Thursday, March 31, 2016

Turner v Bulter Farms - Getting A New Board When There Is No Quorum For An Election

A couple of years ago the Florida Legislature passed a bill which allowed homeowner associations to forego elections if there were only enough candidates to fill vacant spots.  While I was not sure how the change to Fla. Stat. 720.306(9)(a) would affect elections, weighing the pros and cons of the law, I have to say it has been very beneficial based on a ruling recently by the Department of Business and Professional Regulation ("DBPR") in the arbitration case of Laura Turner v. Butler Farms Homeowners Association, Inc., DBPR Arb. Case No. 2015-02-8216.

Ms. Turner was the only person to submit her name for candidacy to the Board of Directors for the association.  When there was no quorum at the annual meeting, the three incumbent directors announced they would remain in office.  Ms. Turner petitioned DBPR for arbitration of an election dispute and the arbitrator, Leah A. Sims, ruled Ms. Turner was the only board member since the incumbents terms had expired and none of the incumbents had not submitted their names as candidates. 

I think this is a great ruling and congratulate Ms. Turner for taking the initiative to arbitrate the matter.  So many homeowners give up because they feel the fight is useless and they will never be able to remove board members who have been entrenched in the board long term.

Sunday, February 28, 2016

Board Meetings: How They Should Be Conducted

Today's blog is about notice, quorum, the right to speak, the right to record meetings, handling disruptive attendees and meeting minutes.

Notice Requirements:

The notice requirements for a meeting are contained in the Bylaws and/or Articles of Incorporation of the association.  Sometimes they are even contained in the Declarations if special notice is required to decide a particular piece of business, such as increases in assessments which require membership approval.

The Florida Statutes provide a default notice procedures if the documents are silent. The default notice procedures are as follows:

  • Regular board meetings must be "posted in a conspicuous place in the community at least 48 hours in advance of the meeting, except in an emergency."  

  • If notice is not posted, then the association is required to mail notice to each member at least seven (7) days before the meeting.

  • Any meeting in which assessments will be levied must be noticed with a statement assessments will be considered and the nature of the assessments. This includes levying annual assessments, even if assessments are not increased. While this sentence in the statute does not state 14 days advanced notice is required, it is in the same subsection that requires 14 days notice for meetings to consider special assessments and amendments to rules affecting parcel use.  My opinion is to provide 14 days advance notice and that seems to be the industry standard.

  • Any meeting in which special assessments will be considered must be noticed by mailing the notice to each homeowner at least 14 days in advance of the meeting and the notice must state assessments will be considered and the nature of the assessment.  This includes levying annual assessments, even if assessments are not increased.

  • Any meeting in which amendments to rules affecting parcel use must be noticed by mailing the notice to each homeowner at least 14 days in advance of the meeting

Quorum Requirements:

Whenever a majority of the board meets, even if it is at a picnic, and discusses board business, it is a board meeting and must be noticed and open to all members.  

For membership meetings, the quorum is the number of owners listed in the bylaws or other association document.  Florida Statutes provide a default of 30% if the documents do not provide for a quorum.

Members' Right to Speak, Right to Record Meetings and Disruptive Attendees:

It is truly amazing how many associations try to circumvent these two rights.  Either they are misinformed, are unaware of the law regarding these rights, or have gone rogue.

Every member has the right to speak at least three minutes at a meeting on any item on the agenda. This law used to have requirements the member had to provide advance notice, which meant the members were not given an opportunity to speak if the agenda was not published in advance. The laws have changed.  The board can adopt reasonable rules on how to comply with this and control disruptions, but not to the point members are denied their rights. Many associations still use the technique of holding all member commentary until the end of the meeting in an open forum, but this could be troublesome eventually. If there is a topic which has generated a lot of controversy, the members should be allowed to speak as long as they remain orderly. Robert's Rules of Order help in these situations.  Appointing a parliamentarian to keep the meeting in order is helpful too. If you do not want your meetings to go on all night, plan them out specifically. If you know you have a controversial topic, allow a specific amount of time to discuss it.  If you know you have someone who will want to talk three minutes on every topic, limit the number of times a member can speak, but make it reasonable. Use a timer for the three minutes so no one will accuse anyone of not allowing the full three minutes.  If the discussion is still heated and taking quite a bit of time, consider tabling the topic for a special meeting and plan for a longer amount of time to discuss.  If the topic is that important to the membership, the board should be paying attention to their concerns.

