Tuesday, July 10, 2018

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!

Friday, June 1, 2018

Tips & Tricks for Living in a Florida HOA (or COA)

Our firm limits its practice to community association law, which is the technical term for the field of law dealing with homeowner associations (HOAs) and condominium associations (COAs).  We also handle work with other types of communities, such as mobile home parks.  We represent both associations and individual homeowners, so we see both sides of the problems.  Everyday we receive multiple calls from homeowners who have problems with their association, often after they have gotten into trouble.  We have blogged about this topic numerous times, but since the laws are revised each year, the advice is subject to change, although not much.  More importantly, we feel the need to say it over and over to help as many people as possible.

Tip No. 1:

Read your association documents and not just the ones you were given. You should have Declarations of Covenants, Conditions and Restrictions (aka Decs or CCRs) or a Declaration of Condominium plus Bylaws, Articles of Incorporation and most likely Rules and Regulations or Architectural Guidelines (or both).  Go to the official records for your county, by searching on the name of your county and Official Records.  Look for a link to search the official records and search for amendments, supplements, modifications, restrictions, bylaws, articles, and notices for any new restrictions or amendments and modifications to the originals, plus any notice of preservation if the original Declarations are approaching thirty years old.  This applies to HOAs only, not COAs.  Read every document carefully and if you are unsure of the meaning and it may have some effect on you or your property, ask a lawyer to interpret it for you.  The best way to stay out of trouble is to know the rules and obey the rules.  The best way to keep your association from becoming corrupt is to know the rules and make it obey the rules.

Tip No. 2:

Read the Florida statutes governing your association (Chapter 720 for HOAs, Chapter 718 for COAs and Chapter 723 for mobile home park lot tenancies where you own the home, but rent the lot).  Familiarize yourself with the relevant statutes, but do not try to cite them and cram them down your Board of Directors throat, at least not without asking a lawyer if your interpretation of them is correct. Knowing the law helps protect you, but misquoting or misinterpreting the law makes you look like a troublemaker and a nut job.  Plus, there is case law (judge's rulings) which interpret the statutes and give them a meaning other than what a layperson would think they mean.  Not all judges interpret them the same way and different jurisdictions (courts in different counties) could have different rulings.  Even the appellate courts (there are five in Florida) do not always agree on the meaning.  The law is not always black and white.  That would be too easy.

Tip No. 3:

Never withhold your assessments (aka dues, maintenance fees).  The law does not permit it.  Here is where the law is black and white.  If you do not agree with the way the association is being operated or managed, either recall the Board of Directors, elect new board members, or seek legal advice.  Withholding your assessments will result in you being foreclosed on and losing your home.

Tip No. 4:

Always pay your assessments.  While this sounds like Tip No. 3, it is not.  Often owners experience some kind of hardship, whether it is financial, family, or physical.  Your association cannot give you a break because you cannot afford to pay and the courts are not allowed to give you a break either.  Inability to pay is not a defense and the association can foreclose on your property a lot faster than any bank.  It can also foreclose even though the bank is foreclosing too.

Tip No. 5:

Always ask permission before making changes to your property.  If you are unsure if you need permission, check your documents.  If you are not positive whether permission is required or not, ask an attorney to review the documents.

Tip No. 6:

Never proceed with an improvement if your application has been denied -- even if you think the association is wrong.  The law requires you to get a court order, called a declaratory judgment, determining who is right and who is wrong.  Proceeding despite a denial will just result in a lawsuit against you.

Tip No. 7:

Always keep you property maintained.  The courts cannot consider financial hardship.  When you purchased a property in an association, you agreed to keep it maintained.  The excuse you were unaware there was an association is not a defense.

Tip No. 8:

Participate in meetings and even campaign to be a board member. Get your neighbors involved. If no one is watching what is going on it is very easy for an association to become a corrupt organization.  If you do not agree with the way the association is being operated and managed, become a board member or recall the Board of Directors.  Legal fights are expensive. Volunteering is not.

Tip No. 9:  Whenever you apply to your Architectural Review Committee (ACC or ARB), save a copy and when you get it back approved, save that copy FOREVER.  More importantly, make sure you get it back.

Friday, April 27, 2018

The Importance of Insurance for Condominium Owners

I continue to be amazed by the number of condominium owners who contact me after they have lost everything in a disaster and had no insurance to cover their personal property and the improvements in their unit, such as kitchen cabinets, or to protect them from liability for damages to adjacent units.  The "this will never happen to me" mentality can result in financial devastation.

