Fighting Over Your Lawn and the Florida Friendly Landscaping Statute

We frequently hear about disputes with homeowners who are fighting with their association ("HOA") over their right to Florida-Friendly Landscaping ("FFL").  For those of you who are going "what?," several years ago Florida passed several laws to help conserve water and reduce the amount of chemicals applied to landscaping as an initiative to save our aquifers.  The motto of the program is "right plant, right place."  Florida tends to go through cycles of droughts, so having a yard which is 90% St. Augustine grass is not always feasible or environmentally friendly.  This grass is hard to grow in sandy soils and can require watering up to four times a week during the summer.  It also is less tolerant to disease and pests than some of the other alternatives.  For more information on FFL, go to www.floridayards.org.

The purpose of this blog is discuss the litigation aspect of exercising your right to FFL.  Chapter 720 of the Florida Statutes provides a homeowners association may not prohibit a homeowner from implementing FFL.  This does not mean the homeowner can just rip out the St. Augustine grass and proceed with new landscaping.  If the Declarations of Covenants, Conditions and Restrictions ("Declarations" or "CCRs") require approval for landscaping changes, then the homeowner must fill out the application and get approval.

The biggest obstacle to implementing FFL is there are some bad, bad associations out there who know most homeowners are not going to spend their life savings and three or more  years of fighting over their grass.  There is no way to estimate how much a case will cost because you never know what the other party is going to do or how aggressive they will fight.  Staying in a case all the way through trial could cost $100,000 or more.  If the homeowner wins, they are entitled to their reasonable attorneys' fees (not 100%), but if they lose they are on the hook to reimburse the association its reasonable attorneys' fees.  Not many people are willing to take this risk or spend the money, especially over grass, so like so many other association disputes, the homeowner backs down.  There are no state agencies to hold the associations accountable, so they get away with breaking the law.

Homeowners sometimes will start litigating, but halfway through they have a change of heart, run out of money, or worse yet, face some type of personal crisis (divorce, death, health issues).  The problem is they have to decide if they can stick it out or pay the association its attorneys' fees.

Stress is another big challenge to defending your right to FFL.  Just like all litigation, it's an emotional rollercoaster.  There are wins and losses in the battle to the finish line.  Sometimes the stress is overwhelming.

So what's the solution?  Better legislation.  That's no easy task!  Until the Florida Legislature decides to put in a monetary penalty enforceable by a state agency into the FFL statutes, we are at the mercy of the Board of Directors of the associations.  There are a number of good associations out there which embrace FFL.  Your homework, if you want FFL, is to talk to your board and write your legislators!  Now get out there and save the planet!

How An Association Can Get Into Trouble Over Assessments - BOARD MEMBERS PAY ATTENTION!

With the volatile economy more and more associations are changing property management firms and law firms, but there are some problems which can arise and the association would probably be on the losing end of litigation.

Many owners contact me because their associations have made these changes and now they are unable to pay their assessments because the information regarding where to send payments is not timely distributed to the members.  When a member's check or electronic payment is returned, this is a refusal of a tendered payment, which is not permitted by Florida law.  Should the association attempt to lien and foreclose, the member not only has a valid defense, but could also bring a counter claim for breach of contract.

It is imperative for associations to notify their members immediately of any changes to make sure payments are not being rejected.

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......

Community Association Living - Notice Requirements for Board Meetings and Member Meetings

Very rarely is a statute clear enough to avoid debate by lawyers taking different positions. Even if the law seems to be clear, it will still generate lots of questions with lawyers taking different positions.  The notice requirements in Fla. Stat. 720.303(2)(c) are a good example.

This statute provides the Bylaws will determine the notice requirements and if they do not then the following apply....  The statute then goes on to state BOD meetings are to be posted 48 hours in advance of the meeting in a conspicuous place in the community.  Exceptions to this are meetings to "levy" assessments or to change rules governing parcel use, which require fourteen (14) days notice to the members by U.S. mail to their home address.

