Condo Association Election Basics at Start of Season
By Michael L. Hyman
At least 60 days prior to the meeting and election, the association must mail, deliver or electronically transmit a first notice to all unit owners alerting them of the date, time and location of the meeting. Those who wish to be considered for board membership must then give the association written notice of their intent to run at least 40 days prior to the scheduled date of the election, and they may also submit information sheets about themselves.
A second notice together with an agenda for the meeting must then be mailed, delivered or electronically transmitted to all of the members together with a ballot that lists every candidate who submitted their names to run for board membership. Any information sheets submitted by the candidates and the return envelopes that allow for owners to print and sign their names and unit numbers must also be included.
At least 20 percent of the eligible voters must cast a ballot in order for the association to proceed to open the envelopes and count votes.
Within 90 days after the election, new directors must certify in writing that they have read the association’s declaration of condominium, articles of incorporation, bylaws and current written policies; they will work to uphold these documents and policies to the best of their ability; and they will faithfully discharge their fiduciary responsibilities to the association’s members. Otherwise, they must submit a certificate of having satisfactorily completed an educational curriculum administered by a division-approved condominium education provider (such as our law firm which regularly conducts board member certification seminars).
Elections can sometimes prove to be extremely challenging and contentious for associations, and it is imperative to consult closely with highly qualified and experienced legal counsel in order to help ensure that they adhere to all of the statutory mandates.
Michael L. Hyman is a partner with the South Florida law firm Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A. who has focused on community association law since 1970. The firm represents more than 800 associations and maintains offices in Miami-Dade, Broward and Palm Beach counties. (305) 442-3334, www.srhl-law.com, www.FloridaHOALawyerBlog.com.
New Monitoring Services Help Associations Catch Owners Conducting Unauthorized Short-Term Rentals
By Michael L. Hyman
The problem of short-term rentals offered through Airbnb and other similar websites in violation of community association documents and rule restrictions has quickly become one of the most pressing issues facing associations today. Even though Airbnb, HomeAway and VRBO claim they prohibit their hosts from renting residences in communities with rules prohibiting against short-term rentals, enforcement of this policy by the online home sharing providers is virtually nonexistent.
Unit owners conducting these rentals know full well that they are violating provisions in their association’s documents, so they typically walk their new guests into the property and advise security that their visit is authorized.
These unauthorized guests can cause potentially serious nuisance, security and liability issues for associations, which are now developing and implementing new registration forms and non-compensation statements to verify that guests are not paying for their stays.
In addition to these and other measures, a number of new service providers have now sprouted up to help associations monitor and detect listings for rentals of their properties in all of the leading home sharing websites as well as Craigslist. These include STRMonitor, BNBShield, SubletSpy, Sublet Alert and Stopbnb.
These service providers use automated search applications and algorithms to find and report listings in their clients’ communities and properties. Once the listings are identified, some offer additional investigation and enforcement services to help associations take the necessary steps in order to stop the rentals from taking place.
The growth of Airbnb and its competitors in today’s sharing economy appears to have no end in sight. By working with experienced association counsel and utilizing these new rental monitoring and prevention services as necessary, community associations will be able to effectively enforce documentary provisions prohibiting short-term rentals.
Michael L. Hyman is a partner with the South Florida law firm Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A., who has focused on community association law since 1970. The firm represents more than 800 associations and maintains offices in Miami-Dade, Broward and Palm Beach counties. (305) 442-3334, www.srhl-law.com, www.FloridaHOALawyerBlog.com.
Responding to Special Accommodation Requests
From time to time practically all community associations receive requests from individuals for exceptions to pet restrictions, parking space assignments, community architectural rules or other special accommodations. In an effort to avoid discrimination complaints or Fair Housing Act violation claims, associations should establish appropriate procedures to address such requests.
