Condos and HOAs

Hard to believe hurricane season is nearly here, which means it is time to get ready for the worst by preparing your condo, home and community for the worst.

Five things to consider:

Protect  your condo and home, but also protect your neighbors’ home: Remove planters, lawn furniture, lawn gnomes from your yard as a major storm approaches to make sure they do not become projectiles that can damage property and people.

Lend a hand: You may be busy putting up your own shutters, for instance, but try to find time to help a neighbor. Pay particular attention to elderly neighbor or anyone with a medical condition, as well as those who live alone. Getting your home ready early will allow time for you to check in with neighbors. Helping to keep vulnerable neighbors (and their homes) prepared properly is the right thing to do, and it can help lessen damage to the whole community in the long-run.

Read your insurance documents one more time: Make sure you know what is covered and not on your premium. You may think you know, but reading the documents, including that darn fine print, beforehand is just plain smart. Learning after the fact that you have a huge deductible (which you forgot you changed to save money last year) can lead to heartbreak and financial doom. Also, make sure to keep your insurance and other important documents safe. Place in a safe deposit box, or at least a water-proof container.

List your emergency contacts: Now is the time to make sure you have all of your emergency contacts (family, friends, doctors, pet shelters, etc.) listed somewhere safe. Hedge your bet, create multiple lists. Leave one or two in a plastic bag, type them into your computer, laptop and all family smartphones.

Contact your association board: Find out the rules for putting up shutters, ask about a community disaster plan, volunteer to help for duties before and after a storm strike. You may be able to walk the neighborhood to make sure neighbors prepare their homes properly, or after the storm to help find out what damage or injuries occurred. You are not alone, you live in a community in which neighbors depend on each other.

What do you say? Do you have your own tips to share? Does your community have a safety plan you rely on and are proud of? Send an email to dvasquez@sunsentinel.com.

Also, check out my fellow blogger Gary Poliakoff’s recent post on community hurricane preparedness.

Tsunami in Japan, tornados in Alabama, flooding in Mississippi River; Hurricane Season is just around the corner.  Community Associations need to develop a disaster plan without further delay.  Based upon first hand experiences, in the aftermath of Andrew, Opal, Charley, Ivan, Wilma, et al., I wrote a pamphlet titled, “Disaster Recovery and Planning,” which is available, free of charge, on line at -http://www.newneighborhoodspublishing.com/docs/DisasterRecoveryBooklet.pdf.

The key to being prepared are the following recommendations:

1)      Designation of a Disaster Coordinator
2)      Designation of an Information Facilitator
3)      Create a photographic record of the premises and CDs of the association book and records.
4)      Maintain adequate insurance; that which complies with the mandates of state law.
5)      In the aftermath of a storm, move quickly to secure the premises from criminal acts and mitigate damages by:

a)      Drying in “or” shoring up” the premises
b)      “Drying out”
c)      Debris removal

6)      Include within the five (5) phases of reconstruction:

i)        Project planning / scheduling
ii)       Construction bidding
iii)     Construction negotiations
iv)     Construction / rehabilitation
v)      Project completion / close out

Remember to file insurance claims in a timely manner and DO NOT file false claims that will result in the association waiving its entire claim.

Next Thursday, I’ll discuss the Association’s Emergency Powers.

The Broward Coalition regularly gets requests from members looking for firms that others have had good experiences with, and we always send out a “Member needs assistance” blast asking for recommendations. We’ve had feedback on bankers, concrete restoration, engineering, paving contractors, painting, piping and association management, to list a few.

Jim Lord, president of Townhomes of Oriole, made an excellent suggestion that we’re going to follow up on, that we establish an online database that only members can access. It would maintain at a minimum, vendors, specialties, job type/description, satisfaction rating, and consent by members to be contacted about their experiences. We like to give information and help in a positive way whenever we can.

I’m going to send out a blast asking for input on the plan, suggestions for additions or changes, and of course names of vendors that our members have had good relationships with. This is just one example of how we work together to help one another with the myriad of issues association boards have to deal with.

