rembaumlaw | Rembaum's Association Roundup

May 8, 2020January 25, 2021

From One Disaster to the Next: Hurricane Season Starts June 1

If the effects of the Corvid-19 virus were not enough, June 1^st begins Florida’s unenviable hurricane season. Never has it been more important to board members and managers to understand the emergency powers approved by the legislature and codified into Florida Statutes in Chapters 718, 719 and 720 for use during a declared “state of emergency.” Many associations have already utilized these powers in their efforts to curb the Corvid-19 virus from spreading. If you are not yet familiar with these powers, well, you need to become learned before disaster strikes.

The statutorily required pre-requisite to utilizing the legislative emergency powers is that the Governor of the State of Florida has declared a “state of emergency”. Importantly, when exercising emergency powers, there should be a rational relationship between the action undertaken and the disaster itself. For example, an emergency special assessment needed to fix the condominium roof damaged by a hurricane, during a state of emergency makes good sense. However, just because there was a hurricane and a state of emergency declared, does not mean the emergency powers can be used to levy a special assessment to build a new gazebo, most especially when there was never a gazebo before.

The Covid-19 situation illustrates to many seasoned community association lawyers that the emergency powers granted by the legislature were drafted for use in response to, and for preparation for, natural disasters. More specifically, “in response to damage caused by an event for which a state of emergency is declared.” Suffice it to say, use of the emergency powers to help contain a virus epidemic was likely not contemplated. Nevertheless, circumstances warranted that the emergency powers be utilized during the Covid-19 crisis for which a state of emergency was indeed declared. Likely, as a result of the Covid-19 virus, the community association emergency powers granted by the Florida legislature will be tweaked by the legislature in its next session to provide for better applicability to an ever-evolving world where states of disaster are not limited to weather events alone.

The specific emergency powers legislation can be found in section 718.1265 Florida Statutes for condominium associations, section 720.316 Florida Statutes for homeowners’ associations and section 719.128 Florida Statutes for cooperative associations. While each are very similar, there are a few subtle differences that go beyond the scope of this article. Also, it should be noted that an association can amend its governing documents to prohibit a board member’s use of the statutory emergency powers. Perhaps, one justifiable reason to do so would be if the membership approves its own version of emergency powers which most obviously should be discussed with the association’s legal counsel before considering to do so.

A few of the emergency powers that are common to all of Florida’s community associations, unless otherwise provided, include:

Conduct board meetings and membership meetings with notice given as is practicable under the circumstances
Cancel and reschedule any association meeting.
Name as ‘assistant officers’ persons who are not directors, which assistant officers shall have the same authority as the executive officers to whom they are assistants during the state of emergency to accommodate the incapacity or unavailability of any officer of the association.
Relocate the association’s principal office or designate alternative principal offices.
Enter into agreements with local counties and municipalities to assist counties and municipalities with debris removal.
Implement a disaster plan before or immediately following the event for which a state of emergency is declared which may include, but is not limited to, shutting down or off elevators; electricity; water, sewer, or security systems; or air conditioners.
Based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine any portion of the property unavailable for entry or occupancy by unit owners, family members, tenants, guests, agents, or invitees to protect the health, safety, or welfare of such persons.
Require the evacuation in the event of a mandatory evacuation order.
Based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine whether the property can be safely inhabited or occupied.
As to condominiums, mitigate further damage, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus, including, but not limited to, mold or mildew, by removing and disposing of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the condominium property, even if the unit owner is obligated by the declaration or law to insure or replace those fixtures and to remove personal property from a unit.
As to condominiums, contract, on behalf of any unit owner or owners, for items or services for which the owners are otherwise individually responsible, but which are necessary to prevent further damage to the condominium property. In such event, the unit owner or owners on whose behalf the board has contracted are responsible for reimbursing the association for the actual costs of the items or services, and the association may use its lien authority provided by s. 718.116 to enforce collection of the charges. Without limitation, such items or services may include the drying of units, the boarding of broken windows or doors, and the replacement of damaged air conditioners or air handlers to provide climate control in the units or other portions of the property.
As to homeowners’ associations, mitigate further damage, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus, including mold or mildew, by removing and disposing of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the association property.
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.
Without unit owners’ approval, borrow money and pledge association assets as collateral to fund emergency repairs and carry out the duties of the association when operating funds are insufficient.

These emergency powers are limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the owners and the owners’ family members, tenants, guests, agents, or invitees and shall be reasonably necessary to mitigate further damage and make emergency repairs.

Please be sure to review the legislation that is specifically applicable to your type of association, be it a condominium, cooperative or homeowners’ association, as the above powers were presented for purposes of this article.

Prior to taking any action, consultation with the association’s attorney is an absolute must as this article is intended to provide useful information for consideration and not specific legal advice. Stay safe!

(Reprinted with permission from the May 2020 edition of the Florida Community Association Journal and as written by attorney Jeffrey Rembaum)

May 5, 2020May 6, 2020

Re-opening Amenities In Times Of Uncertainty, Part 2

In response to our article from May 3rd, 2020, we have received inquiries from readers regarding the ability of an association located in Palm Beach County to use volunteers to provide the pool monitoring as required by Palm Beach County Emergency Order Number 5.

In relevant part, the Palm Beach County Order provides that as to the re-opening of community swimming pools the association must have “[o]ne (1) or more facility staff or management be present at each facility location to monitor and ensure compliance with the [Order].” There is no definitive instruction in the Order as to how a community association is to comply this particular requirement. However, based upon the plain meaning of the words, the association should have personnel from management or association staff physically present at the association’s pool facilities during its operating hours to monitor the use of the pool facilities to ensure compliance with the Order.

In addition, based upon an April 28,2020, posting from the Palm Beach County website, it is suggested that an association could also appoint a committee of community volunteers to perform the pool monitoring. The issue created by the Palm Beach County Website posting is that the Order required “facility staff or management” to provide the pool monitoring. The term “volunteers” was not not used.

