Condos and HOA’s

Condos and HOA's

Surfside Towers Collapse contributed by yellow banana owners?

/in ,

We see some of the same decisions made year after year by some local Condominium boards. Whatever we do this year, let’s not raise our owners’ Assessments over last year’s amount. Usually, in such buildings, the reserves have been woefully underfunded with the owners opting to partially or fully waive the funding of Association reserves. This is the easiest way to keep the annual assessments from raising each year. If a necessary building repair expense arises, they can always special assess for that. These are typically older buildings with an older population of owners who are hoping to sell or die before any hefty assessments will come do. We call this the yellow banana crowd. In these buildings, the Directors see that they better not increase the assessments or they will be voted off the board.

In other buildings you have the usually younger, green banana folks, who want to live in their units for many years and want to keep their building in tip top shape so that their investment grows nicely and are willing to pay increasing annual assessments to do so.

The current law easily permits the conduct of the yellow banana owners and directors.  Section 718.112(f)2.a., Florida Statutes provides that: “In addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance.  These accounts must include, but are not limited to , roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000. The amount to be reserved must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance of each reserve item.  The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extensions of the useful life of a reserve item caused by deferred maintenance.  This subsection does not apply to an adopted budget in which the members of an association have determined, by a majority vote a duly called meeting of the association, to provide no reserves or less reserves than required by this subsection.”

In taking the “optional” vote to reduce reserves or have no reserves, Section 718.111(f)4., Florida Statutes provides that the proxy question for the membership vote must say “in capitalized, bold letters in a font size larger than any other used on the face of the proxy ballot:  WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.”

From reading various reports about Surfside Towers, apparently after many years of putting off building structural repairs even after engineer warnings, the building’s board was finally levying special assessments to cover over 15 million dollars in building repairs.  This was, it appears now in hindsight, too little and much too late.

Association board, especially in older buildings, should take Surfside Towers as a wake-up call and start budgeting adequately for expected future repairs.  Nobody likes rising assessments year after year, but you can’t just keep kicking the can down the road.  Directors have a fiduciary (similar to paternalistic) duty to the owners to properly maintain the common elements of the building.  The board has the duty to prepare a fully funded budget each year and no one is requiring the board to put out a membership vote to waive or reduce the full funding of reserves.

If it has been a few years since you have had an engineering reserve study done on your building to make sure you have adequate budgets and adequate reserves, now may be the time to get a new reserve study done, start funding the Association reserves realistically, and making structural and preventive repairs on the building sooner rather than later.

Condos and HOA's

New legal protection from COVID lawsuit for condos and HOA’s

/in

On March 29th, Florida Governor Desantis approved and signed Senate Bill No. 72 to protect Business Entities from COVID lawsuits in Florida. The new law became effective on that date.

As a basis for the new laws the Bill says that: “The Legislature finds that the COVID-19 outbreak in this state threatens the continued viability of certain business entities, educational, institutes, governmental entities, and religious institutions that contribute to the overall well-being of this state. The threat of unknown and potentially unbounded liability to such businesses, entities, and institutions, in the wake of a pandemic that has already left many of these businesses, entities, and institutions vulnerable, has created an overpowering public necessity to provide an immediate and remedial legislative solution. Therefore, the Legislature intends for certain business entities, educational institutions, governmental entities, and religious institutions to enjoy heightened legal protections against liability as a result of the COVIC-19 pandemic. The Legislature also finds that there are no alternative means to meet this public necessity, especially in light of the sudden, unprecedented nature of the COCID-19 pandemic. The Legislature finds the public interest as a whole is best served by providing relief to these businesses, entities, and institutions so that they may remain viable and continue to contribute to the state.”

The Bill first states that “Business entity” includes a corporation not for profit as defined in s. 617.01401.  Not for profit business entities include Condominium and Homeowners’ Associations.

The new law then says that in order for a court not to dismiss a COVID-19 legal complaint, that the “plaintiff must submit an affidavit signed by a physician actively licensed in this state which attests to the physician’s belief, within a reasonable degree of medical certainty, that the plaintiff’s COVID-19 related damages, injury, or death occurred as a result of defendant’s acts or omissions.”