NOTE:  Any changes to the way meetings are conducted, including adopting Robert's Rules of Order, should be adopted as a policy by the board through a resolution, which can be written, voted upon, recorded in the public records if necessary, and published to the membership.  This will avoid any accusations of making up the rules as you go along.

Florida law allows members to record board meetings. IT IS THE LAW! They can use either video or audio recording and do not have to provide notice the meetings are being recorded. There is no expectation of privacy in an association meeting and board members do not have to give their consent.  Assume all meetings are being recorded. The board of directors can adopt rules to make sure any cameras are not interfering with the meeting, such as blocking the view of other members. Caution should be taken to not create a rule under the right to adopt rules just to make sure the members do not get a good recording and especially do not adopt a rule requiring the member to provide notice the meeting will be recorded.  Do not put your association at risk of a lawsuit for treading on the members rights.  They have very few, but the few they have they will fight aggressively to protect. If the board is not doing anything illegal or unethical there should be no concern with meetings being recorded.

(10) RECORDING.Any parcel owner may tape record or videotape meetings of the board of directors and meetings of the members. The board of directors of the association may adopt reasonable rules governing the taping of meetings of the board and the membership.

While an association has the right to remove a member from a meeting if they are being too disruptive, the trend to have law enforcement issue a trespass warning against an owner in order to keep them out of all future meetings is just plain dumb.  All meetings must be open to all members, so if an association trespasses an owner from their clubhouse, then the association will need to move the meeting to another location where the owner can attend.  Putting up physical barriers to prevent owners from attending is not a good idea either, especially the disabled.  You would think common sense would not make this an issue, but it became necessary for one homeowner to actually lobby our elected officials to amend Fla. Stat. 720.303(2) to include "A meeting of the board must be held at a location that is accessible to a physically handicapped person if requested by a physically handicapped person who has a right to attend the meeting."  His association spent over $100,000 in litigation costs because the association refused to hold any meetings where he could attend in his wheelchair.  He wasn't even asking for all meetings to be moved, just when there was a agenda item that was important to him.

 Meeting Minutes:

This is a very important topic because all too often the minutes do not reflect enough information about the meeting.  Each topic discussed, whether it was on the agenda or not, should be reflected in the minutes.  Each board vote should list specifically how the board members voted by name.  The only exception is if a vote is unanimous, which could be stated as "motion passed by unanimous vote."  Each item should have a motion to present the item for a vote and a second.

Now some words of caution.  The Florida Statutes have been revised to allow board members to "communicate" by email, but votes may not be taken by email. While this has always been the method used to provide information to board members about an upcoming agenda item, there has been a rise in the number of associations who obviously are discussing agenda items in detail in emails and then simply voting on the item at a meeting without discussion, thus circumventing the rights of members to be informed about the details of an issue. This will certainly cause a rise in litigation and is not in the best interest of the association.

The bottom line is board members and owners alike need to use common sense.  Board members should not look for creative ways to hide things from the owners and owners need to communicate in a reasonable manner at meetings.  Shouting at someone will not get them to agree with you.

Friday, January 15, 2016

2016 Senate Bill 7031 - HOA Declarations Exemption from Marketable Record Title Act

I personally think this bill is a bad idea.  We have enough problems with HOAs which are governed by ancient documents written decades ago!

Bill Text Senate Bill 7031

Proposed language:

712.03 Exceptions to marketability.—Such marketable record 33 title shall not affect or extinguish the following rights: 34 (10) A covenant or restriction of a homeowners' 35 association or mandatory property owners' association.

