Monday, July 7, 2014

HOA Emergency Powers - Legislative Update FS 720.316

There is trouble brewing on the horizon and it doesn't come from a hurricane, but the effects will be felt after a hurricane or some other natural disaster passes through.  I'm talking about the provisions in House Bill 807, which is now state law (FS 720.316) effective July 1, 2014, which give homeowner associations emergency powers in case of a natural disaster.  Those powers include levying special assessments, borrow money or pledge assets as collateral without a vote of the membership.  You want to know why I think it's a bad idea? Subsection (2) of the law states the authority granted in subsection (1), which I stated above, is "limited to that time reasonably necessary...."  Any time you see the word "reasonable" in a statute it will take a judge, at least two lawyers and close to $200,000 or more in legal fees and expenses to determine what is "reasonable."

Why would the Florida Legislature think giving HOAs a free pass on this is a good idea?  Do they really think life in a HOA is perfect for most people and all will be okay? These are the same people who could not get a bill passed to allow for a state agency to regulate HOAs -- they should know giving them more power will only add to the corruption and abuse that goes on in an unregulated industry.  My only guess is someone spiked the refreshments on Capitol Hill. This is why my friend, Jan Bergemann of CyberCitizens for Justice, thinks the HOA statute is the "Attorney Employment Act."  It will surely keep me busy for years to come.  

Let's revisit this after a hurricane hits Florida.  I would like any HOA or member of a HOA hit by a hurricane to let me know how this new law worked out for you.  Please prove me wrong.

And speaking of new laws....we now have a challenge under the Florida Constitution for retroactive application of a new law to an existing contract.  The law doesn't say it is intended to be applied to existing associations.  In the section authorizing special assessments, it comes slightly close. In subsection (1)(j) with "Notwithstanding a provision to the contrary, and regardless of whether such authority does not specifically appear in the declarations..."  Wait a minute -- the first part says the HOA can't do it if there is a provision in the association documents prohibiting it, but the part after the comma says the HOA can regardless of what's in the governing documents!  More billable hours for all attorneys! 

This one really disappoints me......

Tuesday, July 1, 2014

Community Association Law 2014 Legislative Updates

The information below is copied word for word from the summary of House Bill 807 located at http://www.flsenate.gov/Committees/BillSummaries/2014/html/728.  I will discuss each revision in the next coming weeks.

