Recalls After House Bill 1237

Recently our firm had the experience of representing clients in the first recall arbitration after HB 1237 revised Fla. Stat. 718.112(2)(j), which are the laws governing recalls.

Unfortunately, the Florida Statutes conflict with the Florida Administrative Code and since the Department of Business and Professional Regulation (DBPR) operates under the Florida Administrative Code (FAC), DBPR declined jurisdiction to hear the case. Even though lawyers are taught in law school the statutes overrule the FAC, the head arbitrator, James Earl, explained he does not have the authority to declare the FAC is invalid and it will be approximately six (6) months before they update the FAC.  

The next step would be to file a state court action for declaratory relief to have a judge rule the FAC is invalid and certify the recall or to challenge the FAC and DBPR in an administrative hearing before the Department of Administrative Hearings. Another option is to file for emergency injunctive relief. While we are fully prepared to do so, there is an election coming up in a couple of months and the issue would be moot.

This leaves homeowners with a recall process which is completely ineffective if the recalled board members refuse to recognize the recall is "effective immediately" and step down.

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.

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.