If a fire were to destroy everything, the condo association ("COA") is not liable, in most instances, to fully restore your unit, especially if the fire is caused by another owner or tenant.  In most instances, the COA is only liable to restore the unit to bare floors, walls and ceilings -- no fixtures, no cabinets, no floor coverings, not even paint on the walls.   This scenario gets even worse if your the unit owner liable for the fire when an appliance or electrical outlet short circuits.  You could be on the receiving end of a lawsuit by every other unit owner affected and their insurance companies. 

The same problems would occur if there is a water leak, which are very common in condominiums -- toilets overflow, air conditioning units leak, and pipes under the sink can fail.  In this scenario, not only are you liable for your damages, and your tenant if you rent, but you are also liable for any water leaking into or flooding an adjacent unit.

Get that insurance!

Thursday, April 19, 2018

2018 Legislative Update - Chapter 718 The Condominium Act

Here are the 2018 Legislative Updates to the Condominium Act, Chapter 718, with my comments in bold italics:

  1. FS 718.303(3)(b), which is the statute authorizing fines and suspensions for violations, has been revised to mirror Chapter 720, the Homeowner Association Act, and provides a fine cannot be imposed unless the unit owner is given at least fourteen (14) days notice a hearing will be conducted to impose a fine and the hearing will be conducted by a committee composed of no less than three (3) members who are not directors, officers or employees of the association or the parent, spouse, child, brother or sister of a director, officer or employee of the association.  The actions of the committee are limited to approving or rejecting the proposed fine and any imposed fine must be paid within five (5) days after the hearing.  The association must provide written notice to the unit owner of the fine or suspension.  Tenants, guests and invitees of the unit owner are allowed to attend the hearing.
  2. FS 718.111(12) has been amended to provide the condominium association to comply with a request to inspect the official records within ten (10) business days from the receipt of a request, mirroring the Homeowner Association Act.  The previous version required the request to be completed within five (5) days, but the penalty did not trigger until the 11th day.  This statute was also revised to require electronic records for electronic voting to be kept for one year.
  3. FS 718.112(c)(1) was amended to allow associations to post a meeting notices and agendas on the association's website and to email the notice to members with a link to the website for those members who consent to electronic notices.  This is in additional the other requirements for posting notices in common areas or mailing notices.  In addition, this statute was revised to require notices of meetings to discuss regular or special assessments must include provide a description of the purpose of the assessment and the estimated cost.
  4. FS 718.112(2)(c)(6) was amended to make owners who consent to email notices responsible for removing or disabling any email filters which might prevent the receipt of the notice.  In other words, if the owner does not receive the email because it was sent to a junk folder or deleted by the email server, the association is not responsible.
  5. FS 718.112(g) requires condominium associations with 150 units or more to post the official records on a website by January 1, 2019.  The requirement to post a summary of bids has been changed to allow the posting of actual bids and only those in excess of $500.  The requirement to post proposed financial reports to be discussed at meetings has been changed to monthly income/expense statements to be considered at a meeting.  Language has been added which would not invalidate any action or decision at a meeting for the failure to post the required information.
  6. FS 718.111(12)(b) has been amended to require certain documents be retained permanently, such as plans, permits, warranties, condo documents, rules, and meeting minutes.   Language was also added to exempt the association or its agents from liability for accidental disclosure of confidential information.  This means it is clear there is liability for intentional disclosure.
  7. FS 718.111(13)(e) provides a penalty if the association fails to deliver the annual financial report to the unit owner after a request is made and the Division of Condominiums also orders the association to deliver the report.  The penalty states the association may not waive the reporting requirement for the year of the request and the following fiscal year.
  8. FS 718.112(2)(a)(1) requires a condominium association with five (5)  or few units have at least three board members.
  9. FS 718.112(2)(d)(2) has been revised to allow board members to serve more than one (1) year terms if authorized by the bylaws or article of incorporation.  No board member can serve more than eight (8) consecutive years unless approved by two-thirds (2/3s) vote of all the unit owners casting votes.  Despite the overwhelming amount of discussion outlining the need to determine if the eight (8) year limit applies when the statute was enacted July 1, 2017 or is retroactive, the Florida Legislature failed to clarify this issue. The Division of Condominiums has indicated it would interpret the eight (8) year limit to start when the statute is enacted, but it has yet to be tested.
  10. FS 718.112(2)(d)(3) requires the board of directors to adopt a rule designating a specific place where meeting notices will be posted on condominium property.  Recent court rulings have required associations to record a resolution of the adopted rule in the county records and to mail a copy to owners within thirty (30) days of recording the rule.
  11. FS 718.112(2)(j) provides a board member's recall is effective immediately at the conclusion of the board meeting to certify or reject the recall if the recall is deemed facially valid and the recall certified.  The board member will have ten (10) days to turnover all association documents.  The same provisions are true used if the recall is by written agreement.  If the association fails to hold the board meeting within five (5) days of the unit owner recall meeting or the service of the written recall, or fails to certify the recall, the unit owner representative may file an arbitration petition with the Division of Condominiums challenging the board's failure to act or failure to certify the recall.  A board member who is recalled may file a petition to challenge the recall.  If the arbitrator reinstates the board member with a finding the recall was invalid, the petitioning board member is entitled to recover attorneys' fees and costs from the unit owners.  If the unit owners prevail and the arbitrator finds the board member's challenge to the recall was frivolous, the unit owners may recover attorneys' fees and costs from the petitioning board member.
  12. FS 718.113(2)(a) was revised to require unit owner approval be obtained before material alterations or substantial changes are made to common areas.
  13. FS 718.113(8) was added to allow the installation of electronic vehicle charging stations within the unit owners limited common element parking area as a matter of public policy. The unit owner may not cause irreparable damage to the condominium property and is responsible for installation and payment of a separate meter and the payment of the electricity as well as maintenance, repair and hazard and liability insurance for the charging station.  The unit owner is responsible for the removal of the charging station when it is no longer required.  The unit owner is also responsible to the association in any increased costs to its insurance for the use and installation of a charging station.  The statute does not address the right to a charging station if the unit owner does not have a limited common element parking area. 
  14. FS 718.3026 and 718.3027 were combined.  These were the statutes governing conflicts of interest, which created much confusion in 2017.  The only change to the combined statutes requires 2/3's of the board of directors to approve any contract or transaction between the director and the association and the director with the conflict must abstain from voting.