Associations may not be able to arbitrarily deny or simply delay considering the request to the next board meeting. The process for evaluating the request should include an opportunity to seek and obtain corroborating information from the appropriate professionals or providers involved in treating the disabled individual seeking the accommodation. The association should further be able to conduct a meaningful review of the information provided to determine that the accommodation requested is reasonable and necessary to afford the qualified disabled individual an equal opportunity to use and enjoy the unit in which the individual resides.
Qualified legal counsel may assist condominium and HOA stakeholders to understand the fair housing laws, recent developments in case law, the groups of protected individuals and the latest trends in fair housing complaints against associations. Through the use of effective legal representation, community association managers and directors should familiarize themselves with the type of information they are entitled to request in connection with a requested accommodation. Community association directors, management and legal representatives should aim to create policies and procedures establishing a fair and consistent process to properly respond to requests for reasonable accommodations while protecting the ability for the association to enforce the provisions of its governing documents.
By working with experienced and qualified legal counsel, association boards are able to effectively consider the important factors in making decisions pertaining to requests for reasonable accommodations while avoiding the potential for mistakes which may prove to be costly to the association.
Roberto C. Blanch is a partner at the South Florida law firm of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, and has focused on community association law since 2001. The law firm focuses on community association law, represents more than 800 community associations in Florida, and maintains offices in Miami-Dade, Broward and Palm Beach counties.
www.srhl-law.com, www.FloridaHOALawyerBlog.com, 305-442-3334.
Condo Construction Projects:
Why It’s Vital for Associations to Seek Counsel FirstBy Lisa A. Lerner
By Lisa A. Lerner
For community associations, construction projects often represent some of the costliest expenses they will ever approve, but in many cases associations enter into these contracts without consulting qualified association counsel in advance. With certain exceptions, condominium associations are required to obtain competitive project bids that exceed 5 percent of the total annual budget, including reserves. For Homeowners Associations, the threshold is 10 percent.
Associations should contact board members or managers at other properties where the contractor has performed similar projects to check references. Contractors should be asked to submit written bids in response to bid packages from the association that may include specifications and drawings prepared by a licensed engineer or other design professional. Attorneys will obtain the correct name of the legal entity of the selected contractor and verify that it is properly licensed to perform the work. They can also search for any complaints filed against the contractor.
It is also critical for associations to stipulate that the contractor must maintain proper insurance coverage and limits, including workers’ compensation and commercial general liability insurance. The association will need to be named in original certificates of insurance reflecting that it is an additional insured and not merely a certificate holder. Association attorneys and insurance professionals are able to verify the proper insurance provisions are included in the contract and the contractor has all of the proper coverage. The contractor should also produce all necessary building department permits for the project. Under no circumstances should work be performed
without having secured proper permits. To comply with construction lien laws, the
association must file a Notice of Commencement for any project over $2,500.
The payment schedule in the contract should be commensurate with the percentage of the work that is completed, and it should include a retainage of 10 percent that is held back for each payment. The contractor should provide releases of liens and progress payment affidavits for all partial payments and releases from
all of the subcontractors and suppliers.
For additional important details, read the longer version of this article at www.southfloridaopulence.com.
Partner Lisa A. Lerner with the Coral Gables-based law firm of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A. has focused on representing
condominium and homeowners associations in matters involving all aspects of community association law since 1983. www.srhl-law.com, www.
HOAs, Condo Associations Must Implement Safeguards to Prevent Election Fraud
A recent case in Las Vegas has set a new bar for the heights to which criminals will go in their efforts to defraud condo associations and HOAs for contracts worth millions of dollars. A U.S. Justice Department investigation revealed that 11 homeowners and condominium associations in Las Vegas were defrauded of millions of dollars in a board of directors takeover scheme that took place from 2003 to 2009. Forty-one defendants were convicted as part of the investigation.
The Scandal Details
The defendants were accused of getting their straw unit buyers elected to community associations’ boards of directors through forgery, bribery, ballot stuffing and dirty tricks, all with the help of a Kung Fu grandmaster to intimidate wary board members. As disclosed under his plea agreement, this martial arts expert admitted that the conspirators would rig the associations’ board of director elections by using stolen and forged ballots so that they could win a majority voting control of the boards in order to secure lucrative contracts once control was obtained. Co-conspirators traveled to Mexico to print phony ballots, used the master key at a condominium complex in order to remove ballots from mailboxes, and retrieved discarded ballots from a condominium’s dumpsters.