We’re very lucky that we have such an enthusiastic and positive group of members, and we’re always looking for ideas that help make associations as well as our community stronger and better. I can’t imagine doing all that we do without the kind of people that we’ve been blessed with, who always answer the call for help, advocacy, and hard work. We take every opportunity to thank them for everything they do, because without them, we couldn’t have accomplished even a quarter of our goals. Once the establishment realized how many people are vitally interested in making life better not just for associations, but for all citizens of Broward, our positions are taken very seriously.

And that’s what the Coalition’s mission has always been.

Do friends let friends buy Condos? That was the message on the bumper sticker on the car in front of me last week. It made me chuckle but then made me think a little longer about what went into the sentiment.

 Buying a condominium doesn’t have to be a scary or mysterious process and, like planning a wedding without thinking about the potential decades of marriage to follow, deliberation needs to be given to the overall lifestyle choice before signing on the dotted line.

 What do you need to think about if you are considering a condominium purchase?

Perhaps the first item on your “To Do” list is to check to see if the condominium community you are considering is FHA approved. In 2009, the Federal Housing Administration announced that it would insure loans on condos only in developments where at least 50% of the units are owner occupied and, for new developments, where at least 30% of the units are already sold. The rules for FHA approval are even tougher for Florida condominiums. If you plan to use an FHA-insured loan for your condominium purchase, you can check if the community is FHA approved at https://entp.hud.gov/idapp/html/condlook.cfm.

Next you should consider if you can easily afford the monthly maintenance fee for your new condominium as well as any unexpected special assessments that might crop up. You certainly can’t predict if a hurricane will hit your new home months after purchasing it but you can investigate whether or not the community has reserves for the roof, exterior painting, paving and any other item for which the deferred maintenance or replacement costs exceed $10,000. If the association members have routinely waived or underfunded reserves, please know that this puts you at risk for a special assessment some time in the near future.

 Is the community mostly owner or tenant occupied?If that dynamic makes a difference to you, find out ahead of time. Just as important, if you plan on renting out your condominium at some point check to see how permissive or restrictive your community’s rules on leasing are. In that same vein, other lifestyle factors which are important to your happiness or livelihood such as owning a pet or pets, driving a commercial vehicle, running a business out of your home, etc. all demand a careful review of the association’s governing documents to be sure you can live within the community’s framework. If you cannot, don’t count on changing the status quo after you move in; better to find a community that meets your current and future needs in this regard. Also, don’t count on the fact that the documentary restrictions you find in place at the time of purchase will always stay that way. Association members can and often do vote to change important restrictions and you just might find yourself on the losing end of that vote.

What kind of delinquencies is the community currently experiencing? Again, the answer to this question will impact you in terms of the burden you will be expected to carry. While you are not entitled to a copy of the association’s budget, your seller/owner is and should provide a copy to you as well as proof of the association’s insurance coverage and information about association deductibles which will again impact your wallet as a new owner.

Finally, talk to a few of the residents you might encounter and look at the community bulletin board, newsletter and/or elevators. Does there seem to be a pervasive feeling of distrust or unease? Is the bulletin board littered with demands for a board recall or accusations of misuse of association funds? If you request your seller/owner to give you a limited power of attorney to attend a specific board or membership meeting, you will have a rare but important opportunity to see how well attended that meeting is, what the hot button topics in the community might be and how the board communicates with those in attendance.

Like any real property purchase, buying a condominium is an important step and can impact your future happiness. If you do your homework and buy in a community that fits your needs, the answer to the question “Do friends let friends buy condos?” is a resounding yes!

The Florida House and Senate have passed the latest reform bills, which will soon be sent to the Governor’s office for his signature or veto. If he does nothing, the bill still becomes law.

The reforms, if passed into law, will make life harder for delinquent owners by banning them from serving on boards and forcing landlord/owners to allow tenants to pay full rent money to the board until all debts are paid. They will also make it easier for homeowners in HOAs to speak up about items the board is considering at owner meetings.

Among the highlights:

Condos:

Will clarify that associations can now demand full rent from tenants in delinquent properties as opposed to just the current assessment amount.

Will make sure landlords cannot penalized a tenant for paying rent to the association to cover delinquent payments on behalf of the unit owner/landlord.

Will allow condo board members to submit proof of attending state-approved education courses in lieu of signing a form certifying they have read their documents and Florida law.