The confusion comes in because the statute reads:

"An assessment may not be levied at a board meeting unless the notice of the meeting includes a statement that assessments will be considered and the nature of the assessments. Written notice of any meeting at which special assessments will be considered or at which amendments to rules regarding parcel use will be considered must be mailed, delivered, or electronically transmitted to the members and parcel owners and posted conspicuously on the property or broadcast on closed-circuit cable television not less than 14 days before the meeting."

Breaking this down, you can see the confusion.  First, what is the meaning of "an assessment may not be levied.."  It is unbelievable how much you can debate if an increase to an existing assessment is levying an assessment.  My opinion is each year when you set the rate of assessments you are "levying" an assessment. The next issue is the second sentence states the fourteen (14) day written notice is required for "special assessments" and ignores regular assessments.

Leave it to the lawyers to muck it up, right?  Just use common sense!  Play it safe and use the fourteen (14) day notice.  If your Bylaws have a longer period (many have fifteen days), then use that.  Out of precaution, don't use less even if the Bylaws permit it.  Industry practice has been to use the fourteen (14) day notice as a guideline.  When in doubt, be conservative!

Conflicts - What Motivates Board Decisions

No matter how nice your community is now, it doesn't take much to change your little slice of heaven into a nightmare.  A new board of directors, a new property manager, a new association attorney, or the neighbors from hell can all wreak havoc on a community and create misery for everyone.  The misery comes in the form of higher assessments for legal fees, those intimidating covenant violation notices and possible fines, past due assessments which spiral out of control with legal fees, interest and late charges, or what I refer to as "neighbor wars," often fueled by one or the other claiming the association supports their position.

Avoiding conflict is best achieved by understanding the governing documents, understanding how an association functions and operates, understanding the various people managing and operating the association, and understanding common problems that may arise between owners or owners and the association.

The biggest complaint I hear are owners who feel victimized by their associations, the association's attorneys, or the property manager.  While it does happen and unfortunately frequently, knowing what motivates the actions and conduct of your association helps to keep you out of the crosshairs.  Once you have that target on your back there is little chance of ever living in peace.  Even if you are successful in litigation, chances are, unless you move, you won't enjoy living in the community and there will always be animosity. 

It takes all kinds of personalities to make up a community and you cannot not possibly get along with everyone or make everyone like you.  Add to the mix a board of directors of a private corporation with a contract you entered into waiving many of your property rights and you have a recipe for disaster if you are not prepared and informed.

While a have a theory the worst of board members are those who failed at their careers and decided to run your association so they can have their egos stroked, many board members start out with good intentions. Some have what it takes to do a good job without making enemies, but many are just average people with the same stresses in life as everyone else -- jobs, family, finances, mortgages, health concerns, etc.  Board members take on a voluntary job (at least they better not be paid or they are violating state law) and try to manage the community with limited funds.  The association, nine times out of ten, has a revenue stream that is generated by assessments only.  Many owners lose sight of that fact and assume it's a corporation with profits and a fat bank account.  Nothing is further from the truth.  Most associations are non-profit organizations with a limited budget based on the amount of assessments per household and an average of 25% to 40% of those households are not paying the assessments and are in a mortgage foreclosure.  Think of it like this -- what would you do if your paycheck was cut 40%?  Ouch!  On top of that you have everyone in the community complaining assessments are too high and at the same time complaining the pool needs repairs, the clubhouse needs a new roof, the entrance sign needs a face lift -- the list goes on and on. It's no wonder these volunteers reach their burn out level quickly.

Now consider the fact associations are either not regulated at all or have little regulation.  Currently the State of Florida does not regulate homeowners associations except for elections. Hopefully that changes in 2014. The State does regulate residential condominiums, but not commercial condominiums and hotel condominiums.  The regulation that does exist is limited and cannot include claims for personal damages or an assessment dispute.  Add to this lack of regulation a property manager who is required to take 18 hours of class work to get a license, if they have a license.  State law requires the property manager, or community association manager (CAM) and the manager's firm to each be licensed, but there are a number of unlicensed managers in the industry.  I am not trying to bash the CAMs -- there are a number of excellent CAMs out there who are hard working and have high ethical standards, but just like lawyers their profession gets a bum rap for the bad apples in the bunch.

