You Have Questions, We Have Answers!

You Have Questions, We Have Answers!

By Donna DiMaggio Berger, Esq. / Published December 2019

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     We have a house in our single-family home community which had a reverse mortgage with HUD. The elderly owner has been transferred to an assisted care living facility (ACLF). What happens next?


     HUD will declare the mortgage to be in default now that the owner is no longer in residence, and it will set a foreclosure sale of the property. Under the “Single Family Mortgage Fore-closure Act of 1994,” HUD is entitled to foreclosure on mortgages it holds through either a non-judicial process or the standard state foreclosure procedure. HUD often decides to proceed under the (much faster) non-judicial process authorized by the Act. Typically, HUD will credit bid the amount owed; and if that amount is high enough, it is likely that HUD will be the entity taking title to the property.

     As long as HUD has title to this property, it will be required to pay all regular and special assessments that come due and to adhere to community standards and restrictions. If your association has already received notice from HUD that the property is delinquent, and they are proceeding, you should reach out with any exigent safety issues that need to be addressed on the property. Depending on how long the property has been vacant, it may be in a state of serious disrepair. 


     Can an owner who is current in the payment of his assessments at present but has filed for bankruptcy protection serve on our condominium board?


     Yes. The Condominium Act sets forth the eligibility requirements for board members. Owners who are delinquent in the payment of monetary obligations to the association or who are convicted felons whose civil rights have not been restored for at least five years will not be eligible to serve. There is currently no prohibition against owners serving who have previously filed for bankruptcy protection or are even currently in bankruptcy proceedings. 

     If you have an owner who is delinquent in the payment of monetary obligations to the association and that owner has filed for bankruptcy protection, then the automatic stay provisions under the Bankruptcy Code will prevent the association from invoking any remedies while the automatic stay remains in place. Be sure to speak with experienced association counsel when dealing with an owner who is protected by the automatic stay provisions of the Bankruptcy Code.


     My wife agreed to serve on our condominium board of directors thinking she was doing something worthwhile. Shortly after getting on the board, the board member whose seat she took and that man’s cronies started spreading malicious rumors about my wife, and she is now ill. I told her that no good could come from being on the board. Can we sue for infliction of emotional distress?


     Even though board service can be thankless and, in some cases, even harmful to one’s health, your spouse is to be commended for her sense of volunteerism. There are two types of causes of action related to emotional distress, but I warn you that both are often costly and time-consuming actions to pursue. With negligent infliction of emotional distress, you must prove bodily harm. The elements to prove this cause of action are: (1) the plaintiff must suffer a physical injury; (2) the plaintiff’s physical injury must be caused by the psychological trauma; and (3) the defendant must be involved in some way in the event which caused the negligent distress.

     Some of the signs of emotional distress include

  • Depression or general unhappiness;
  • Anxiety and agitation;
  • Moodiness, irritability, or anger;
  • Feeling overwhelmed;
  • Loneliness and isolation;
  • Other mental or emotional health problems.

     With intentional infliction of emotional distress, you do not need to prove resulting bodily harm, but you do need to prove intent or recklessness on the part of the defendant. Intentional infliction of emotional distress is a tort action, and it has three elements: (1) the defendant must act intentionally or recklessly; (2) the defendant’s conduct must be extreme and outrageous; and (3) the conduct must be the cause of severe emotional distress.

     Depending on the circumstances, in addition to the foregoing civil actions, the behavior may also constitute a violation of the association’s governing documents, in which case you may have individual rights under the Condominium Act and, should you prevail, you will be entitled to seek your attorney’s fees and costs. In severe cases, it may be incumbent upon the association to address the “owner vs. owner” behavior.


One of our board members has been accused of mistreating his neighbor at meetings and in postings on our association website. Now that owner is claiming that the board is responsible for defamation of his character. The rest of the board does not want to be involved in this dispute. Do we have to be concerned?


     Any time you agree to serve on a community association board, you must be prepared to play an active role, including censuring the bad behavior of a fellow director when you become aware of it. You have indicated that this director is making these statements at meetings and on the association’s website, which directly puts the association and the individual directors in harm’s way. It is time for the rest of the board to take steps to immediately shut off this director’s ability to continue to engage in this behavior. His or her ability to post on the website should be eliminated and any statements made at meetings should be immediately disclaimed by the board with the offending director removed from the meeting if necessary. 

     If this director holds an office (president, vice president, treasurer, or secretary), the board may take a vote to remove him or her from that office. However, you cannot remove that director from the board altogether unless you remove him or her for failing to pay monetary obligations owed to the association. One way to do this is to pass a board member code of conduct or baseline policies and protocols to better define the roles of each director and the expectations related to service on the board. Violation of that code or those policies should result in fines which, if left unpaid for 90 or more days, would then result in this director’s automatic removal from the board.

     If your fellow board member has engaged in written or verbal defamation, it is time to put your insurance carrier on notice of a potential claim. Often, there is not coverage in place to defend defamation committed by a director. However, your governing documents undoubtedly contain language which requires the association to defend and indemnify board members should they be sued while serving on the board. Unless that indemnification provision in your documents excludes defamation and other intentional wrongdoing, the association may be required to defend and indemnify this director for his or her wrongdoing and may not have the insurance coverage in place to do so easily. Indemnification provisions should be carefully drafted to avoid this quandary.

Donna DiMaggio Berger

Shareholder, Becker

     Donna DiMaggio Berger is a Shareholder in Becker’s Community Association Practice in Ft. Lauderdale, Florida. She is a member of the College of Community Association Lawyers (CCAL), a prestigious national organization that acknowledges community association attorneys who have distinguished themselves through contributions to the evolution or practice of community association law and who have committed themselves to high standards of professional and ethical conduct in the practice of community association law. She is also one of only 190 attorneys statewide who is a Board Certified Specialist in Condominium and Planned Development Law.
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