Managers Report newsletter

Absentee Owners and Unoccupied Condominium Units

In condominium associations throughout the state, it is common for there to be seasonal unit owners who leave their units unoccupied during portions of the year. For associations faced with periodically unoccupied units in multifamily condominium buildings, there are distinct legal issues worth considering in advance of problems arising.

Florida’s Condominium Act (the “Act”) does not require absentee unit owners to have their unoccupied units periodically inspected for damage or deterioration. To overcome the absence of a statutory requirement, associations may adopt amendments to their declaration of condominium so that such inspection requirements are enacted to avoid problems originating in unoccupied units going undetected and/or unreported for long periods. Additionally, while the Act authorizes associations to “operate” association-installed hurricane protections to guard against damage to the condominium property, it does not require such protection to be installed. Therefore, it may be prudent to require all unit owners, including but not limited to absentee owners, to install such protection. To incentivize compliance, Section 718.111(11)(j), Florida Statutes provides that the responsibility for damages not paid for by insurance proceeds is shifted from the association to unit owners when such damages result from the unit owners’ failure to comply with the association’s declaration or rules.

The Act provides associations with an irrevocable right of access to enter units when necessary to undertake maintenance of common elements, and as necessary to prevent damage to common elements or to a unit. Associations should ensure that their documents or rules require a working key to all exterior doors and/or that contact information for local persons caring for unoccupied units be provided to the association. It is not recommended for an association to wait until an emergency arises before first contemplating how it will gain access to unoccupied units.

Fortunately, this subject is one that most association law practitioners have addressed in one manner or another. Condominium associations that find themselves concerned about unoccupied units are encouraged to discuss this with legal counsel so that a strategy for dealing with such units may be developed.

Joseph Arena

Senior Attorney, Becker
Ft. Lauderdale | bio

Switching Hats: Can a Lawyer Who Represents an Association also Serve as a Member of the Client’s Board of Directors?

The short answer: there is no express prohibition against this, but it’s complicated and not recommended for either the association or the lawyer. There are several ethical issues that arise due to the lawyer’s duties to the entity as its counsel, fiduciary duties to the entity as a director, and the lawyer’s personal self interest in both roles.

A board member who is also an attorney can be a great asset for a community association board, as she may have the attention to detail, certain knowledge, and communication skills that are useful to serving on the community’s board. Many attorneys do sit on the boards of their communities and are of great service to their communities. However, this does not substitute the need for independent legal advice from an attorney who specializes and is experienced in community association law.

If a lawyer serves as both director and counsel, the lawyer must be extremely careful in examining which hat—lawyer or director—she is wearing during all communications as she navigates between the two roles. This also needs to be clearly communicated to her fellow board members. For example, an attorney-client relationship may unintentionally arise when the entity reasonably believes that the lawyer-director is acting as its counsel in providing legal advice. Or when acting as counsel, she must take every reasonable step to ensure that the board understands that she is representing only the association itself and that she does not represent any of its individual board members, officers, employees, or anyone else.

Even with careful navigation between the two roles, there are a number of issues that may arise. The first, as briefly touched upon, is that conflicts of interest may arise. A lawyer-director who is personally affected by the legal advice she is giving to the board undermines her capacity to provide objective advice.

The second is in determining the scope of the lawyer’s representation. Generally, a client determines the objectives or goals of the representation, and the lawyer must abide by the client’s decisions. Meanwhile, the lawyer typically determines the means, such as the technical and legal tactical issues, to reach those objectives. However, the lawyer should consult with the client as to the means, as required. For the lawyer-director, this may cause some issues. For example, when wearing the “lawyer hat,” she must abide by the decisions of the entity regarding the objectives, even if as a director, she disagrees. She must also use her best judgment in determining whether to follow certain instructions as to the means of representation. This may put her at odds with her fellow board directors, who may urge her otherwise. On the other hand, the lawyer-director cannot retire her best judgment when putting on her “director hat” especially where she may disagree with the board’s instructions as to the means of representation.

Third, certain courts have held that a lawyer-director is held to a higher standard of care than a non-lawyer-director. When she is wearing her “counsel hat,” she is required to provide competent representation. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation. This may put the attorney in an unintended position where board members are simultaneously shielded from certain liability. The lawyer-director must remind her fellow board members when she is wearing her “director hat” and not providing legal advice, otherwise she will be held to the level of competence required of lawyers. This is especially true if the lawyer does not specialize in community association law, which reinforces the point that community associations should hire independent counsel specializing in community association law even if a lawyer sits on their board.

A fourth issue concerns confidential information. As the entity’s lawyer, the lawyer is required to maintain certain information confidential and privileged. As a board member, the director will have to make certain disclosures. Again, this would require careful switching of hats to determine where legal advice is protected by the attorney-client privilege and when business-related advice is not. The line is not clear and outside the scope of this article.

Given the complexities and importance of the statutory requirements impacting Florida community associations, it is strongly recommended that associations seek independent legal counsel who will best serve the needs of the community.

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

Board Member Tidbits

For this article, I thought I would jump around and discuss various items regarding board members, board meetings and a few association operational issues that keep popping up as questions and issues.

Board member certification.

Let’s start with the board member certification requirement, which applies to condominiums, homeowner associations and cooperative association board members.

