafting written notices of annual or board meetings;
Drafting annual meeting or board meeting agendas, and
Drafting affidavits of mailing.

The 1996 Court opinion found the following activities to be dependent upon the specific circumstances:

Modification of limited proxy forms promulgated by the state;
Drafting a limited proxy form;
Drafting documents required to exercise the community association’s right of approval or right of first refusal on the sale or lease of a parcel.

The 1996 Court opinion found the following to be ministerial and could be performed by a CAM:

Modification of a limited proxy form to include the name of the community association;
Phrasing a yes or a no voting question concerning either waiving reserves or waiving the complied, reviewed, or audited financial statement requirement;
Phrasing a yes or a no voting question concerning carryover of excess membership expenses; and
Phrasing a yes or a no voting question concerning adoption of amendments to the Articles of Incorporation, Bylaws, or condominium documents;
The Court also found that the drafting of documents required to exercise a community association’s right of approval or first refusal to a sale or lease may require the assistance of an attorney, since there could be legal consequences to the decision.

The Court then went on to address 14 additional activities that community association managers typically perform. Here they are:

Preparation of a Certificate of Assessments due once the delinquent account is turned over to a lawyer;
Preparation of a Certificate of Assessments due once a foreclosure of the unit has commenced;
Preparation of Certificate of Assessments due once a member disputes in writing to the association the amount alleged as owed;

HOLDING—preparation of each of the three documents do not constitute the practice of law.

Drafting of amendments (and certificates of amendment that are recorded in the official records) to declaration of covenants, bylaws, and articles of incorporation when such documents are to be voted upon by the members;

Holding—the preparation of these documents constitute the unlicensed practice of law

Determining the number of days to be provided for statutory notice

Holding—if the determination of the number of days to be provided for statutory notice requires the interpretation of statutes, administrative rules, governing documents, or rules of civil procedure, then, it would constitute the unauthorized practice of law for a CAM to engage in this activity. If the determination does not require such interpretation, then it would not be the unlicensed practice of law.

Modification of limited proxy forms promulgated by the state;

Holding—If there is no discretion regarding the wording, and it is a yes or no question it is not the unauthorized practice of law. However, if the question requires discretion in the phrasing or involves the interpretation of statute or legal documents, the CAM may not modify the form.

Preparation of documents concerning the right of the association to approve new prospective owners;

Holding—if the preparation requires the exercise of discretion or the interpretation of statutes or legal documents, a CAM may not prepare the documents. For example, the association documents may contain provisions regarding the right of first refusal. Preparing a document regarding the approval of new owners may require an interpretation of this provision. An attorney should be consulted to ensure that the language comports with the association documents. On the other hand, the association documents may contain a provision regarding the size of pets an owner may have. Drafting a document regarding this would be ministerial in nature as an interpretation of the documents is generally not required.

Determination of affirmative votes needed to pass a proposition or amendment to the recorded documents;
Determination of owners’ votes needed to establish a quorum;

Holding—if these determinations require the interpretation and application of statutes and the community association’s governing documents, then this would constitute the unauthorized practice of law. If no interpretation is required—they would not.

Drafting of pre-arbitration demand letters;

Holding—this task is ministerial in nature and is not considered the unauthorized practice of law.

Preparation of construction lien documents (e.g., notice of commencement and lien waivers, etc.);

Holding—This is a very complicated and technical area of the law—Preparation of these documents would constitute the unlicensed practice of law.

Preparation, review, drafting, and/or substantial involvement in the preparation/execution of contracts, including construction contracts, management contracts, cable television contracts, etc;

Holding—Preparation of these documents constitute the unlicensed practice of law.

Identifying, through review of title instruments, the owners to receive pre-lien letters;

Holding—if the CAM is only searching the public records to identify who has owned the property over the years, then such review is ministerial in nature and not the unauthorized practice of law. In other words, if the CAM is merely making a list of all record owners—no violation. If however the CAM uses the list and then makes the legal determination of who needs to receive the pre-lien letter, this would constitute the unlicensed practice of law because it involves an analysis as to who must receive the letters.

Any activity that requires statutory or case law analysis to reach a legal conclusion.

Holding—It would constitute the unlicensed practice of law for a CAM to engage in activity requiring statutory or case law analysis to reach a legal conclusion.

