Condos and HOA's

Does your association need to levy a special assessment to pay for Irma damage?

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There has been some very heavy Hurricane Irma cleanup and repair costs for many Southwest Florida condominiums and neighborhoods. Of course none of these unexpected costs were in the association’s budget for this year. So, how are associations going to pay the Irma damage and repair bills coming due?

There are basically three ways to pay these bills: Borrow from the bank, raise the regular assessments in the 2018 budget, or levy special assessments.

As most associations don’t want to pay bank interest unless necessary, and they also don’t want to raise regular assessments that much year to year, the most chosen method we are seeing associations using is levying special assessments.

After Hurricane Wilma in 2005, the state Legislature enacted broad emergency powers for association boards to use after hurricanes to address these types of issues. For condominium associations, it is Section 718.1256, Florida Statutes; and for homeowners associations, it is Section 720.316, Florida Statutes. The emergency language is almost identical for both types of associations.

Section 718.125(1)(l), Florida Statutes provides that: “To the extent allowed by law … in response to damage caused by an event for which a state of emergency is declared … in the locale in which the condominium is located, may, but is not required to, exercise the following powers: … (l) Regardless of any provision to the contrary and even if such authority does not specifically appear in the declaration of condominium, articles, or bylaws of the association, levy special assessments without a vote of the owners.”

Section 718.125(2), Florida Statutes goes on to provide that this power “shall be limited to that time … reasonably necessary to mitigate further damage and make emergency repairs.”

So association boards can levy such special assessments at a board meeting to cover the cleanup and repair costs from the hurricane.

For condominium unit owners that have unit insurance, this special assessment can be a bonus to them because under their regular HO-6 Unit Insurance Policy, they have $2,000 loss assessment coverage, which they can recover from their insurer less any applicable unit deductible. Usually, all the insurer requires to pay off such coverage is a copy of the association’s notice of the special assessment levied and maybe a copy of the minutes from the board meeting at which the assessment was levied.

Some unit owners may have purchased higher loss assessment coverage than the $2,000, and some homeowners may have purchased such coverage in their homeowner’s policy.

So if you get a special assessment for hurricane damage, check your unit or home policy to see if you can collect some or all of the special assessment from your unit or home insurance carrier.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Condos and HOA's

Some owners looking to blame others after Hurricane Irma

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Many Southwest Florida condominium and homeowners’ association owners suffered damage to their unit, home, cars or other possessions as a result of Irma’s wrath.

While most understand that hurricanes are considered no-fault “acts of God” that caused their damage, there have been a few who what to try to have someone else cover their costs of repairs by trying to find fault with their governing association or their neighbor.

Because hurricane insurance deductibles are high (usually 2 percent of the home’s value or more), most of the damage owners incurred were under their deductible even though maybe in the thousands of dollars.

Rather than eating the deductible costs like most, some owners have tried to concoct reasons why the association or their neighbor was somehow negligent and should pay for their damage.

We have heard some say that the association or neighbor did not properly trim their trees, properly stake down new planting or properly button down outdoor furnishings before the storm and such items were then blown into their home or unit by the storm.

All an association or a neighbor can do before a storm is act in a reasonable manner to minimize storm damage within the short time frame before it appears the area will be hit by a storm. They can, of course, move pool furniture and other movable objects inside or secure them in another fashion. However, they probably do not have time or manpower to remove awnings or stake down new trees.

It would be a rare instance to show that an association’s or neighbor’s conduct before a hurricane would rise to the level of being legally negligent.

Also, if an association’s common area tree or your neighbor’s tree falls on your fence, pool cage or home, the association or neighbor is not responsible for your damage or responsible to remove the fallen tree. You are responsible to remove that part of the fallen tree on your property and fix your own fence, pool cage or home.

If an owner puts in a claim with the owner’s first party insurance carrier, if its carrier believes the association or some other party was negligent before or during a hurricane thereby contributing to the owner’s damage, the owner’s insurer will bring the owner along in any action to recover damage allegedly caused by the association or another.