Community association boards control the purse strings of the communities that they govern, and they have been long-standing targets for unscrupulous board members. For those who own residences in condo and HOA communities, this board takeover scheme underscores the level of involvement and vigilance that is necessary in order to help ensure that their community associations avoid this type of fraud.
Unit owners should make every effort to vote in all elections and submit their own ballots, as fraudsters may attempt to secure and utilize forged ballots from those who do not normally vote in the elections. They should also attend the election meeting and determine whether their ballot was counted or disallowed due to the submission of more than one ballot for their unit.
If association members believe that the integrity of their board of directors has been compromised, they should consult with highly experienced legal counsel in order to discuss and determine their next steps. Election recalls, court appointed receivers, and other legal actions are among the measures that can be pursued, and criminal investigations by state and federal law enforcement are also possibilities that can come into play.
Partner Gary M. Mars with the South Florida law firm of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel has focused on community association law since 1991. www.srhl-law.com, www.FloridaHOALawyerBlog.com, 305-442-3334.
New Online Association Voting Law: relief or Headache?
The Florida Legislature recently approved a new law that will allow community association members to cast their votes for director elections and other matters online through the use of an electronic voting system. While associations in other states have had this ability for some time now, this is a change for the millions of Floridians living in shared-ownership communities.
If casting a vote becomes easier for association members, the hope is that more of them will participate. However, even if member participation increases, will the use of an online voting system bring new concerns for your community? For years, many of the disputes in condominiums, cooperatives and homeowners associations, have stemmed from the annual meeting and election process. People who ran for the board and weren’t elected are often convinced that the current board or the manager who doesn’t like them somehow ‘kept them off.’ We’ve heard tales of ballot boxes being stuffed, tampered with and altogether ignored. In the condominium setting, allegations of forgeries on outer envelopes is always a concern, while in the HOA setting, complaints of rampant proxy abuse are common in connection with the election of the board members.
Election disputes don’t come cheap. They are subject to mandatory arbitration with a Florida state agency and can cost up to $5,000 or more depending on how hotly contested the matter is. Other votes, such as waiving reserves, amending use restrictions and approving material alterations can all have significant long-term consequences, so ensuring the integrity of the voting process is crucial.
While the online voting process will undoubtedly have some wrinkles (particularly at the outset), the current ‘paper’ voting system also has its warts. Boards who wish to utilize an online voting system need to pass a Resolution, obtain written consent from their members and vet online voting providers. With the proper due diligence, there is little reason not to embrace an online voting system for your community.
Donna DiMaggio Berger is a Shareholder at the community association law firm of Becker & Poliakoff and has represented all types of shared ownership communities throughout Florida for more than two decades. She is the author of a popular association industry blog – www.communityassociationlawblog.com.
Ms. Berger can be reached at (954) 364-6031 or via e-mail at firstname.lastname@example.org.
Retrofitting In Condominiums the Clock is Ticking
Recent changes to Florida Statutes include provisions in the Fire Safety Code requiring condominiums to undertake installation and/or changes to certain fire/safety related devices within the condominiums. Due to the significant expense typically required to retrofit a condominium in the manner contemplated in the Fire Safety Code, and in recognition of the significant burden this would place on unit owners, changes to the Condominium Act (Chapter 718 of Florida Statutes) allows an association to vote to “opt-out” (upon the approval of a majority of the entire membership) of the requirement to retrofit the fire sprinkler system that services the common elements, association property and units.