Next added to the mix of things is the association attorney.  Associations want aggressive attorneys because the board members are afraid of being personal sued despite being protected by the Business Judgment Rule.  The Business Judgment Rule protects morons, idiots and those who just make plain honest mistakes. It also protects the association to an extent.  There are some overly aggressive association attorneys who count on owners not having the $100,000 or so it takes to fund a lawsuit.  Without state regulation of the association and a high price tag on justice, its the perfect storm.  Every day I get calls from people who ask me to take their case on a contingency because its a good case, it will generate publicity for me or its extremely unjust.  Its not easy for me to tell them a) I don't have the resources to fund their case and b) unless you have a physical injury that generates big money damages no law firm will take it on a contingency because it just not a good business decision to tie you your working capital with no return on investment, if any.

So how do you avoid the perfect storm?  Let's break it down into two categories:  1) past due assessments and 2) violations.

Most owners do not realize there is almost no defense to not paying your assessments.  Its your absolute duty to pay your assessments, even if you think the association failed to properly notice a meeting to vote on an increase or is misappropriating (stealing) funds.  The only defenses available are if you paid the assessments and can prove it, the association refused your payments, the association did not provide notice before filing a lien or foreclosing, the board met in secret to impose the  increase or the board did not notify the community of the increase.  Even with those defenses it is hard to win against the association.

If you get past due in assessments you will always be past due until you pay the total amount due!

I leave that as a stand alone statement so everyone can understand the importance of this.  By state law any payments are credited to all charges other than assessments first.  Assessments are credited last, so anything less than 100% of the amount demanded means you are past due and the association can lien and foreclose on your home.  There is no minimum amount.  Even though you may owe them $100 and your neighbor owes them $10,000, they can foreclose on you first.  Its all about which owner the association is most likely to recover from with the least amount of legal fees expended.  Or it could be they don't like you, but the court recognizes the association does not have the funds to go after everyone at once and will let them pick and choose who to go after without any consequences for their selections.  Before you jump to any conclusions, look at it unemotionally.  Is it smarter to go after the owner who owes $100, is current in the mortgage, has a job and generally pays any debts or go after the owner who owes $10,000, is in a mortgage foreclosure, has no job and is likely to file bankruptcy?  Even if the association forecloses, if there is a mortgage on the property it is only a matter of time before the bank forecloses on whoever buys the property at the foreclosure auction, which is often the association.  If there is already an active mortgage foreclosure the bank can file a motion and get the property from the association in six to eight weeks where it takes years to get it from the homeowner.

What's the deal with all that interest, late fees, administrative charges and attorneys' fees?  Well, as I said before, the only source of revenue an association has is assessments and there has to be consequences to not paying assessments or everyone would withhold them.  The association cannot waive the attorneys' fees or they are passing on costs you generated to your neighbors and your neighbors could bring a lawsuit against the association.  Assessments can definitely not be waived or the association could be sued for not enforcing the declarations.  Do associations abuse this and over charge these fees?  Yes, but I don't blame the associations themselves as much as I blame the property managers and the lawyers.  Like I said -- its the perfect storm -- an unregulated business where those who do business with the association are guaranteed to get paid.  All the association has to do to pay its bills is increase assessments.  Greed is a problem.  Owners and board members alike have to watch out for property managers working with attorneys to generate billable hours for both.

A word of caution -- don't try to plead financial hardship, death, disability, job loss or any other personal issues.  The courts cannot consider this when they rule on these cases. These claims are not a defense to not paying assessments.  If you want to keep the roof over your head pay the mortgage and the association.  I would rather skip a mortgage payment then the association payment. At least you can negotiate with the bank -- eventually.