Owners must realize that Mother Nature is unpredictable, and as we all know now during hurricanes, the damage inflicted does not discriminate. One home may have a large tree fall on it, another may lose part of its roof and other may be flooded, while the neighboring home may have only a little pool screen tears or no damage at all.

So it really is the luck of the draw how much one’s property will or will not be damaged in a hurricane and owners need to understand whatever damage they have is almost always the storm’s fault and not any fault of anything or anybody else. So owners need to repair their property and move on and quit trying to find scapegoats.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Condos and HOA's

Do you need a membership vote for material alterations?

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Condominium and homeowners’ associations, that have been around for a while, usually at some point want to upgrade their common elements or common areas to stay up with the times.

That 90’s paint color scheme of the buildings is no longer in fashion, pavers are now preferred over asphalt in the parking and roadway areas, or that social room carpeting needs to go and be replaced with low maintenance tile. Such upgrades are considered material alterations under the law and may require a membership vote.

A material alteration is a change in the look or function of the item being upgraded. Typically, if you are changing out association “personal property” that is not attached to the “real property” land or building, you do not need a membership vote and just the board can decide. This would include changing out the chairs, table, lamps and ashtrays in a social room.

However, if you are changing part of the building (paint color-inside or out), or attached property such as carpeting, tile, window coverings or other attached fixtures, you made need a membership vote to do so.

In a homeowners’ association, the answer as to what vote is required to make a material alteration is usually pretty straight forward as its governing documents normally require only the board or architectural review committee (ARC) approval for such alterations.

However, determining whether a membership vote will be required in condominium associations can be more complicated. Section 718.113(2)(a) Florida Statutes provides that: “there shall be no material alteration or substantial additions to the common elements or to real property which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of the material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions.”

Many original developer-drafted documents are silent on this issue so 75 percent approval of the membership will be required. As this is a very high hurdle to obtain, many associations will amend their documents to require say 75 percent or 66 ⅔ percent of only those who vote will be required to approve material alterations and only for alterations over a certain dollar amount say $30,000 to $50,000. This allows the condominium board to approve less expensive alterations but will require the board to go to the members for proposed high dollar changes.

Some think that minor changes in paint color of buildings do not need a membership vote, but a court in Florida has held that even going from white to beige is considered a material alteration requiring in membership vote. There are some noted exceptions Florida courts have found that do not require a membership vote for material alterations.

These include alterations or modifications that are incidental to the repair, preservation or replacement of existing improvements, such as installing a new sea wall to protect the property or if an engineer finds the alteration is a better replacement for longevity and protection of the property, such as replacing river rock with tile, replacing asphalt with pavers or replacing real cedar shake roof shingles with faux shake shingles.

As you can see, there are nuances when it comes to which material alterations require membership votes and which do not. So, if you are not sure, you should check with legal counsel before entering into contracts for such alterations or upgrades to avoid running the risk of having to spend the same amount of money twice to convert the material alteration back to the old look if you are successfully challenged for not obtaining a membership vote first when you should have.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Condos and HOA's

Must communities retrofit for handicap accommodation

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The question often arises as to whether condominium, cooperative and homeowners’ associations need to install wheelchair ramps, elevator or swimming pool lifts or redo common area bathrooms to accommodate handicap persons.

The general answer is that associations may have to waive certain rules to reasonably accommodate the handicap, such as allowing emotional support or service animals in a no-pet building but the association does not have to spend association funds on modifying the common areas to accommodate the handicap, such as adding wheelchair ramps. However, if the handicap person wants to spend their money to alter the common areas for their use, then the association has to allow for reasonable modifications to do so.

Recently this answer was confirmed by the 1st District Court of Appeals in the case of Harbour Pointe of Perdido Key Condominium Association Inc. (Perdido Key) v. James Henkel (Henkel), 216 So. 3d 753, (Fla. 1st DCA, 2017).

