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.

Correct Mailing Address is Critical to Association Living!

Questions about past due assessments, collection fees and liens almost always include a statement the inquirer did not receive notice.  Not having your correct mailing address on file with the association puts the liability on you. Just like not signing for the certified letter is on you and the association will receive it back marked "UNCLAIMED."

If you are going to dispute any charges, here is my advice:

Pay off the lien first and then bring a separate action for recovery of any fees if the association violated your due process rights. Never risk the loss of your property to prove a point or fight over improper fees.

Hire a HOA/condo lawyer  to audit the fees and bring any possible action.  You need someone who is experienced not only in this area of the law, but the industry practices.

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.

Change Your Address with the Association!!

All too often I am asked for advice on dealing with associations filing a lien or foreclosing on a home and the first statement the homeowner makes is "I never received a notice."  Unfortunately, rarely will that work as a defense to save your home from being sold at a foreclosure auction by your association.  

You have to give your association your address where you receive your mail!  It's foolish to think if you don't update your address to get notices and payment coupons a judge not order a sale of your home.  You have a duty to notify the association of your most current address.  You also have a duty to ask for the amount due if you don't receive a notice or payment coupon.  The courts have ruled against homeowners consistently on these issues because if you live in a community that has a sign with the communities name on it at the entrance, you have notice your community is governed by an association and you pay assessments to that association.

Avoiding the mail or a summons does not work either.  All the association has to do is prove they mailed the notice to the correct address. If you avoid a summons the courts allow the associations to serve you by publishing a notice in some obscure small newspaper no one reads.  Its usually too late by the time you find out you have been served by publication because the court can then enter a default judgment against you.  Plus this just adds to the attorney's fees you are required by state law to reimburse the association (that's if you can come up with the money to pay off the demand or judgment and save your home).

The bottom line is don't be foolish.  If you can't afford to pay the association, call them and try to make payment arrangements.  The association can foreclose on your home quickly and faster than a bank because the association is the original creditor and not a third party who took it by assignment.

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......

Associations -- There is a Better Way!

It's no secret I have been an advocate for homeowners embroiled in disputes with their associations.  I originally went to law school to practice employment law.  I changed directions when I bought my home in a HOA and my welcome to the neighborhood consisted of a volley of "f-bombs" from someone claiming to be the HOA president.

In the past couple of years I have changed direction in my practice of community association law.  Not only did I realize individual owners suing an association is difficult for my clients, both emotionally and financially, but creates a hostile environment for everyone that often lingers even after the dispute is resolved. I now focus my attention on representing the associations.  I figure I can make a difference by helping associations proactively avoid litigation rather than helping the owners litigate.  Not all disputes can avoid litigation. There will always be those one or two homeowners in every community that will be stubborn or even aggressive and want to fight, but litigation should be a last resort.

Let's face it -- if your association has a bad reputation it will affect property values and the resale of homes. Desirable associations attract home buyers.

The ingredients for a good association are education, communication, the right CAM and the right lawyer.

Most homeowners do not intentionally violate the covenants.  Just because the homeowner received a copy of the governing documents, doesn't mean they understand them.  If they did, most members who are past due in their assessments would realize the association can lien and foreclose on their home and would keep the assessments current.  I come across homeowners every day who believe if the bank is foreclosing the association cannot foreclose.  They are surprised when their homes are sold by the association with a bank foreclosure pending.

There is a simple fix to this.  The association should have a website the provisions of the governing documents can be explained, broken down in individual topics, and then promote this website regularly. Make sure new owners receive the web address right away.  Encourage members to review the website before undertaking improvements to property.  There are a number of services out there which help those technology-challenged individuals build a website.  If a website isn't feasible, create a newsletter!  Now you have education and communication!

Another point about communications -- confrontational notices do not work.  It is human nature to become defensive when being harshly reprimanded.  I believe the first notice to a homeowner should be a gentle reminder and an invitation to discuss the issue at a meeting if necessary.  The old saying "you catch more flies with honey" is true. You will get more owner cooperation if you acknowledge they either did not know better or forgot and have a chance to remedy the situation.  Threatening to send them to the association lawyer if they do not obey demands only ends up costing the association and owners more money for legal fees.

The right CAM is important.  Identifying the right CAM is not so easy and there is no one size fits all.  Some associations need the CAM to be very involved and some only need a CAM to collect assessments, pay bills and send out violation notices.  The right CAM will meet your expectations and work well with the association.  The wrong CAM will partner with the lawyer to increase billable hours for both of them by fueling disputes.  The wrong CAM will control the association funds and keep board members out of financial decisions.  The wrong CAM will make board decisions without the board members being involved. The wrong CAM will think it's their job to run the association, not the board.  

