FCAP Community

Published June 2020

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Florida Community Association Professionals’ (FCAP) training is offered on two levels. Level one consists of courses meeting Florida’s continuing education requirements for CAMs, and level two is the Florida Advanced CAM Studies (FACS) courses. For further information about the more than 50 online continuing education classes available or to pursue the Certified Florida Community Association Manager (CFCAM) designation, please visit www.fcapgroup.com/membership/education-training/.

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Because You Asked
By Betsy Barbieux, CAM, CFCAM, CMCA

Betsy,
     My condominium association has postponed the annual election twice. Any ideas as to how long they can postpone it? Is this an “emergency” situation? I would appreciate any suggestions.
– Timothy

Timothy,
     I know some communities that have had March, April, and May annual meetings and elections postponed due to the social distancing requirements. And, yes, I would consider these times as an emergency; we are in uncharted waters and doing the best we can with our community processes and procedures.
     Assuming there are more candidates than board seats, it would be my belief that the elections in a condominium could still be held since they are mail-in ballots, and a quorum is not needed to count the ballots and announce the winners. Otherwise, the existing board members stay seated but may rearrange their officers’ positions at the board organizational meeting.
     On the annual meeting side of the equation, if there are amendments, a budget, reserves, or material alterations/substantial additions that need to be voted on, those are all done on a limited proxy and could be mailed in.
     But if there is nothing for the owners to vote on, my thought would be to go ahead and schedule the annual meeting, tell everyone to stay home, not have a quorum, and be done.
     Remember, the elections are an entirely separate procedure from the annual meeting and can go forward even if there is no quorum on the annual meeting track (page 109 in your Prelicensing manual). Also, see my March article in the Florida Community Association Journal at www.fcapgroup.com/flcaj/flcaj-articles/election-review/.
     Most CAMs don’t understand it is a two-track system with each track happening independent of the other.
– Betsy

Betsy,
     Hopefully, you remember we spoke about my issues in regard to my condominium association! One of the issues was the reserves. The treasurer moved the reserves around into “different” accounts without a membership meeting or membership voting.  I filed the correct paperwork with the DBPR to look at the reserves and several other issues. With regard to my issues concerning the reserves, I clearly showed that monies were moved in violation of Section 718.111.  I thought the DBPR was where owners could go for assistance when governing documents were not being followed, but that clearly seems to not be the case.  Along with the other issues that the DBPR would not address, they responded that they would not address my reserve question and basically quoted Section 718.112.  I believe that is an incorrect interpretation. 
     I thought the DBPR was supposed to help us. We really need some help.  My wish would be that someone from the DBPR would come down (or send someone down) to look through the books and run this corrupt board out of town.
     Please let me know if you have any ideas on how to proceed.
– Peg

Peg,
    I’m sorry to hear this report. One of the things I have found is that the DBPR won’t try to interpret your complaints. They have to be very concise and specific-ally tied to a statute number and FAC rule number. I always suggest using bullet points and enumerating the issues as Count 1, Count 2, Count 3, etc.
     The DBPR really should address the reserves issue. You may be required to go to arbitration before you can go to court for the meeting procedures issue.
     Mandatory non-binding arbitration is required to resolve certain disputes.  The parties may proceed to court only after submitting the matter to arbitration.  Dispute is defined as “any disagreement between two or more parties that involves:

1. The authority of the board of directors, under this chapter or association document to:
   1. Require any owner to take any action, or not to take any action, involving that owner’s unit or the appurtenances thereto.
   2. Alter or add to a common area or element.
2. The failure of a governing body, when required by this chapter or an association document, to:
   1. Properly conduct elections.
   2. Give adequate notice of meetings or other actions.
   3. Properly conduct meetings.
   4. Allow inspection of books and records.

     The DBPR will not address poor or stupid business decisions of the board.
– Betsy

     Please consider me a resource and never hesitate to ask questions. Be sure to subscribe to our YouTube channel—CAM Matters (www.youtube.com/c/cammatters)! It has a lot of good information for owners and boards.

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CAM to CAM
Insurance Essentials, Part Two
Marcy L. Kravit, CMCA, AMS, PCAM, CFCAM
Florida Community Association Professionals (FCAP) Education and Training Coordinator
AKAM On-Site Managing Director

Editor’s Note: This is the final part on insurance essentials. Parts one and two can be read at www.fcapgroup.com/flcaj/flcaj-articles/fcap-community-april-2020/ and www.fcapgroup.com/flcaj/flcaj-articles/fcap-community-may-2020/.

Soliciting Insurance Bids

    Managers are required to solicit bids to obtain proper insurance coverage for the community’s common areas and to ensure that they review, evaluate, and assess the bidding process methodically. It is essential to maintain a chronological schedule of insurance coverages. The association must comply with federal, state, and local laws and, most importantly, the association documents to insure the association appropriately. The association may be required to obtain an “agent of record letter” and submit the last few years of loss runs/history and an updated insurance appraisal.