How a physician can make a determination within a reasonable degree of medical certainty that a person got COVID on Condominium or Homeowners’ Association property as a result of the acts or omissions of those running the Association sounds like a very heavy lift.

Even if this lift can arguably be made, then the court must determine whether the “defendant made a good faith effort to substantially comply with authoritative or controlling government-issued health standards or guidance at the time the cause of action accrued.”

As far as I can tell, most all Condominium and Homeowners’ Associations enacted emergency rules requiring face masks and social distancing on common elements or common area property.

So if the court decides the Association made such a good faith effort, “the defendant (Association) is immune from civil liability.”

If the court decides the Association did not make such a good faith effort, “the plaintiff may proceed with the action. However, absent at least gross negligence proven by clear and convincing evidence, the defendant is not liable for any act or omission relating to a COVID-19-related claim.”  The burden of proof is upon the plaintiff to demonstrate that the defendant did not make a good faith effort and the claim must be brought within 1 year.

Proving gross negligence by clear and convincing evidence is also very hard to do. Gross negligence has been defined at “Wordnik.com” as “negligence evidencing a total or near total disregard for the rights and welfare of others and for the consequences of an act.”

You maybe could reach this burden of proof if an Association advertised and held a “lets spread COVID” party and specifically invited people known to be actively infected with COVID at the time.  We are unaware of anything like this happening at Condominium or Homeowners’ Associations in Southwest Florida.

Although there may be an unusual fact pattern out there wherein an Association in Florida actively engaged in promoting the spreading COVID-19, I think it can be safe to say under this new law that it will be a rare occasion in Florida wherein a Condominium or Homeowners’ Association will ever be found guilty in a COVID-19 lawsuit if attempted or brought.

Condos and HOA's

Should a Condo or HOA require proof of vaccination to use the common facilities?

/in

Now that a lot of the population is getting a COVID vaccination, we are hearing that a few Boards of Directors of area Condominium or Homeowners’ (HOA) Associations are floating the idea of considering requiring proof of vaccination for owners, family members, tenants and guests in order to use the common area amenities such as the clubhouse, social room, fitness room or swimming pool.

For the following reasons we do not believe it a good idea to try to implement such a requirement:

Purchasers of Condominium Units and Single Family Homes in a Homeowners’ Association are granted an easement and right to use all of the common facilities along with all the other owners in the community as are the purchaser’s family members, guests and tenants.  Only allowing those with proof of vaccination to use the facilities would arguably be a breach of this substantive right granted to each owner to use the facilities.

Allowing some residents to use the facilities who provide proof of vaccination while disallowing the rest would arguably create two classes of citizens in the community which some Florida Courts have found to be prohibited housing restrictions.

Showing proof of vaccination could be considered disclosure of a medical record of the person. Per relevant Florida Statutes, such medical records in an Association’s possession are not to be accessible to unit owners or homeowners. Access to such vaccination records could easily be breached thereby setting up the Association for a possible lawsuit.

If a person chooses not to be vaccinated because of religious reasons, requiring proof of vaccination could expose the Association to religious discrimination.

The governor of Florida has passed an Order prohibiting business from requiring vaccination passports.  A Condominium or Homeowners’ or Coop Association is a not-for-profit corporation and must follow many Florida business regulations so it is arguably a business.

The State Legislature has also passed laws this session to provide a lot of immunity protection to businesses from COVID lawsuits.

So there are many potential pit falls that could bestow an Association if it tries to require proof of vaccination to use the common facilities and it litigation ensued, it could become very costly.

The real question then is whether there is any great safety or security advantage to requiring vaccination passports for use of the common facilities in a community in light of the strong political push back from some owners and possible litigation the Association may face in doing so.  Masking and social distancing has already been in place for many communities.  The changes of vaccinated individuals getting COVID are very slim and those who choose not to vaccinate have made a personal decision to accept the risk of getting sick or deathly ill from COVID.  It would be extremely hard to prove that someone got COVID using the common facilities of the Community.

