Estoppel Certificates

The Time Is Now

By Michael J. Gelfand, Esq. / Published November 2017

Heads up! It is not just about pulling a form! With due credit to Gershwin, who wrote that in “summertime, and the livin’ is easy,” the seasonal slowdown in real estate transactions during the summer seems to have lulled many Florida community associations, their directors, and management into inaction. Inaction does come with a price.

With some abrupt circumstances, the practical significance of the new Florida laws regulating estoppel certificates is starting to hit home with directors, managers, owners, brokers, and lenders. For those who left town before the end of the 2017 legislative session, those who have been in wishful denial, or those who have been ignoring our monthly Memorandum to Clients legislative updates, Chapter 2017-93 Florida Laws amends Florida Statutes procedures effective July 1, 2017— for Florida condominium associations in Section 718.116, for Florida cooperative associations in 719.108, and for Florida statutory homeowners associations in 720.3085(1).

Florida community associations must gather significant non-financial information which is now required to complete certificates. This information includes confirmation of transfer approval requirements, including whether there is a right of first refusal; insurance contact information; and other non-assessment requirements of the statute.

The astute reader will note that so far there has been no mention of the traditional focus of estoppel certificates, that being how much and when the money is due. The association must take care to ensure that the estoppel certificate is not only correct for amounts due through the date of the certificate, but also for 30 days thereafter, which extends to 35 days if the certificate is sent by regular mail, as opposed to hand delivery or electronic mail. A mistake may be held against the association!

Why is there a concern of obtaining the information in advance? The answer is that there is a short response deadline. Certificates must be provided within ten business days of a request. If the deadline is not met, then no fee may be charged for the preparation and delivery of the certificate.

Regarding fees to prepare a certificate, the statute provides maximum amounts. The association must have a written resolution or management, bookkeeping, or maintenance contract providing for the payment. It cannot be overly emphasized that the maximum preparation fee stated in the new laws is not the minimum that an association must charge. When the directors set or authorize estoppel certificate preparation fees, the directors must take into account what amount is reasonable and appropriate.

Most associations appear to have been cognizant of our warnings since the spring regarding the certificate requirements. If your association has not undertaken the proper steps, including a proper authorization, proper determination of non-financial disclosures, and proper completion of information, then please ensure that you swiftly consult with your association’s counsel so that matters can be properly undertaken within the ten-day response deadline.

Knowingly Serving Drinks to an Alcoholic Who Causes an Accident Will Likely Lead to Liability

It is not uncommon for country clubs to serve alcohol to their members after a round of golf. What may be a little more uncommon is to serve alcohol to golfers not only after a round of golf but before and during a round of golf. What happens if a club member is involved in a fatal traffic accident after being served drinks by the club? The club may face serious liability if the club knows that the member is addicted to alcohol.

In a decision that may impact Florida country clubs and Florida community associations that serve alcohol, a Florida appellate court recently determined that serving a patron a substantial number of drinks on multiple occasions was sufficient evidence to be considered by the jury in determining whether the club knew that the patron was a habitual drunk. The facts of Gonzalez v. Stoneybrook West Golf Club, 42 Fla. L. Weekly D 1593 (Fla. 5th DCA, July 14, 2017) indicate that Hartman regularly played golf at Stoneybrook, a golf club whose employees serve alcoholic beverages inside the clubhouse and on the golf course. After playing golf and consuming alcohol, Hartman caused an automobile crash that resulted in a death.

The decedent’s estate sued the club for the wrongful death of the decedent pursuant to Section 768.125, Fla. Stat. (2014), Florida’s reverse dram shop liability statute which provides that a person “who knowingly serves a person habitually addicted to the use of any or all alcoholic beverages may become liable for injury or damage caused by or resulting from the intoxication of such. . .person.” The club argued that there was no evidence that the club had any knowledge of Hartman’s alleged addiction to alcohol. The trial court agreed and granted summary judgment for the club, not allowing a trial.

The Florida appellate court pointed out that a friend of Hartman testified in a deposition that Hartman was intoxicated almost every time they played golf together at the club, starting the day with two whiskey and Cokes in 16-ounce Styrofoam cups poured by bartenders who were familiar with Hartman. Half way through a round, Hartman usually bought another whiskey and Coke, and he would also buy drinks from the “cart girl.” The court determined that there was in fact enough evidence to be considered by a jury in determining whether the club knew that Hartman was a habitual drunk.

The lesson to be learned is something that should be obvious to everyone. Never serve too much to a person known to have an alcohol problem who will then be getting in a car to drive. This applies not only to golf clubs, but also likely applies to Florida community associations that serve alcohol, which may also include social clubs and organizations.

Michael J. Gelfand, Esq.

Senior Partner of Gelfand & ARPE, P.A.

Michael J. Gelfand, Esq., 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 ga@gelfandarpe.com or (561) 655-6224.