     It is recommended that the manager prescreen bidders and make sure they can provide the following:

• Understanding of and experience in the industry
• References in the industry
• The ability to bid admitted surplus line A-rated carriers
• No conflicts of interest for the association
• Carrier’s rating and financial size
• Timeline on how quickly they can submit and pay on claims
• Options for policy deductibles and premiums

     It is essential that the manager meet with the board and agent to establish recommended procedures for filing and monitoring claims. Basic policies and procedures should be agreed upon.

     Preferably, the agent selected should be able to schedule an educational seminar offering residents an inside look at what the association’s policies cover and what types of insurance they should consider for protecting their property.

General Summary—Manager’s Role in Risk Management

• Have knowledge of the association’s governing documents, insurance policies, and applicable state statutes
• Be proactive, observant, and report issues to the owners and board
• Review and report known exposures for loss on a monthly or quarterly basis
• Manage and administer the association’s insurance
• Establish a good working relationship with the association’s insurance agent
• Communicate regularly with the association’s insurance agent, board, and residents on insurance matters
• Plan, organize, lead, manage, control, and inform!

General Summary—Insurance Agent’s Role in Risk Management

• Recommend insurance coverages
• Obtain quotes
• Coordinate financing options
• Provide timely loss history/loss runs
• Bind coverage
• Identify exposures
• Report and file claims
• Follow up with claims
• Assist with disaster planning and implementation
• Explain coverage to owners, board, and residents (rentals)
• Advise of market changes and association coverage changes
• Provide options for mitigation credits
• Evaluate flood zone and any potential changes

     Keep in mind that underwriters are responsible for the approval of coverages and pricing. An underwriter’s relationship with the agent is critical and sometimes depends on the volume of business. Some agents have access to a greater number of carriers and represent specific companies. The manager and the association should consider an agent whom they feel confident in and comfortable with and who is working for success in obtaining the best price and program for the association.

     Once the association has received the bid, give the agent a specific time to provide a bid presentation, and include a list of questions in advance. It is important to select the agent or broker 90–120 days prior to renewal. Managers need to be knowledgeable and professional in acting as the unbiased liaison for the association when bidding the insurance. The board has a fiduciary duty to hold the agent accountable to meet the association’s expectations for a professional and mutual long-term relationship!

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FCAP Member Spotlight

What is the company’s full name?

     Burg Simpson Eldredge Hersh Jardine Professional Corp.

 

Where is the company’s headquarters?

     Colorado

What year was the company established?

     Michael Burg founded the firm in 1977. Our first Florida office opened in Sarasota in 2018. 

Who are the company principals?

• Michael S. Burg—Founder/Shareholder, practicing for 43 years
• Peter W. Burg—Senior Shareholder
• Alan K. Simpson—U.S. Senate (R-Wyoming) from January 1979 to 1997

What is the company’s history?

     Burg Simpson has offices in Florida, Colorado, Arizona, Ohio, Wyoming, New Mexico, and Nevada. We are a trial law firm. We practice in various areas of law nationally, including construction defect litigation, personal injury, wrongful death, and mass tort. Our diverse experiences empower our lawyers with the tools they need to seek the best results for our clients. Our Florida lawyers focus exclusively on construction defect litigation.  They apply our national and collective experiences locally to help Florida communities live better. 

 What area of the state does the company serve?

     All of Florida. Our office is in Sarasota, and we are opening a Tampa office soon.

What are the primary services that the company provides?

     Construction defect litigation. We can help with condominium, townhome, and patio communities, single-family homeowner associations, single-family homeowners, and high-rise condominiums.

What is the company’s business philosophy?

     To change people’s lives for the better. When a client comes to us, it is not just another “case” or “file.” It is an opportunity for us to help. We listen and strive to understand our clients because every situation is different. Once we join forces, we brainstorm with our entire legal team, using nationwide experiences and years of dealing with construction defect issues to develop a refined and locally focused strategy to help our clients in the most meaningful way, whether it is in or out of the courtroom.

What are some of the advantages of working with community associations?

     We have the opportunity to make an impact and help many people at the same time. 

What are one or two items you would want boards of directors to understand about your line of work?

     The clock is ticking.  Boards, on behalf of their communities, only have a certain amount of time to take legal action against a builder or developer before their rights expire. If community members sense there are construction defects around their community, it is never too soon to bring that to a construction defect attorney’s attention and have that attorney conduct a preliminary assessment. We take these matters on a contingency fee and front the costs for associations, which means associations do not pay for legal fees or costs unless they recover. Therefore, there is no harm in contacting a construction defect attorney sooner rather than later. 

     For more information, visit Burg Simpson at burgsimpson.com or call 941-777-6776.