With that in mind, if an association located in Palm Beach County decides to use volunteers to provide the pool monitoring function, then the following should be taken into consideration:

If a resident who contracts Covid-19 later sues the association alleging a breach of the Order somehow led to their contracting of the virus, then will the association be in a position to show compliance with the Order when, in fact, volunteers were used? While such a lawsuit is remote, given today’s litigious environment it is not out the question.
Does the association have legal defense coverage which would at least provide for assignment of defense counsel so that the association will not have to go out of pocket in the event its other insurance policies do not provide coverage?
Does the association have insurance coverage in place to cover acts of volunteers?
Does the association have volunteer workers comp type coverage in place?

Although not required by the Order, we suggest that the association consider conspicuously posting or having available as a handout a summary of the CDC Social Distancing Guidelines and the Palm Beach County Emergency Order Number 5 as related to use of community pools. The following links are provided for your reference:

Remember to also discuss the re-opening plan with your association’s legal counsel.

May 3, 2020

RE-OPENING AMENITIES IN TIMES OF UNCERTAINTY

The re-opening of amenities is anything but easy due to the local Orders being promulgated by Palm Beach, Broward and Miami-Dade Counties. Please be sure to review your County’s specific order(s) to ensure your association remains in compliance. These Orders have similarities but are also VERY different. A link to the recent re-opening Orders follows:

As to the Palm Beach County Order, take note that that staff and management are responsible to ensure compliance with the Order with respect to the tennis/racquet court facilities, and that one or more facility staff or management must be present at the pool to monitor and “ensure compliance with the restrictions of the Order.” However, it is not at all clear what measures must be taken to “ensure compliance with this Order.” We do not think it would be sufficient to only post a sign setting forth the CDC Guidelines and the additional restrictions in the Order. Although the tennis/racquet court facilities guidelines, unlike the community pool guidelines, do not require personnel to be present at the tennis/racquet courts to monitor and ensure compliance, in our opinion the board should consider some type of responsible monitoring.

With respect to a swimming pool in Palm Beach County, “facility staff or management” must be present at the pool whenever it is open to monitor and ensure compliance with the restrictions set out in the Order, including social distancing and pool bathroom sanitation. If that cannot be accomplished, then the pool and or bathrooms should remain closed.

When opening a swimming pool in Broward County, their Order provides that the pool may not operate at more than 50% capacity. In person supervision in addition to sanitizing gates, railings and showers is required if the pool deck furnishings are left in place. However, by removing the furnishings, the wording of the Order seems to indicate the need to sanitize gates, railings and showers has been eliminated. If the decision by the Board is to reopen the pool, whether the furnishings remain or are removed a level of reasonable cleaning/sanitizing should be maintained, as necessary maintenance remains a continuing obligation of the association with regard to common elements/areas, which would require sanitizing the pool gates, handrails, doors, bathrooms and the like minimally as the association normally would, but clearly should be performed more frequently during these times.

Residents of Miami-Dade County will have to wait a while longer to be able to use their association swimming pool because their Order does not yet address opening association swimming pools.

We have heard that certain county staff are giving their personal interpretations of the Order(s) in response to questions from board members. If you think that relying on these unofficial and unauthorized interpretations will shield your association from immunity, think again! It is far more likely that staff interpretations of the County Orders will not provide any protection whatsoever, most especially if a resident contracts Covid-19 and a lawsuit is brought against the association. Until local governments revise their Orders to provide missing clarity, the plain language, conservative interpretation of these Orders should be followed to help ensure your association is protected as much as possible under the circumstances. Remember, too, that an association can have stricter requirements than those set out in the orders, but cannot adopt less strict requirements.

It is also unclear from the Orders how governmental enforcement of the restrictions is to occur by the County or any municipality, as it seems very (very) unlikely that there will be patrols driving around to check on compliance. Even if such patrols did exist, they could not hope to keep up. The more likely scenario is that the self-reporting of violations could possibly lead to monetary or other penalties against the association. Clearly, if the Board is of the opinion that the requirements in their County’s Order cannot be met at this time, it or are removed is certainly within the reasonable business judgment of the Board to keep those amenities closed. However, that said, reasonable business judgment should not be used by a board to make a decision to open amenities where the board believes it lacks the ability to be fully compliant with their county’s local Orders.

We encourage board members to contact their association’s legal counsel for guidance regarding reopening any tennis/racquet courts and/or pool facility, and to continue to monitor the guidelines, directives and orders issued by the CDC and the applicable local authorities. Stay safe.

April 13, 2020

The 2020 Census: The Importance of Being Counted, Especially Now

The U.S. Constitution provides that every ten years, the United States must conduct a census to count the entire population of the nation. Moreover, federal law requires each person to complete the census. Each year, the federal government distributes more than $675 billion to states and communities based on Census Bureau data. Additionally, information gathered in the census is used to determine how many Representatives each state has in Congress and is used to redraw the congressional district boundaries. Local communities rely on census data to plan for new roads, schools, and emergency services. In the private sector, businesses use the census data to decide where to build factories, offices, and stores which create jobs in the community. In order for your community to receive the maximum benefit from the 2020 Census, every member must be counted.

The United States Census Bureau has made the process of responding to the 2020 census easier than ever. Beginning in Mid-March each household will receive an invitation to respond to the census with options for how to respond. You may respond online where the questionnaire will be available in English and 12 additional languages. You can also respond by phone in English or 12 additional languages. If you would prefer to respond to the questionnaire on paper, the Census Bureau will be mailing paper questionnaires to every household that has yet to respond by mid-April. Finally, those who prefer to respond in person will be able to do so in mid-May as census takers will being visiting all household that have not yet responded. Census workers will make six attempts to find residents who do not return forms. So, if you want to avoid finding a Census Bureau field representative on your doorstep, complete the questionnaire online or over the phone when you receive it in mid-March.