Within 90 days after being elected or appointed to the board, the board member must certify in writing to the secretary that he or she has read and understands the governing documents and will faithfully discharge his or her fiduciary responsibility.
In lieu of this certification, a board member may submit certification of satisfactory completion of the education curriculum administered by a division-approved condominium educational provider taken within one (1) year before or 90 days after being elected or appointed.
The certification is valid for as long as the board member continuously serves on the board
Associations must maintain the certificates for five years after the election. In a condominium association, the association must maintain the certificates for five years after the election or for the duration of the board member’s term, whichever is longer.
Failure to either certify in writing to the secretary or submit certification of satisfactory completion of the education curriculum means that the director is suspended from service on the board until he or she complies.
The board may temporarily fill the vacancy during the period of suspension.
Any vacancy created based on a director being suspended may be filled according to law until the end of the period of the suspension or the end of the director’s term of office, whichever occurs first.
Once the director complies with the certification requirements, he or she is back on the board, and the replacement director is no longer on the board.

Basic Board Meeting Questions

Do members have the right to speak at board meetings?

Yes, on agenda items.

Do non-members, such as tenants or guests, have the right to speak at, or even attend, board meetings?

Unless the right is specifically in your governing documents, no. However, the association must apply this uniformly, and sometimes that is not a simple as it sounds. For example, if only one spouse is on the deed, that spouse is the “member”. The other spouse is technically not a “member,” unless your documents specifically provide otherwise. In such a scenario, the member spouse may be allowed to attend and speak, while the non-member spouse may not. If the association does not allow non-members to participate in meetings, that would include spouses who are not on the deed.

Can the association promulgate rules on owners’ participation at board meetings?

Yes, and I strongly encourage them to do so. Rules can cover such things as how long a member may speak on agenda items, how many times a member may speak on one item, directions regarding audio and video recordings so as to not disturb or disrupt the conduct of the meeting, etc.

Can a member discuss items at a board meeting that are not on the agenda?

Without the board’s permission, generally no. Some board have what is referred to as good and welfare, open forum, etc., where members are given the opportunity to address items that are not on the agenda with the board. If the board has such open forums, it is important that all board members be present to give legitimacy to such interactions.

Can the board remove a board member from the board?

No. Only the membership can remove a board member from the board. The board can remove a board member from an officer position at any time at a duly noticed meeting where the item is on the agenda. Board members can always reapportion board officer positions at a duly noticed meeting where the item is on the agenda. There may be an exception if your association members vote directly for the officers of the association, but that is extremely rare. In the vast majority of cases, the board members vote for the board officers.

Basic Reserve Questions

Are condominium and cooperative reserves required to be fully funded?

Yes, unless the membership has properly waived funding of reserves.

Can required reserves be partially waived? For example, can the membership vote to only fund 25 percent, or 50 percent, of the required reserves?

Yes.

Can the board use reserve funds for other than intended purposes? For example, if there is only $50,000 in the roof reserve, the roof needs to be replaced now, and the cost of the roof replacement is $100,000, can the board borrow $50,000 from other reserve items to pay for the roof repairs?

If your reserves are set up utilizing the straight-line reserve method, absolutely not. Only the members can vote to use reserves for other than intended purposes, which must occur at a duly noticed meeting where the item is on the agenda. If your reserves are set up under the pooled method, while you still have individual categories and allocations, all funds in the pool can be used to pay for any reserve item. Pooled reserves can be complicated so an association should confer with its accountant before setting up pooled reserves.

Can the board borrow from the reserves to pay for unanticipated operating expenses or operating deficits?

Absolutely not. This would fall under the same scenario as above, where the reserves are being utilized for other than intended purposes.

Is the association required to give members the option to waive reserves?

No. Whether or not members are given the option to waive reserves is up to the board.

Can the board convert regular (straight-line) reserves into a pooled reserve?

No. Existing straight-line reserves can only be converted into pooled reserves upon a vote of the membership. The board can decide on its own to begin pooling reserves moving forward; in that case, the existing straight-line reserves remain in their straight-line configuration, while future reserves would go into the pool. Generally, when a board is converting to pooled reserves, the membership will vote on whether or not to convert the existing reserves to pooled reserves so there is only one type of reserves.

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

The Association’s Responsibility for Wildlife on the Property

As Floridians, we are familiar with various types of wildlife surrounding our neighborhoods. It’s not uncommon to spot feral cats and ducks while walking the dog, or large iguanas out on the golf course. And let’s not forget about the numerous alligators, as well as coyote and black bear sightings. As new communities develop and expand into natural habitats throughout the state, interactions between residents and wildlife are increasingly common. Most of the time, these interactions are not problematic, but dangerous incidents can, and do, occur. The tragic alligator attack of the two-year old child at Disney World comes to mind, as well as the alligator attack of the University of Florida student. In a recent case, a mobile home park resident brought a wrongful death suit against the mobile home park after her husband was bit by fire ants while walking their dog in the park and died a couple of days later. This leads to the question; can an association be held responsible if someone is injured due to wildlife on its property?

As we know, an association is responsible for the operation and maintenance of the common areas. Additionally, landowners have certain duties to keep their properties in safe condition. If a resident or visitor is injured on property as a result of the association’s negligence, the association can be held liable. Generally, premises liability is based on the negligence of a property owner or occupant in allowing invitees or licensees to enter an area on the property, without warning, where the owner or occupant could foresee that such persons could be injured by a dangerous condition on the property that is unknown to the invitee and cannot be discovered through due care. However, does this extend to wildlife on or entering the association property?

When it comes to wild animals in their natural habitat, generally, the property owner (or association in this case) does not have the obligation to warn or protect others from wild animal attacks, unless the animal has been reduced to possession, or the animal is not indigenous to the locality but has been introduced onto the premises. For example, in the case of the University of Florida student mentioned above, the court discussed that alligators are indigenous to Florida. The University, in this case, did not create the dangerous condition, but rather the alligators moved from their natural habitat of Paynes Prairie State Park to the adjoining recreational lake on campus.