Regardless of what you think of the decision—CAMs are well advised to abide by it or face the risk of being charged with the unauthorized practice of law and face a host of possible penalties. Not only should CAMs be careful, but Board members need to understand the decision of the Florida Supreme Court just as much as the managers do—and make sure not to ask your community association manager to take the role of the association’s attorney. By doing so, you place the manager in the difficult position of saying “NO” in order to comply with the law, while simultaneously looking like they refused to perform a task asked for by their employer.

Board members, managers, and attorneys should work together to familiarize themselves with the above opinion. Board members should be careful about asking managers to do tasks that could place their manager in jeopardy of being accused of practicing law without a license. Managers should know their limitations and that their license is on the line if they go too far, cross the line and practice law, even if their intentions were simply to be helpful and save the association money on attorney’s fees. Attorneys should also know that their help is not needed for everything, but instead primarily for interpreting the governing documents, the Florida Statutes and for preparation of documents that wind up getting recorded in the public records. The bottom line is that effective communication among everyone ensures proper distribution of required tasks and minimizes the risks that the above opinion is not complied with.

Eric M. Glazer is a native of Brooklyn, New York Mr. Glazer obtained his B.A. in Political Science at New York University. While at N.Y.U., Mr. Glazer was employed in the Kings County District Attorneys Office. Mr. Glazer obtained his Juris Doctorate at the University of Miami School of Law. In 1994 he established his own law office in Aventura and has recently relocated to Hollywood. Mr. Glazer has represented hundreds of community associations in the South Florida area. More info can be found at his website.

Preventing Gate Damage – And How to Deal with it When it Happens

You don’t have to be in this industry to know that gates and barrier arms get hit a lot. More than a lot. Whether you live in a gated community, visit friends or family that do, or just pass by, the damage is hard to miss when it happens.

Often times the gate was hit by a tailgater. It’s possible the driver didn’t know how to get in and thought he or she could follow closely behind someone else. Of course though, the driver didn’t make it. It could have also been that the entrance to the community wasn’t lit well at night, and the driver didn’t see the barrier arms as he or she turned in. Either way, it only gets worse when that driver took off, and now the community is left with the costs.

To try and solve the initial problem, it is important that a community has the appropriate barrier arms or gates installed. For instance, if the entrance is rather dark at night, consider LED barrier arms. Envera Systems installs these arms that are red when closed and green while opening. The arms illuminate the gated entry and make drivers more aware of it.

A second option is high-speed barrier arms, which close faster after one car has driven through. The abrupt closure of the arms can stop tailgaters before they have a chance to speed through. Another way to stop tailgaters is to have barrier arms installed in front of a gate. This method allows one car to drive through while the barrier arm is open, then it will close with that car between the arm and gate. Once the arm is closed, the gate will open, and the single vehicle is let through. This is a very effective method for preventing tailgating.

However, it is almost inevitable that a community’s gates or barrier arms will be damaged at some point though. That is why it’s important to have proper surveillance in the area. With the Envera Virtual Gate Guard system, accompanying cameras capture multiple angles of a community’s entrance. Plus the driver’s face is captured at the patented kiosk, and license plate cameras capture the license plate of each driver. This means vehicle owner information can be provided to a community when damage occurs, and the community can use the information to try and recoup damage costs.

To have the most secure solution, a combination of gates and/or barrier arms and some sort of surveillance is best. All of the previously mentioned options can work well with the right community, but every community is unique. That is why it is important for communities to talk with security professionals. With the right company, an appropriate system can be designed to match a community’s specific security needs. In this case, it can be better determined which method is most likely to stop a tailgater for that community, as well as how it will be taken care of when it does happen.

Brie Peterson is the Business Development Consultant for Envera Systems. She works closely with the sales and marketing departments to provide best-in-class service to the communities that Envera works with. Envera Systems specializes in security technology systems with remote guards to replace of enhance guards at communities. Contact info: (855) 380-1274 or www.EnveraSystems.com.

Getting What You Pay For!

When I arrived on the property, I knew ahead of time that the customer was extremely unhappy with their new paving project. I knew that they had tried to make amends with the contractor, and the contractor tried to make them happy but was failing miserably. I also knew what their RFP (Request for Proposal) was, and what I seen on property told me they got exactly what they paid for.

As with most communities, the board decided to go with the lowest bidder, and no one thought to ask why they were almost half the cost of the second lowest bidder, but they did note that he was a really nice guy! If I could have $100 for every time a board told me that a contractor “seemed like a nice guy,” I would be a millionaire!