It appears the downside to a community requiring vaccine passports far outweighs the marginal possible benefit of requiring them.

If an Association board still wanted to require such vaccine passports, we would suggest that it would need to at a minimum amend its governing documents, with a full vote of the membership in the community, as a board vote would have to be “reasonable” and many would consider such a passport requirement as unreasonable.  However, an amendment to the Declaration or Bylaws with a membership vote would not have to be reasonable as long as it is not arbitrary, capricious or unconstitutional.

Condos and HOA's

In a Condo who insures what and who pays for the damage?

/in

Questions often arise when there is an insurable event (such as when a water or sewer pipe bursts), who pays for the damage?  The Condominium Association or the Unit Owner.

The answer will depend upon what the damaged items are.  Section 718.111(11)(f), Florida Statutes, provides that:

  “(f) Every (Condominium Association) property insurance policy issued or renewed on or after January 1, 2009, for the purpose of protecting the condominium must provide primary coverage for:

1. All portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications.

2. All alterations or additions made to the condominium property or association property pursuant to s. 718.113(2).

3. The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.”

So, the Association’s insurance policy covers the structures of the building(s) as originally installed or replaced plus all approved alterations or additions to the building(s).  The Association policy also covers the unit A/C equipment (this was a change to the Statute after Hurricane Irma to insure that all the air conditioning is repaired and turned on as quick as possible after a hurricane to prevent mold growth).  The unit owners’ policies, if obtained, cover their personal property and some fixtures within the unit and floor, wall and ceiling coverings. The drywall in the units and the stuff behind the drywalls is the Association, wherein the paint or wall paper on the drywall is insured by the unit owner.

  While the Association is required to carry insurance on the structures, the Statute does not require unit owners to carry a unit policies and many unit owners decide to self-insure their unit and not carry unit insurance unless their Declaration of Condominium requires them to do so (most do not).  Many owners who do not have a mortgage decide to take the risk of self-insuring their condominium unit.

Another question that often arises is who pays for the dry-out of the unit (fans etc.) from the pipe burst as the Statute is silent on this.  As both the Association benefits from the dry-out (less chance of mold behind the walls) as well as the unit owner (property saved from turning moldy green or black) the dry out cost should be shared proportionally between the Association and the Unit Owner depending upon how much they benefit.  If it cannot be determined a proportional share, the dry out cost is usually shared equally- 50/50.

  Who pays the Association deductible for an internal unit drywall repair (unit perimeter drywall is Association responsibility) can be a complicated answer and depends upon whether there was ever a deductible opt-out vote of the members or not. If that question arises, you should check with your Association’s legal counsel.

For non-insurable event damage (such as mold growth from a slow water leak over an extended period of time), you will need to look at your governing documents maintenance, repair and replacement responsibilities usually contained in your Declaration of Condominium to determine whether the Association or the owner must pay for the repair.

Condos and HOA's

Condominium budget preparation issues

/in

It is that time of year when Condominium Associations start working on preparing their budgets for 2021. Usually a small committee or the board will have a “workshop” to come up with a preliminary budget and later in the year the board will vote on the final budget.

We are often asked whether this budget workshop can be a closed meeting as the board is not yet voting on the meeting.  Although there are many good reasons to keep such meetings small, notice of such meetings must be posted on the property at least forth eight (48) hours before the meeting and members have a right to attend such workshop meetings.

Section 718.112(2)(c), Florida Statutes, requires  that: “Adequate notice of all board meetings, which must specifically identify all agenda items, must be posted conspicuously on the condominium property at least 48 continuous hours before the meeting except in an emergency. . . . Meetings of a committee to take final action on behalf of the board or make recommendations to the board regarding the association budget are subject to this paragraph.”

Now when it comes time to approve the final budget once it has been determined after the workshop meeting, a copy of the proposed final budget along with copy of notice of the board meeting to approve same must be delivered to the unit owners at least fourteen (14) days before the board meeting.