The vote may be undertaken at a duly-noticed membership meeting, or via the written consent process in lieu of having a membership meeting. If a membership meeting is held, the Statute requires 14-day advance written notice be sent to the entire membership via mail or hand-delivery. The vote to forgo the retrofit is considered effective once a Certificate is recorded in the Public Records of the County where the condominium is located, attesting to the vote. If the vote is undertaken, the association must send written notice to the entire membership of such decision within 30 days of the vote (an Affidavit of Mailing must be executed and kept in the Official Records of the association demonstrating this notice of the results of the vote was delivered to the membership). If the retrofit “opt-out” vote is held, the Statute requires the association to report the results to the Division of Florida Condominiums, Timeshares, and Mobile Homes (“Division”).
If an association does not obtain the required majority approval to forgo the retrofitting (or chooses not to vote), the association must submit a building permit application with the applicable local governmental authorities by December 31, 2016 regarding the intent to comply. The completion of the retrofit is not required until December 31, 2019. Consultation with a licensed contractor and local building/fire department officials is recommended regarding the specific requirements. If an association obtains a valid vote to forgo retrofitting, the membership has the ability to vote to rescind the earlier “opt-out” vote, and to proceed with the retrofit if a Special Meeting of the Membership is called by a petition of 10 percent of the membership, and a majority of the membership again votes affirmatively, this time in favor of rescinding the prior decision. This Special Meeting/Vote may only be called once every 3 years. As the deadline for qualifying for the opting out is approaching, boards of directors and association members should be discussing the options available and planning accordingly. To assist with ensuring that all proper procedures are followed should you elect to proceed with the “opt-out”, it is recommended that the board consult with association counsel.
An Overview For Condominium Associations
By Robert L. Kaye, Kaye Bender Rembaum
The topic of “reserves” in condominium associations is one which can be confusing. Chapter 718 (governing condominiums) of the Florida Statutes contains provisions regarding reserves.
For condominiums, reserves are required to be included in all proposed budgets each year, as set forth in Section 718.112(2)(f) F.S.
Budget Details For Reserves
Reserves are required to be included for the roof, painting, paving and any item of deferred maintenance that will cost more than $10,000.
A separate schedule for the reserves is required to be included in the budget and the method of calculating the amount that must be reserved is provided in Section 61B-22.005 of the Florida Administrative Code. Funds held in reserve may only be used for the matter for which they are being held unless a different use is approved in advance by a vote of the unit owners. The Statute also allows an association to consider reducing or entirely waiving the reserves each year. Whether it be for using the funds for a different purpose, or to reduce or waive them, the association must obtain the vote of a majority of the unit owners present at a meeting of the membership at which a quorum has been established. Unless a lower number is provided in the governing documents, a majority of the unit owners constitutes a quorum. The actual number of votes needed in such a vote will therefore depend on how many unit owners participate in the vote.
For cooperatives, Section 719.106(1)(j) F.S. contains substantially the same provisions as for condominiums and should be treated in the same fashion.
For homeowners associations, the issue of reserves was added to the Statute relatively recently, in 2007. For more information on reserves related to HOAs and Cooperatives, go to www.KBRLegal.com.
2014 Legislation Affecting Community Associations
During the 2014 Legislative Session in Florida, a number of bills were adopted which will have an impact on community associations. Among the new legislation is House Bill 807, which contains provisions affecting condominiums, effective July 1, 2014. Following is a very brief overview. For more details, including the Community Association Manager Bill – House Bill 7037, go to www.southfloridaopulence.com.
• Repair and Rental of Abandoned Units: Provides authority for an association, at the discretion of the board, to enter an abandoned unit to inspect the unit and adjoining common elements.
• Insurance – Repair Obligation Clarified: Provides that in the absence of an insurable event, any repairs required will be by either the association or the unit owner, in accordance with the declaration or bylaws.
• Official Records & Unit Owner Directories: Modified to clarify that all telephone numbers may be included in a Directory, although an owner may choose to not have their numbers listed (i.e., opt-out).
• Board or Committee Meeting Participation: Allows participation in a meeting by telephone, to add real-time video conferencing, or similar real-time electronic communications as a way for a Board or Committee member to attend, be counted toward quorum and vote.