Nevertheless, where the association is aware or reasonably should have known of a particular wildlife issue and makes no efforts to reduce the attractants to the community, a court may find the association liable in the event of injury. Associations in areas prone to wildlife visits may consider adopting certain rules and regulations to reduce attractants of wildlife, such as trash procedures that reduce the likelihood that wildlife wanders into the community looking for food.

The association may also consider erecting signs by entrances or areas where wildlife may be encountered, warning residents and visitors to avoid contact. Although year-round occupants may be familiar with their community’s wildlife, guests and temporary workers, such as contractors, may not. The court examining the University of Florida incident focused on the number of signs posted by the recreational lake warning visitors to avoid swimming and warning of the possible presence of alligators. The court concluded that the proximate cause of the injury was that the swimmer ignored clear warning signs. The court did not conclude that the University would have been negligent had there been no warning signs, however, this case shows that the court took into account the due diligence of the University in its analysis.

In the case of the fire ants mentioned above, the court also took note of the due diligence of the mobile home park. For example, the court noted that the park had an exterminator spray insecticide every other month in order to kill ants and staff would treat visible ant mounds. However, the court ultimately concluded that the mobile home park was not liable because they did not bring the fire ants on the property, nor did they harbor, introduce, or reduce the fire ants to possession, but did take action to treat manifestations of ants.

It is noteworthy that courts seem to specifically distinguish where wildlife is found in “artificial structures” or places where they are not normally found, as opposed to their natural habitat, which could extend to artificial structures on association property. Again, liability does require that the landowner know or should know of the unreasonable risk of harm posed by an animal on its premises, and if the landowner cannot expect others to realize the danger or guard against it.

Because each community is different, the association should consult with legal counsel to determine if certain precautions concerning wildlife are warranted for the community. Placing signs or including provisions in the association’s documents prohibiting feeding or interacting with wildlife may be prudent for associations seeing an uptick of wildlife entering or near the property.

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

“Drawing a Line in the Sand” by Reviving Previously Unenforced Restrictions

The previous boards failed to enforce the parking restrictions in the community, and now parking has become a nightmare. The new board would like to remedy the solution, but can the board begin to enforce a restriction that has not been enforced in the past?

Generally, the association may lose its right to enforce a restriction if it does so inconsistently, unevenly, or arbitrarily. This is known as “selective enforcement,” and when selective enforcement is shown, the association may be estopped from enforcing a given restriction.

However, all is not lost. A previously unenforced restriction may be “revived” with notice from the board that it will enforce the restriction going forward. Essentially, the board draws a line in the sand, which lets owners know that from this point forward, the board will actively and evenly enforce the restriction in question. The process for reviving a provision comes from the case of Chattel Shipping and Investment, Inc. v. Brickell Place Condominium Association, Inc., 481 So.2d 29 (Fla. 3rd DCA 1985). In Chattel Shipping, the association’s declaration of condominium prohibited unit owners from enclosing their balconies without prior approval from the board. Multiple owners, nevertheless, enclosed their balconies without the requisite approval. The board, prompted by a letter from the city that the enclosures violated the city’s zoning ordinance, informed the owners that it would enforce the restriction and prohibit future balcony constructions. After this announcement, one unit owner, Chattel Shipping and Investment, Inc., enclosed its balcony. When the association secured a mandatory injunction requiring the removal of the balcony enclosure, the unit owner sought a reversal on the ground that the association had failed to require the dismantling of the other existing enclosures and thus was unequally and arbitrarily enforcing the restriction.

The Court rejected the owner’s argument, holding that the association could adopt and implement a uniform policy under which a building restriction will be enforced only prospectively without the enforcement of the same being deemed selective and arbitrary. Thus, the Chattel Shipping case stands for the proposition that an association can revive the enforcement of a restriction despite previous non-enforcement by notifying the members of the board’s intent to prospectively enforce the restrictions.

The purpose of properly notifying owners of prospective enforcement is to dispel the arguments and even appearance of unequal and selective enforcement that may be raised by owners. To prove selective enforcement, an owner needs to show that there are instances of similar violations of which the board had notice, but has refused to act. The Florida Administrative Code provides that the owner shall indicate the unit(s) to which each example pertains, the unit owner(s), how long the violation has existed, and shall indicate whether the board knew of the existence of the violation(s).

In drawing this line in the sand, the restriction is “reset.” This works well for temporary violations, such as a parking restriction, but what about violations with more permanent consequences, such as pet violations?

If the previous boards have turned a blind eye to house cats or has not enforced the one-dog policy and now a number of owners have pets in violation of this restriction, the board cannot reasonably expect that following the date of a resolution all owners with pets in violation will move or get rid of their pets.

In that case, in addition to a Chattel Shipping resolution, the board may also determine that it’s best to adopt a “grandfather clause” as part of the restriction. “Grandfathering” allows owners or residents who are already doing something to continue doing so, even if they would be in violation of the new (or newly enforced) restriction. Over time, there will be fewer and fewer exceptions to the restriction as grandfathered owners move away or pass away. And eventually, the restrictions will apply to all owners and residents of the community, as subsequent purchasers in the community will be buying the units under constructive notice of the community’s restrictions.

In adopting the restriction and providing for grandfather status, the language should be drafted carefully with the guidance of association counsel. The association should request that owners who seek to be grandfathered provide a written request to the association by a certain deadline. The deadline allows the association to clearly determine whether a violation existed prior to or after the passage of restriction in the event of a challenge. With a written request, the association can also evaluate each request and have a written record of which owners and/or what (i.e., which vehicle, which pet, etc.) has been granted grandfather status. For example, if the association seeks to restrict oversized vehicles or pickup trucks, the association will request that those owners who currently have oversized vehicles or pickup trucks register their current vehicle, including details such as the model, make, color, and year. This specific vehicle will be granted grandfather status, which means that if the owner exchanges his pickup truck for a different or newer truck, his new vehicle will not be grandfathered in and if the new vehicle is oversized, he will be in violation of the new restriction.