Section 718.112(2)(e), Florida Statues, states that:  “Any meeting at which a proposed annual budget of an association will be considered by the board or unit owners shall be open to all unit owners.  At least 14 days prior to such meeting, the board shall hand deliver to each unit owner, mail to each unit owner at the address last furnished to the association by the unit owner, or electronically transmit to the location furnished by the unit owner for that purpose a notice of such meeting and a copy of the proposed annual budget.  An officer or manager of the association, or other person providing notice of such meeting, shall execute an affidavit evidencing compliance with such notice requirement, and such affidavit shall be filed among the official records of the association.”

In addition to the estimated operating revenues and expenses, the proposed annual budget must include reserve accounts for capital expenditures and deferred maintenance. Pursuant to Section 718.112(2)(f), Florida Statutes: “These accounts must include, but not be limited to roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000. The amount to be reserved must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item.” The Association may use a straight line or pooled method for determining a fully funded budget. Utilizing the pooled method usually decreased the amount of reserve assessments required in a fully funded budget as reserve funds are calculated to be needed just in time when the line items are need to be paid for.

A fully funded reserve budget must be adopted by the board unless a majority vote of the membership vote to provide for no reserves or less reserves than fully funded.  In order to take this membership vote, the board should present a budget with fully funded reserves to the members along with an alternative budget will less than fully funded or no reserve funding.  Such a vote can be taken at a special membership meeting immediately before the board meeting to vote on the budget and would also require a fourteen (14) day notice of the special members meeting.

The proxy question asking the owners to approve less than a fully funded reserve budget must state in large font:  “WAIVING OF RESERVES, IN WHOLE OR PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.”

Condos and HOA's

When to enforce, when to change rules

/in

Most Condominium and Homeowners’ Associations have governing documents containing a number of restrictions and rules and regulations.  They are designed to keep the communities attractive and the residents happy.

  Exteriors of homes and yards are to be kept up, roofs cleaned and condo lanai’s kept from becoming eye sores.  Businesses with commercial vehicles and client traffic coming and going are not to be conducted from a home or condominium unit.  Neighbors are not to be creating nuisances with loud late night parties.

  When an owner doesn’t follow one of these rules made for the benefit of all residents, they need to be dealt with quickly so the place does not deteriorate.  If a cordial phone call or e-mail from the property manager or a director does not solve the rule violation, then the matter should be turned over to legal counsel so that the violation ceases and does not happen again.

If legal counsel must get involved, then the violator will be sent a cease and desist letter.  If the violation continues after the attorney letter, then legal action may be taken against the violator.  Such action could be an Arbitration Complaint with the Division of Condominiums, a pre-suit Mediation Action for a Homeowners’ Association or a County or Circuit Court Complaint depending upon what kind of violation it is.  If such becomes necessary the offender could be responsible for the Association’s prevailing party attorney’s fees in addition to their own.  So it could become very costly if a violator does not comply once he or she is informed of their violation.

  What about rules or regulations that are on the books and violations have been occurring but no enforcement has been implemented by the Association?  Well, an Association cannot enforce a violation that it has no actual knowledge about. Therefore, a resident must make a written complaint first to the Association so that the Board becomes aware of the violation that is bothering another resident.  Once it knows of the violation, the Board has the fiduciary duty to enforce the rule being broken.  If it does not, a resident could go after the Board for not enforcing the rule.

What about a rule on the books that no one cares about?  Sometimes there are old rules that have been around for a long time but residents don’t have a problem with other residents breaking the outdated rules.  One example is prohibition of pick-up trucks.  Many association have no pick-up trucks allowed rules.  They were usually written long ago when not many people had pick-up trucks and those who did usually had work trucks which were unsightly with tools and material all in the back and maybe commercial signage.

  Well today, most new pick-up trucks are not your granddaddy’s pick-up trucks.  Many cost twice the price of a regular car and can be quite good looking and upscale.