In this case, Henkel filed a housing discrimination complaint with the Florida Commission on Human Resources (Commission) pursuant to the Fair Housing Act. Henkel alleged that Perdido Key committed discriminatory housing practices by making modifications that created inaccessible routes and entries to public and common use areas at the condominium.

The Administrative Law Judge said that Henkel had failed to establish that the association discriminated against him based on his handicap and recommended dismissal of the complaint. The Commission disagreed with the judge’s conclusion so Perdido Key appealed the final order of the Commission.

The 1st District Court of Appeals found that the Commission erred in determining that Perdido Key committed discriminatory housing practices by allegedly making modifications to the opening pressures of the entrance and exit doors of the condominium that rendered them non-complaint with the Fair Housing Act’s design and construction standards.

Perdido Key did not design or construct the condominium and there was insufficient evidence that the association modified the doors since ownership of the condominium was transferred and the association became responsible for the management and operation of the condominium. In fact, a former association manager testified that: “We did have maintenance try to adjust the doors, but they were not adjustable.” The original judge found that “the subject doors have opening pressures that vary, but are usually out of compliance with applicable Florida and Federal standards for handicap access.”

Apparently, according to Henkel, it used to be easier to open the doors when the building was brand new and then it became more difficult and that is why he brought the complaint probably thinking that the association, by adjusting them, made them harder to open. However, the manager testified that the doors were not adjustable and other testimony showed that such doors’ opening pressures will vary and are usually out of handicap access compliance.

Because condominiums and HOAs are not places of public accommodation, they are not required to have all the handicap parking spaces and handicap bathroom facilities like you find at a public place such as a grocery store, concert hall or airport that must comply with more strict ADA requirements.

For many older condominiums there are no handicap parking spaces and such condominiums are not usually required to add them now because the buildings were not designed, nor required to be designed, with handicap parking spaces originally.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He concentrates his practice in the areas of community associations including representing condominium, cooperative and homeowners’ associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. If you have any questions about the column, Rob can be reached at www.SandGlawfirm.com.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Condos and HOA's

New legislation affecting condos, co-ops and HOAs

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Last year the Florida Legislature was silent when it came to passing any laws affecting community associations. Not this year.

This year four bills were approved and signed by the governor and one was vetoed. SB 398 applies to condos, cooperatives and HOAs and prescribes a “form” for estoppels certificates. We discussed that bill last month.

This month we will look at HB 1237 affecting condominium associations only, and HB 6027, which puts all associations (condos, cooperatives and HOAs) on equal footing so that required yearly financial reports are based upon total income of associations and the 50-unit financial reporting exception is removed.

SB 1520 tweaks how condominiums can be terminated. As terminations rarely happen, we won’t get into discussing SB 1520.

These new laws became effective July 1, 2017.

HB 1237, called the “Miami-Dade Grand Jury Bill” was the result of a Grand Jury Report filed by the Miami-Dade Grand Jury last February in reaction to a “parade of horribles” dealing with some large condominium associations in Miami. It is intended to get at supposed widespread criminality, fraud and abuse apparently seen only in Miami. However, the whole state now gets to suffer the arguably ill-written law resulting from the bad facts coming out of Miami.

For condominium associations only, HB 1237 now says:

Condominium fraud. Committing fraud and taking kick-backs in a condominium association is now a crime in Florida instead of just a civil infraction. Forgery of a ballot envelope or voting certificate used in condominium elections is now punishable as a felony in the third degree as is theft or embezzlement of association funds, destruction of, or the refusal to allow inspection or copying of an official record accessible to unit owners in furtherance of any crime is considered tampering with physical evidence.

If an officer or director is charged by information or indictment with a crime, he or she must be removed from office. While the charge is pending, the person may not be appointed or elected or have access to the official records. If the charges are resolved without a finding of guilt, the officer or director must be reinstated for the remainder of his or her term of office, if any remains.

Association attorney cannot represent management. To prevent conflicts of interest between associations and their management companies, it has now specifically been stated that an association may not hire an attorney who represents the management company of the association.