There are times when grandfathering owners or a Chattel Shipping resolution may not be appropriate. For example, if a new restriction to balcony enclosures is adopted by the association due to a need to protect the structural integrity of the building, the prior right to place items on the balcony will need to yield to the overriding safety considerations of the new rule. In such a case, the board should obtain documentation of the overriding safety concerns, such as from an engineer’s report, before requiring owners to change structures that were previously allowed. Another example is if certain items are no longer code compliant, even if the equipment would ordinarily be entitled to grandfather status, the equipment should be brought up to code, if possible, or removed if rendered inoperable.

If your association is facing an enforcement problem, association counsel can assist in reviving a restriction.

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

Attention to Detail

Attention to detail. A simple phrase that’s not always so simple to comply with, especially in a community association context.

There are several technical provisions in the statutes governing community associations that must be complied with. Chapters 607, 617, 718, 719, and 720, Florida Statutes have numerous requirements that associations must adhere to. A few examples include meeting notice requirements, board member eligibility requirements, record inspections, and others. Associations must be cognizant of changes to the statutes regarding such requirements, some of which pertain to regular or recurring events.

As associations go through the process of annual and election meeting notices, budget meeting notices, etc., one cannot just blindly use the previous year’s notice as a template for the current year’s notice. Associations must review any changes in the statutes to ensure this year’s notices are still in compliance. Having your association attorney prepare, or at least review, all such notices before they are sent out will help ensure the association is in compliance with the most recently enacted statutes.

For example, Section 718.112(2)(d)(2.), Florida Statutes, previously provided that a person who is delinquent in the payment of any monetary obligation due to the association, is not eligible to be a candidate for board membership and may not be listed on the ballot. That provision was changed in 2021 to now provide that a person who is delinquent in the payment of any assessment due to the association, is not eligible to be a candidate for board membership and may not be listed on the ballot. A small but significant difference. If your election meeting notice includes any information about candidate eligibility, blindly copying the previous year’s notice would have the association sending out inaccurate information regarding board member eligibility. Attention to detail.

Another example pertains to a condominium unit owner’s suspension of voting rights due to a delinquency. Section 718.303(5), Florida Statutes, previously provided an association may suspend the voting rights of a unit or member due to nonpayment of any fee, fine, or other monetary obligation due to the association which is more than 90-days delinquent. That provision was changed in 2017 and now provides that an association may suspend the voting rights of a unit owner or member because of nonpayment of any fee, fine, or other monetary obligation due to the association which is more than $1,000 and more than 90-days delinquent. While this change went into effect a few years ago, unfortunately I still run across associations attempting to suspend voting rights of owners who are more than 90-days delinquent, but such delinquency is not more than $1,000. Again, attention to detail.

Another area where attention to detail is necessary is the preparation of limited proxies. When voting on a waiver of reserves in a condominium, Section 718.112(2)(f)(4), Florida Statutes, provides that proxy questions relating to waiving or reducing the funding of reserves or using existing reserve funds for purposes other than those for which the reserves were intended must contain the following statement in capitalized, bold letters in a font size larger than any other used on the face of the proxy ballot: “WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.” When reviewing limited proxies prepared by associations for such votes, very frequently I notice that while the disclaimer language is in capitalized, bold letters, it is not in a font size larger than any other used on the face of the proxy ballot. Attention to detail.

Posting of meeting notices is required by the statutes. Forty-eight (48) hours’ notice for a regular board meeting; fourteen (14) days for some board meetings; 60-days for election meetings, etc. Only mailing, or emailing notices is not sufficient. Some meeting notices require an association to execute a proof of meeting notice (usually an affidavit signed by an association board member or manager). While these notice requirements may seem trivial, especially since the notices are mailed and/or emailed to owners, they are required by statute. Failure to properly post such notices may result in any action taken at said meeting being void. Failure to maintain proof of meeting notices when required may have the same effect, if any action taken at said meeting is challenged. Attention to detail.

In regard to homeowner associations, Section 720.306, Florida Statutes, previously provided that official notices were to be sent to the address on the property appraiser’s website. That provision was changed to provide that official notices once again are to be sent to the mailing address in the official records of the association under section 720.303(4), Florida Statutes. Attention to detail.

There have been technical changes in how associations must notify owners of delinquent assessments before the owner can be sent to the attorney for collections. These are technical requirements that should be discussed with your association attorney. Blindly following previous practices in regard to such collection notices and actions will result in delays and owner defenses to association collection actions. Attention to detail.

In regard to budgets, remember that budgets mailed to association members must contain the period of the budget year (for example, Jan 1, 2022 – Dec 31, 2022). I have seen many associations go through the arduous process of preparing and adopting a budget, only to have such budget challenged by a member because it did not contain the actual budget period, even though there was enough information on the budget to know what period it was for. Attention to detail.

While some of the above matters may seem minimal in regard to their impact on the association or its members, the Florida Department of Business and Professional Regulation, Division of Condominiums, Timeshares and Mobile Homes (“Division”) has recently changed its approach in regard to association education versus fining. In the past, a first violation of one of the above provisions, or another what would appear to be “minor” violation, was generally resolved by the issuance of a warning letter from the Division, recounting the violation, the remedial measures, and a warning to the association that future similar violations could result in a fine. Those “warning” days appear to be over, as the Division has adopted a much more stringent enforcement posture, which usually results in a fine to the association, even for a first violation of a seemingly minor provision. Fines range from $10 to $30 per unit, with a maximum fine of $5,000. I have seen recent cases where the Division initially sought to impose the maximum $5,000 fine for an initial, minor violation (minor in accordance with Rule 61B-21, Florida Administrative Code.)