If your residents don’t mind having these nice looking pick-up trucks in the driveways or in the parking areas, then a Board should probably put up a vote to the members to remove the pick-up prohibition from their governing documents.  This should go for any rule that the vast majority of the members no longer want to be enforced.

If you don’t get rid of such rules, then all you need is one resident who does not like their neighbor and will go after the Board if the Board does not make their neighbor get rid of their truck.  If the Board refuses (without getting the rule amended out by the members), then the Board could be sued by the owner for not enforcing the rule on the books. This could become expensive for the Association and politically a problem for the Board.

Summer may be a good time to have a committee review all the rules and regulations of your Association and determine what rules are no longer wanted and what ones should be changed or added to keep up with the times. Your legal counsel can then help you prepare the legal documents to have the members vote to make the changes.

Condominium Associations

Most associations should have 5 directors

/in , ,

We see a few Condominium or Homeowners’ Associations with only three directors serving a one year term and some larger Associations with seven or nine directors.

There is a benefit to larger Master Homeowners’ Associations, with many neighborhoods and condominiums, to have many directors so that each of the various sub-communities have a representative on the master board.

However, for the vast majority of Associations five directors is the best number because you can obtain a quorum of the board and have a board meeting if only three directors show up.

Some smaller Associations say it is difficult to get more than three directors because of apathy in the community. However, having only three directors can be a major problem because a quorum is then only two directors. Then, if two directors meet at the pool, in the social room, in each other’s units, or on the telephone and discuss Association business, such acts could be considered to be an illegal board meeting. Under the Florida Sunshine Laws contained in the Florida Statutes, when a quorum of the board meets and discuss Association business (in this case two directors), the meeting is considered an official board meeting and must be noticed at least 48 hours before the meeting and the meeting must be open to all the members. This of course could be a real problem when the two directors believe they are just getting together socially, to play golf, or just to talk on the phone.

To avoid such a Sunshine Law problem, having five directors is much better because it then takes three directors to get together discussing Association business to have a quorum and therefore a board meeting.

Next is the issue of having one year terms of director verses two year staggered terms. With a five member staggered board, three directors will be elected one year to serve two year terms and two directors will be elected the following year to serve two years terms then and so on and so on.

The beauty of staggered terms is that you will get a continuation of service and directors with knowledge of Association business staying on the board each year which allows for a much smoother operation of your Association year to year and the new board not having to reinvent the wheel every year.

If your Association does not already have five (5) directors with two year staggered terms and you want to move to this set up, you will probably have to amend your Association’s Bylaws to provide for such.

Some of you may be aware that a new law was passed last year imposing eight year term limits on Condominium Association directors. There were differing opinions as to whether the eight years included years served before the law become effective 7/1/19 or only years served by directors elected after 7/1/19.

The division of condominiums in Tallahassee finally have said that they see the law, as do most Condominium attorneys, is that it provides that the eight years term limit does not start until a director is elected, or starts to serve, after 7/1/19 no matter how many years the director may have served before 7/1/19. It is difficult for many Associations to find good members willing to serve on their Association’s board. Therefore, hopefully the Legislature will be wise and repeal this eight year limitation before 2026 when some good directors may start reaching their eight years max.

Informative Trade Show coming up: South Gulf Coast Trade Expo & Taste of the Expo; 106 Vendors and 8 Food Court Restaurants; Free parking, free admission, free food court; 2 free classes: Legal Update and Board Certification. A fabulous service and products trade show for CAMs, Association Board Members and Homeowners. Friday, April 3rd from 9 am to 1 pm at Alico Arena, on the grounds of SGCU in Fort Myers. Register at www.southgulfcoastchaptercai.com.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice 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.
Homeowners Associations

Keeping drones from being a nuisance in your community

/in , ,

We keep hearing that delivery companies will soon be delivering packages to our doorsteps by drones. Developers and realtors are using drone footage as marketing tools. Hobbyist and kids are flying them around in their spare time.

How should your Condominium or Homeowners’ Association handle the growing number of drone use from becoming a nuisance in your community?