Purchases at foreclosure sales. To prevent another possible conflict of interest, a board member, manager or management company may not purchase a unit at a foreclosure sale resulting from the association’s foreclosure of its lien for unpaid assessments or take title by deed in lieu of foreclosure.

Official records. Bids for material, equipment or services are not listed as official records of the association and members may now designate an authorized representative to obtain copies of association records and unit renters have a right to inspect and copy the association’s bylaws and rules.

Large associations – website. It appears all associations with 150 or more units must have a website established by July 1, 2018. The following documents must be posted on the website: Association’s governing documents (declaration, articles, bylaws, house rules and amendments), management and other agreements, budgets and financial reports, director certifications and in lieu of other forms of providing notice of meetings, notices of meeting may be given by posting on the website.

Financial reporting. Associations of fewer than 50 units are no longer exempt from the financial reporting requirements of larger associations. If an owner requests a copy of the most recent financial report and is denied, the owner can notify the Division of Condominiums in Tallahassee, who can then remove the right to waive a more expensive financial report if the association fails to provide the requested report to the owner after notice. In HB 6027, the exemption for associations of fewer than 50 units in cooperatives and HOAs has also been removed. In addition, per HB 6027 for condos and cooperatives, the limitation that associations could not waive the financial reporting requirements for more than three (3) consecutive years has been removed so condo, cooperatives and HOAs can all now waive financial reporting requirements each and every year if they wish.

Debit cards: Association officers, directors, employees and agents may not use a debit card issued to an association for the payment of association expenses, and if such persons use such a card for any expenses that are not a lawful obligation of the association, they may be prosecuted as credit card fraud. Looks like no way to have an association debit card. Apparently an association credit card is still OK.

Board of directors term limits, recall. Now going forward from July 1, 2017, a director cannot serve on the board for more than four (4) consecutive two-year terms unless the term limit is waived by at least two-thirds of the total voting interests or there are not enough eligible candidates to fill the board positions. Any board service before July 2, 2017 should not count towards the new term limits. The bill also eliminates board certification of a vote to recall board members. So a board member being recalled cannot dispute the recall prior to removal but would need to contest by petition to the Division after recall and perhaps replacement and apparently at his or her own expense.

Conflicts of interest. There are extensive new provisions dealing with conflicts of interest. However, some of the provisions conflict with each other. One provision prohibits contracts with service providers if such a provider has a financial relationship with a director or officer or someone related to the director by blood or marriage. However, another provision appears to permit such contracts if the conflict is disclosed, the director recuses himself or herself on the voting for such contract and the board then approves the contract.

Arbitration: There are new certification requirements by the Division of Florida Condominiums, Timeshare, and Mobile Homes for arbitrators and new time limits in the arbitration process apparently to speed up arbitrations.

Voting rights. In order to suspend voting rights of an owner, in addition to the owner being at least 90 days delinquent in assessments, the delinquency must now be more than $1,000 and a 30-day notice must be given to the member before the suspension takes effect. A receiver of a unit cannot exercise voting rights now.

Financial institution reporting. Condominium associations are now required to report to the Department of Business and Professional Regulation an annual report containing the names of all of the financial institutions with which it maintains accounts and any association member can get a copy of the report from the department.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Homeowners Associations

New laws creating uniform estoppel certificates

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There were five (5) bills approved this year by the Florida Legislature affecting community associations.

As of the writing of this article, only one bill had been signed by the Governor, SB 398, that prescribes new detailed information and procedures required to be followed by condos, cooperatives and HOAs in response to request for estoppel certificates. It was co-sponsored by our local Representative, Kathleen Passidomo (representing District 28 – Collier, Hendry and the southeast portion of Lee County). The bill became effective July 1, 2017.

Next month we will review the other four (4) bills assuming they are signed by the Governor and thereby become law.

An estoppel certificate is a document stating what assessments and other monies are owed to the association to be provided to the unit owner or unit owner’s designee or a unit mortgagee or its designee typically when a unit or parcel is being sold or refinanced. Monies are typically set aside at closing to pay the association what is due.

