Rembaum’s Association Roundup

Governing Document Amendments in Light of COVID-19

By Jeffrey A. Rembaum, Esq. / Published July 2020

As a result of the unexpected COVID-19 crisis and its ramifications on Florida’s community associations, there are lessons that can be learned. Early on, an unexpected issue many community associations faced was whether the board could rely on the emergency powers set out in the Florida Statutes to help protect both residents and property alike during this time of uncertainty (the “emergency powers legislation”). The Condominium, Cooperative, and Homeowners Association Acts each provide that the board of directors is granted certain emergency powers in response to damage caused by an event for which a state of emergency is declared by the governor. While local governments at the city and county level may similarly declare a state of emergency, the emergency powers only spring into existence upon the governor’s issuance of an executive order declaring a state of emergency in response to damage caused by event.

These emergency powers include, just to name a few, the ability to cancel and reschedule meetings, conduct such meetings with as much notice as may be practicable, levy assessments, restrict access to the property, and so much more. More specifically, Sections 718.1265 as to condominiums, 719.128 as to cooperatives, and 720.316 as to homeowners associations, Florida Statutes, each provide enumerated emergency  powers available to the board of directors that may be exercised “in response to damage caused by an event for which a state of emergency is declared….” However, in light of the COVID-19 pandemic, the interpretation of the phrase “in response to damage caused by an event” created questions and confusion for both laymen and lawyers alike.

At issue was whether the emergency powers legislation only applies to situations where there is actual property damage and/or as a result of hurricane damage. Even if not necessarily intended for COVID-19 type situations, to many lawyers, including this author, there was no question that the emergency powers could be utilized by board members of Florida’s community associations in response to the instant pandemic. Nevertheless, others questioned whether the emergency powers legislation should apply since it was initially drafted in response to hurricane-type events and not a medical event, such as the COVID-19 pandemic.

By way of background, the emergency powers legislation was drafted in response to the series of hurricanes that hit Florida in 2004; however, it took the Florida legislature approximately four years to pass it into law. A plain reading of the emergency powers legislation even demonstrates that these statutes were drafted with hurricane-type damage in mind and not other disasters, such as global pandemics. But, that does not mean they cannot be applied to other situations. In fact,  on March 27, 2020, the Florida Department of Business and Professional Regulation Division of Condominiums, Timeshares, and Mobile Homes (the “Division”) issued an unexpected order that provided that the phrase “response to damage caused by an event” should not be considered when reading the emergency powers legislation. Then, on May 20, 2020, the Division entered a second order explaining that its prior order would expire on June 1, 2020 which is slightly more than a month before the governor’s state of emergency is set to expire on July 7, 2020. Without regard to whether the Division had the necessary authority to issue such orders in the first place, the result of its second order has attorneys asking, once again, does the emergency powers legislation apply? While a great many lawyers experienced in the body of community association law believe so, that does not mean that a court would agree upon legal challenge. Candidly, it would be surprising if the court did not agree, but one never knows with certainty how a court will ultimately rule, most especially on issues of first impression, for which this certainly qualifies.    

There is already legislative chatter about the need to revise the emergency powers legislation to make it more adaptable to the different types of disasters that can occur. But, community association boards should be able to rely, right now, on the emergency powers in any situation where the governor has declared a state of emergency where health of the members can be at issue. Even if the Florida legislature does amend the emergency powers to make it patently clear that the board may exercise its statutory  emergency powers during a declared state of emergency for a pandemic, such an amendment will take time, and that could mean anything but a fast fix. So, what is an association to do to prepare for the next unanticipated state of emergency?

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Well, at least in this instance it is quite likely that your association can act much more quickly to amend the community’s declaration or bylaws than the Florida legislature can to amend the Florida Statutes. With that in mind, the board can sponsor and the association membership can adopt an amendment to the declaration or bylaws that clarifies that the emergency powers set out in the Florida Statutes (with specific reference) apply to all states of emergency declared by the governor to the extent the safety and welfare of the members and/or the property is at issue. In addition, or as an alternative, specific emergency powers can be drafted in the declaration or bylaws, too.

A few suggestions for consideration include the following:

• During any emergency, the board may hold meetings with notice given only to those directors with whom it is practicable to communicate, and the notice may be given in any practicable manner. The director, or directors, in attendance at such a meeting shall constitute a quorum.
• The board may cancel, reschedule, and/or postpone board and member meetings, including the annual meeting, if necessary, to protect the health and welfare of the members.
• Corporate action taken in good faith during an emergency under this section to further the ordinary affairs of the association shall bind the association and shall have the rebuttable presumption of being reasonable and necessary.
• The board may use reserve funds to meet association needs and may use reserve funds as collateral for association loans. The board may adopt emergency assessments with such notice deemed practicable by the board.
• The board may adopt emergency rules and regulations governing the use and occupancy of the units, common elements, limited common elements, and association property, with notice given only to those directors with whom it is practicable to communicate.
• Any officer, director, or employee of the association acting with a reasonable belief that his actions are lawful in accordance  with these emergency  bylaws shall incur no liability for doing so, except in the case of willful  misconduct.
• The board shall act to keep all members informed of all board actions taken pursuant to these emergency powers by U.S. mail, closed circuit TV, social media, or email, etc., as may be practicable under the circumstances.

     If your association is interested in adopting such an amendment to your association’s governing documents, please be certain to seek out competent legal counsel that has the requisite expertise in the area of community association law.

Jeffrey Rembaum

Attorney, Kaye Bender Rembaum

Attorney Jeffrey Rembaum has considerable experience representing countless community associations that include condominium, homeowner, commercial, and cooperative associations throughout Florida. Every year since 2012, Mr. Rembaum has been inducted into the Florida Super Lawyers. Together with his partners, attorneys Robert Kaye and Michael Bender, their law firm, Kaye Bender Rembaum, is devoted to the representation of community and commercial associations throughout Florida. Kaye Bender Rembaum, with offices in Palm Beach, Broward, and Hillsborough Counties (and Miami by appointment), provides their clients with an unparalleled level of personalized and professional service. For more information, visit kbrlegal.com.