Similar to process servers, associations must admit census workers performing official business for the 2020 Census. In accordance with Section 223 of Title 13 of the U.S. Code provides that anyone who willfully neglects give free ingress and egress to a duly accredited representative of the Census Bureau may be subject to a fine of up to $500.00. The Census Bureau has also provided information to help you verify that an individual visiting your association and/or home, as the case may be, is actually a Census Bureau employee. You and your association’s security gate personnel will be able to verify a Census Bureau field representative using the following information:

A Census Bureau field representative will always present an ID badge that includes their name, their photograph, a Department of Commerce watermark, and an expiration date.
A Census Bureau field representative will be carrying an official bag with the Census Bureau logo or a laptop, and will provide a letter from the Census Bureau on official letterhead stating why they are visiting your residence or community.
If you or your association’s security staff desire to independently verify a field representative’s status, you can enter the person’s name in the Census Bureau’s staff search website at www.census.gov/cgi-bin/main/email.cgi or contact the regional office for Florida by calling (470) 889-6800.

Understandably, you may be concerned over the confidentiality of your census responses, but the law is clear: no personal information can be shared. All the information you share is protected by law and cannot be used against you. The Census Bureau is prohibited from releasing any identifiable information about individuals, households, or businesses, even to law enforcement agencies. The Census Bureau and its employees are prohibited from releasing information that identifies you personally. Each employee and contractor is sworn to protect your information, and a violation of that oath can result in a fine up to $250,000 and/or up to five years in prison. The Census Bureau takes strong precautions to protect online responses as well. All data is encrypted to protect personal privacy and once the Census Bureau receives the data it is taken offline.

Not only does, federal law requires you to complete the census, but Section 221 of Title 13 of the U.S. Code even provides that a $100 fine will be imposed on anyone over the age of eighteen who refuses or willfully neglects to complete the census. So, what are you waiting for? Go and complete your 2020 Census- the information gathered in the 2020 Census will be of vital importance to your association, your surrounding neighborhoods, the city, county and state.

COVID-19 UPDATE:

The health and safety of your Community and all residents is very important to us. We also realize that our clients have uncertainty and concerns around the continuing operation of your Community, and our team of attorneys will remain available to all of you during these times.

In addition, we added a very useful and informative section to our website. Visit it by clicking HERE.

March 29, 2020April 13, 2020

COVID-19 UPDATE: Your Questions Answered & Emergency Powers Confirmed

OUR KBR TEAM OF ATTORNEYS OFFER GUIDANCE TO YOUR MOST PRESSING COVID-19 QUESTIONS

1. If we have a resident who tested positive for Covid-19 should we inform the entire community?

If the positive test has been confirmed, while it is ok to alert the entire community that a member has tested positive for Covid-19, it is definitely NOT ok to identify the infected person by name and/or property address. It is recommended that you contact Association counsel for assistance in preparing or reviewing the notice to the membership.

2. What do we do if a confirmed, infected person in our community refuses to self-quarantine?

Consider contacting the County Health Department, the local Police Department, Department of Homeland Security, and Center for Disease Control to report them. Please be reminded that you have no independent authority to force anyone to self-quarantine.

3. Should we close the association clubhouse and gym during the quarantine period?

With known infections escalating at a breakneck pace, community leaders must make tough business decisions to protect the health, safety and welfare of community residents, staff and to promote compliance with local, state and federal emergency orders and declarations. We recommend implementing strategies to minimize spreading the disease and taking actions designed to maintain a safe environment. Prohibiting use of indoor common facilities and amenities generally falls within the discretion of the board of directors, particularly in light of the emergency powers granted to all Boards of Directors, during this pandemic, by Florida Statutes, and is strongly recommended by the state health department.

Consequently, we recommend restricting access to these facilities as the most effective way to prevent residents from becoming infected after touching surfaces, railings, entry doors, furniture or other items. This is especially important if residents typically congregate in the clubhouse in close proximity to each other.

Board members are obligated to act with good faith, with the care of a reasonable person and in the best interests of the community. It is certainly in the best interest of the community to maintain a clean and safe environment. It is likewise in the best interests of the community for the association to promote social distancing in compliance with recommendations of governmental agencies.

4. Should we close the association swimming pool during the quarantine period?

As far as we know, there is no evidence that the infection spreads from one person to another in water, however boards must take the same considerations stated above into account,. Some associations are permitting owners to use the pool after the association removes the pool furniture, so long as each person agrees to remain 6 feet from one another and limit the number of users to less than 10. This continued use would still require the association to engage in extraordinary cleaning/sanitizing measures for any high-touch areas including railings, access-ways, bath facilities and the like. The logistics, costs and possible liability concerns often lead directors to the conclusion that shutting the pool facilities is a far better alternative, which is legally supportable and suggested.

5. Should we forgive all assessment payments for 60 days? Should we reduce our budget by 20%?

Certainly these are unprecedented times. Many communities will be faced with critical decisions regarding the likely financial impact the Covid-19 virus will have on the owners and overall operations of the association.

However, as board members have a fiduciary duty to ensure that the association meets its many financial obligations, we do not recommend adopting a blanket policy to forgive all assessments for all owners for a certain period of days (30, 60, or 90 days), nor do we recommend an immediate reduction in the budget.

The primary reason is that the association must still function in an effective manner, which includes ensuring that its vendors and obligations are timely paid and met, including, without limitation, insurance, maintenance/sanitation of the common elements and facilities, security, and communication services (telephone, internet, cable). Some communities may have loan repayment obligations as well. Adopting a blanket policy to forgive all assessments can invariably cause some owners, who otherwise had no intention of withholding payment or paying late, to take advantage of the “amnesty” period, which will only create a negative impact on the association by interrupting the necessary cash flow for community services.