Next on the list is covenant violations.  The best way to avoid them is to know the rules! Period!

You need approval of your association to change anything.  If you make that assumption you should stay out of trouble.  Its better to ask for permission and not need it then to not ask and try to get a lawyer's forgiveness.  You can count on the lawyer being involved.

Some of the newer rules, or rather laws of the state:

1. An association cannot prohibit or prevent an owner from installing Florida Friendly Landscaping.  Its a matter of public policy and important to conserving our natural resources.  You are still required to get your association's approval.  No one has figured out how to deal with the issue of what to do when the association denies your application and the law says you can do it anyway.  There are cases pending in court over this.  Some associations have been wise enough to realize their lawyers were probably looking at generating billable hours and its a losing proposition for them -- they dismissed their cases.  Other aren't so smart.

2. You have a right to a hearing with 14 days advance notice of the hearing before you can be fined.  While this part of the statute was passed as a matter of public policy the statute is written as if to imply associations have a right by statute to fine owners.  The previous rule, before this statute was passed, was an association could only fine you if the Declarations, Bylaws and Articles of Incorporation authorized fines.  My position is this is still true and there is no pubic policy reason for imposing fines by statute, but its a lot cheaper to pay the fine than to fight in court and possibly an appeal.  Many associations also believe if you don't show up to for the hearing the fining committee can impose the fine without having the hearing.  Wrong!!!  But again, is it feasible to spend lots of money to fight a fine?

3.  A buyer is liable for the past due assessments of any previous owner.  The statute only addresses assessments and not late fees, interest and attorneys' fees.  While it is industry practice to charge all these to any buyer, there are cases pending challenging this.  Stay tuned.  One pet peeve I do have is charging a new owner the attorneys fees for the association attorney's involvement in a mortgage foreclosure.  Associations are named as a defendant in a mortgage foreclosure because they have a competing lien and the bank cannot claim the 12-month cap on liability if the association is not named.  There is no rule of civil procedure that allows one defendant to assess their legal fees against another.  I would think the Florida Bar would have issues with this as well.  It has also been the industry practice to not write off any past due assessments and other charges after the bank pays their 12-month cap and hold this for the next buyer.  The Third District Court of Appeals ruled against that on August 14, 2013.  It sends a clear message.

4. No stealing by board members!  Finally!!!  If a board member is arrested for a crime involving the association the board member is automatically removed from office as a matter of law.  Did I hear a big "WOOHOO" out of Davenport, Florida?  I am eternally grateful to the Polk County State Attorneys' Office for a job well done.

5. Old law, but important:  before you can sue your association you must engage in pre-suit mediation for homeowner associations and arbitration for condominium associations.  There are exceptions as noted above for assessment disputes and, for arbitration, personal damages.

6. Another old law that's important:  if your board of directors is doing a lousy job you can initiate a recall and remove them.  This is much easier and less expensive than a lawsuit.

Remember pay your assessments and ask permission.  Do those two things and you can avoid a lot of heartache and legal fees.  While it goes against my anti-establishment nature, most association battles are not worth it emotionally and financially.

While I didn't touch on neighbor-on-neighbor disputes, which are virtually impossible to resolve, my only advice is to put yourself in their shoes and ask yourself would you be annoyed living next door to you?

Good luck and next time buy farmland.

Recorded Deed Restrictions and Other Documents

For any HOA organized after October 1, 1995, the Bylaws, Declarations (also called CC&R's) and Articles of Incorporation have to be recorded in the county records where the HOA is located. Prior to that only the Declarations were required to be recorded.  An appellate court issued a ruling stating no restriction can be enforced against a lot owner unless the document is recorded in the county records, so as a precaution most HOAs have recorded their Bylaws and Articles even if they were created prior to 1995.  Subsequent rulings have caused HOAs to record their "Rules and Regulations" as well.  Rules and Regulations, which can be created by a vote of the board of directors, without a member vote, are meant to clarify restrictions and cannot create new restrictions.