The provisions related to condominium associations include:
  • Authorizes the associations to enter an abandoned unit to inspect the unit and adjoining common elements, to make specific repairs, and to maintain the unit, and permits the association to charge the unit owner for expenses incurred by the association,
  • Provides the circumstances in which a unit may be considered abandoned;
  • Provides that the insurance responsibility of the association or unit owners for reconstruction, repair, or replacement in the absence of an insurable event shall be determined by the provisions of the declaration or bylaws;
  • Permits board and committee members to participate, including voting, in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication, and for such participation to count towards a quorum;
  • Provides that the previous owner does not include an association that acquires the title to a delinquent property through foreclosure or by deed in lieu of foreclosure. The present unit owner’s liability for these costs associated with the collection process is limited to the amounts that accrued before the association acquired the title to the delinquent property.
  • Prohibits condominium associations from recording a termination of condominium that failed to receive the required approval (80 percent of the voting interesting and 80 percent of the original principal amount of outstanding recorded mortgage liens of timeshare estates in the condominium, unless the declaration provides for a lower voting percentage). It provides that a new attempt to terminate the condominium may not be proposed at a meeting or by solicitation for joinder and consent for 180 days after the date the failed plan was first given to all unit owns;
  • Repeals the Community Association Living Study Council; and
  • Extends the time period to be classified as a bulk buyer or bulk assignee from July 1, 2015 to July 1, 2016.
For cooperative associations, the bill:
  • Revises the financial reporting requirements by increasing from 60 days to 90 days the time to prepare a financial statement, or to contract with a third party to prepare the financial statement;
  • Specifies the type of financial reporting required based on the association’s total annual revenue amounts;
  • Limits the financial reporting requirement, for associations of fewer than 50 units, regardless of the association’s annual revenues, to the preparation of a report of cash receipts and expenditures, unless otherwise required by the declaration or other recorded governing documents;
  • Provides that persons who have been suspended or removed by the division or who are delinquent in the payment of any monetary obligation due to the association are not eligible to be a candidate for board membership and may not be listed on the ballot; and
  • Provides for the removal from office of a director or officer charged by information or indictment with a felony theft or embezzlement offense involving the association’s funds or property.
In regard to homeowners’ associations, the bill:
  • Requires that meetings of the board of directors of a homeowners' association and meetings of the association’s membership must be held at locations that are accessible to physically handicapped persons; and
  • Provides that an association does not have to provide members with copies of an amendment to the governing documents after it is approved by the membership if a copy of the proposed amendment was previously provided to the members before the vote on the amendment and the proposed amendment was not changed before the vote.
In regard to condominium and cooperative associations, the bill requires outgoing board or committee members to relinquish all official records and property of the association in their possession or control to the incoming board within five days after the election. The bill provides that an outgoing board or committee member who violates this requirement is personally subject to a civil penalty by the Division of Florida Condominiums, Timeshares, and Mobile Homes. It also prohibits a board member from voting by e-mail.
For cooperative and homeowners’ associations, the bill authorizes boards to exercise specified emergency powers in response to the declaration of a state of emergency, including the authority to implement a disaster plan, mitigate damages, and borrow money with the approval of the membership.
In regard to condominium, cooperative, and homeowners’ associations, the bill provides that unit owners may consent in writing to the disclosure of contact information to which other owners are prohibited from having access.

Monday, June 30, 2014

HOAs - Don't Mess with the Disabled!!!

It's that time of year when all the community association law firms start blogging about the legislative updates to the Florida Statutes that will be enacted July 1, 2014.  It's interesting to read the various blogs because they always include what the writer interprets the meaning of the new statute will be and, if you read more than one blog, you get a more than one interpretation (flag on the play -- litigation imminent!).

Here's one that should be real clear and I credit John and Kim Whitt for standing firm and seeking justice. They proposed to our elected leaders to add two words to Fla. Stat. 720.303(2), which requires meetings to be open to all members. Those two words "and accessible" make a world of difference to people like John who is confined to a wheelchair.  Common sense and compassion for other human beings would lead you to think this is not necessary; after all, the Fair Housing Act requires HOAs to provide reasonable accommodations for those who request it in order to attend meetings. Well, no one goes around accusing HOA board members of using common sense with any regularity.  In fact, all I hear all day is about conduct that is not only senseless, but unreasonable, offensive, insensitive and ruthless.  But I digress.  While those two words didn't make it into the statute, a version of it did:  "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."

This was no simple task and I congratulate the Whitts and our political leaders for accomplishing this. At this point I bet you're wondering what led to this.  I am here to tell their story -- the real story.  Not some version with a spin on it to make the people think it was an innocent mistake.

John and Kim Whitt are wonderful people.  They are nice people.  They are not troublemakers.  When they bought their home in 2009 in a beautiful, rural community in Pasco County life for them changed. The community is comprised of 45 or so well-kept spacious homes on spacious lots, many of which are adjacent to wetlands.  Everyone's dream home, right?  The Whitts were eager to be involved in the community and to get to know their neighbors.  One obstacle faced them.  The HOA held it's meetings, as it did for a number of years, in a vacant lot with a cattle grate, livestock fence and extremely soft soil.  The meetings are held in a far back corner under trees with roots that made it impossible and still make it impossible for John to attend the meetings.  John asked the board if the meetings, not all, but at least some, could be held somewhere so he could attend and even offered his house.  He was refused.  A former board member, who is a contractor, offered to install a concrete pad a no charge to accommodate John's request.  The board voted against this. Of course in their version they offered to install the concrete pad and John refused, but that's just the usual HOA spin on facts to try and get people to believe they meant well.  John even offered the HOA to remove him from membership and the deed restrictions so the HOA would not have to comply. It's not like he was going to start a pig farm at his beautiful home.  Pig farms are prohibited by zoning ordinances in this area, but more on that later.  The HOA spins the tale the Whitts never wanted to be part of the community and when their request to be excused was denied they resorted to pushing the access to meetings as the issue.