Will allow boards to ban delinquent owners from common areas, such as pools and club houses, without holding a hearing beforehand.

Makes clear that when an owner’s voting rights are suspended, the quorum requirement is reduced by the number of such suspended voters so as to safeguard the ability to achieve a quorum.

HOAs:

Will create a form letter for homeowners communities (along with condos and co-ops) to be sent to tenants explaining their obligation to pay rent to the association to cover an owner’s delinquent payments.

Will prohibit associations from cutting certified or franchised services to individual delinquent owners, including Internet and cable TV services.

Will ban felons from serving on the board, which would mirror current condo law.

Will allow owners to speak at board meetings on any item on the agenda, no longer requiring a petition from a number of owners to do so.

What do you say? Do you agree with such law changes? Do you disagree? Send an email to dvasquez@sunsentinel.com.

Recently this paper posted an answer to the question, “Can a Condo Board embarrass a unit owner by posting a late notice for maintenance payments on his front door?”  Unfortunately, the answer posted was “yes.”

I disagree. This answer is wrong on many levels. There is no Florida statute that requires or even authorizes associations to publicly post delinquency notices on a property owner’s door.  The statute erroneously cited in defense of this practice is Fla. Stat. § 718.121.  This statute states that the notice (of intent to file a lien) shall be deemed delivered upon mailing. Delivery clearly means delivery by mail.   (That is also consistent with the law for homeowner’s associations).  The purpose of this statute is to provide notice to the homeowner – not to the pizza deliveryman.

Public posting of delinquency notices exposes the association to liability.  While the federal Fair Debt Collection Practices Act would not apply to associations, the Florida Consumer Collection Practices Act (FCCPA) does.  This Act specifically prohibits such practices.

Public posting may also provide grounds for a lawsuit against the association for invasion of privacy.   This is not based on the constitutional right to privacy, because a community association is not a governmental agency.  Instead, it is a cause of action against a private person (or in this case, corporation) for the public disclosure of truthful private facts that a reasonable person would find objectionable.  The disclosure must be of the type not ordinarily made public – that is, not newsworthy to the public.  Even if disclosure of delinquencies is newsworthy to association members, it is not newsworthy to the pizza deliveryman, FTD florist, or mail carrier.

People may disagree about the wisdom of public shaming.  Frustrated homeowners paying the tab for their delinquent neighbors might even wish we could revive the scarlet letter and medieval stockades.   I sympathize with this frustration.  However, condo boards should be aware that posting delinquency notices on homeowners’ doors is asking for trouble.   It is not legally defensible.    It is also not strategically smart.  There are more productive (and safer) ways to recover late assessments.

I’m pleased to share with our readers a summary of SB530, which was just passed by the Florida Legislature and has been sent to the Governor for his signature.  The following summary was prepared by the Community Association Leadership Lobby (CALL).

• Official Records (Condominiums and HOAs)

-     Will clarify that owners are permitted to consent in writing to the disclosure of their protected contact information.

-     Will clarify that although personnel records are not available for inspection by owners, the owners will be permitted to inspect employment agreements and budgetary and financial records that indicate the compensation paid to employees.

• Open Meetings (Condominiums)

-     Will permit condominium boards the right to hold closed meetings (not open to unit owner observation) for “personnel” matters.  Legal counsel need not be present.  (This is already the law in the homeowners’ association context.)

• Attachment of Rents (Condominiums, Cooperatives and HOAs)

-     Will clarify that “future monetary obligations” includes all rent due from the tenant to the unit or parcel owner and must be paid to the association until all delinquent accounts are paid in full.

• Director Certification (Condominiums)

-     Will provide that condominium association directors may submit proof of educational course attendance (in lieu of signing the certification form) and such course must have been completed within 1 year before or 90 days after the date of the election or appointment. 

-     The written certification is valid as long as the director serves on the board without interruption.

• Suspensions (Condominiums, Cooperatives, HOAs)

-     Will allow suspension of common element use rights for non-payment (no hearing is required) and for bad acts (hearing is required).

-     Will clarify that if voting rights are suspended, the suspended vote will not count towards quorum or vote required to approve an action.

-     Suspensions for non-payment will not require hearing, but will require board approval at properly noticed meeting.

