Homeowners Associations

Homeowners Associations

How to protect the look of your neighborhood

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So one of your neighbors from Indiana likes John Cougar Mellencamp’s song “little pink houses” and the next thing you know they painted their house pink. Another neighbor puts on a new asphalt roof after the hurricane when all the other roofs in the neighborhood are barrel tile to save a few thousand dollars. Can your homeowners’ association make these folks conform and change the pink color and the asphalt roof?

Maybe not if you do not have good language in your declaration of covenants or if your association’s guidelines and standards do not mention house color or roof types.
Section 720.3035, Florida Statutes, provides that: “(1) The authority of an association or any architectural, construction improvement, or other such similar committee of an association to review and approve plans and specifications for the location, size, type, or appearance of any structure or other improvement on a parcel, or to enforce standards for the external appearance of any structure or improvement located on a parcel, shall be permitted only to the extent that the authority is specifically stated or reasonable inferred as to such location, size, type, or appearance in the declaration of covenants or other published guidelines and standards authorized by the declaration of covenants. . . . (5) Neither the association nor any architectural, construction improvement, or other similar committee of the association shall enforce any policy of restriction that is inconsistent with the rights and privileges of a parcel owner set forth in the declaration of covenants or other published guidelines and standards authorized by the declaration of covenants, whether uniformly applied or not.”
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A Florida court has interpreted this Statutory Section to mean that if you do not have any provisions in either your Declaration of Covenants or any published Guidelines and Standards as to the external appearance of homes, or the location, size, type, or appearance of any improvement (such as a swimming pool, fence, or patio addition), a homeowner in your community can do pretty much whatever he wants on his lot as long as he meets county or city codes.

Some homeowners’ associations may have some limited published guidelines concerning some aspects of external appearance of homes and what and where different structures can be placed upon a lot. However, usually there are a lot of possible alterations that homeowners may want to make that are absent is such guidelines.

Rather than having to look at every possible alteration that could be made and creating guidelines the size of a dictionary, we have found that the best way to curb such outlier behavior is to get a membership vote to amend your declaration of covenants to say something like: “The guidelines and standards for any item not contained in any written architectural guidelines and standards shall be whatever already physically exists in the community as originally constructed or which has been previously approved within the community as allowable alterations to what physically existed. If any item does not already exist within the community as previously approved nor is the criteria for such a guideline or standard contained within the written approved guidelines and standards, then such an item may not be used, placed or changed unless or until some criteria for such an item has been added to the written guidelines and standards.”

Most owners, who bought into your community, did so liking the original look of the homes in your neighborhood. After many years, some owners may want the look of their neighborhood to be updated. With the above type language added to your declaration, your association can then control how the updates can look by adopting new standards and guidelines. Without such “already physically exists” language, you may get a whole lot of strange new looking updates throughout the neighborhood that you cannot then make the owners change their alterations back to the original look once discovered.

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.
Homeowners Associations

When do associations have to get competitive bids?

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When it comes to condominium and homeowners’ associations contracting for services and supplies for their communities, the associations are all over the map on the procedures they use to find a provider. Some will go get competitive bids on each and every contract and always take the lowest bid while others will obtain no bids and just contract with whoever they want. Neither of these extremes would be following the applicable laws and good business practices as an association’s contracting policy.

Let’s first look at what kind of contracts do not require competitive bids. As professional services are considered unique and each professional provide their services in an individual manner, according to Section 718.3026(2), Florida Statutes, for condominium associations, contracts with employees of the association, and contracts for attorney, accountant, architect, community association manager, time-share management firm, engineering, and landscape architect services do not require competitive bids. An association is free to find the unique professional they like and hire them.

There are two other situations where competitive bids are not required. If an association needs to obtain products and services in an emergency or if there is only one source of supply in the county of the product or service, an association can go ahead and just sign a non-bid contract.

In contrast, competitive bids must be obtained by condominium associations, pursuant to Section 718.3026(1), Florida Statutes, for all other contracts that are for the purchase, lease, or renting of materials or equipment, or for the provisions of services and which require payment by the association on behalf of any condominium operated by the association in the aggregate that exceeds 5 percent of the total budget of the association including reserves.

So, for contacts for low amounts where the price does not reaches 5 percent of the total annual budget (including reserves), competitive bids are not required.

If bidding is required, nothing in the statute requires an association to accept the lowest bid and a minimum of only two bids are required. For some reason, many think that you have to get at least three bids.

There are very similar contract provisions concerning when competitive bids are needed for homeowners’ association (HOA) contracts under Section 720.3055, Florida Statutes. One major difference is that the threshold requirement for competitive bids for HOAs is 10 percent of the total annual budget of the association including reserves.

So there really are not that many contracts that an association gets involved with that require competitive bids. The scope is limited to large cost contracts for goods or services that will exceed 5 percent or 10 percent of the annual budget and that won’t be provided by one of the listed excepted professionals. There is nothing wrong with getting competitive bids from professionals if an association wants to make sure they are getting a good deal for their money. However, many times when it comes to the listed professionals, you will be comparing apples to oranges as each professional provides its services in their owner unique way. Therefore, the differences in how the professionals operate need to be understood when you are putting out, and then reviewing, bids from different professional.

Last, it is important to point out that all contracts with the association for the acquisition of materials that will not be fully performed within one (1) year and all contracts for the provision of services must be in writing. If they are not in writing you probably won’t be able to hold the provider to whatever terms may have been agreed to verbally.

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.