Here we are five years later. The Whitts sued the HOA, but lost. I won't rant about that until I'm ready to relinquish my license to practice law.  The former board member/contractor and two other couples who own homes in the community sued the HOA because the deed restrictions had expired while the Whitts were litigating and were not properly amended to extend them.  They won on summary judgment.  No HOA.  The HOA is appealing, but going through the revitalization process as the same time. They are promoting revitalization by claiming if the deed restrictions are not revitalized they will be a community with pig farms.  I don't think any of the owners have a pot-bellied pig, much less a pig farm, which is illegal in this particular area anyway.  On top of that, the HOA has held the Whitts out in ill will to the neighbors every chance they get, blaming them for the high legal fees they incurred with a huge unpaid balance.  No one really knows what that balance is because not only will they not show the owners the amount due and the balance changes frequently.  If they think the HOA won, how come they owe so much money in legal fees?  

The Whitts may have lost the case, but evidently a lot of people, including members of the Florida Legislature and some decent people in their community, thought they shouldn't.  They were successful in getting the statute amended despite the HOA attorney saying they wanted to create the "Homeowners Association with Disabilities Act."  They have suffered for it.  Homeowners in their community who do not even know them despise them based on the tale the HOA spins about this -- a HOA that has been ruled to not have deed restrictions.  

And just for giggles -- the HOA now claims it is still a mandatory association without deed restrictions because the Articles of Incorporation and the Bylaws are still valid.  

Monday, May 19, 2014

Covenant Violations and the Fining Process - What Your Rights Are as a Homeowner

This is the time of year where our firm gets a lot of calls about covenant violations, mostly lawns that took a beating during the winter months.  The Florida climate, which goes from almost freezing to tropical in a 24-hour period, tends to be harsh on lawns, but I digress.  That's a blog about Florida-Friendly Landscaping.

There are several things the homeowner should know about the fining process because if you know what the law provides, it is less likely you will be taken advantage of by your HOA.  Remember -- knowledge is power.

A board of directors cannot impose a fine against a homeowner.  The HOA is required to have a committee of at least three (3) members, who are independent and are no relation to the board of directors, the property manager, officers, agents or employees of the HOA.  The committee should be comprised of an odd number to avoid a tie vote.  The odd number of members is industry standard and not part of the statute.  The committee has to agree by a majority vote to impose a fine, which cannot be retroactive, and the board of directors cannot override the vote to impose a fine, but can override the vote to withhold a fine being imposed.

The HOA is required to give the homeowner notice of a hearing to be held to vote on the fines.  The HOA is required to give the owner at least 14 days notice. Now here's where many HOAs get it wrong.  The statute, Fla. Stat. 720.305(2)(b) states "A fine or suspension may not be imposed without at least 14 days’ notice to the person sought to be fined or suspended...."  The statute does not say mailed at least 14 days in advance, IT REQUIRES THE NOTICE TO BE GIVEN TO THE OWNER AT LEAST 14 DAYS IN ADVANCE.

The statute also provides this is a hearing, not a meeting.  The HOA should not be noticing the hearing to the membership to attend as a lynch mob.  Hearings do not require notice.  The only people that should be present are the homeowners, the committee and if the HOA is going to present the case to the committee, a representative of the HOA.  This is usually the property manager or a board member.  The representative of the HOA should not be sitting in on deliberations and voting by the committee.  This would prevent the committee from making an independent decision.