Under the new provisions, requests for estoppel certificates can now be made by electronic means (email) and the association is required to designate an email address for such requests.

The contents of a certificate must include the date of the certificate; name of owner; unit/parcel number/designation; any owned parking spaces; the association’s attorney information (if account has been turned over to attorney for collection); fee for the certificate; name of the person requesting the certificate; amount of periodic assessment with a paid through date; the date of the next installment due; an itemized list of monies owed; a list of scheduled additional or special assessments not currently due; transfer fees; open violations of rules or regulations by the existing owner; whether board approval is necessary for the transfer of the unit/parcel and if so whether such approval has been provided; whether a right of first refusal exists, and if so, whether it has been exercised; contact information for other associations governing the unit/parcel; and contact information for the association’s insurance carriers.

An estoppel certificate remains effective for 30 days from issuance or 35 days if mailed. The charges for an estoppel certificate is limited to $250 but an additional charge of $150 is permitted if the owner is delinquent and $100 for expedited service within three (3) business days. Otherwise, delivery must be made within 10 business days or no charge may be made for the certificate after 10 business days.

In cases where certificates for multiple units owned by the same party are requested, there is a sliding scale per unit/parcel starting at $750 for up to 25 units increasing to $2,500 for more than 100 units.

The new estoppel certificate laws should bring uniformity throughout the community association world when informing interested parties what is owed to an association and thereby assist in quicker and more efficient closings and refis.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Condominium Associations

How associations can approve and pay for improvement projects

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With many of the local condominium and homeowners’ associations clubhouse buildings now reaching 30 to 40 years of age, many associations are looking at doing major remodeling projects to the inside or outside of the buildings to keep their look competitive with new products reaching the market.

Because such improvements are considered material alterations, it first must be determined if a membership vote will be required to make the changes to the common elements or the common areas.

Section 718.113(b), Florida Statutes provides that: “there shall be no material alteration or substantial additions to the common elements or to real property which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions.”

Therefore, in condominium associations, you need to first look at the declaration to determine what vote of the membership will be required for the material alteration remodeling. If the declaration is silent, then you will need the 75 percent approval vote of the members.

For homeowners’ associations (HOAs), there is no similar provision in Chapter 720, Florida Statutes. Therefore, you would look to the declaration of covenants to see if any membership vote is required. Typically in HOAs, no membership vote is required, so the association board and/or architectural review committee can decide on the alteration.

After determining what vote is needed to make the changes, you must then decide how the alterations will be paid for. There are four ways to pay: 1) use operating funds or increase the budget to raise the assessments for the next year, 2) levy a special assessment, 3) borrow money from a bank or financial institute, or 4) borrow from reserves.

Usually, you do not have enough extra money in the association’s operating account to pay for the remodel project, so if you are not going to do the work until the next year, you can increase next year’s budget to cover the costs. As the board approves the budget, you probably don’t need a membership vote.

However, most associations don’t want to make large increases in their regular assessments from one year to the next because members plan their personal budgets on paying about the same every month or every quarter for their regular assessments.

Instead, you could levy a special assessment wherein the members have to pay one or more lump sums over time to cover the costs. You may or may not need a membership vote for the special assessment depending upon what your bylaws or declarations provide.

The next option is to borrow the money from a bank. Most associations don’t need a membership vote for the association to borrow money, but check your governing documents because some require a membership vote to borrow. You can pay back the bank loan over time, then with spread out increases to the future annual budgets. You will also have to factor in interest.

The last option is to borrow from reserves. If you have not set aside a reserve line item for remodeling, you will definitely need a vote of the members in a condominium to borrow reserves and you might need a vote in a HOA.

Section 718.112(2)(f)3, Florida Statutes provides that: “Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts, and may be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a duly called meeting of the association.”

A similar provision is provided in Chapter 720 for HOAs requiring a membership vote to borrow from reserves if reserve accounts were established by the developer or the membership elected to provide for reserves.

