When Florida’s legislature is in session, there is never a shortage of topics to write about. House Bill 1357 (“HB 1357”) is no exception. It is another overreaching piece of legislation that will only serve to make assessment debts harder to collect and will cause association assessments to increase in order to comply with its overreaching and micro-managing requirements. HB 1357 is inartfully conceived. There is no intent to criticize anyone that participated with HB 1357, but rather to point out the many problems that will be created should such an ill-conceived legislative effort be passed into law.
Statutorily Required Websites: Condominium associations with 500 or more units and homeowners’ associations with 7,500 or more parcels must create and maintain a legislatively required website which mandates stringent, onerous, and, quite candidly, obnoxious requirements as to what must be contained and continually updated therein. If a community desires to spend its assessment revenues in this manner, then that should be a decision for each individual community and not mandated by the State. Unnecessary litigation will ensue by every unhappy association member who believes that their association’s website does not contain the information as required by statute. This legislation will require associations to engage the service of yet another professional requiring significant payment for services rendered. In some instances, it could even require a full-time dedicated IT/website employee in order to maintain HB 1357’s ongoing posting requirements. If passed into law, it would only be a matter of time until some other legislature makes these requirements applicable to each and every community association in the State, regardless of their size.
Impediments to Collection of Past Due Assessments: Regarding the collection of past due assessments by condominium and homeowners’ associations, the decision of the association to take legal action to collect unpaid assessments or to use a third-party to collect unpaid assessments should not be dependent upon whether the Association has complied with new statutory obligations that require newly written collection policies that mandate when payment plans can be considered, their terms, inclusive of a mandated six month payment plan. The entire scope of the association’s collection regime should be set out in its declaration and not by way of a separate statutorily required written collection policy. The ability of a community association to offer a payment plan is unique as to each request made by an association member. The association must have complete flexibility in terms of structuring such payment plans and the factors for consideration of such plans and should not be subject to stringent requirements as would be required by this legislation which clearly removes the ability of an association to have the necessary discretion needed to create flexible payment plans. In and of itself, this legislation will impede the ability of an association to readily collect past due debts and will increase every association’s legal fees by requiring the adoption of yet another collection policy. It will create significant impediment to the collection of past due assessments.
Conflicts of Interest: Regarding condominium and homeowners’ association director and officer conflicts of interest, all sorts of new disclosures and procedures are creating conflicts of interest that may occur when the association may hire an officer, director or other relative of a director or officer. The use of the term “relative of a director or officer” is fully undefined and most problematic. Does this mean that a board member’s wife’s fourth cousin once removed on her grandmother’s uncle’s side of the family is included within the scope of the term “relative”? In terms of the board’s ability to remove a director or officer who violates the conflict of interest legislation, HB 1357 provides the board the unquestionable and incontestable ability to remove a sitting board member without any avenue of redress for that board member to dispute the findings of the board. This will create an unjust, unfair result. It is only a matter of time until an a board of directors majority, unhappy with a fellow board member, makes false accusations against such board member and removes them using this legislation as a pretext to do so.
HOA Committee Meetings: This part of HB 1357 completely revamps the homeowner associations’ need to notice committee meetings. At present, the need to notice committee meetings is quite different for condominium versus homeowner associations. In short, all condominium association committee meetings must be noticed unless there’s an exemption in the bylaws. This is not so for homeowner associations where it is only necessary to notice committee meetings when final expenditure of association funds are considered or architectural decisions are made. This has provided great flexibility to homeowner associations to operate more efficiently. For example the condominium association has to notice its bake sale committee meetings, while the homeowners’ association bake sale committee does not similarly need to do so. This legislation will change this requirement so that homeowners’ association committee meetings of every nature must be noticed, minutes taken, etc. This is just another example of bad, ill-conceived legislation likely caused by one or two unique circumstances rather than looking at the good of the whole.
Safety on the Roadways: There should be no impediment to an association’s ability to create a safe environment for its members. Rarely is speeding within a homeowners’ association not problematic. Yet, HB 1357 makes it unlawful for a homeowners’ association to enforce and impose statutorily imposed traffic laws as provided in Chapter 316, Florida Statutes. The ability of a homeowners’ association to take measures to reduce speeding within the community should not be prohibited. Oftentimes, community association roads have speed limits posted below the minimum speed that would otherwise be allowed by law and therefore, lower than that as would be enforced by law enforcement. As a result, community associations with speed limits, such as 15 miles per hour, need the ability to adequately control speeding on their roadways. This legislative initiative will cause serious injury and likely death if passed into law… it is just a matter of time.
Leasing: Investors’ leasing rights should not be paramount to owners’ rights to protect their community from becoming a rental community. However, the legislature wants to create an unfair regime for homeowners’ associations, as it did for condominium associations to protect the investors. As to a member’s rental of their property within a homeowners’ association, HB 1357 makes effort to mirror existing condominium association legislation that requires all rental restrictions to be set out within the declaration of condominium. What the legislature does not seem to understand is that community associations are not rental communities but rather are first and foremost communities for owners to live in. Therefore, it is extremely important for community associations to easily amend their community’s rental requirements. The fact that investors choose to gobble up homes in a homeowners’ association is the unique individual decision of the investor, but the investor does so with the understanding and risk tolerance that the board of directors or members could later change the rental requirements. Complete flexibility is needed to protect the lifestyle for those members who live within the community. In other words, the rights of the members living in the association’s community should be paramount to offsite investor owners seeking rental income.
HB 1357 requires homeowners’ association voting to take place from 7 AM to 7 PM. It is ridiculous. It is also diametrically opposed to the absentee balloting process.
The likely unintended consequence, yet very real occurrence, that will be created if this legislation is adopted will be significantly increased assessments for all association members in order to comply with the requirements of the legislation in terms of hiring requisite technology personnel to create and administer the association’s statutorily required websites and fees to legal counsel to create the necessary written collection policies for collection of assessments. Removing the ability of a community association to control speeding on its roadways is ill-conceived and, simply put, reckless.