Of course, it is also important to demonstrate compassion during this period and Boards do have the authority to consider hardship requests from an owner on a case-by-case basis, which can include: agreeing to extend the period of time for an owner to make payment; waive late fees; enter into payment plan; or, to send additional late notices before turning a delinquent account over to legal counsel for collection. The types of hardships to be considered by the Board can include, without limitation, a documented reduction in household income by the owner or an increase in household expenses, as well as documented medical reasons. Also, if there are items in the budget that are discretionary and vendors for these non-essential services are willing to work with the Board to either temporarily suspend those services or defer payment, the board can exercise its reasonable business judgement to work with such vendors on those points. It is recommended that you review any proposed policies with your association counsel before implementing them.

6. Should our association restrict guests or contractors during the quarantine period?

Among the statutory emergency powers of a condominium board is the right to determine any portion of the “condominium property” unavailable for entry or occupancy by unit owners, family members, tenants, guests, agents, or invitees to protect the health, safety, or welfare of such persons based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board. Condominium property is defined by the Florida Condominium Act (Chapter 718 of Florida Statutes) to include both common elements and units.

However, the statutory emergency powers for homeowners’ associations are a little different. They provide that the board may determine any portion of the “association property” unavailable for entry or occupancy by owners or their family members, tenants, guests, agents, or invitees to protect their health, safety, or welfare based upon the advice of emergency management officials or upon the advice of licensed professionals retained by the board. The term “association property” is not defined by the Florida Homeowners Association Act (Chapter 720 of Florida Statutes), but would seem to refer to property owned by an association, including only the common area and not lots or homes.

Whether an association may, should or must restrict or prohibit guests or contractors from entering the community due to COVID-19 depends upon the nature of the community, applicable law and, of course, the orders or directives from federal, state, county and local authorities.

In many condominiums there are shared elevators, lobbies, entry doors, hallways, stairways and the like. Since residents are in close proximity to each other, and guests and contractors will typically need to share access points with residents, it is likely reasonable to limit guests and contractors in condominiums with such shared areas. However, exceptions for guests and contractors who are necessary for the resident must be considered. A condominium association must surely allow a resident to have a guest who is necessary for a disability. In addition, residents may also need guests for other essential purposes and they should not be precluded from accessing units. Of course, these issues need to be evaluated on a case-by-case basis.

In a condominium setting, it appears reasonable for the board to similarly restrict access and work by contractors, other than those who are performing necessary work, to be determined by the board. It is not advisable to restrict contractors who are needed to ensure that a unit is fully functional and habitable. Optional renovations, which are generally unnecessary to maintain or repair the unit, may be restricted. It is interesting to note that many of the emergency orders issued by local governments, such as Broward and Palm Beach Counties, provide that contractors are essential workers who may work despite the orders.

As noted above, the authority of the board of a homeowners’ association to prohibit entry or occupancy appears to apply to common areas rather than the lots and homes. Furthermore, unlike a condominium, even where the homes are attached (such as townhomes), they typically do not have very much shared areas. Presumably a guest or contractor of a resident is able to go directly to the resident’s home without contacting or affecting areas used by other residents. As such, the board of a homeowners’ association may not have as much legal support for a restriction on guests or contractors of residents.

7. Should our association prevent tenants and owners from moving in during the quarantine period?

Unless there is a future State or local order that further limits or restricts activity in community associations, it does not appear that a restriction preventing owners from moving into a condominium or homeowners’ association community would be reasonable. The fact is that owners have more rights than tenants, and obstructing an owner from entering their property is likely not warranted unless, for example, the property was destroyed by a hurricane or is otherwise unsafe. However, it must be recognized that additional use of the shared areas of community associations could lead to the spread of COVID-19.

As a result, certain restrictions on new leases, particularly new short-term leases which have not been approved, may be reasonable to prevent a “revolving door” situation when there is an influx of too many people in the shared areas of the community. This may also include screening tenants concerning whether they have recently been exposed to COVID-19 and using it as a basis to deny immediate occupancy. As noted above, there is typically less shared area in homeowners’ association communities and, therefore, a homeowners’ association may have less reason to preclude new tenants. In any event, all applications for the proposed transfer or lease of a unit or lot should be timely reviewed in accordance with the governing documents for the community to ensure that the association complies with any applicable time frames during which approval must be furnished to the owner or applicant.

Also, On March 27, Governor DeSantis signed an Order prohibiting vacation rentals less than 30-days. The Order expires 14 days later unless extended.

We strongly encourage Boards to discuss these issues with your association’s legal counsel to ensure legal and appropriate measures are being undertaken to deal with this rapidly ever evolving and fluid situation.

Confirmation of Emergency Powers

Please see the Order from the Secretary of the D.B.P.R. confirming the application of the Emergency Powers for all Boards, as well as the tolling of the deadline for financial reporting requirements for Condominium, Cooperative and Timeshare Associations, during the current State of Emergency.

Short Term Rental Prohibition Order

On March 27, Governor DeSantis signed an Order prohibiting vacation rentals less than 30-days. The Order expires 14 days later unless extended.

We added a very useful COVID-19 resource section to our website. You can visit it by clicking HERE:

The Kaye Bender Rembaum Team Remains Available to You and to Your Community Association

March 16, 2020March 23, 2020

SPECIAL CORONAVIRUS EMERGENCY POWERS EDITION: BOARD EMERGENCY POWERS

FOR CONDOMINIUM, COOPERATIVE & HOMEOWNERS’ ASSOCIATIONS

All board members and managers should take a few moments and brush up on emergency powers approved by the legislature and codified into Florida Statutes in Chapters 718, 719 and 720 for use during a “state of emergency.” Hopefully, your association will not need to use them. But just in case, now is the time to familiarize yourself with this important legislation.

No doubt the emergency powers granted by the Florida legislature to a condominium, cooperative and homeowners’ association board of directors for use during a “state of emergency” were intended for hurricanes and the like. Nevertheless, should circumstances warrant, they can be utilized during this state of emergency caused by the Coronavirus. However, use of these powers should be reasonably related to the threat at hand. In other words, there should be good reason for their exercise such that there is a nexus between the emergency action taken and the situation at your association as related to the Coronavirus.