So make sure you get the proper vote of the members or the board before you start on that upgrade remodel project.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Condos and HOA's

Extra fees limited in condos; not in HOAs

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We often get asked by board members, officers and managers of community associations whether their association can charge a capital contribution fee to new owners or charge a fee for processing unit sales and lease applications.

The laws pertaining to such fees are quite restrictive for condominium associations while the laws for such fees in homeowners’ associations allow for generous collection of such fees.

For condominium associations, you can only charge fees to owners and tenants in amounts that have specifically been approved by the Ssate Legislature as evidenced in Chapter 718, Florida Statutes. However, in homeowners’ associations you can pretty much charge whatever amount of fee you want as long as the fee is set forth within your declaration of covenants.

When it comes to charging new purchasers a capital contribution in condominium associations, developers can charge such fees to original purchasers. Once turnover has occurred, the condominium associations can no longer charge such fees as Chapter 718 does not provide for allowing such capital contribution fees to be charged after turnover.

Capital contributions are a fixed sum of money new purchasers in condominiums usually have to pay at closing that go into the association coffers so that there is some money in the association operating account at turnover when the developer leaves. Usually the capital contribution fee is anywhere from one month up to one quarter of the association’s annual assessment amount.

For homeowners’ associations, Chapter 720 does not prohibit capital contribution fees from being charged after turnover from the developer. Therefore, a homeowners’ association can charge a capital contribution fee at the approval of all closings after turnover if the fee is contained in the governing documents. We have seen such fees in homeowners’ associations run from $500 to $5,000.

To see what a condominium association can charge for processing a lease or sales application, Section 718.112(2)(i), Florida Statutes provides that: “No charge shall be made by the association or any body thereof in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless the association is required to approve such transfer and a fee for such approval is provided for in the declaration, articles, or bylaws. Any such fee may be preset, but in no event may such fee exceed $100 per applicant other than husband/wife or parent/dependent child, which are considered one applicant. However, if the lease or sublease is a renewal of a lease or sublease with the same lessee or sublessee, no charge shall be made.”

In homeowners’ associations, Chapter 720 does not prohibit or limit such transfer fees to $100. Thus, a homeowners’ association can charge whatever transfer fee it wants as long as such fee and association transfer approval processing powers and procedures are contained in the neighborhood’s declaration of covenants.

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In recap, a condominium association can only charge fees which are permitted by Chapter 718, while a homeowners’ association (governed by Chapter 720) can charge pretty much whatever fees it wants as long as such fees are contained in its governing documents.

In condominiums, people live close together, so over the years, the State Legislature has decided through Chapter 718 that there should be lots of rules, restrictions, and controls the condominium associations must conform to (more like living in a big city).

In contrast, because homeowners live father apart, the Legislature has decided that there is not the need for as many controls governing homeowners’ associations in Chapter 720 (more like living in a small town).

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Condos and HOA's

How to get the proxy votes needed for approval

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This is the time of year when most condominium and homeowner associations have their annual meeting. When there is something to vote on, such as amending the governing documents, approving a property enhancement project, or waiving the annual audit, proxies are sent to the owners so that the requisite vote can be obtained to approve the amendments or alteration project or to save money by waiving the audit.

What many associations face at the meeting is the apathy of owners, who will not be at the meeting and also fail to mail in their proxy, resulting in a lot of owners views not being heard. Usually it is not an intentional act for owners to not send in their proxy. Rarely is the reason they did not send their proxy in is because they are against the questions being asked. Usually they don’t believe their vote is really needed or they just forget to send in their vote.

Many owners, who regularly invest in company stocks and bonds, get proxies from their invested companies all the time and lots of those proxies go to the circular file rather than being completed and sent back to the company. The same thing seems to happen with community association proxies.

If an amendment to the governing documents went out with the annual meeting documents, a lot of time, effort and consideration went into preparing the amendment by the board or a committee and the association’s attorney. The amendment may have been requested by a lot of owners or the board believed the owners would want to consider the amendment.