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

Limited Common Elements: What Are They and Who Is Responsible?

Condominiums generally consist of the following two components: 1) the units that are subject to exclusive ownership by one or more persons, and 2) the common elements, which are any areas not included within the unit boundaries. Unit owners, in addition to the exclusive ownership of their units, also own an undivided share in the common elements. Commonly, the association is responsible for the maintenance, repair, and replacement of the common elements at common expense, while the unit owners are each responsible for their individual units at their own expense.

What about those areas of the condominium property that are used only by one owner or a group of owners but lie outside the boundaries of the units, such as a parking space or balcony? These may be a subset of common elements known as limited common elements, if so designated by the declaration of condominium.

The Florida Condominium Act defines limited common elements as those common elements that are reserved for the use of a certain unit or group of units, as specified in the declaration of the condominium. This definition indicates that the limited common elements are a subset of the common elements. See Gary A. Poliakoff, Law of Condominium Operations §4:65 (“[A]lthough all limited common elements are common elements, not all common elements are limited.”). Unlike the common elements, the limited common elements are restricted to the use of one or a few unit owners. The right to use limited common elements is appurtenant to one unit or group of units, meaning that the right to use the limited common elements is tied directly to that unit or units’ ownership. Common examples include parking spaces, storage units, balconies, or patios. There are also less obvious elements external to the unit boundaries, but serving exclusively one unit owner or group of owners, such as plumbing lines or air-conditioning units, that may be limited common elements. The key component in making the determination as to whether something is a limited common element stems from the Condominium Act definition, which provides that the designation of these common elements as “limited” common elements is entirely dependent on the language of the declaration.

If the limited common elements are a subset of the common elements, does this mean the association is responsible for their maintenance, replacement, and repair? Sometimes, but not always.

The Florida Condominium Act states that the association is responsible for maintaining the common elements, which includes the limited common elements. This is logical, if all limited common elements are common elements, it follows that the association is responsible for the maintenance, repair, and replacement thereof at common expense. If the declaration is silent, maintenance of the limited common elements is an association responsibility, as a “common expense,” meaning all owners share the cost. This may sometimes seem unfair or surprising to condominium unit owners in that they are paying for the maintenance, repair, and replacement of condominium property that they are not permitted to use, such as the neighbor’s balcony. The law allows the declaration to delegate maintenance responsibility for limited common elements to the benefiting owner(s), or to the association but at the expense of the benefitting owner(s).

The Florida Condominium Act provides that the declaration can require that the limited common elements be maintained by the individual unit owners who benefit from the exclusive use of the limited common elements. Again, declaration language is key to this responsibility allocation. The maintenance responsibility delegation to the unit owners can also be accompanied by a provision that this maintenance is at the expense of the benefitting owners, rather than at common expense. Even if the association does maintain the limited common elements, it may be able to allocate the costs of the maintenance to those owners entitled to use the limited common elements in question. Again, the declaration needs to provide that the costs of the maintenance is the responsibility of the unit to which the limited common element is assigned. In such a case, the association can perform the required maintenance or repairs and charge the owner or owners who benefit from the use of these limited common elements.

Importantly, even if the maintenance and costs for the limited common elements are designated by the declaration as the responsibility of the unit owner, the board, nevertheless, has the right to enter and access a limited common element for necessary repairs in an emergency or after reasonable notice, in the same manner it can access a unit.

The designation of common elements as limited common elements can also be significant in determining the board’s authority to regulate or reassign these areas. For example, if parking spaces or storage units are limited common elements pursuant to the declaration, the board would not have the right to reassign the spaces or units without the permission of the owners who have exclusive rights to use the same. On the other hand, if those parking spaces or storage units are not designated as “limited” common elements by the declaration, the board may have the right to reassign the same.

Associations with ambiguous or vague documents can run into issues when it comes to distinguishing exactly who is responsible for what and determining the board’s authority over certain areas of the condominium. In the event that the declaration is unclear, it is important to discuss options with association counsel. The Condominium Act strictly limits the way an association can spend its money, which means it is important that the association understand what it is responsible for and what it is not responsible for before inappropriately spending association funds. If the association seeks to have the unit owner or group of owners who benefit from a certain common element to be responsible for the maintenance, repair, and replacement of the same, the declaration needs to both designate the area as a limited common element and allocate the responsibility to the benefitting owners. If the association prefers to handle the maintenance of certain limited common elements, but at the benefitting unit owner’s expense rather than common expense, it is also important for the declaration to provide that the association’s maintenance of the limited common elements charged to the owner(s) is secured by a lien in the same manner as the common expense assessment lien. It is best to obtain an opinion from association counsel as to the delegation of responsibilities before undertaking major repairs where the declaration is unclear or ambiguous. Association counsel can also work with the board to amend the declaration to better meet the needs of the association based on the design of the condominium property.

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale |bio

To Mediate or Arbitrate….? A New Pre-Suit Option for Resolving Disputes in Condominium Associations

As most condominium association boards and managers are aware by now, Section 718.112(2)(k), Florida Statutes, of the Condominium Act, was most recently amended to require a condominium’s bylaws to include a provision for alternative dispute resolution as provided in Section 718.1255, Florida Statutes. The alternative dispute resolution process outlined in Section 718.1255, Florida Statutes, was also amended, effective July 1, 2021, to allow for arbitration or mediation of certain condominium disputes. Previously, prior to filing a lawsuit in state court, condominium associations and unit owners were required to petition the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation (“Division”) to conduct an arbitration hearing when there was a disagreement or “dispute” between the association and unit owner regarding the following:

The authority of the board of directors, under the Condominium Act or the association documents, to:
- Require any owner to take any action, or not to take any action, involving that owner’s unit or the appurtenances thereto; or
- Alter or add to a common area or element.