Saturday, December 5, 2015

My Email Regarding HOA Reform Bill and Affordable Legal Representation

I wrote this to Senator Alan Hayes, House Representative Mike La Rosa, Florida Bar President Ramon Abadin and my friend, Jan Bergemann of Cyber Citizens for Justice (


I am writing to you today, as an attorney who represents both homeowners’ associations and homeowners who are being victimized by their associations. The HOA Reform bill is critical at this point and comes at a time when the president of the Florida Bar, Mr. Ramón Abadin, has pointed out, in the November issue of the Florida Bar Journal, the need for a new business model because the working class cannot afford an attorney and do not qualify for legal aid.  I see this injustice every day in my practice as I have to tell clients the high legal fees and costs they would incur to hire me to protect them from being another HOA victim.  These cases are not the type that are done on a contingency because rarely has someone been physically injured.  I turned down at least one case a day, sometimes as many as five.  Yesterday it was three.   Most firms won’t represent the homeowners because the associations are a “cash cow.” 

The homeowners’ associations are unregulated and the condominium associations have limited regulation with the Dept. of Business and Professional Regulation (“DBPR”) not having jurisdiction over assessments, which is the biggest source of abuse for homeowners.  Even the appellate courts, in a case called Ocean Two Condo. v Kliger, where the Court stated “Because of the statutory lien rights and the power to prosecute the foreclosure action, an association and its attorneys have ample leverage, and the unit owners have very little. Every telephone call, meeting, or hearing regarding the genesis of the dispute and the amount due produces an incremental unit of attorney billings, and every day until resolution of the dispute increases the interest tariff.” 

In my practice I have witnesses law firms that have paralegals do all the work, yet the homeowners are billed attorneys’ fees, not paralegal fees.  I have witnessed a law firm give sales pitches to associations during hiring interviews and state that “95% of the homeowners can’t afford to sue you and the 5% that can will soon learn that money can be used for a vacation, their children’s college, or retirement and will give up.”  Unfortunately, this is true.  I have seen a law firm give homeowners a letter stating they could not call or come to their office to resolve their assessment delinquency, but could fax their credit card or email and then are given the email address of a former staff member.  Once I got involved the charges ballooned from $795 to over $3,600 with the attorney telling me he had to read all those emails the owner sent trying to get a response.  This is outrageous and had I not gotten involved he would have forced the homeowner to pay those ridiculous legal fees.

The industry not only needs more regulation, but more affordable legal representation. Let’s give DBPR jurisdiction to arbitrate assessment disputes.  This is the biggest source of abuse.  Arbitration is less expensive for the homeowner and the threat of arbitration might help tamper the abuse.

Regulation of the homeowners’ associations is needed to help curtail the abuse of out of control board members.

Right now there is a rise in homeowners’ associations setting up their own corporations to perform work normally performed by vendors.   This results in the board of directors putting their family members on the board of these corporations as paid directors, if not themselves in some cases; the board members receiving free services, the members being denied access to see accounting records of these corporations even though their assessments paid to set up this corporation and bought any equipment, furniture or other assets.  Several times I have witnesses where these corporations are either owned or operated by a board member or have contracts with a board member.  Some associations set up these companies to operate a receivership or rental program to take control of homes in foreclosure, which is needed, but instead funnel the rental income to themselves or the corporation without the association getting a dime.

There is also a rise in the community association management firms setting up their own corporations to perform work normally performed by vendors.  These corporations are then paid top dollar and paid promptly with no one given a chance to dispute an invoice.

There is a rise in the number of cases in which deed restrictions have expired under the Marketable Record Title Act but the HOAs continue to operate as mandatory associations and threaten to foreclose on owners who refuse to pay because they know the chances of the owner affording an attorney are slim.

I have witnessed board members targeting homeowners they do not like.  This targeting sometimes includes criminal activity, which is hard to prove.  Any witnesses refuse to get involved because they know they will be targeted.

The Village Condominium Association in Orlando was taken over by a board member who slowly was able to get rid of anyone who did not agree with him and then proceeded to give himself the management contract, the security contract (with armed security despite not having the proper licenses), and the maintenance contract.  This board member marked all the board members’ assessments as paid each month despite no payment.  He was able to take approximately $40,000 a month from the association (which we documented), depleted the reserves and diverted money from insurance claims to his own pocket. A receiver was eventually appointed to take over and the board removed.