• Board Member Communications: Authorizes board members to use email as a means of communication but clarifies they may not cast a vote on an association matter
• Removal of the Association as an Intervening Owner for Purpose of Determining the Obligations of a New Owner for Past Due Assessments.
• Limitation on Attempt to Terminate a Condominium: If a plan of termination of a condominium fails to receive the required approval vote, the plan shall not be recorded and a new attempt may not be proposed for 180 days after the date of the failed plan was first given to all owners.
• Elimination of the Community Association Living Study Council. This is for informational purposes only and is not intended, nor should it be considered, the providing of legal advice. Should you have any questions about any of the information contained in this article, please contact your association counsel.
Accessing a Condominium Unit When The Owner is not Present
By Michael S. Bender, Esq., Ka ye Bender Rembau m, P.L.
While Section 718.111(5) of Florida Statutes provides associations with the irrevocable right to access all units in the condominium, such right is not absolute. The qualifying portions of the Statute are “when necessary,” “to perform maintenance, repair or replacement of common elements or of any portion of a unit to be maintained by the association,” and “to prevent damage to the common elements or to a unit or units.” Occasionally, a board may be overzealous in its desire to access the unit and there can be consequences from doing so improperly.
The Fourth District Court of Appeal reviewed this issue in the recent case of Small v. Devon Condominium B Association, Inc. In this case, the association had a practice of providing monthly pest control services within each unit. After many years, unit owner Small informed the association that she had learned she suffered from a breathing disorder and requested the association stop treating her unit, indicating she would take care of the pest control herself. The Board agreed and did not treat her unit for about 5 years. In 2009, a new Board took over and demanded access to the unit to perform pest control services. The unit owner declined and the lawsuit followed.
Ultimately, the Appellate Court ruled in favor of the unit owner, stating that an association must demonstrate the desired access is BOTH reasonable and necessary for such access to be proper. An association claiming “necessity” alone is not sufficient. The facts of the particular case clearly demonstrated that, notwithstanding the association claiming the necessity of access, the previous fiveyear history at the unit did not support that conclusion. Additionally, the personal medical issues of the unit owner supported the conclusion that the association request was not reasonable.
The practice lesson to be learned from this case is that care must be exercised by the board of directors when considering accessing a unit. The facts and circumstances involved should be thoroughly reviewed and if there is any question whether the association should be accessing the unit without the permission of the unit owner, consultation with the association attorney should occur before doing so.
FREE SEMINARS FOR BOARD MEMBERS & CAMS:
Navigating The Fair Housing Act — Assistance Animal or Pet? Offered in Pompano Beach and Palm Beach Gardens throughout the summer. For details, go to KBRLegal.com
Have You Ever Been the Victim of a Crime in Your Community Association
By Donna DiMaggio Berger, Esq.
While it was not shocking that these teens might have been disaffected, lacked parental oversight and behaved badly, what was unbelievable was that one celebrity after another had left a door open to the house, had not turned on their security alarm system and had wads of jewelry and money either under their beds or in unlocked safes.
In true Hollywood fashion, the bad guys were eventually caught although their actual time served was a little light-handed. Watching the teens in the movie scale walls and fences and open expensive, unlocked cars parked in neighborhoods brought up memories of the one time I was the victim of crime inside my community association.
I live in a community which has both a wall and a manned guard gate as well as video cameras at our entrance. Still, we have not been without security incidences over the years, but most of those were related to owner error as I am about to relate. Given the difficulty one has in entering a community like mine, it may be that residents get a little looser with their own security measures. Cars may be left unlocked, garage doors stay open during the day or at night, a door or window remains unlocked and alarms are not routinely activated when an owner is “just running out for a minute.”
A few years back, a number of cars in our neighborhood, including mine, had items removed from them one night. All of those cars were left unlocked, including mine. I had no one to blame but myself when I realized all of my CDs were gone. Our board did everything right by getting the word out that the incident had occurred and reminding residents to lock their cars as well as their homes. Of course, one always assumes that these incidences are caused by other people and not the folks living in our own community, but the reality is that crime occurs inside our ranks as well as outside them.