The failure of the Association to:
- Properly conduct elections.
- Give adequate notice of meetings or other actions.
- Properly conduct meetings.
- Allow inspection of books and records

A plan to terminate the condominium, per Section 718.117, Florida Statutes.

(Note that disputes regarding the following are NOT subject to the statutory alternative dispute resolution process outlined in Section 718.1255, Florida Statutes: title to any unit or common element; the interpretation or enforcement of any warranty; the levy of a fee or assessment, or the collection of an assessment; the eviction or other removal of a tenant from a unit; alleged breaches of fiduciary duty by one or more directors; or claims for damages to a unit based upon the alleged failure of the association to maintain the common elements or condominium property.)

Section 718.1255(5), Florida Statutes, now allows the condominium association or unit owner to choose between the Division’s arbitration hearing process or the presuit meditation process with which homeowner associations are required to comply per Section 720.311, Florida Statutes, of the Homeowners Association Act. (Condominium election and recall disputes are not eligible for mediation and are required to be arbitrated by the division or filed in a court of competent jurisdiction.) It is important for condominium boards to consider a number of factors when choosing whether to pursue presuit arbitration or mediation of a particular dispute. Below are guidelines for an association to consider and discuss with its attorney when considering its enforcement and alternative dispute resolution options:

1. Language of the Governing Documents

As always, the first place for an association to start when considering its enforcement and alternative dispute resolution options is the association’s governing documents (which collectively refers to an association’s declaration, articles of incorporation, bylaws, and rules and regulations). Some association declarations or bylaws may contain a specific notice and alternative dispute resolution procedure with which the association is required to comply prior to initiating a lawsuit against an owner. For example, the declaration may contain a clause that expressly states that the association “shall” submit certain disputes to arbitration, in which case, the association must arbitrate the dispute or amend the provision to remove the requirement. The association’s attorney may also conduct an analysis of the association’s governing documents to determine if there is certain language within the documents which automatically incorporates into the association’s governing documents future changes to the Condominium Act (“Kaufman language”).

2. Timing

The Division arbitration hearing process is similar to the hearing process followed in state court. When a party files a petition to initiate arbitration with the Division, an arbitrator is appointed to act as a “judge” between the parties who are responsible for filing motions and presenting evidence and testimony in support of their position. If required, the arbitrator may conduct a mini-trial or evidentiary hearing during which the parties may produce and present evidence and cross-examine witnesses. In light of the foregoing, the arbitration process can sometimes last a few to several months (if not a year or two) before there is a final opinion issued by the arbitrator. Even after the arbitrator issues a “final” opinion, Section 718.1255(4)(k), Florida Statutes, allows the parties to file a complaint for “trial de novo” in state court within thirty (30) of the arbitrator’s final decision. In which case, the parties would essentially have to “re-litigate” the dispute from the beginning before the state court judge.

The presuit mediation process outlined in Section 720.311, Florida Statutes, requires the association send a statutory offer to participate in mediation to the alleged violator. If the individual does not respond within twenty (20) days from the date of the letter, or if the individual does not agree to mediate, the Association can proceed with filing a lawsuit against the individual in state court, without any additional notice to the individual. Additionally, persons who fail or refuse to participate in the entire mediation process may not recover attorney’s fees and costs in subsequent litigation relating to the dispute, even if he or she is ultimately the prevailing party in the lawsuit.

On balance, the presuit mediation process may be quicker than the arbitration process in resolving the underlying dispute (if the individual agrees to mediate) or obtaining a final resolution of the dispute in state court. (Note that Section 718.1255(4)(c), Florida Statutes, does allow a party to file a Motion to Stay the arbitration if the Association is requesting emergency relief.)

3. Cost and Attorney’s Fees

Because the arbitration process is similar in time and, in some cases, effort to the state court hearing process, the Association can expect to incur costs, including but not limited to petition filing fee ($50), administrative or management company costs, mailing and copying costs, etc., and attorney’s fees; even if the individual does not aggressively fight or defend against the Association’s petition. On the other hand, if the Association chooses to offer presuit mediation, and the other party agrees, the Association will still incur administrative and management fees but the other party must also specifically agree to pay or prepay one-half of the mediator’s fee. Additionally, the attorney time/expense associated with preparing and attending a one or two-day mediation are generally less than the attorney time/expense time associated with the entire arbitration process.

With regard to attorney’s fees, Section 718.1255(4)(k), Florida Statutes, provides that the prevailing party in the arbitration shall be awarded the costs of the arbitration and the “reasonable attorney fees” in an amount determined by the arbitrator. It is important to note, however, that in any arbitration, the Association’s success as the “prevailing party” is not guaranteed and thus, the Association can be subject to paying its attorney fees and the other side’s attorney fees if the arbitrator issues an opinion against the association. Additionally, even if the association is ultimately determined to be the “prevailing party,” it is responsible for paying its attorney fees and costs up front and throughout the duration of the arbitration. Not to mention, there is no guarantee that the arbitrator will award the Association the entire amount of its costs and fees nor that the individual is financially capable of paying the Association’s award of attorneys’ fees and costs (ie: “judgment proof”).