Due to the Coronavirus, a myriad of other issues present themselves for consideration, too. Should board meetings be held and if so, how? Should the board learn of an infected member living in the association, what next? Should the infected person be identified to other members? What type of notice should be provided? Should an entire condominium be quarantined due to one case of coronavirus or should only those members who were in contact with the infected member be in quarantine? These are issues of first impression and the list goes on…

During this time, if there is no reason to have a board meeting because there is no business to be voted on, then consider cancelling the meeting. If a board meeting is needed, consider doing so by conference call. Remember, all members still have the right to listen and, at the right time, speak. If this is not possible, be sure to draft into the minutes the reason why, because there is no emergency power that allows excluding the members attendance and participation at a board meeting.

Based on what we have all seen and read, the infected person will be quarantined along with all other persons the infected person identifies as having been in contact with them. Therefore, one way or the other word of the situation is likely to get out. Nevertheless, notice to the entire community should be considered, but identification of the infected person should be avoided.

Meetings with a large numbers of attendees should be avoided, but if meetings with a large number of participants become necessary, then consider spacing out the seats to avoid unnecessary close contact.

Plan ahead by stocking up on several weeks of supplies needed for the smooth operation of the association.

Consider temporary closing of the clubhouse and other areas of possible congregating. Obviously, Bingo and similar games should be avoided. Shows should be cancelled and re-scheduled, if possible, etc.

The Board should focus on the protection of its members though minimization of health and economic risks. Regardless of what steps are taken, given the circumstances, there are possible legal consequences. Therefore, bear in mind prior to taking any action, consultation with the association’s attorney is an absolute must as this column is intended to provide information for consideration and not specific legal advice.

Thank you to so many friends and peers who provided their comments to this writer, which led to this article during this most difficult of situations taking place in uncharted territory.

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THE SPECIFIC LEGISLATION

Following is the legislation that provides the specific emergency powers for Florida’s community associations. First presented is emergency powers for condominium associations, followed by emergency powers for cooperative associations and emergency powers for homeowners’ associations.

EMERGENCY POWERS: CONDOMINIUM ASSOCIATIONS

718.1265 Association emergency powers.—

(1) To the extent allowed by law and unless specifically prohibited by the declaration of condominium, the articles, or the bylaws of an association, and consistent with the provisions of s. 617.0830, the board of administration, in response to damage caused by an event for which a state of emergency is declared pursuant to s. 252.36 in the locale in which the condominium is located, may, but is not required to, exercise the following powers:

(a) Conduct board meetings and membership meetings with notice given as is practicable. Such notice may be given in any practicable manner, including publication, radio, United States mail, the Internet, public service announcements, and conspicuous posting on the condominium property or any other means the board deems reasonable under the circumstances. Notice of board decisions may be communicated as provided in this paragraph.

(b) Cancel and reschedule any association meeting.

(c) Name as assistant officers persons who are not directors, which assistant officers shall have the same authority as the executive officers to whom they are assistants during the state of emergency to accommodate the incapacity or unavailability of any officer of the association.

(d) Relocate the association’s principal office or designate alternative principal offices.

(e) Enter into agreements with local counties and municipalities to assist counties and municipalities with debris removal.

(f) Implement a disaster plan before or immediately following the event for which a state of emergency is declared which may include, but is not limited to, shutting down or off elevators; electricity; water, sewer, or security systems; or air conditioners.

(g) Based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine any portion of the condominium property unavailable for entry or occupancy by unit owners, family members, tenants, guests, agents, or invitees to protect the health, safety, or welfare of such persons.

(h) Require the evacuation of the condominium property in the event of a mandatory evacuation order in the locale in which the condominium is located. Should any unit owner or other occupant of a condominium fail or refuse to evacuate the condominium property where the board has required evacuation, the association shall be immune from liability or injury to persons or property arising from such failure or refusal.

(i) Based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine whether the condominium property can be safely inhabited or occupied. However, such determination is not conclusive as to any determination of habitability pursuant to the declaration

(j) Mitigate further damage, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus, including, but not limited to, mold or mildew, by removing and disposing of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the condominium property, even if the unit owner is obligated by the declaration or law to insure or replace those fixtures and to remove personal property from a unit.

(k) Contract, on behalf of any unit owner or owners, for items or services for which the owners are otherwise individually responsible, but which are necessary to prevent further damage to the condominium property. In such event, the unit owner or owners on whose behalf the board has contracted are responsible for reimbursing the association for the actual costs of the items or services, and the association may use its lien authority provided by s. 718.116 to enforce collection of the charges. Without limitation, such items or services may include the drying of units, the boarding of broken windows or doors, and the replacement of damaged air conditioners or air handlers to provide climate control in the units or other portions of the property.

(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.

(m) Without unit owners’ approval, borrow money and pledge association assets as collateral to fund emergency repairs and carry out the duties of the association when operating funds are insufficient. This paragraph does not limit the general authority of the association to borrow money, subject to such restrictions as are contained in the declaration of condominium, articles, or bylaws of the association.

(2) The special powers authorized under subsection (1) shall be limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the unit owners and the unit owners’ family members, tenants, guests, agents, or invitees and shall be reasonably necessary to mitigate further damage and make emergency repairs.

History.—s. 15, ch. 2008-28.

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EMERGENCY POWERS: COOPERATIVE ASSOCIATIONS

719.128 Association emergency powers.—

(1) To the extent allowed by law, unless specifically prohibited by the cooperative documents, and consistent with s. 617.0830, the board of administration, in response to damage caused by an event for which a state of emergency is declared pursuant to s. 252.36 in the area encompassed by the cooperative, may exercise the following powers:

(a) Conduct board or membership meetings after notice of the meetings and board decisions is provided in as practicable a manner as possible, including via publication, radio, United States mail, the Internet, public service announcements, conspicuous posting on the cooperative property, or any other means the board deems appropriate under the circumstances.

(b) Cancel and reschedule an association meeting.

(c) Designate assistant officers who are not directors. If the executive officer is incapacitated or unavailable, the assistant officer has the same authority during the state of emergency as the executive officer he or she assists.