While some board of directors just say they want to ban drones in their community, this is easier said than done as flying vehicles (such as airplanes or helicopters) have the right to fly over your community’s airspace and there are a lot of benefits to having as described above to having drones around.

So, rather than trying to prohibit drones, we suggest that community associations have their owners approve amendments to their governing documents to allow them as long as they are flown legally and do not unreasonably disturb the residents.

As for flying legally, drones can be defined as powered, unmanned, aerial vehicles that use aerodynamic forces to provide vehicle lift, can fly autonomously or be piloted remotely, and designed to be recoverable. The drones need to 1) be registered with the FAA, to the extent required, 2) be operated by an individual duly licensed by the FAA, to the extent required and 3) be flown and utilized only in accordance with the FAA and other applicable governmental requirements.

As for not disturbing the residents, the drones need to 1) be flown within the community in a manner not to interfere with an owner’s reasonable expectation of privacy, 2) not utilized in any fashion to spy or otherwise peer or take pictures into the residence of another owner’s property, 3) not utilized to harass any person with respect to private property or to the Association’s common property and 4) not utilized in a manner to cause injury to person or property.

It is good to add language to the amendments that make the operator of a drone liable and solely responsible for any injury to person or property which results from the use of such drone. If the operator fails to comply with the new amendments, the person shall constitute a nuisance and violation of the regulations.

To protect the association, the new regulations should provide that the association is not a guarantor or protector of an individual’s right to privacy with respect to any drones that are flown in the community and that the association will only undertake actions under the regulations if the association representatives have direct knowledge and evidence of a violation or following receipt of a written claim from an offended resident and subsequent inspection by the association and determination of a violation.

New technology develops much quicker than the legal rules and regulations that come slowly after once an issue arises, privacy is invaded, property is damaged or persons get hurt by it. That is why it is prudent to get ahead of the curve so your residents who use or are affected by the new technology will clearly understand what their legal rights and obligations are in relation to the new technology. Adopting such drone rules and regulations should help keep the peace in your building or neighborhood.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice 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.
Condominium Associations

New directors must sign the form or go to class

/in , ,

Last month we talked about what owners must do to run for the board in a Condominium or Homeowners” Association. This month we will discuss what document a newly elected or appointed director in a Condominium Association, Cooperative Association, or Homeowners’ Association must sign to be in compliance with State Law requirements.

Florida law says that new directors must either sign a new director certification form or attend an educational class and obtain a certification of completion form.

Section 718.112(2)(d)3.b., Florida Statutes provides that: “Within 90 days after being elected or appointed to the board of an association of a residential condominium, each newly elected or appointed director shall certify in writing to the secretary of the association that he or she has read the association’s declaration of condominium, articles of incorporation, bylaws, and current written policies; that he or she will work to uphold such documents and policies to the best of his or her ability; and that he or she will faithfully discharge his or her fiduciary responsibility to the association’s members. In lieu of this written certification, within 90 days after being elected or appointed to the board, the newly elected or appointed director may submit a certificate of having satisfactorily completed the educational curriculum administered by a division-approved condominium education provider within 1 year before or 90 days after the date of election or appointment. The written certification or educational certificate is valid and does not have to be resubmitted as long as the director serves on the board without interruption. A director of an association of a residential condominium who fails to timely file the written certification or educational certificate is suspended from service on the board until he or she complies with this sub-subparagraph. The board may temporarily fill the vacancy during the period of suspension. The secretary shall cause the association to retain a director’s written certification or educational certificate for inspection by the members for 5 years after a director’s election or the duration of the director’s uninterrupted tenure, whichever is longer. Failure to have such written certification or educational certificate on file does not affect the validity of any board action.”

Similar language is provided in Chapter 720, Florida Statutes for Homeowners’ Associations and Chapter 719, Florida Statutes for Cooperative Associations.

Even though the new director certification forms says that the director has read “all” of the association’s governing documents (most directors never have read all of their governing documents and never will- nor has their Attorney), there is no penalty under the Statutes for signing the document and not actually reading the governing documents.