The RFP the community sent out did not clarify whether or not they wanted to mill out the existing asphalt cap or just pave right over it. Even before seeing the pictures of the previous asphalt cap, I would have recommended that the community remove the existing asphalt cap strictly because of the concrete curbing and gutter that separated the parking stalls from the roadway.

The second hint that I would have milled out the old asphalt was a doorway that led to the trash dumpster. Nobody thought about it prior to paving but when the contractor raised the asphalt cap 1” he prevented the door from opening. When the board addressed the problem with the paving contractor, they jumped right on the problem and ground out the new asphalt to allow for the door to open all the way! YAY! No.

When they took out the asphalt from in front of the doorway only, they created a ponding area that now held water if it rained. Not only did it hold water, it also posed as a trip hazard for anyone trying to navigate their way into the doorway! Definitely not the solution the community was hoping for!

In addition to the standing water issue by the doorway, the community was starting to notice that the new asphalt was starting to “spall” or come up when the residents were backing out of their parking stalls. They notified the contractor of the issue and the contractor came out and laid new asphalt on top of the weakened, spalled areas and called it a day. When the board arrived to view the correction, they were mortified to see that although the thin areas were corrected, they now had large black repairs on top of the new pavement and it looked horrible! The contractor’s corrections were making their property look worse than it did before the new overlay!

It’s great that we can copy and paste a paving specification from one document to another but not understanding what we are requesting can lead you down the wrong path twice! Make sure that when you are looking at paving bids that they take note of difficult areas like doorways, access ramps, manhole covers, and hardscapes. Without taking these things into consideration, you might be paying for something you don’t want or worse, paying for something you requested but not something you wanted!

Asphalt Restoration Technology Systems, Inc. (AR Tech) has been established in Florida since 1993. Connie Lorenz is President of AR Tech and has been with the company since 1999. Her leadership, skills and classes have taught thousands of consumers about proper asphalt maintenance and has helped save them thousands of dollars, and she has become an advocate in the industry focusing on protecting homeowners, property managers, and owners from the downfalls of questionable contractors and improper techniques. For more information, visit www.asphaltnews.com.

Have You Thanked Your Manager This Month?

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Now is the time of year to reflect on the things and people for which we are grateful. Residents and directors of community associations could add to their “I am grateful for” list the managers who serve them and their associations.

Here are some of the reasons why:

Managers assist directors in handling hundreds of thousands up to millions of dollars worth of property. You warn directors who are about to make wrong decisions in managing those pricey assets. How hard it must be for you to watch directors make costly mistakes. Thank you for patiently working with directors to undo the damage.

Managers understand the documents and requirements of the law. Thank you for all the times you tell directors to get legal opinions before they proceed with an uncertain course of action. Whoa to the board who is too cheap to spend the money for attorney’s fees or that does not heed the advice of counsel.

Managers are bound by their license to be certain all the association funds are placed in the proper accounts. Thank you for all the times you keep the board from making terrible mistakes when they wanted to “move” money around from reserves to the operating account.

Managers have to look to the future and anticipate capital expenditures for balcony and concrete restoration. Thank you for the manager who will only work with an association whose reserves are fully funded.

Managers deal with people, pets, parking, and the pool all day long. Thank you for being a therapist, veterinarian, and parking and pool monitor.

Managers understand that rules enforcement is part of living in a community association. Thank you for reminding residents and directors that enforcement of violations is in the course of business and is not to be taken personally.

Managers know it is wise to move quickly to foreclose a lien or sue a resident for a rules violation. Thank you for stepping in and doing the hard work so residents do not lose the enjoyment of living in their communities.

Managers have residents call them all times of the day and night when they should be calling the police or locksmith. Thank you for all the times you answered your telephone and helped even when it wasn’t in your contract or job description.

Managers work hard during the off season to maintain the common area so residents’ investments will increase. Thank you for being able to come home to a beautiful community every fall.

Managers have to learn conflict prevention and negotiation skills. Thank you for the times you did not yell back at a resident who was having a bad day.

Managers take 20 hours of classes every two years to keep up with the new laws and changes in their industry. Even though we miss you when you are gone, thank you for keeping yourself current on community association management.

Managers know that with each election of directors, their contracts could be cancelled. Thank you for not bailing out on us when your future seemed uncertain.

Managers go over and above the requirements of exercising due professional care by taking a personal interest in our associations. Thank you for your good will and devotion to our community.