The same applies to the lawyers.  The right lawyer will answer the board's questions and encourage the resolution of disputes early.  The wrong lawyer will lead the board to believe they have the ultimate power and cannot lose a dispute. The wrong lawyer will bully and abuse homeowners.

Associations should be proactive when dealing with violations and collections.  Identify the problem areas and work on them proactively.  Make sure your owners know not paying assessments means they risk losing their home and usually quickly.  Let them know the association doesn't want their home, but has a duty to collect assessments from everyone.  Let them know financial hardship is not a defense the courts will entertain.  Offer a payment plan to help out those who are already past due, but be aware that if the association lawyer handles the payment there are outrageous fees to set it up and process payments.  The association can facilitate the payment plan so it stands a better chance of success.  If your association has authority to impose fines, make sure the members know about the process and don't try to rig it by appointing members to the fining committee who are friends and supporters of the board or biased against the owner.  Make it a fair hearing before the fining committee or the association will most likely end up in litigation.  Make sure all members are aware of the process for applying for approval to implement improvements to their property.  Communicate on a regular basis those items that require approval as well as those that do not.  

There is a better way to have an association and not make everyone in it miserable.  It's not easy because most members of the association don't care to be involved or hear about it, but it is possible.

Assessments Current But The Association Insists Assessments Are Past Due - Who Is Right?

What do you do when the association claims you are past due with your assessments and your records indicate you are current?   

Answer:  Address this immediately because the association can lien and foreclose on your property!  

Don't ignore that first Intent to Lien Notice!!  It will not resolve itself or go away.

You need to attempt to resolve this now before a foreclosure gets recorded because even if you win, it still shows up in the public records and court records and cannot be removed. 

Here's the things you need to check for:

The association is required to send you two copies of the Intent to Lien Notice and then, after filing the lien, two copies of the Intent to Foreclose Notice before foreclosing.  Each notice is sent by regular mail and certified mail.  Avoiding signing for the certified mail will do more harm than good because most judges will consider the mail received if you leave it unclaimed.

The notices are sent 45 days in advance for homeowner associations and 30 days in advance for condominium associations.

While you have a good defense if this procedure is not followed, you are risking losing your home.  Better to be proactive and get it resolved rather than waiting for a summons to be served by the sheriff.

Check to see if you were late.  If you were late with any payments, the HOA is entitled to the interest, late fees and attorneys' fees. So while you may think you are paid up to date, if you were ever late and only paid the assessment, you are past due because all the other charges are paid first and the HOA last.  Do not submit the assessment payment to the association thinking you can pay the interest, late fees and attorneys' fees later.  Once your account is with the attorney, you are liable for all of the charges.  State law protects the associations on this issue and provides for payments to be applied to assessments last.

If, after all these issues are considered, you still are certain you do not owe the additional fees, I suggest you pay what they are asking and then sue the HOA. If there is a property manager (CAM) and/or attorney involved, I suggest filing a complaint against their licenses if you are certain you were never liable for additional charges. It's not unusual for HOAs to stand firm even when they are wrong because they figure you can't afford to sue them (it is expensive). 

Time to Pay Assessments - Even If You Don't Receive a Bill

One of the biggest issues my clients have with their associations is past due assessments because they did not receive a bill from the association.   Don't make the mistake of thinking you have a defense if they do not send out a bill.  The state laws protect associations and do not require them to send the bill.

Florida courts have ruled an owner is on notice of assessments due by virtue of purchasing property subject to an association and it is the duty of the owner to make sure those assessments are paid.  If you have not received your bill for your assessments, it is your duty to contact the association to find out if the amount has changed and to remit payment.

Also, remember -- the association is entitled by law to all interest, late fees and attorneys' fees and costs if you are past due.  IF YOU HAVE BEEN TURNED OVER TO THE ASSOCIATION ATTORNEY FOR COLLECTION, SEND PAYMENT TO THE ASSOCIATION ATTORNEY.  Attempting to avoid these fees by sending the assessments to the association directly will only cause you to incur more fees and costs.  The association will either return your payment (even though they are required to accept it) or forward it to the attorney.  No matter how they handle it, by law, the payment is applied to everything but assessments and if there is any leftover then it is applied to assessments.  Until you pay the full amount you will always be past due.

Bottom line -- you cannot get out of paying the assessments because the association may not have sent a bill or, because of mail service, you didn't receive the bill and the association can LIEN and FORECLOSE on your property for non-payment.