I could write a book on the atrocities committed against homeowners, including cars being set fire, fake bombs on lawns, handicapped owners in wheelchairs being refused to attend meetings and harassed, racial discrimination, sex discrimination, discrimination against veterans.  I have witnessed homeowners being evicted from their homes for past due assessments when their home was in a trust and the association demands the rent be paid to them from the “tenant.”  And let’s not forget the Higgins v. Timber Springs case in which Mr. Higgins was foreclosed upon while on active duty in the military.  Our firm was able to get the foreclosure reversed.  We took the case pro bono, one of the few we could afford to handle as a small firm, because Mr. Higgins could not afford an attorney and was trying to deal with this situation while deployed. 

The sad part is when I have to give these homeowners a quote of the fees to litigate they decide it’s easier to sell their home and move, sometimes to another state.

I apologize this email is so long, because I know your time is valuable, but I appreciate the efforts each of you are making in trying to protect the rights of our citizens.  So many of them lose their homes, not because they can’t afford them, but because they upset their HOA, became a victim, and cannot afford an attorney.  Thank you!


Barbara Billiot Stage, Esq.

Tuesday, October 13, 2015

My HOA Turned Me Over to Collections -- PLEASE HELP!!!

This is a frequent call I receive.  Here's my advice:

If you were ever late with just one payment, you set into a motion a problem that just snowballs.  It may be possible you mailed your check on time but it was not delivered on time.  The association is still entitled to late fees, interest and attorneys' fees whenever a payment is late.  Once the account is late, the account is sent to the attorney and any payments you mail are rerouted to the attorney, which is the reason for the delay in posting payments. 

By state law all payments you send to the association are applied to non-assessment charges first and assessments last.  This means unless you pay the amount demanded in full you will always be late and subject to foreclosure.  Contacting the attorney only adds more legal fees because by state law the association is entitled to all of their attorneys' fees even if a case is never filed.

You need to resolve this now because the association is most likely preparing to foreclose on your property.

Unless you can prove you were never late starting with the first time your ledger is showing a late payment, which is usually not possible without a tracking number on the mail, you will need to request a payment plan in writing to the attorney.  Payment plans are generally approved for 6 to 12 month repayments. The payment plans can be expensive as well because the attorneys charge to set up the plan and charge to process the checks and monitor your account to make sure you continue to pay. 

If the payment plan doesn't work out for you or the association doesn't approve it, consider filing bankruptcy.  If you owe more on your home than it is worth you could lien strip the debt.  If not, you could file a Chapter 13 plan and put the debt into a 5-year repayment plan.  Filing a Chapter 7 without lien stripping will relieve you of the debt, but the lien remains and the association could still foreclose.  You also have to pay any assessments that come due after you file bankruptcy.

If you are in this situation -- hire a lawyer! YOU ARE AT RISK OF LOSING YOUR HOME!

If the association has a third party debt collector, this is definitely a complicated matter that requires hiring a lawyer.

Saturday, August 22, 2015

HOA Bullies & Condo Commandos

The biggest complaint I hear recently from people calling my firm for help is bullying and harassment by their association.  This is no surprise to me since a ruling last year which basically said if you live in an association you better learn to have a thick skin.  The courts and the arbitrators lost their patience long ago for the constant bickering in community associations. Now this lack of patience memorialized in a ruling.

Part of the problem is this misconception that because the associations are corporations bringing a lawsuit against one would result in a big damages award, so owners are quick to want to sue their associations and jam up the courts with harassment cases. The reality of the situation is that unless you have been seriously injured, either physically or in some other manner (like losing your job because the association called your employer), you will be lucky to get all of your attorney's fees  and legal expenses, much less anything for pain and suffering.  These are just not big dollar cases, which means if you do want to sue you will need to finance the case yourself because they are not eligible for a contingency fee arrangement (pay only if you win).

Don't misunderstand me -- I have seen some horrendous acts against homeowners, some of them criminal, but even in those cases lack of evidence is a problem.  The associations are crafty enough to not commit these acts in front of witnesses.