If proxy questions were included to waive the annual audit or roll over any excess funds, and if the requisite approval of those questions is obtained, then the association will save a lot of money in CPA expenses and possibly in taxes.

So you have good things that will probably result from obtaining the necessary approval of proxy questions, but many times these good things will not happen because not enough proxies are returned because of apathy.

In order to avoid this downside of not obtaining enough “yes” proxy votes, we suggest that associations form a committee to get the vote out. They should open the proxies as they are returned. A few days before the meeting, they should get on the phone or email owners, who have not yet sent in the proxy and ask them to do so. Owners can email or fax back copies of their signed proxies and the copies can be counted the same as the originals.

If you get to the meeting and such a committee was not formed, and therefore the requisite number of “yes” proxies was not obtained before the meeting, there is still a way to salvage the time and effort that went into the proxy votes.

At the meeting, it should be noted that many owners did not have the chance to vote yet, and that in order to give the chance to chime in on the proxy questions, the meeting should be adjourned to be reconvened at a date, time and place (within 90 days) for the purpose of the proxy votes only. If the date, time and place for the reconvened meeting is specified at the meeting, then no additional notice of the reconvened meeting, neither mailed nor posted, is required.

The remaining agenda items can then be addressed in the normal course of business at the original meeting.

Once the reconvened meeting date has been set, a committee can be formed to get the vote out so that enough approval votes will be in hand at the reconvened meeting for the questions to pass.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.
Condominium Associations

How to get the proxy votes needed for approval

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This is the time of year when most condominium and homeowner associations have their annual meeting. When there is something to vote on, such as amending the governing documents, approving a property enhancement project, or waiving the annual audit, proxies are sent to the owners so that the requisite vote can be obtained to approve the amendments or alteration project or to save money by waiving the audit.

What many associations face at the meeting is the apathy of owners, who will not be at the meeting and also fail to mail in their proxy, resulting in a lot of owners views not being heard. Usually it is not an intentional act for owners to not send in their proxy. Rarely is the reason they did not send their proxy in is because they are against the questions being asked. Usually they don’t believe their vote is really needed or they just forget to send in their vote.

Many owners, who regularly invest in company stocks and bonds, get proxies from their invested companies all the time and lots of those proxies go to the circular file rather than being completed and sent back to the company. The same thing seems to happen with community association proxies.

If an amendment to the governing documents went out with the annual meeting documents, a lot of time, effort and consideration went into preparing the amendment by the board or a committee and the association’s attorney. The amendment may have been requested by a lot of owners or the board believed the owners would want to consider the amendment.

If proxy questions were included to waive the annual audit or roll over any excess funds, and if the requisite approval of those questions is obtained, then the association will save a lot of money in CPA expenses and possibly in taxes.

So you have good things that will probably result from obtaining the necessary approval of proxy questions, but many times these good things will not happen because not enough proxies are returned because of apathy.

In order to avoid this downside of not obtaining enough “yes” proxy votes, we suggest that associations form a committee to get the vote out. They should open the proxies as they are returned. A few days before the meeting, they should get on the phone or email owners, who have not yet sent in the proxy and ask them to do so. Owners can email or fax back copies of their signed proxies and the copies can be counted the same as the originals.

If you get to the meeting and such a committee was not formed, and therefore the requisite number of “yes” proxies was not obtained before the meeting, there is still a way to salvage the time and effort that went into the proxy votes.

At the meeting, it should be noted that many owners did not have the chance to vote yet, and that in order to give the chance to chime in on the proxy questions, the meeting should be adjourned to be reconvened at a date, time and place (within 90 days) for the purpose of the proxy votes only. If the date, time and place for the reconvened meeting is specified at the meeting, then no additional notice of the reconvened meeting, neither mailed nor posted, is required.

The remaining agenda items can then be addressed in the normal course of business at the original meeting.

Once the reconvened meeting date has been set, a committee can be formed to get the vote out so that enough approval votes will be in hand at the reconvened meeting for the questions to pass.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.