If you find yourself in front of the committee, bring a recorder.  You have the right to do so, although the committee will probably say you don't.  Even board meetings are cut short and adjourned because board members tend to think you have no statutory right to record meetings.

You are entitled to obtain a copy of the minutes from the hearing.  The committee should create minutes and record the vote, listing the vote of each committee member.

If a fine is imposed, you should pay it and then challenge the decision.   Never risk your home.  If you pay the fine, the risk to your home is removed and you can challenge the decision without worrying about losing your home to a foreclosure.  Unpaid fines in excess of $1,000 can be the source of a lien and foreclosure.

Now, off topic, if you have one of those troublesome lawns that doesn't thrive no matter what you try to do to save it (you know, those St. Augustine lawns), then look into Florida-Friendly Landscaping (FFL).  You still have to submit an application to the ARC or ACC or whatever your HOA calls it, but by law the HOA cannot prohibit you from implementing FFL.  Check out the website by the University of Florida's IFAS extension at floridayards.org

As far as other violations go, please do not make improvements to your home without filing the ARC/ACC application and please do not store boats, trailers, RVs, 4-wheelers, jet skis and other recreational items on your property.  These are the biggest sources of fines in HOAs.


Tuesday, May 6, 2014

Buyer Beware - You Are About To Be A HOA Victim

NOTICE:  New out-of-state home buyers -- welcome to Florida and please turn over your new home to the HOA.

This has been going on for a while, but the number of owners contacting me because they have been victimized is increasing at a steady pace

Here's the scenario:

-  You sign a purchase agreement to buy a home in a HOA
-  Your closing documents have charges to pre-pay the HOA; sometimes for a couple of months,
    sometimes til the end of the year
-  You expect to get a coupon book to pay your assessments; sometimes you do, sometimes you don't
-  You receive an intent to lien notice for past due assessments despite not getting a coupon book or even
    paying your assessments
- You call the property management firm who tells you a) the bookkeeping hasn't posted all the payments
   b) it's not a mistake on their part and just send the money and they will fix it or c) they didn't receive your
   payment but send it in and they will take care of it
-  The property management firm doesn't tell you that you have incurred interest and late fees and maybe
   even attorneys' fees and any payment goes to the fees first and assessments last so you will continue to
   be past due
- The issue then snowballs into a dispute that involves the HOA attorney, who liens your house and then
   sends a notice to foreclose
-  Every phone call, email or letter to the HOA attorney generates more legal fees

What's really going on:

-  Unscrupulous property managers and attorneys work together to generate billable hours for both
-  You may have pre-paid assessments but the management company did not properly credit them
-  You were given an incorrect amount
-  Your payment was "lost" because there is no way to prove you did send it and a payment dispute
    means more money for the HOA manager and attorney
-  You are told they will fix the problem while they are really preparing a lawsuit to foreclose

The problem:

There is no defense to non-payment of assessments unless you can prove you did actually pay them and the HOA made a mistake, which is rare to have the proof necessary for this defense.

How to avoid the problem:

Ask you real estate agent or title company the name and address to send payments.  The title company should get this from the estoppel request they are required to send to the HOA.  Pay your assessments in advance at least until the first of the new year so you can be certain you get a coupon book.  Use a bill pay service so you have proof of processing and delivery of the payment.

Of course the best solution is to not buy a home with a HOA.


Monday, April 28, 2014

CCFJ BANNER
OPEN LETTER TO GOVERNOR SCOTT


Governor Rick Scott;

This legislative session has clearly shown what you - as Florida's 
Governor - areall about: A promoter for special interests with little 
concern for Florida's citizens and consumers. When it comes to 
homeowner association reform, your agenda has been anti-
consumer and especially anti-homeowner. 

As a registered Republican who has voted for the Republican ticket 
all my life, I am plainly disgusted with your vision of Florida. You, with 
the help of "Speaker" Weatherford -- speaker in the meaning of 
speaking for special interest, have killed the single most important 
consumer protection bill that was filed - or forbidden to be filed - during 
this legislative session... a House companion to Senator Hays' 
SB 1348.