Without regulation by the State of Florida and lack of funds available to the homeowners to bring litigation, the homeowners often have no recourse.  The associations know this and know they can get away with violating state laws and the governing documents of the association.

My recommendations for living in a community association are:

1. Move.  My opinion is the risks outweigh the benefits of living in an association.  You might live in a great association right now, but one election can change everything.

2. If you can't move, educate yourself.  It's harder to take advantage of someone who knows what their rights are and can stand up for those rights.  If you haven't read your governing documents (Declarations, Bylaws, Articles of Incorporation, Rules and Regulations), do so NOW. If you are not sure what something means, pay a lawyer to interpret it for you.  It's better to spend a few hundred dollars now then to spend thousands later if you end up in trouble.  Also, read the state laws.  Chapter 720 of the Florida Statutes governs homeowner associations and Chapter 718 governs condo associations.

3. Try to resolve disputes in an amicable manner first.  Respond promptly to all letters and notices you receive from the association.  Even if their letter is antagonistic, don't respond while your angry and try to respond in a friendly manner.  These letters are often form letters written by the association lawyer who has to put certain things in them to comply with the law.  For instance, the law requires the association to let you know that if you do not pay your past due assessments the association can lien and foreclose on your home.  It has harsh language in it, but most of the language is required. Same thing goes for covenant violation notices. If the association is going to impose a fine the association has to provide you with a notice 14 days in advance of a hearing.  The word "hearing" is usually enough to upset anyone, but it's required to be in the notice.

4.  Always pay your assessments.  No matter how you feel about the way the association is being operated and managed, you cannot withhold assessments and you will lose your home if you do. Even if the money is being embezzled, you still have to pay your assessments.  State law makes it an absolute duty to pay and none of the other issues are a defense.  Financial hardship is not an excuse. If you know you can't pay, call your association and ask for payment arrangements before you are late.

5. Maintain your property.  The fastest way to get into trouble with your association is to not keep your property maintained.  You bought your property in an association so that everyone would keep their property in a neat, attractive manner to preserve property values.  We all have hard times sooner or later, but that doesn't excuse anyone from keeping up their property.  A lot of things can be done to keep the property up that don't cost money, like mowing and edging the lawn or picking up trash, toys, or other items.

6.  Keep an eye on the money.  It's alarming how many associations have funds missing or misappropriated.  Ask for a copy of the annual financial reports.  The associations are required to send out a notice each year letting homeowners know the reports are available.  Periodically ask to see the monthly financial reports.  You have a right to see any official records as long as you send a certified letter to the association requesting access to inspect the records.  Don't ask for copies to be sent -- the associations have no duty to provide the copies other than during the inspection.  The association has ten (10) business days (five for condo associations) to provide you with access to the records.

7.  Don't go looking to pick a fight.  The odds are against you, especially if you don't have deep pockets.  Once you become involved in a dispute with your association chances are you will never be treated decently again.  It gets personal.  It shouldn't, but it does because this is a corporation that is run by your neighbors.

8.  Attend meetings and encourage your neighbors to attend meetings.  Associations become a problem when the homeowners don't care to be involved.  This goes back to item #2.  You can't educate yourself if you don't know what's going on in your neighborhood.

9.  Campaign to be a board member.  Again, lack of participation by the homeowners leads to rogue boards and abusive associations.

10.  If you must litigate, make sure it's over something really important and not just name calling or a general dislike for your associations.  Ask yourself if it's something worth you spending 3-4 years in a court case over and spending tens or hundreds of thousands of dollars over.  There is a financial cost to litigation as well as an emotional cost.  Once you engage in litigation with your association you can't just walk away.  If you back out you will have to reimburse the association their legal fees, which could reach $100,000 or more very quickly.  Make sure you hire a lawyer who has experience litigating against associations. It's not your typical court case.  There are pre-suit requirements and special rules.

Finally, contact your elected officials and tell them we need state regulation for homeowner associations.  We need a state agency to oversee the homeowner associations.  We have regulation for condo associations.  While it's not the ultimate fix to the problem, it's an improvement and arbitration with the State of Florida is less expensive then litigation in civil court.