Managers interview and consult with experts, engineers, contractors, vendors, attorneys, and accountants. Thank you for doing that for us so we can enjoy the pool, golf course, clubhouse, and tennis courts.

Managers know how to compare apples to apples and oranges to oranges. Thank you for all the money you save us by your reviews and recommendations of our insurance policies and lawn maintenance contracts.

Managers know all the dates required by law for board meeting notices, recall procedures, and annual elections. Thank you for reminding us of those so we stay out of court.

Managers know and love their residents and take a special interest in them. Thank you for calling me about my mother and letting me know she wasn’t doing well so I could come help her.

Managers understand budgets, reserves, financials, and the difference between “fully funded” and “fully funding.” Thank you that we can depend on you and don’t have to know about such things.

Managers can often quote the statutes and documents verbatim. Thank you that we don’t have to know what 617, 718, 719, 720, and 721 are, or that the declaration contains restrictions that “run with the land”, or that the articles of incorporation and by-laws govern the business of the association.

Managers deal with many ethnic and religious groups, are often bilingual, and have to be aware of customs and practices of their overseas residents. Thank you for being a terrific international diplomat.

Managers sometimes have to act as the referee at board meetings and annual elections. Thank you for stepping in and reminding us to act like adults and be civil to each other.

Thank you for being our manager!

Happy Thanksgiving!

betsy Betsy Barbieux, CAM, CFCAM, guides managers, board members, and service providers in handling daily operations of their communities while at the same time dealing with different communication styles, difficult personalities, and conflict. Effective communication and efficient management are her goals. For more than 15 years, Barbieux has educated thousands of managers, directors, and service providers. She is your trainer for life! Barbieux is the author of Boardmanship, a columnist in the Florida Community Association Journal, and a member of the Regulatory Council for Community Association Managers. For more information, contact Betsy@FloridaCAMSchools.com, (352) 326-8365, or www.FloridaCAMSchools.com.

FCAP Profile: Cliff Glansen, President, FlatFee.com

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ell me a bit about your background:

I am originally from Wayne, New Jersey. My family and I moved to Florida in 1992.

How and why did you choose your current profession?

After buying and selling condominium foreclosures for many years, I then started FlatFee.com in 1999. At the time, a “discount broker” was a dirty word to traditional brokers and realtors. However, through time, most brokers had a buyer from their office that they had shown one of our limited service listings. Their idea of FlatFee.com had slowly changed. Within two years, we were in 44 MLS’s covering all of Florida and Alabama counties. We quickly became the largest MLS listing office in Florida and Alabama and have been so for 14 years. I saw a rising interest in FSBO listings in the beginning that has steadily grown. I am sure that today every property owner understands the term For Sale By Owner. It is stated that 16 percent of homes are sold by discount brokers and/or FSBOs. I find this upward trend simply remarkable.

Tell me a bit about your business:

FlatFee.com is an Internet company that MLS lists properties for sale and for rent. For a “Flat Fee” a client saves the traditional three percent listing fee. The client chooses the commission they wish to offer the buyer’s agent. Realtors contact the client for showings, details, and presentation of contract. The client also reserves the right to sell the property themselves as a FSBO and would save all commissions.

The concept is simple. One would start a file at FlatFee.com and complete our MLS form and post photos of the property. Our staff would post the listing in the appropriate MLS. The listing is then syndicated to Realtor.com, Zillow, and Trulia plus many more sites.

From your business perspective, what is one of the most challenging issues facing community associations?

With large rental turnover, management companies and associations must save rental advertising dollars while retaining control of their rentals. Couple a listing commission savings with advertising to the three main public sites plus the exposure to every realtor in the local MLS, and the client has more control of their property than ever before.

What is the achievement—business or personal—that you are proudest of?

I have been proud of FlatFee.com through the last 16 years. We have been building strong relationships and trust with MLS’s, brokers, and clients that make our referral business outstanding. However, personally, my three children are the best achievement a person could ask for.

What is your business philosophy?

The correct business philosophy is: Work with clients as you wish they would have worked for you.

Which individual has had the most positive influence on your professional or personal life?

This answer is simple: My Mom. She is still going strong at 95 and is ever challenging herself to learn something new. Her lessons taught to me were to work hard, be honest, keep your faith, and care for family and friends. Follow these simple rules, and you will sleep at night with a clear conscience.

What activities do you enjoy outside of your professional life?

Outside interests are my garden and my Model A Ford. Both give me a chance to move away from the computer and clear my thoughts.