To make things more complicated, the courts have said a lot owner is on notice to check for deed restrictions if it is obvious from the general scheme of the neighborhood certain things may not be permitted.  For instance, if every house has clay tile roofs you are on notice you cannot have a different type of roof.  Also, if there is a sign on the entrance with the name of the subdivision, that is a clear sign you should ask about deed restrictions and is sufficient notice.

One issue that comes up often is the waiver of enforcement of restrictions.  When an association fails to enforce a restriction it can lose the right to enforce it in the future through the Doctrine of Waiver.  Some courts have held the period of time to be one year (Third District Court of Appeals), some have held it is a five-year period (Fourth District Court of Appeals), while the Fifth District Court of Appeals said it could be either based on the type of claim sued upon (injunctive relief for specific performance or breach of contract).

An association can enforce a previously waived restriction by issuing what is called a "Chattel Shipping Letter," named after a case by the same name.  It requires the association to pass a resolution by board vote to start enforcing the restriction again and to send a copy of the resolution to all owners.  As a word of caution association should also record such a resolution in the county records.

The War Is On - Florida Friendly Landscaping Battle with Florida HOA

Please visit this website to help Renee Parker fight the Summerport HOA in Windermere, Florida. http://www.indiegogo.com/Florida-Friendly/emal

In 2009 former governor Charlie Crist signed into law a revision to the Homeowner Association Act, Fla. Stat. 720.3075(4), which states "may not prohibit or be enforced so as to prohibit any property owner from implementing Florida-friendly landscaping …"

This law is very important as Florida faces droughts and is considering importing water from the State of Georgia due to water shortages, yet Florida homeowner associations are still taking homeowners to court claiming they cannot implement their Florida-Friendly plans. The HOA attorneys claim they are not prohibiting the Florida-Friendly landscaping, but have the right to regulate it. The problem is their "regulation" of the landscaping plans does indeed inhibit it.

Keep your eye on this case -- Summerport Homeowners Association v Jeff and Renee Parker. It's a very important battle.

HOA & Condo Liens - Saving Your Home

Frequently I am asked to help homeowners settle their past due assessments with their condo or homeowners association. This is a very serious situation because the association can and will foreclose much faster than any mortgage company or bank.

Frequently homeowners make the mistake of assuming that 1) if the mortgage company or bank is foreclosing, the association cannot; 2) if the homeowner pays the past due assessments, but not the interest, late fees or attorneys' fees, the association cannot foreclose; 3) sending a check to the property manager will stop the foreclosure; 4) the homeowner can withhold assessments if the association is not doing their job and 5) the association can waive some of the past due assessments and charges.

These are all incorrect and a big mistake. Trying to get around these issues will only increase the attorneys' fees and other charges the association is entitled by law to correct.

It is very important to note that BY LAW, any payments are applied to attorneys' fees and costs FIRST, interest and late fees NEXT and assessments LAST. Unless you pay the full amount being demanded, you will always be past due in assessments and the association can foreclose.

Your options, if you cannot pay the full amount demanded, are:

1) Negotiate a payment plan;

2) File Chapter 13 bankruptcy.

The first option may not be the ideal solution because many association law firms charge $250 to set up the payment plan and $50 per month to process payments, which adds considerably to the amount due and owing.

Chapter 7 bankruptcy is not an option for saving the home. The discharge of association assessments in a Chapter 7 applies only to assessments that came due prior to filing bankruptcy and only extinguish the debt to the person, not the property. This means the association can still foreclose against the property. Also, the homeowner is still liable for assessments that come due after filing bankruptcy.

If a homeowner wants to avoid the foreclosure of the pre-petition assessment lien, the homeowner will have to pay off the pre-petition debt (either in full or through a settlement with the association) even though that debt has been discharged, or file a Chapter 13 bankruptcy which will allow the homeowner to spread the debt over a five-year payment plan. The association may or may not be entitled to 100% of the charges and if the association fails to file a claim, they will not receive any pre-petition assessments and charges.