Published June 2019
Editor’s Note: Welcome to the 2019 “Summer School” Issue of Florida Community Association Journal. The material found in these four articles will not only be valuable to all board members, but it will also be submitted as four, one-hour CEUs for CAMs. The material in the magazine will serve as the curriculum for the courses with certification testing done online.
The next three months will feature board member and CAM Training. June has as its focus Legal and General Education. Hurricane Preparedness and Industry Leaders will be featured in July, and Finance/Budgeting and General Education will be the focus in August.
The contributions below are from some of the Women of the Industry who appeared in our November 2018 issue. They address a variety of current legal issues that community associations in Florida are facing.
For more information about the CEU program, please visit www.fcapschools.com.
With summer in Florida comes the rainy season and often complaints of “flooding” in neighborhood yards and streets. Homeowners may not realize that standing water resulting from rainfall is a temporary and critical part of the drainage system, which not only serves the particular community but also the interconnected system of stormwater treatment benefitting the entire region and state.
What many residents view as an unsightly wet mess may be part of the drainage system working as it is intended. According to the South Florida Water Management District at www.sfwmd.gov/sites/default/files/documents/faqs_rainy_season.pdf, ponding in streets, driveways, and yards is part of the system as designed, and it keeps the water from entering homes. The delay in water drainage after heavy downfalls also serves to prevent overflowing of lakes and canals and also allows for pollutants to filter out before reaching the aquifer.
Nevertheless, when this occurs, homeowners will often complain to the association. To evaluate whether or not such instances of standing water are “normal” and whether the association has an obligation to address it, the association should refer to its stormwater permit and governing documents to ensure it is properly maintaining the elements of the drainage system for which it is responsible.
For more information on Henderson, Franklin, Starnes & Holt, call (239) 344-1108, email email@example.com, or visit www.henlaw.com.
The erosion of civility in our society has begun to manifest itself in private residential communities. This lack of civility comes in many forms, from rudeness to other residents, staff, and contractors on the property and disruptive behavior at meetings, to more dangerous and escalating behaviors.
While it is impossible to legislate civility, the proximity in a multifamily dwelling or a community with shared amenities heightens the impact of these behaviors and creates a myriad of legal issues and operational challenges for volunteer boards and their managers. Perhaps the most difficult legal issue is the determination of when a lack of civility requires action in the form of regulation, enforcement, or, in egregious circumstances, additional security measures.
The impacts of this lack of civility are quite real as boards will find the quality of life and the ability to conduct business diminished as limited time and resources are increasingly devoted to the personal interactions between residents and staff instead of the operation and maintenance of the community. You will also find it more difficult to attract and retain good staff and contractors and, most importantly, few if any good people will want to serve on the board or even on a committee. Given the obligation of the association to protect the person and property of the residents, there is a point where regulatory and enforcement action is required.
What can the board do? Run a businesslike meeting. The more organized and businesslike the board members are, the less opportunity for disruption. Some communities even require board members to sign and adhere to a code of conduct in order to set the proper example and tone for the community. Adopt and enforce rules regarding the manner in which residents treat each other, the staff, and the contractors on the property. While this is an inherently subjective concept, most of us recognize truly unacceptable behavior when we see it. Operate with transparency and solicit input from the community. Some communities fracture because of a sense of secrecy, whether real or perceived. Some fracture because of generational differences in the approach to the maintenance and improvement of the facilities. Those boards that address these issues head on and send a clear message that uncivil behavior will not be tolerated will do a great service to their communities.
For more information, visit Becker at www.beckerlawyers.com.
Rising sea levels are an important issue which cannot be ignored by Florida communities, especially coastal ones, if they want to be resilient and prepared for expected adverse effects. Miami has the most to lose of any coastal city in the world in terms of financial assets, just above New York City. Florida has more residents at risk from sea level rise than any other U.S. state. The legal implications of sea level rise in Florida at every level are vast.
Government and municipal action thus far seems lacking. Some—but not enough—cities have approved bonds for measures such as shoreline stabilization, storm drainage improvements, elevating sea walls, and raising roads. Municipalities also need to address legal issues such as changing building and zoning codes, eminent domain and land takings, and tax incentives for developers, among others.
But when the state or local municipalities enact stricter building elevation requirements and developers elevate new construction, what will happen to adjacent properties, which have lower elevations? This would likely cause water run-off and flooding on adjacent parcels, which may, in turn, create private litigation in neighbor vs neighbor disputes based on negligence or nuisance concepts. In addition to their neighbors, aggrieved owners might sue local governmental agencies, planners, realtors, and even their own attorneys.
Condominium and homeowner associations are quasi-governmental microcosms, which also need to be proactive to protect their residents’ property values. Boards must plan for the financial impact of mitigation efforts through reserve funding. A reserve study can help plan for necessary capital improvements and addressing underground facilities such as garages and drains. Boards may likewise face liability for failing to take preventive measures.
There are many factors which need to be considered by Florida communities to mitigate adverse impacts due to rising sea levels, including addressing a myriad of legal issues.
For more information, visit Becker at www.beckerlawyers.com.
Apathetic members of associations are a troubling reality. The apathy manifests itself by the lack of participation in running for the board of directors, in voting, and in adhering to the restrictions of the governing documents. The problem with the apathy is that it can interfere in the proper administration of an association and prevent progress.