Similarly, for the few directors who chose to go to a class, there is no requirement to pay attention or take or pass any test. As long as the warm body director shows up, he or she will get a certificate of completion.

As long as one of the two forms (new director certification form or certification of completion of educational class) is turned into the Association within 90 days of the election or appointment to the board, the director qualifies to be on the board.

So that the qualification requirement for directors does not become an issue at your condominium, cooperative or homeowners’ association, all of your directors should sign a director certification form at your organizational board meeting following your annual meeting this season. You can get such a form from your Association attorney if your manager does not already have one. The association Secretary should then keep the signed forms along with the other Association records.

It is very interesting that the State of Florida makes unpaid volunteers willing to serve on their association’s board go through this mindless routine of signing these forms and filing them with the association’s records.

Even if a new director forgets to sign a form and is therefore “suspended” from the board, the suspension can be lifted in just a few minutes by giving the director the form and then putting it in the file. So this “sign da papers” law is really a form over substance needless imposition on volunteers care of the State.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice 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.
Condos and HOA's

Be prepared for annual election of board members

/in , ,

The first quarter of the new calendar year, also known as “season” is coming up and this is the time that most condominium and homeowners’ associations have their annual meetings and annual election of directors because the most residents are in town.

If you live in a condominium, at least 60 days before the annual meeting/scheduled election, the association must mail a first notice of the date of the election and a unit owner or other eligible person desiring to be a candidate for the board must give written notice of his or her intent to be a candidate to the association at least 40 days before the scheduled election. The candidate can also provide a candidate information sheet (resume) within 35 days before the scheduled election.

It is very important that a candidate makes sure that the association receives the notice of intent to be a candidate on or before the 40 day deadline. If the candidate misses the 40 day deadline, even by one day, the candidate cannot be on the ballot nor automatically be on the board if less intents are received than there are open seats for election.

If there are more intents to be a candidate received than there are director seats coming open for election, then there will be a ballot and election at the annual meeting. The ballot has to be sent to all owners, along with a second notice of annual meeting at least 14 days before the annual meeting/election.

If there are less intents to be a candidate received than there are director seats coming open for election, then the candidates who got their intents to the association before the 40 day deadline will automatically be on the new board.

For homeowners’ associations there is no requirement for first and second notices of annual meetings. The election of directors, if one is required must be held at, or in conjunction with the annual meeting or as provided in the governing documents. The notice of annual meeting must also be sent to all members at least 14 days before the meeting. The election must be conducted in accordance with the procedures set forth in the governing documents of the Association and all qualifying members of the association are eligible to serve on the board and a member may nominate himself or herself as a candidate for the board at the annual meeting.

However, if the election process of the homeowners’ association allows candidates to be nominated in advance, then the association is not required to allow nominations at the annual meeting. For this reason, many homeowners’ associations will adopt election process rules that will mirror the process used in condominium associations (60 day 1st notice, 40 day intent to run deadline, 35 day information sheet deadline and 14 day 2nd notice), so that candidates must put in their notice of intent to be a candidate at least 40 days before the annual meeting/election. Once the homeowners’ association has adopted such election process rules, there will no longer be any surprise nominations for directors from the floor at the annual meeting.

It is instructive to know who is qualified to be a candidate for the board. For most condominium and homeowners’ associations, the bylaws provide that a candidate must be a member of the association. However, some bylaws do not require directors to be members so they could have a non-owner Manager, CPA, Attorney or Engineer, tenant or golfing partner be a director.

A candidate must be eligible to be a candidate to serve on the board of directors at the time of the deadline for submitting a notice of intent to run in order to have his or her name listed as a proper candidate on the ballot or to serve on the board. A person who has been suspended or removed from the board by the division of condominiums or who is delinquent in the payment of any monetary obligation due to the association, is not eligible to be a candidate for board membership and may not be listed on the ballot. A person who has been convicted of any felony is not eligible for board membership until such felon’s civil rights have been restored for at least 5 years of the date such person seeks election to the board.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice 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.