Have you ever been a victim of crime in your community association? If so, did your own error contribute to your loss as mine did? Were you lulled into a false sense of security that walls, gates, guards and cameras provide at times?
There is a happy ending to my own story. A few days after the incident, I noticed my CD case tucked into a bush in one of our common parks while I was out walking my dog. Apparently, the thieves were not so keen on my musical taste so they threw away the spoils. I had my Chicago and Journey CDs back where they rightfully belonged!
2013 Legislative Changes Affecting Community Associations
By Michael S. Bender, Esq., Kaye Bender Rembaum, P.L.
Following the conclusion of the 2013 Legislative Session in Tallahassee, Governor Scott signed into law several pieces of legislation which effect Condominium Associations. Some of the more pertinent legislation is set forth in detail below:
Changes to Section 718.111(8) F.S. removed language regarding approval requirements for the association to purchase any land or recreational lease, referring such issues to the provisions of Section 718.114 F.S.
Section 718.111(11) F.S. regarding association insurance clarifies that certain obligations of the association apply to damages only when caused by an “insurable event.” Additionally, it further clarifies unit owner responsibility for reconstruction costs, including that such costs are collected as an assessment against the unit through the lien and foreclosure process.
Copying of Official Records by an inspecting owner is addressed in changes to Section 718.111(12)(c) F.S. The new provision allows for a portable device to be used by a member or his or her authorized representative for copies and, in such event, at no charge. Subsection (c)5. has been revised to allow for the creation of a directory containing the name, parcel address and telephone number of each owner, but any owner may request, in writing, to withhold telephone number.
Section 718.111(13) F.S. has been revised to increase threshold gross budget levels relative to the specific financial reporting requirement. Associations with annual revenues between $150,000 and $300,000 minimally are required to prepare a compilation; those with annual revenues between $300,000 and $500,000 must minimally prepare a reviewed financial report; and, those with annual revenues of over $500,000 must minimally prepare an audit. Associations with annual revenues of less than $150,000 must prepare a report of cash receipts and expenditures, as must associations with any level of annual revenues if it operates fewer than 50 units (reduced by the change from fewer than 75 units). The minimum reporting requirements continue to be able to be reduced each year upon a vote of the membership, unless the bylaws mandate a specific level of reporting.
With respect to unit owner meetings and board service, Section 718.112(2)(d)(2) F.S. has been revised to remove the requirement of a vote of owners to affirm 2 year staggered terms when they are expressed in the articles or bylaws. This subsection also clarifies when an owner is ineligible to be a candidate for the board and listed on the ballot. If the person desiring to be a candidate is delinquent with any monetary obligation, in any amount at the 40-day cut off for ballot eligibility, that person is not eligible to be on the ballot.
Section 718.112(2)(d)(3) F.S. has had a provision added that an association is only required to broadcast notice of meetings if it is the only means of notice.
Section 718.112(2)(d)(4) F.S. clarifies that the prohibition on proxy voting for director elections do not apply to timeshare condominiums. Subsection (b) has been revised to add that director certifications are to be maintained for the greater of the length of term on the board if uninterrupted or 5 years. A new subsection (c) indicates that any challenge to the elections process must be commenced within 60 days after the announcement of the results.
Section 718.112(2)(j) F.S. has been revised regarding certain recall related issues. New subsections (5) and (7) were added, authorizing the unit owner representative for a recall attempt to file a petition for arbitration to challenge the failure of the board to act on the recall, and a recalled board member to file such a petition to challenge the validity of the recall in the instance that the board otherwise does not. A new subsection (8) provides that no petition will be accepted by the Division
if there are 60 or fewer days until the next scheduled election, or when 60 or fewer days have elapsed since the election of the board member sought to be recalled.