The Bill also contains some provisions that were primarily advocated through other constituents and groups:

• Collection of Rent from Tenants (Condominiums, Cooperatives, HOAs) 

-         Will provide a form letter to be sent to tenants explaining the tenant’s obligation to pay rent to the association.

-         Will provide tenant with immunity from any claim by the landlord related to the rent timely paid to the association after the association has made written demand.

• Elections and Staggered Terms (Condominiums) 

-         Will clarify that board member terms do not expire at the annual meeting if all of the member terms would expire at the annual meeting but there are no candidates. 

-         In those cases where the board member terms expire at the annual meeting, the board members may stand for reelection unless prohibited by the bylaws.  (This suggests that term limits may be permitted, if provided in the bylaws). 

-         Will clarify that a candidate must be eligible to serve on the board at the time of the deadline for submitting a notice of intent (i.e., 40 days before the election) in order for his or her name to be listed as a proper candidate on the election ballot or to serve on the board.

• Termination (Condominiums)

-     Will provide for “partial” termination of condominiums and that amendments providing for same are not subject to s. 718.110(4).

-     Plan of termination in a partial termination must reflect the remaining interests in the non-terminated portion of the condominium.

-         Modifies distribution protocol and mortgagee participation to reflect partial termination.

-         Will allow for termination because of economic waste or impossibility if a condominium includes units and timeshare estates where the improvements have been totally destroyed or demolished.  Will require a plan of termination be filed in court by a unit owner seeking equitable relief.

• Membership Agreements (Condominiums)

-     Will provide for association acquiring membership agreements by vote of a majority of entire voting interests instead of reference to declaration and s. 718.113(2).

• Management Fee Collection (Cooperatives)

-     Will remove provision from 2010 statute allowing cooperative associations to lien for collection services for which the association has contracted.

• Homeowners’ Associations/Bulk Television/Internet/Information (HOAs)

-     Will create s. 720.309(2) to basically mirror condominium statute, as amended in 2010, regarding bulk purchase of information or internet services.

-     Will prohibit homeowners’ associations from denying individual service to any resident from certificated or franchised provider.

• Bulk Buyers/Bulk Assignees (Condominiums)

-         Will amend definition of “bulk assignee” and “bulk buyer” to mean a person who acquires more than 7 condominium parcels in “a single condominium.”

-         Will provide that bulk assignee is not liable for warranties under 718.203(1) or 718.618, except “as expressly provided by the bulk assignee in a prospectus or offering circular, or the contract for purchase and sale executed with a purchaser,” or for design, construction, development or repair work performed by or on behalf of the bulk assignee.

-         Will provide that if, at the time the bulk assignee acquires title to the units and receives an assignment of developer rights, the developer has not relinquished control of the board, for purposes of determining the timing of transfer of control, a condominium parcel acquired by the bulk assignee is not deemed to be conveyed to a purchaser, or owned by an owner other than the developer, until the condominium parcel is conveyed to an owner who is not a bulk assignee.

-         Will require filing with the division and certain disclosures to purchasers and lessees if bulk assignee or bulk buyer is offering “more than seven units in a single condominium” for sale or for lease for a term exceeding 5 years.

-         Will provide that bulk assignee or bulk buyer are not required to comply with the filing or disclosure requirements if all of the units owned by the bulk assignee or bulk buyer are offered and conveyed to a single purchaser in a single transaction.

-         Will provide that a person acquiring condominium parcels may not be classified as a bulk assignee or bulk buyer unless the condominium parcels were acquired on or after July 1, 2010, but before July 1, 2012.  

• Homeowners’ Association Board of Directors Eligibility and Meetings (HOAs)

-         Will carry over the provisions in the Condominium Act regarding board eligibility.  A person delinquent in the payment of any monetary obligation to the association for more than ninety (90) days, and convicted felons will not be eligible to serve on the board.

-     Will allow members of a homeowners’ association to speak at meetings of the board with reference to all designated agenda items, and will no longer require a petition of the voting interests to speak at a board meeting. 