Without a doubt, the presuit mediation process is generally cheaper than the presuit arbitration process with regard to both actual costs and attorney fees. Because the parties are encouraged to come to the table to discuss the dispute with the assistance of a neutral mediator, it is more likely that a resolution can be reached more quickly (and calmly) than if the parties first address the issues and their positions in an adversarial type of hearing (as is the case with arbitration or litigation in state court). Additionally, during the privileged and confidential mediation process, the Association is able to assess the strength of its claim and that of the other side’s prior to deciding whether it wants to pursue full blown litigation on the issue in state court. Lastly, and importantly, even if the other side does not agree to mediate or the mediation results in an impasse between the parties, the Association is not at risk of paying the other party’s attorney’s fees, as is the case if the Association is not the prevailing party in the arbitration proceeding.

4. Nature of the Dispute

As already outlined above, not every dispute is subject to the presuit mediation or arbitration process outlined in s. 718.1255(4)(k), Florida Statutes, so it is important for the association to review each dispute or potential claim with the association’s attorney as well as the association’s insurance carrier (as applicable). If the dispute is one that involves a topic or issue that involves or affects a number of owners, the Association may consider the arbitration process in order to obtain a “final” opinion from the arbitrator which might be applicable to other owners (ie: enforceability of the Association’s rules regarding official records and written inquiries). If, however, the issue is one that concerns only one owner or is highly fact-specific, the confidential, presuit mediation process may be advisable.

The latest changes to Section 718.1255, Florida Statutes, reflect the legislature’s continuing commitment to helping condominium associations and unit owners resolve disagreements in the most cost-effective and timely manner. Be sure to review your association’s current alternative dispute resolution process and procedures with association counsel today to ensure it is up-to-date and effectual in resolving the condominium’s disputes.

Shayla J. Mount

Attorney at Law, Becker
Orlando | bio

Maintaining Civility in Community Associations

This past year has brought out divisiveness and discord at all levels of governance, including community associations. Although emotions always seem to run particularly high, community associations have been filled with neighbors with differing values, preferences, and opinions as to how the association should be run and maintained. Even pre-COVID, association governance could become intensely personal. The board makes tough decisions that impact members’ property values, enjoyment of the property, and quality of life. This makes communicating in a civil manner a requirement of living in a community association, especially in associations with shared amenities and with members residing in close proximity to one another.

When communications disintegrate and a lack of civility becomes the standard in a community, emotions, interruptions, and personal attacks can overshadow fundamental business and operational decisions. These meetings and communications are unproductive and can leave all involved with a distaste for the community or board members, which may lead to good directors no longer wanting to remain on the board or cause good staff to leave. This also takes time and resources away from the necessary operation of the community to resolve interpersonal conflicts between members, directors, and/or staff. Maintaining civility in association communications, both spoken and written, can go a long way in solving practical problems and resolving disputes. This includes emails and social media, which have made it easy to send or forward regrettably uncivil communications.

Disagreements are bound to happen in any community association, and striving for unanimity from members on issues is not the aim. In the majority of cases, board directors, members, and management all want what is best for the community but may disagree on the approach. A civil and business-like approach to association communications and decisions can allow members to respectfully voice their disagreements, while also understanding that the board may need to make difficult decisions they do not like or agree with. The board should have the ability to inform members what behaviors, such as personal attacks, are unacceptable. This applies to communications between board members as well. Directors should be ready to address poor behavior from another director if the need arises.

Some communities have implemented a board member code of conduct within their governing documents to set a standard for civility. Such a code can help set rules and guidelines for interactions between directors, and with members, management, staff, and contractors. This language can also help set reasonable expectations as to how directors must conduct themselves when it comes to maintaining the privileged nature of communications, disclosing potential conflicts of interest, and setting aside personal agendas. This helps directors better understand how to fulfill their fiduciary duties and helps members have more confidence that directors are conducting themselves in the best interest of the community as a whole. Association counsel can assist in drafting this language to best fit the needs of your community.

Implementing reasonable rules governing meeting conduct can also be helpful to ensure that meetings are conducted in a productive, business-like manner. Members have a right to attend board meetings and a right to speak on agenda items at the meetings. The association can adopt written reasonable rules governing the frequency, duration, and manner of unit owner statements. The board can emphasize that these rules are not to limit owners’ right to speak but rather so that all may have an opportunity to be heard and ask their questions. Where issues may turn contentious or difficult decisions need to be made, association counsel can attend and assist the board in conducting the meeting.

At the end of the day, the board members have a fiduciary duty to the members of the association, which means they must act in the best interest of the association as a whole, act in good faith, and avoid conflicts of interest. When directors are newly elected, they must certify in writing that they will work to uphold the association’s governing documents and policies to the best of their ability and will faithfully discharge their fiduciary responsibility to the association’s members. Whether or not a code of conduct is in place in the community, these are mandatory responsibilities of any director sitting on the board of a community association. These responsibilities also mean that the board will have to make tough decisions, which will not necessarily be popular with members, but that are beneficial to the community as a whole. Maintaining civility throughout this sometimes-difficult process will go a long way in enhancing the members’ respect for the board members and the board members respect for each other and the members.

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

Hurricane Preparation

Yes, it’s that time of year again. The six month long hurricane season in South Florida. South Florida has seen an increase in hurricane activity over the past years, and that is expected to continue this year. Let’s look at some ways community associations to prepare for such storms.

Information on how to prepare for storms and emergencies usually revolves around preparing the building, securing association property, etc. Let’s talk about some of the other, just as important aspects that community associations need to be aware of in order to properly prepare for a storm, natural disaster or emergency.

Preparing for hurricanes, tropical storms and other disasters is a year round endeavor. Management contracts, landscaping contracts, security contracts, elevator contracts and construction contracts should all be reviewed for emergency procedures and in particular named storms. Some of the particular provisions that can be added into these types of contracts are:

Management Contracts

What extraordinary relief services will be provided by your management company?