Tuesday, April 17, 2018

2018 Legislative Update - Chapter 720 Homeowners' Association Act

Here are the updates to the Homeowners Association Act, with my comments in bold italics, which will go into effect July 1, 2018:

  1. FS 720.303(2)(c)(1) was revised to allow electronic notices by facsimile if the member consents to electronic notices.  Previously electronic notices were limited to email addresses only.
  2. FS 720.306(1)(e) was added to require the underline/strike-through method be used for proposed amendments to documents (Declarations, Bylaws, Articles of Incorporation, Rules & Regulations) to show what language is being added (underline) or deleted (strike-through).  If the amendments are so extensive the reader could be confused, the new language must be proceeded by the disclaimer "Substantial rewording. See governing documents for current text."  This statute also provides an amendment becomes effective when it is recorded in the county records.
  3. FS 720.306(1)(f) was to provide an immaterial error or omission in the amendment process will not invalidate an otherwise properly adopted amendment.  Without a definition of "immaterial" we can expect this to be a source of litigation.
  4. FS 720.306(9)(a) was revised to authorize HOAs to forgo an election if the number of vacancies for the board of directors equals or exceeds the number of candidates provided nominations from the floor are not required by statute or the bylaws and write-in candidates are not permitted. This allows the seating of candidates even if a quorum is not attained at the annual meeting.  Watch out for HOAs which have nominating committees without a provision in the bylaws authorizing nominations from the floor.  The HOA could control the outcome of the election by nominating only candidates they like and not nominating more candidates than vacancies.
  5. FS 720.3085(3)(B) has been revised to require HOAs to accept all payments from owners and allows the HOA to ignore any restrictive endorsements or letters accompanying the payment stating the amount tendered is payment in full.
  6. FS 720.305(2) was amended to provide fines are now due and payable within five (5) days after it is imposed. Watch out for HOAs claiming the payment was not timely received or not sending the notice before the fine is due! There is no language providing for a deadline to provide the notice.
  7. FS 720.303(2) has been amended to allow board members to discuss board business by email, but board members may not vote by email.

Additional updates for 2018 were made to the Marketable Record Title Act ("MRTA") which changes the procedures for preservation.  The required 2/3s vote of the board and the mailing of the notice of preservation to members has been deleted.  The failure to index the notice of preservation against the lots of the members will not affect its validity.  

Likewise the revitalization statute in FS 720.403-720.407 has been revised to remove the requirement a vote for revitalization is done at a meeting and allowing revitalization to be done in writing.  An owner has one year after expiration to file a court action exempting their property from the revitalization process.

Wednesday, April 4, 2018

Winning the Assessment Game

A large majority of my practice involves clients who hire me to help them resolve their issues with past due assessments.  Most people do not realize you cannot withhold assessments for any reason, including financial hardship, divorce, death or being dissatisfied with the way the association is being managed.  Once an owner is past due in assessments, the debt snowballs into an amount which is difficult to pay and trying to get a payoff amount is a moving target with each phone call or email increasing the balance.  This is because state law favors the association and makes the owner responsible for all legal fees and costs to collect past due assessments.  It is a necessary evil.