(d) Relocate the association’s principal office or designate an alternative principal office.

(e) Enter into agreements with counties and municipalities to assist counties and municipalities with debris removal.

(f) Implement a disaster plan before or immediately following the event for which a state of emergency is declared, which may include turning on or shutting off elevators; electricity; water, sewer, or security systems; or air conditioners for association buildings.

(g) Based upon the advice of emergency management officials or upon the advice of licensed professionals retained by the board of administration, determine any portion of the cooperative property unavailable for entry or occupancy by unit owners or their family members, tenants, guests, agents, or invitees to protect their health, safety, or welfare.

(h) Based upon the advice of emergency management officials or upon the advice of licensed professionals retained by the board of administration, determine whether the cooperative property can be safely inhabited or occupied. However, such determination is not conclusive as to any determination of habitability pursuant to the declaration.

(i) Require the evacuation of the cooperative property in the event of a mandatory evacuation order in the area where the cooperative is located. If a unit owner or other occupant of a cooperative fails to evacuate the cooperative property for which the board has required evacuation, the association is immune from liability for injury to persons or property arising from such failure.

(j) Mitigate further damage, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus, including mold or mildew, by removing and disposing of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the cooperative property, regardless of whether the unit owner is obligated by the declaration or law to insure or replace those fixtures and to remove personal property from a unit.

(k) Contract, on behalf of a unit owner, for items or services for which the owner is otherwise individually responsible, but which are necessary to prevent further damage to the cooperative property. In such event, the unit owner on whose behalf the board has contracted is responsible for reimbursing the association for the actual costs of the items or services, and the association may use its lien authority provided by s. 719.108 to enforce collection of the charges. Such items or services may include the drying of the unit, the boarding of broken windows or doors, and the replacement of a damaged air conditioner or air handler to provide climate control in the unit or other portions of the property.

(l) Notwithstanding a provision to the contrary, and regardless of whether such authority does not specifically appear in the cooperative documents, levy special assessments without a vote of the owners.

(m) Without unit owners’ approval, borrow money and pledge association assets as collateral to fund emergency repairs and carry out the duties of the association if operating funds are insufficient. This paragraph does not limit the general authority of the association to borrow money, subject to such restrictions contained in the cooperative documents.

(2) The authority granted under subsection (1) is limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the unit owners and their family members, tenants, guests, agents, or invitees, and to mitigate further damage and make emergency repairs.

History.—s. 16, ch. 2014-133.

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EMERGENCY POWERS: HOMEOWNERS’ ASSOCIATIONS

720.316 Association emergency powers.—

(1) To the extent allowed by law, unless specifically prohibited by the declaration or other recorded governing documents, and consistent with s. 617.0830, the board of directors, in response to damage caused by an event for which a state of emergency is declared pursuant to s. 252.36 in the area encompassed by the association, may exercise the following powers:

(a) Conduct board or membership meetings after notice of the meetings and board decisions is provided in as practicable a manner as possible, including via publication, radio, United States mail, the Internet, public service announcements, conspicuous posting on the association property, or any other means the board deems appropriate under the circumstances.

(b) Cancel and reschedule an association meeting.

(d) Relocate the association’s principal office or designate an alternative principal office.

(e) Enter into agreements with counties and municipalities to assist counties and municipalities with debris removal.

(f) Implement a disaster plan before or immediately following the event for which a state of emergency is declared, which may include, but is not limited to, turning on or shutting off elevators; electricity; water, sewer, or security systems; or air conditioners for association buildings.

(g) Based upon the advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine any portion of the association property unavailable for entry or occupancy by owners or their family members, tenants, guests, agents, or invitees to protect their health, safety, or welfare.

(h) Based upon the advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine whether the association property can be safely inhabited or occupied. However, such determination is not conclusive as to any determination of habitability pursuant to the declaration.

(i) Mitigate further damage, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus, including mold or mildew, by removing and disposing of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the association property.

(j) Notwithstanding a provision to the contrary, and regardless of whether such authority does not specifically appear in the declaration or other recorded governing documents, levy special assessments without a vote of the owners.

(k) Without owners’ approval, borrow money and pledge association assets as collateral to fund emergency repairs and carry out the duties of the association if operating funds are insufficient. This paragraph does not limit the general authority of the association to borrow money, subject to such restrictions contained in the declaration or other recorded governing documents.

(2) The authority granted under subsection (1) is limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the parcel owners and their family members, tenants, guests, agents, or invitees, and to mitigate further damage and make emergency repairs.

History.—s. 19, ch. 2014-133.

February 14, 2020January 22, 2021

HOW TO REMOVE TROUBLESOME TREES

A great many streets in Florida’s residential communities are lined with oak trees. While they can look so appealing as a canopy, many of these trees can raise sidewalks and driveways. Their massive roots can grow into plumbing lines, cause various trip hazards and kill the grass, too.

Until recently, it was very problematic to remove these trees for a variety reasons. Moreover, it was also expensive to deal with all of the governmental red tape caused, in many instances, by over zealous city officials, such as the city forester, who requires strict compliance with the community’s original landscaping plans, etc. Well, the Florida legislature listened to stories of local government unreasonableness and did something about it to the great satisfaction of association members everywhere.

But, there is still a problem because many local governments refuse to accept that House Bill 1159 was passed into law in 2019. This new law prohibits a local government from requiring a notice, application, approval, permit, fee or mitigation for the pruning, trimming, or removal of a tree on residential property when an arborist or landscape architect documents that the tree presents a danger to persons or property. As an important FYI, mangroves are exempt and all existing requirements for mangrove trimming, etc., remain steadfastly in place.

Apparently, the problem of local government personnel ignoring this new law is so pervasive that on January 7, 2020, the Speaker of the Florida House of Representatives, Jose Oliva, sent a memo to all Local Government Officials alerting them that they need to follow this new law and that the House of Representatives will be “diligent in executing its oversight responsibilities in order to protect the rights of property owners and to prevent illegal governmental actions that interfere with these rights. WOW!!!