Are you really convinced that you can buy the votes of us citizens by 
promising to decrease our annual car-registration fees by $25?

Word had it at the beginning of the legislative session that only 
non-controversial bills would pass and signed by you because of 
the upcoming election. In the past few weeks it became obvious 
that non-controversial was supposed to mean that the bill would be 
ok if not opposed by special interest. You obviously didn't care if 
the bill would be very controversial in the eyes of Florida's citizens.
  
Do you honestly believe that collecting campaign funds from special 
interests will buy you back the Governor's mansion? Do you honestly 
believe that all registered Republicans will vote for you despite you 
having trampled on their rights and needs with feet? 
 
Your desire to achieve a sound bite of "no new fees" or "no increase 
of government", will allow - minimum for another year - the inability for 
homeowners to file a simple complaint with your DBPR in the same 
way a condominium owner can when abusive association leaders act 
illegally.
  
Your actions will allow greedy investors to continue to kick families out 
of their homes who did everything their contracts asked for (H 1061 
didn't even get a committee hearing). And the list of consumer-friendly 
bills killed behind closed doors goes on!

The anti-owner bill H807/S798 is passing with flying colors with more 
nonsense added in committees! Under the cover of clarifying existing 
laws this bill will do nothing but create more lawsuits - lawsuits Florida's
homeowners and condo owners can ill afford. The tag team of 
Moraitis/Ring has created more financial damages to Florida's 
homeowners and condo owners than the hurricanes in the last ten years 
together!

I guess many Republican homeowners and condo owners will remember 
the good old times when we had a governor who helped passing 
owner-friendly bills and signed them into law:


GOVERNOR CHARLIE CRIST 
SIGNING COMMUNITY 
ASSOCIATION BILL H 995
From left: Rep. Kevin Ambler, Rep. Julio Robaina, Rep. Franklin Sands, 
Rep. Yolly Roberson,  Rep. Joe Gibbons, Senator Alex Villalobos, 
Rep. Juan Zapata
------------------------------------------------------------------------------------------------------------ 
After this for homeowners and condo owners disastrous legislative 
session many of Florida's homeowners (est. 2,5 million) and condo 
owners (est. 1.45 million) and their families will definitely remember 
the good old times. I guess it's time for Florida's citizens to work on 
much needed changes on November 4. My advice to all these 
voters (using your words): "LET'S GET TO WORK!"

Regards,

Jan Bergemann, President
Cyber Citizens For Justice, Inc. 

Sunday, April 20, 2014

Letter to Governor Rick Scott

Dear Governor Scott,

It was very disappointing to not have the bill this year to create an agency to regulate homeowner associations. 

Despite what the courts have ruled, a high percentage of these associations are dictatorships who widely abuse homeowners.  As my friend Scott Gardner said 'I doubt our founding fathers ever envisioned any private corporation having so much power over the citizens of this country."  Valuable property rights are gone. 

While the courts hold the position these people entered into a contract and they had a choice not to, this contract is one-sided. One-sided contracts are thrown out all the time. 

What people don't agree to in these contracts are to be ruled by boards who steal money or use the money for private vendettas. 

What these people don't agree to is being victimized by attorneys and community association managers who work I'm collusion to fuel disputes and billable hours. 

What these people do not agree to is having thousands of dollars of unregulated attorneys fees assessed against them if they are a couple days late with a payment or if their payment is lost.  

What these people don't agree to is being sued for exercising statutory rights such as implementing Florida Friendly Landscaping. 

These people entered into these contracts thinking if something went wrong the State of Florida would protect them.  The State has failed our citizens. 

The State of Florida has aided and abetted the creation of a system more corrupt than any government.  

Regards
Barbara Billiot Stage, Esq. 

Sent from my iPhone