So what do you do?  Simple answer:  pay your assessments in advance.  Pay them at least two installments in advance and check your account with the association on a regular basis to make sure you are current.  Most management companies now have online access for owners to check their balances.

Do not use an automatic draft from the management company which takes your money out of your account for you.  Use the bill paying services your bank offers to send money to creditors so you are in control of the funds.  At least one management company I will not name has expiration dates on the automatic draft documents they use and the automatic draft stops after one year, requiring the owner to renew it.  If the owner is not paying attention to the email notices advising them it is time to renew, the automatic drafts stop and the owner is quickly in collections.

If you mail in your payment, you run the risk of the mail not being delivered or management losing your payment, which the management company will deny.  It is the owner's responsibility to make sure payment is delivered.  This would mean sending it by certified mail to track delivery, which can be expensive.  If you pay in person make sure you get a receipt.

What you should not do?  Here's a list:

1. Do not withhold payment because you did not receive a notice or a coupon.  You purchased property in a community with an association and the law states that is your notice of a duty to pay assessments.  If you do not know the amount of the assessment, contact the management company or the board of directors and find out.  At the very least pay the amount of the last assessment, but be aware you will still incur interest and late fees if the full amount is not paid.

2. Do not try to pay the assessment only once it is past due.  Any payments are applied to interest and late fees first, attorneys' fees and costs next, with any leftover funds applied to assessments.  You will always be past due in assessments if you do not remit the full amount.

3. Do not try to avoid attorneys' fees by paying the association directly.  This will only increase your legal fees and delay posting the amount to your account because the association will send your payment to the attorney.  You are then billed by the attorney for processing partial payments.  Once you are in collections, deal with the attorney directly.

4. Do not call, write or email the attorney thinking you will increase legal fees for the association as a way to get even.  State law makes the owner liable for these communications.  You are increasing your own legal fees, not the association's.

What should you do if your in collections already?  Submit in writing, a request for a payment plan if you cannot afford to pay the amount in full.  The average payment plan is six months to a year, so do not ask for long-term payment plans.  Some associations will approve 18 months, but it's not the norm.  Be prepared to pay the legal fees for preparing the plan and for processing the payments.  If you cannot afford the payment plan, consult with a lawyer to advise you of your options, but do not ignore the collection letters.  An association can foreclose on your property much faster than a bank.

Thursday, March 1, 2018

Who Runs the Association -- Management or the Board of Directors?

That's an easy answer -- the Board of Directors!!

Strange how many boards or management companies do not understand this simple concept.

The management companies are agents of the association.  They are not the board of directors and they must follow the wishes of the board of directors, who make decisions by a majority vote.  The board of directors relies on the management companies for advice, but if you ask me that's often like asking a refrigerator repairman to fix your automobile.  Taking legal advice from a non-lawyer is definitely not a good idea and seeking the advice of an attorney is the best way for the board to protect themselves from personal liability.

Boards often give management companies the authority to make some decisions on their own, like obtaining services for repairs under $500, or sending out violation letters to homeowners after an inspection.  Management companies should not be making board decisions, such as hiring or firing vendors without board approval, sending out intent to lien notices unless a pre-approved policy is in place, or worse yet, sending an owner to the attorney for collections or violations without the approval of the board.

Some boards give the management companies full discretion to operate and manage the association as they see fit, but I know of at least one instance where that did not work out so well for the association in court. 

If the board members don't want to do their jobs, then turn the job over to someone else!  If the management company doesn't want to follow the board's direction, get a new management company. There are a lot of good ones out there, you just have to find them.

Saturday, February 24, 2018

House Bill 841. (2018)

Last year’s legislation attempting to give homeowners greater protections hit some bumpy roads when everyone tried to apply the law, most notably the recall statute revisions.  It was simply a case of laws with good intentions, but poor wording.

Any hope at fixing these laws to make them more useful and enforceable is being undermined by House Bill 841.  Jan Bergemann of CyberCitizens for Justice took me on a road trip with him to Tallahassee to meet with our elected officials.  The sponsor of HB 841 didn’t have time to meet with us (fair enough since we didn’t have an appointment, not so fair since others without appointments seemed to get face time), but we did get to meet with the legislative aide.  We spoke passionately about our concerns, but our words fell on deaf ears, as we later learned.

The full story is in Jan’s blog at http://www.ccfj.net/CCFJHB841Protest.htm.

Please help in defeating this not-so-owner-friendly bill by writing to the politicians.  Remember this from a famous comedian - poly means many and ticks means bloodsuckers.