If your community has a problem with tree removal caused by local government officials perhaps showing them a copy of the memo might help. Also, be sure to alert your association’s attorney to the problem so that they can intercede on the association’s behalf.

This new law is codified in s. 163.045, Florida Statutes and provides as follows:

s. 163.045 Tree pruning, trimming, or removal on residential property.—

(1) A local government may not require a notice, application, approval, permit, fee, or mitigation for the pruning, trimming, or removal of a tree on residential property if the property owner obtains documentation from an arborist certified by the International Society of Arboriculture or a Florida licensed landscape architect that the tree presents a danger to persons or property.

(2) A local government may not require a property owner to replant a tree that was pruned, trimmed, or removed in accordance with this section.

(3) This section does not apply to the exercise of specifically delegated authority for mangrove protection pursuant to ss. 403.9321–403.9333.

February 9, 2020

CONSTRUCTION PROGRESS PAYMENTS: The Hidden Trap

originally published in the Florida Community Association Journal, February 2020 edition

The owner of real property can end up paying twice when they pay their general contractor who, in turn, fails to pay the subcontractors and suppliers. However, this very real consequence can be avoided, too. While drafted to protect contractors and suppliers, Florida law also provides substantial protection in favor of the consumer (a.k.a, the “property owner”) from having to pay twice for construction supplies and for the work itself. However, the property owner only has the protection if the process outlined in section 713.13, Florida Statutes (2019), is strictly followed. While the statutory regime can be difficult for the layman to interpret, it is not an overly complicated process to follow once understood. That said, even if an owner strictly follows the statutory regime to protect themselves from having to pay twice, many general contractors and their attorneys have found a way to dilute the consumer protection afforded by the statute and, thus, still expose the the owner of the property to the risk of having to double pay for the work. To understand the problem at hand, the overall payment process from the owner to the general contractor as contemplated by Florida’s legislation must be understood.

To start the process, the owner is required to file what is referred to as a “Notice of Commencement.” Amongst other things, the Notice of Commencement identifies the general contractor and the legal description of where the work is to be performed. It is recorded with the local county clerk’s office so that it is a part of the county’s official records. The purpose of the Notice of Commencement is to inform all subcontractor’s and suppliers that if they intend to provide goods and/or services to the property, and if they want to have proper legal standing to record a lien against the property in the event they are not paid, that the subcontractor and supplier must serve a “Notice to Owner” to the owner.

Most importantly, the Notice to Owner informs the property owner of all subcontractors working under the general contractor and all suppliers who provide supplies and materials to the job site under the direction of the general contractor or a subcontractor. In this way, the owner is informed of all of the subcontractors and suppliers working under the direction of the general contractor.

In exchange for payments to the general contractor, the general contractor provides the owner with partial payment affidavits for each payment and a final payment affidavit upon conclusion of the work at hand. The subcontractors and suppliers provide the owner “partial releases” for the payments received from the general contractor using the general contractor as the delivery conduit to deliver the partial release to the owner.

Because the owner enters into contractual “privity” (meaning, “a close connection”) with the general contractor, but not the subcontractors and suppliers, the owner provides all payments due to the subcontractors and suppliers to the general contractor who is responsible to pay all subcontractors and suppliers. But, how does the owner have assurances that the money paid to the general contractor is properly provided to the subcontractors and suppliers? Well, that is where the Notice to Owners received by the owner come in very handy. Since the Notice to Owner informs the owner of all subcontractors and suppliers hired by the general contractor expecting payment, the owner can, and most certainly should, contractually require that the general contractor provide the owner with partial releases from those subcontractors and suppliers as proof of payment. In fact, section 713.06(3)(c)2., Florida Statutes (2019), provides that “[l]ienors [referring to and meaning the subcontractors and suppliers] receiving money shall execute partial releases… to the extent of the payment received.”

Sounds simple, right? Pay the general contractor and receive partial payment releases (a.k.a, a receipt) from the subcontractors and suppliers so that they cannot later claim they are unpaid and thus, be in a position to record a lawful lien against the owner’s property. The question is when should the subcontractors and suppliers provide their partial releases? Should the subcontractors’ and suppliers’ partial releases be provided by the general contractor to the owner contemporaneously with a progress payment, or should the subcontractors and suppliers provide their partial releases only after payment is received meaning the partial releases will only be at least one progress payment behind.

In order to be fully protected from the risk of double payment, the general contractor must obtain the partial releases from the subcontractors and suppliers in advance of payment from the owner. It is as though the statutory process at hand contemplates that either the subcontractors and suppliers trust the general contractor to the extent that they provide their partial release to the general contractor in advance of payment so that the partial releases can be provided to the owner in immediate exchange for payment from the owner. Or, the statutory process implies that the general contractor has sufficient funds to pay the subcontractors and suppliers prior to payment from the property owner so as to be in a position to obtain the partial releases from the subcontracts and suppliers to provide to the owner in exchange for a partial payment. With the partial releases in hand, in the event the general contractor does not pay the subcontractors and suppliers, the owner is fully protected. It is important to understand that without the partial releases in hand, even if the owner paid the general contractor and received a partial payment affidavit from the general contractor, if the general contractor did not pay the subcontractors and suppliers, then they have a lawful right to demand payment from the owner and to record a lien against the owner’s property. Hence, without the partial releases from the subcontractors and suppliers, the owner remains in danger of paying twice for some or all of the work.

Some general contractors insist on providing the owner with the partial releases from the subcontractors and suppliers one payment behind the payments from the owner to the general contractor. Right off the bat, that should be a significant concern to the owner because it means if the general contractor fails to pay the subcontractors and suppliers for any reason whatsoever, be it due to bankruptcy, closing up shop, or running off to the Canary Islands with the money, the owner will still have to pay the subcontractors and suppliers and thus pay twice. In fact, the legislature has even gone so far as to warn the public of this danger.

