Thursday, July 13, 2017

Revisions to Florida Laws Regarding Estoppels!


It’s that time of year and the Florida Legislature has pass several important revisions to the state laws governing community associations. We will review each of the bills enacted, which were effective July 1, 2017.
Our first review is of the changes to the estoppel statutes, Fla. Stat. 718.116 (condominiums) and 720.30851 (homeowner associations).
The big changes are the requirement to designate a person to receive estoppels, through an adopted resolution, and post it on the association’s website as well as to respond to any estoppel request within ten (10) days of receipt and a cap on the fees charged to prepare estoppel certificates. The revisions create some confusions because it now requires associations to have a mandatory website even though it does not out right state this (how can you post it on the website unless you have the website). In fact, Chapter 718 now requires condominium associations to have a website by July 1, 2018, but requires the associations to post the contact information on the website by July 1, 2017. Hmmm…..
Previously, estoppel requests were to be completed within fifteen (15) days, but the response time is now reduced to ten (10) days. Additionally, estoppel certificates must be valid for at least thirty (30) days if submitted electronically and thirty-five (35) days if mailed.
With the revisions come a whole new set of requirements such as providing the unit or lot number in addition to the property address, parking or garage space numbers (for condominiums), the name and address of the association attorney if the account is delinquent, the fee for preparing the estoppel certificate, the amount of the assessments and frequency of payments, an itemized list of all monies owed (assessments, special assessments and other monetary obligations), whether or not there are capital contributions, transfer fees, resale fees or any other type of fee charged for transferring ownership, if there has been any notice to the owner of violations, if board approval is required for the transfer of the property, if there is any right of first refusal, a list of any other associations with contact information which the property is a member, and the name and contact information for any insurance maintained by the association.
The revisions also clarify no fee can be charged if the association discovers an error in the estoppel certificate and needs to amend it.
Rounding off the revisions is a cap on the fees allowed to be charged for preparing estoppel certificates, which are limited to $250.00 if there are no delinquencies and $400.00 if there are delinquencies. The association may also charge an extra $100.00 for an expedited estoppel. There is also a sliding scale of caps for estoppel requests for multiple units owned by one person or entity.
The last important revision is the right to damages and attorneys’ fees if the buyer requests a refund because the closing did not occur and the association fails to refund the estoppel fee within thirty (30) days.

Monday, February 20, 2017

Huge Win for Unit Owners

After several years of arbitration, a trial de novo, both of which our clients won, and an appeal to the Second District Court of Appeals, my clients have been vindicated.  The 2nd DCA came back, rather quickly I might add, with a Per Curiam decision affirming our clients' Final Summary Judgment.  For those of you who are not up with the legal terms, Final Summary Judgment is when the court rules your client is entitled to judgment as a matter of law and a trial is not necessary.  A Per Curiam decision is one without an opinion.  When the appellate courts issue these, it means the losing party cannot appeal to the Florida Supreme Court.

It was a long, hard and stressful road for my clients, who purchased their property in 2013 and received permission to replace the rotted wooden boards on their deck with composite boards. Shortly afterwards, the association accused them of making the deck bigger than the original 1993 deck. This was surprising since the community association manager (CAM), board members, and committee members visited the deck during renovations and never said a word!

The association went as far as to report the clients to Code Enforcement to try and force the removal of the deck. Prior to arbitration, the association demanded complete removal of the approximately 25' x 29' deck.  I say approximate because there was never anything in the Declaration of Condominium or Bylaws stating how decks are to be measured and the CAM testified at arbitration there could be 6" to 1' difference depending on the starting and ending points of the measurements.

After 2-1/2 days of arbitration, the arbitrator for the Department of Business & Professional Regulations ruled the association had no evidence of the size of the original deck and the only person to ever measure the deck was the contractor, who the arbitrator found to be credible.

Not to be out done, the association filed for a trial de novo without having any new evidence to support their allegations, claiming basically they thought the arbitrator did not know what she was doing.  Our clients were awarded summary judgment after the association attempted to take the depositions of the whole building division for Polk County.  I guess their position was our clients were not entitled to their permit, but I would think that would be an issue between the association and the county, not with my clients, who received a permit for their deck.

Half way through the depositions, when I knew I had enough to prove the depositions would not reveal any new evidence or create a genuine dispute of material facts, I filed for summary judgment, which was granted.  The judge found there was no evidence to indicate our clients had increased the size of the deck.

The association seemed more determined than ever, claiming they would appeal all the way to the Supreme Court. On appeal, the association attempted to make new arguments with issues not brought up during arbitration or the trial de novo.  That is just simply not allowed.  Worse yet, the association attorney did not file the transcripts from the summary judgment hearing, so he had no record of any arguments he may have made and could not prove he preserved any objections for appeal.  For the record, the trial judge asked him three times if he had any other evidence to present and finally got the association attorney to admit he did not.

Here we are over three years later -- that's over three years of my clients' lives they will not get back. Over three years of a lot of money spent on legal fees, stress and harassment.  Yes, harassment.  They, along with myself, were the subject of numerous newsletters with the association even claiming, through their non-board member mouthpiece, my clients were suing the association when the opposite was true. My clients have not been able to enjoy their property since this started in October of 2013. So many unit owners bought into the false reports in the newsletters and harassed my clients for "causing trouble."  That's just one of the printable statements.  Shame on these people for not listening to both sides. My clients are really nice, hardworking people. Shame on the association for having a power-hungry board, commonly known as Condo Commandos in Florida.  You thought having a $650,000 slush fund could lead to a win in any case.  Do not think for one second we are not aware of the statements made about the slush fund being for the purposes of discouraging those who are not intimidating into doing as you say.

Congratulations to my clients and I hope you now get to enjoy your beautiful Florida home.


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 (www.ccfj.net):



Gentleman,

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!

Regards,

Barbara Billiot Stage, Esq.