What is the priority of relief services to be provided?

What additional charges will you incur to have your manager oversee repair projects and does your management contract obligate the association to use your manager in this capacity?

Landscaping Contracts

What relief and cleanup services will be provided and in what time frame post-storm?

What preventative services can be provided pre-storm (i.e., tree trimming, staking trees, etc.)?

Tree trimming should be completed before June 1st.

Security Contracts

What relief services will be provided and in what time frame post-storm? How soon after a storm passes will you once again have security personnel in place?

In the event of a name storm, when will security leave their post? When do they return ?

If you have electronic gates, what does your contract require in terms of securing those in the event of a storm?

Elevator Contracts

What relief services will be provided and in what time frame post storm?

If you do not have a generator for your elevator(s) what arrangements has the board made in the event the power is out for any length of time and residents cannot use the elevators?

What preventative services can be provided pre-storm? Is a generator advisable and affordable?

Construction Contracts

Any contracts for construction work on the association property should contain a clause requiring the contractor to secure the premises and their work material in the advent of a storm.

Miscellaneous Contracts

Does the association lease any space to third parties? If so, do those contracts require the association to take any steps to secure the leased premises or clean up the leased premises in the event of a storm?

Association storm preparation and recovery should be a part of every one of the above types of contracts.

An association should have video and photographic documentation of the property condition, as well as an inventory of all association property, before a natural disaster or emergency occurs. This documentation should he updated every year

Documents

Community associations are not-for-profit corporations and, as such, rely heavily on various documents to function properly. Association records should be scanned and uploaded for temporary secure internet storage with hard copies placed in watertight Ziploc bags and secured in a fireproof box. With proper advance planning, your board will have peace of mind that the following documents have been safeguarded and will be available in the immediate aftermath of a storm.

Documents to be secured include:

Insurance policies
Resident lists
Financial records
Employee records
Contracts
Association Governing Documents
Community Plat
Plans & Specifications for the community
Video, photographs and inventory list of association and association property

Computer Records

Hard Drive back-up – thumb drive, online storage, thumb drive

Staff

Don’t forget your staff! If the association has employees, the association’s policies and procedures with regard to those employees’ duties regarding storm preparation and storm cleanup need to be reviewed with legal counsel to ensure compliance with all local and federal ordinances. In addition, the board needs to discuss with counsel proper protocol to allow employees to leave early to secure their own residences and property in the advent of a storm and/or not to report to work after the storm until the property has been determined to be safe.

Post disaster

Immediate Actions

Account for the whereabouts of residents;
Attend to the injured;
Secure the community from acts of vandalism and looting.
Notify the police in the event of a theft;
Document damage with photographs and video;
Before making arrangements to remove storm debris other than life threatening or access obstructing, contact your city to see what plan of action it has for debris removal;
“Drying In”/”Shoring Up” the building structures in order to mitigate against further damage;
Remove, where necessary, wet carpet, wall board, cabinets, etc. when necessary to prevent the growth of mold;
Survey the property and identify areas needing priority attention; and
Open lines of communications with the unit owners, contact emergency services, and notify the contractors and employees, advising of their duties and needs.

Reconstruction & Restoration

Contact Your Attorney Immediately. This is critical to ensure that your insurance provider’s requirements are met and that your community’s rights are protected.
Contact Your Insurance Agent.
Resist the natural urge to use a public adjuster to shepherd your claim without first discussing advantages and disadvantages with legal counsel.
Do NOT sign any contracts or releases without having them properly evaluated in advance by legal counsel.
Resist the attempts by out-of-state and possibly unlicensed vendors who swarm to our state in the aftermath of a disaster to do business with you.
Do not suspend common sense and/or forget to use the resources available to you. Performing due diligence on contractors should still be the norm.
Discuss possibilities for conventional financing and/or SBA disaster loans to fund repair and reconstruction projects with your legal counsel.
Be aware that most damage is not apparent to the visible eye or to anyone other than trained experts. Even if hurricane damage is not readily apparent at first, experts should be consulted to determine the extent of battering your community suffered.

Claims process

DO NOT SETTLE A CLAIM WITHOUT YOUR ATTORNEY’S INVOLVEMENT.

Carefully document the event; this will provide the claims adjuster with a head start in evaluating the claim.

Retain damaged property until a claims adjuster approves disposal (unless retaining such items poses a danger to safety).
Prepare an inventory list of property damaged. List the quantity, the description, the actual cash value and actual loss. Attach bills, receipts and related documents.
The claims adjuster from the insurance company should contact you in 2-5 business days from the date that you reported your claim.
With your attorney obtain all possible evidence in the claim.
Evidence includes, but is not limited to invoices, receipts, pictures, estimates, governing documents and correspondence regarding the claim.
The evidence will be used to document the condition of the property and maintenance prior to the event, as well as damages caused by the loss, emergency repairs performed to mitigate further damage, and repairs made to the property.
The damages that still need repair will be determined with an engineering baseline.
Ensure compliance with all conditions precedent pursuant to the terms of the policy.
Hire forensic experts to obtain a scope of repairs to bring the property back to its pre-loss state.
Notify the insurance company that the association’s attorney is representing the insured (association).
Attempt to coordinate a re-inspection of the property with the association’s expert and the insurance company to review discrepancies between what the insurance company says is due and what the association’s expert says is due.
Make all attempts to settle claim amicably.
Do not “give in” just to settle a claim.
Take further steps as necessary after consultation with your attorney.

Taking the above steps will assist the association in preparing for natural disasters or emergencies, dealing with the immediate aftermath and properly processing insurance claims

Howard J. Perl, Esq.

Shareholder, Becker
Fort Lauderdale | bio

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