Changes to Section 718.113(5) F.S. address the hurricane protection provision and attempt to clarify that doors and other types of code-compliant hurricane protection are
included in what can be installed by the association or unit owner. The definition of what is permitted to be installed has been expanded to include impact glass, doors or other types of code-compliant protection.
Section 718.115 F.S. has been revised to incorporate the same clarifications as in Section 718.113 F.S. as to expenses of installation of hurricane protections and also clarifies that for an owner to receive a credit for the costs
associated with the installation of hurricane protection by the association, the owner installation must comply with current applicable building codes and be the same type
of code-compliant protection being installed by the association.
Section 718.303 F.S. further clarifies areas of the condominium property which cannot be suspended for violations of the governing documents, adding limited common elements, common elements needed to access the unit, utility services, parking spaces or elevators.
Should you have any questions regarding any of these changes, please contact your association legal counsel.
CLARIFICATION IN SPIAGGIA CASE RULING INVOLVING “JOINT AND SEVERAL LIABILITY”
By Michael S. Bender, Esq., Kaye Bender Rembaum, P.L.
The Third District Court of Appeal has attempted to further define the principle regarding what resulted in the protection of certain third party purchasers at lender foreclosure sales involving condominium units and affecting condominium associations, initially set forth in the case of Aventura Management, LLC v. Spiaggia Ocean Condominium Association, Inc. early in 2013. However, the latest decision seems to have made the issue less clear and upon careful reading, may not be in accordance with the provisions of the relevant Statute on this topic.
In Park West Professional Center Condominium Association, Inc. v. Londono, Case No. 3D13-770 (November 27, 2013), the Association there had foreclosed on its lien against a unit in the Condominium during the pendency of a lender foreclosure, and the Association was the successful bidder at the Association foreclosure sale, becoming the owner of the property. Some time later, the lender finished its foreclosure and Londono, a third party, was the purchaser at the lender foreclosure sale. There was then a dispute between the Association and Londono regarding what Londono was to pay to the Association for unpaid assessments, which was initially decided in the trial court and then appealed by both parties.
In attempting to further explain its earlier decision in Spiaggia (which held that the third party purchaser did not owe anything to the Association prior to the third party purchaser acquiring title), the Appellate Court ruled that the Association was jointly and severally liable with the prior owner of the unit that was foreclosed upon by the Association for all sums due before the Association took title to the time that the prior owner acquired title to the unit, and that the third party purchaser was “responsible for unpaid
assessments back to the time when [the Association] took title to the subject property.” The Court seemingly ignores the Statutory issue of whether Londono is jointly and severally liable with the Association for the sums which had been due on the unit prior to the Association taking title. In essence, the Court in Park West has indicated that “joint and
several” liability should only be applied to sums owned by the owner that immediately precedes the current owner and we would not look any further back from there to sums owed by other owners in the chain of title.
For condominium associations that are addressing assessment delinquencies on units that are also believed to be delinquent in mortgage payments, the issue of the possible negative impact of a third party purchaser taking title at a lender’s foreclosure sale is one of several factors that should be considered by the board of directors in deciding whether or not to pursue the lien and foreclosure process. However, the issue should not be the primary basis for the determination. There are likely only a limited number of situations in which this will occur which will then be to the detriment of the association. So long as the amounts due on unpaid mortgages significantly exceed the fair market value of the units, the likelihood of a third party purchaser bidding at a lender sale on such a property is relatively low. As such, the board may not need to place significant weight on this issue in deciding whether to foreclose. Since most every case has unique factors, consultation with the association attorney is recommended prior to making the final decision on whether to pursue foreclosure against a delinquent owner.
Has Your Community Ever Encountered A Non-Compete Clause?
By Donna DiMaggio Berger, Esq.
A client recently contacted me with regard to a personnel matter. The community had fallen in love with a particular security guard and while the contract with the security company was slated for termination, the board wanted to hire this guard personally to continue on with them.
Unfortunately for this community, the guard had signed a non-compete agreement with his current employer and, as a consequence, would not be able to accept the association’s offer of employment for at least two years.
Has this ever happened to your community?