Community associations need concerned owners willing to participate in running the association in order to promote needed change, invigorate the community nature of an association, and ensure proper management. Apathy in running and serving on boards causes the same few members to serve on the board, year after year after year. This scenario can create environments that fuel suspicion, breed hostility, and thwart forward momentum.
A major problem with apathy in voting is that needed changes are prevented from occurring to the restrictions of an association. Many communities have restrictions that are out of touch with the current needs of the community, or worse, are improper, unenforceable, or confusing.
Lastly, apathy in adhering to the governing documents occurs typically either because the members just do not take the time to concern themselves with the restrictions contained in the governing documents or they simply just have no desire to comply. The cost of compliance activities to associations is an expense that should not be necessary and pulls money out of the association that could better be used on improving the community.
For more information, visit Becker at www.beckerlawyers.com.
I find that most association boards do not have a succession plan and rely on management or a long-standing board member to be the archive of knowledge for the board’s activities. This is problematic because it often results in boards taking action in a vacuum and not understanding the context as to why an action was taken or not taken previously. Florida law has created standards in terms of turning over association documents and property, but simply relying on the law doesn’t actually ensure action! Consider that a board must first hire an attorney to then make a demand and ultimately file a lawsuit for the return of property and documents. So, what can a board do? Create a succession plan, which includes a board member handbook that outlines the duty of the board members and articulates the previous board’s actions. If the association has good meeting minutes, these could be included in the handbook as a form of reference. The meeting minutes can explain the actions taken, and then the board can add notes to explain the context for the actions. I would also suggest a calendar highlighting the major milestones in the upcoming year as well as the previous year. A timeline showing what was done and when is valuable in planning for the future. Bottom line: do the work now to ensure success in the future!
For more information on PeytonBolin PL, call (877) 739-8662 or visit peytonbolin.com.
Some owners oppose serving on their association’s board of directors because they fear that the post brings with it an unreasonable level of personal liability and exposure to lawsuits by disgruntled owners.
To quell those concerns, condominium associations and HOAs typically carry Directors and Officers Liability Insurance (aka D&O insurance), which serves to defend and protect directors from claims made against them. Additionally, directors are also protected by the indemnification provisions in the Florida laws governing not-for-profit corporations as well as their association’s articles of incorporation.
These protections shield directors from personal liability for monetary damages stemming from any statement, vote, decision, or failure to act to the extent the director or officer was carrying out their duties as a director. The exceptions to these protections are for violations of criminal law, willful fraud and misconduct, recklessness, or acts or omissions which are committed in bad faith or with malicious purpose.
Unless directors act in an egregious or criminal manner, their actions should be indemnified by the association, and any legal actions taken against them should be covered under the association’s D&O insurance. The fear of exposure to frivolous lawsuits should not deter owners from answering the call to serve as a director or officer on their association’s board.
Homeowners and condominium associations are very budget-conscious entities, and rightfully so. However, there are several areas where an investment on the front end may have greater benefits when a problem arises. One such area is construction agreements for the repair, replacement, and/or alteration of the common elements.
Associations are in the habit of only calling legal counsel when the contractor has not performed adequately. Having the association’s legal counsel review construction agreements prior to the association executing it can serve to clarify existing terms and add missing terms so that each party is aware of their respective obligations and responsibilities to each other.
An association’s counsel should ensure that the association knows the following: 1. complete scope of work (included/excluded); 2. start and finish dates; 3. change order procedures; 4. invoicing and payment procedures; 5. rights, procedures, and consequences of termination; and even, 6. responsibility for storage, parking, and/or utilities. Although this list is not exhaustive, ensuring that at the outset every party knows what to expect and what is expected of them is vital to a successful project.
In the future, consider a legal review by sending the agreement and all related documents, a synopsis of what was relayed to the association regarding the contractor’s promises, and the association’s goals. This gives your legal counsel the ability to ensure that all verbal agreements are memorialized and to negotiate terms of the agreement. This investment in a legal review can be one factor that contributes to the association saving money in the event it has a dispute with the contractor.
For more information on Glazer & Sachs P.A., call (407) 515-1060 or visit www.condo-laws.com.
Following a severe weather event or other emergency, unscrupulous people often try to take advantage of communities’ needs for immediate cleanup. There are contractors who travel to condominiums and homeowners associations asking management and directors to sign contracts on the spot to make repairs and perform cleanup services. Of course, rapid repairs and cleanup are important, but some of the contracts associations are asked to sign include terms that are unreasonable and detrimental to the association. Some providers are unlicensed and lack insurance.
Those of us who were here during some of South Florida’s serious weather events surely remember how difficult it was for many communities to get a quorum of their boards together when telephone and internet services were not working.
If the governor issues a “state of emergency” for a county where your community is located, there are emergency powers provided in both the HOA Act (720.316) and the Condominium Act (718.1265), which provide some relief to communities when they simply cannot function as they would normally. As hurricane season approaches, proactive boards will work with their legal counsel to better understand how to prepare for emergency circumstances.
For more information on Backer, Aboud, Poliakoff & Foelster, call (800) 251-3562 or email firstname.lastname@example.org, or visit www.bapflaw.com.