• Manual Fire Alarms (Condominiums and Cooperatives)

-     Will clarify that a condominium, cooperative or multi-family residential building that is less than four stories in height and has an exterior corridor providing a means of egress is exempt from installing a manual fire alarm system. This corrects the glitch from last year when two different bills adopted different language.  One bill referred to buildings less than four stories in height, and another bill referred to condominiums one or two stories in height.

• Hurricane Protection (Condominiums)

-     Will clarify that an association is permitted to install impact glass or    other code compliant windows as hurricane protection. 

• Joint and Several Liability (Condominiums and HOAs) 

-         Will provide that an association that acquires title to a unit through foreclosure is not liable for unpaid assessments that came due before the association’s acquisition of title in favor of any other condominium association or homeowners’ association which holds a superior interest on the unit.

Earlier I blogged about the Tallahassee Sausage Factory and how some lobbyists like to collect “trophies” by killing something a rival is advocating. It doesn’t seem to matter to them that the issue is worthwhile; what’s important to them is the power they broker.

One really crucial priority would have required insurance companies to notify unit owners when an association policy was cancelled or non-renewed. This came about from the awful incident involving an association president who cancelled insurance that would have paid for the destruction caused by a fire, leaving the unit owners responsible for covering the loss.

Enter the trophy hunters. They managed to yank that provision from an insurance-related bill. Never mind that it would’ve been an invaluable aid to associations, that it would’ve prevented more such abuses, that it would’ve helped with the staggering fiscal burden from disasters, that associations wanted the protection that the notification would afford. Nope, these lobbyists apparently wanted something to brag about, and that was that.

The sponsor of the bill was either distracted or allowed it to happen, perhaps in exchange for something done or not done for/to another bill. Moreover, the hunters are allegedly representing clients that support the provision, but who knows who supports what at any given moment? That’s the way the sausage rolls in Tallahassee, and it smells to high heaven.

Everything lobbyists get and everything they give to charities, etc., is added to the cost of what the entities doing business charge for their services. That means we the people/taxpayers pay that much more. Many of us just don’t think about it in these terms. I had one elected official ask me why she should care what lobbyists are paid. I just looked at her in disbelief, and explained why she should care. It didn’t seem to make an impression on her. But it needs to make an impression on all of us.

We’re going to extend the drive for ethical behavior to all areas of discourse because we can’t afford to have this kind of gamesmanship going on when the interests of the majority who pay the bills are affected so heavily. This is a hill worth defending.

As the 2011 Florida Legislative Session winds down, let’s see how much you know about the rules binding the lobbyists who play a key role in shaping the laws we all must follow.

How would you have answered each of the following questions?

1.  A state legislator may accept a cup of coffee and muffin from Goodwill Industries while touring a facility for legislative business in their district?

False.

A gift ban passed on the last day of  the 2005 special session prohibits legislators from grabbing a cup of coffee or a sandwich with constituents.  This session, legislation was filed to change this so that legislators could attend receptions and local events free of charge if the cost was $25 or less.  The bill stalled in committee.

For more on the Legislature’s gift rule go to: http://www.ethics.state.fl.us/publications/gifts%20info_2007_web.pdf

2.  A legislator may not accept a $10,000 campaign contribution from a company with interests pending before the legislature.

False.

Legislators may set up political committees, which can accept unlimited funds.

3.  Legislators are prohibited from voting on measures that benefit themselves or their family members.

False.

Despite a statewide grand jury report calling for ethics reform, legislation implementing these changes has stalled for the fourth year in a row. This year’s version, SB 86, would prohibit lawmakers from voting on issues that would almost exclusively benefit them or their relatives or the companies for whom they work. Under the bill, lawmakers would have to publicly disclose their potential conflicts of interest before abstaining from voting.

For more information on this bill, go to: http://www.flsenate.gov/Session/Bill/2011/0086
And click on the “analysis” tab.

4.  A lobbyist is prohibited from representing entities that may have conflicting interests.

False.

Lobbyists may represent numerous clients, even those with conflicting interests.  Lobbyists are required to file with the state and report who they represent. This information can be found at:
http://www.leg.state.fl.us/Lobbyist/index.cfm?Tab=lobbyist

Additionally, since 2005, lobbyists have been required to report their income from clients.  This measure was upheld by the Florida Supreme Court in 2009.