Non-compete agreements became even more common during the Great Recession when signing an agreement restricting future employment opportunities seemed like a small price to pay for a job. These types of restrictive provisions can be found in all types of industries including those which service community associations, particularly management and security services. With the economy on the upswing, more and more employees are starting to challenge the non-compete agreements they previously signed without much concern.
While most employers can insist on a non-compete agreement from its employees, those same employers must have a legitimate business reason to enforce same. Some legitimate reasons include the employee possessing the company’s trade secrets or other proprietary information which cannot be accessed through public means. Trying to protect a company’s investment in an employee via specialized training as well as protecting the relationship which the company has created with a client base, existing and potential, is a legitimate reason to enforce a non-compete. Trying to prevent competition is not.
Most non-compete agreements restrict an employee’s ability to obtain similar employment within a certain geographic area and within a certain period of time after leaving the company’s employ. Lest you fear you will lose your favorite attorney if he or she leaves a particular firm, non-compete agreements have been stricken down by the Florida Bar and other state bar associations as they pertain to attorneys. However, the same is not true for other industries where each agreement will be judged on its own merits. Communities looking to hire personnel should inquire about the existence of any non-compete agreements those candidates may have previously signed. Hiring without having that knowledge can present costly problems for the association including an interruption in services if the employee must be fired and rehired at a future date.
The moral of the story for associations: Look before you leap. The moral of the story for employees: Understand the long-term consequences a non-compete agreement can present before you sign on the dotted line!
Donna DiMaggio Berger, Esq. is one of the Founding Partners of the statewide law firm, Katzman Garfinkel & Berger (KG&B), a firm that devotes its practice to the representation of community associations. Ms. Berger can be reached directly at 954-315-0372 or via email at email@example.com
How loud is too loud in your condominium?
By Donna DiMaggio Berger, Esq.
Last month I attended the Aerosmith concert at the BB&T Center. I left with my ears ringing. My husband, however, wasn’t fazed at all by the noise. It made me think about how often noise complaints have arisen in community associations and the best ways to address those complaints. Most governing documents contain a general nuisance clause. Florida common law also defines which activities rise to the level of a general nuisance. Generally, disturbing a member’s peaceful and quiet enjoyment of their property constitutes an actionable nuisance.
Some noise issues are related to hard surfaces being installed without proper soundproofing and in areas that require noise absorbent material in order to safeguard the neighbors below. When that occurs, even normal daily activities resonate with more force than normal. Other times, the source of the problem is a resident’s unwillingness to moderate the decibel level of their television, radio or other device. Some noise issues arise from pets left alone during the day, domestic disputes, excessive partying and, occasionally, the racket is designed specifically to irritate a neighbor.
Sometimes, noise issues can and should be resolved between neighbors without bringing the association into the equation. When an owner contacts the association about a nuisance generated by noise, the association’s first response should be to undertake some due diligence to determine the source and decibel level of the noise and whether surrounding neighbors are similarly impacted. Noice issues become more complicated when the person complaining is more sensitive to noise than the average resident.
Naturally, local ordinances on noise can be consulted to determine whether the noise in question violates municipal or county regulations, but even this avenue has become more complicated recently with the December 13, 2012, ruling by the Florida Supreme Court in the State of Florida v. Richard T. Catalano case. The Florida Supreme Court struck down a 2005 Florida law which allowed drivers who blast their car stereos to be ticketed or have their cars impounded when such sound systems were “plainly audible” from 25 feet away. The Florida Supreme Court, however, held that the state law was overbroad and unreasonably restricted free speech. Since the local ordinances may just have become less effective at controlling noise in private residential communities, it is more important than ever that boards, managers and association counsel discuss what can be done in terms of noise control.
Donna DiMaggio Berger, Esq. is one of the Founding Partners of the statewide law firm Katzman Garfinkel & Berger (KG&B), a firm that devotes its practice to the representation of community associations. Ms. Berger can be reached directly at 954-315-0372 or via email at firstname.lastname@example.org.