Section 713.06(3)(c)1, Florida Statutes (2019), provides in relevant part that, “…[t]he owner may require, and, in such event, the contractor shall furnish as a prerequisite to requiring payment to himself or herself, an affidavit as prescribed in subparagraph (d)1., on any payment made, or to be made, on a direct contract, but the furnishing of the affidavit [by the general contractor] shall not relieve the owner of his or her responsibility to pay or cause to be paid all lienors [a.k.a., the subcontractors and suppliers] giving notice.” [Emphasis added.]

There are three methods to protect the owner from this problem:

The safest method is to ensure that the contract between the owner and general contractor contains a provision that the owner is to be provided the contemporaneous and immediate partial release of lien from the subcontractors and suppliers in immediate exchange for payment to the general contractor.
Hire a different general contractor.
Purchase a payment and performance bond which act as an insurance policy where, among other protections, the insurer will pay the subcontractors and suppliers in the event payment was made by the owner to the general contractor but the general contractor failed to pay the subcontractors and suppliers. If the general contractor is not bondable, that should serve as a warning in and of itself to look for a different contractor. The performance and payment bonds will add three to five percent to the overall project cost and are, one way or the other, paid by the owner. If this route is selected, the owner must make absolutely certain the policy will provide the necessary coverage for this concern as not all insurers may provide this coverage.

Whether an owner decides to enter into contractual privity with a general contractor who insists on providing the subcontractors’ and suppliers’ partial releases only after the owner pays the general contractor and then the general contractor pays the subcontractors and suppliers is risky because there will always remain financial exposure of paying for all or part of the work, twice. If you, your company or community association are considering hiring a general contractor then you need to be aware of this issue. It is suggested that an owner never ever put themselves into a position where there is risk of paying more than once for the same work. Ask yourself this: if the general contractor cannot not afford to pre-pay their subcontractors and suppliers or the subcontractors and suppliers will not trust the general contractor with their partial releases to be provided to the owner upon payment, then should you be doing business with that general contractor in the first place?

Personal experience has demonstrated that some general contractors will tell property owners that delayed receipt of the partial releases is customary and quite ordinary. If you find yourself in that position be sure to tell the general contractor of the beachfront property for sale in Arizona, and go find yourself a different contractor.

December 20, 2019

New CEU Requirements for Licensed Community Association Managers

Effective August 15, 2019, the Regulatory Council of Community Association Managers changed the requirements for continuing education for license renewal. The number of hours required have been reduced from 20 to 15 hours each license period. The new requirements are:

All community association manager licensees must satisfactorily complete a minimum of 15 hours of continuing education per biennial renewal cycle. No license shall be renewed unless the licensee has completed the required continuing education.
Only continuing education courses approved by the Council shall be valid for purposes of licensee renewal.
The required 15 hours of continuing education shall be comprised of courses approved pursuant to Rule 61E14-4.003, F.A.C., in the following areas:

(a) Three-hours of legal update seminars. The legal update seminars shall consist of instruction regarding changes to Chapters 455, 468, Part VIII, 617, 718, 719, 720, and 721, F.S., and other legislation, case law, and regulations impacting community association management. Licensees shall not be awarded continuing education credit for completing the same legal update seminar more than once even if the seminars were taken during different years.

(b) Three-hours of instruction on insurance and financial management topics relating to community association management.

(d) Three-hours of instruction on human resources topics relating to community association management. Human resources topics include, but are not limited to, disaster preparedness, employee relations, and communications skills for effectively dealing with residents and vendors.

Three-hours of additional instruction in any area described in paragraph (3) (b), (c) or (d) of this rule or in any course or courses directly related to the management or administration of community associations.

December 6, 2019

Protecting Tenants at Foreclosure Act of 2009: Resurrected and Here to Stay

On May 20 2009, just after the peak of the national foreclosure crisis, a federal statute was enacted to help protect a residential tenant who was renting a unit subject to foreclosure from being evicted without being afforded a reasonable amount of time to find alternative housing.

The federal law was known as “Protecting Tenants at Foreclosure Act of 2009”. It generally provided that a bona-fide tenant was authorized to remain in a residential unit that was acquired by a new party through foreclosure for the balance of the unexpired term of the lease, unless the unit was acquired by a party that intended to occupy the unit, in which case the tenant was authorized to remain in the unit for ninety days after receiving a notice to vacate.

For purposes of the federal law, a “bona fide tenant” was a tenant who was not the mortgagor or the parent, spouse, or child of the mortgagor and who was under a lease that was the result of an arms-length transaction where rent was not substantially lower than fair market value.

The federal law assured that residential tenants would have a reasonable amount of time to plan and find alternative housing after the unit they were renting was foreclosed and acquired by a new party. However, it also assisted community associations in finding desirable tenants to rent units they owned through the foreclosure of the association’s assessment lien for a fair market value, which then helped the association recoup unpaid assessments and bad debt otherwise attributable to the unit.

The protections of the federal law were intended to “sunset”, which is a term meaning ”to expire”, on December 31, 2012. However, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) later extended the sunset date to December 31, 2014. Once the federal law finally expired on January 1, 2015, tenants of residential property in Florida no longer had any special protection from eviction by parties acquiring such units by foreclosure.

Then, approximately six month later, the Florida legislature adopted its own version of the law as part of the Florida Residential Landlord and Tenant Act. Specifically, section 83.561, Florida Statutes, became effective on June 15, 2015, and provides that “if a tenant is occupying a residential premises that is the subject of a foreclosure sale, the purchaser named in the certificate of title is permitted to give a tenant a thirty day notice to vacate and the tenant must comply”. Therefore, as of June 15, 2015, residential tenants had a much shorter time frame of thirty days’ notice to vacate a unit acquired by foreclosure.

Finally, on June 23, 2018, the federal Protecting Tenants at Foreclosure Act became effective again. It no longer contains any sunset or expiration date; so it is here to stay. Since a federal law will supersede a Florida law when it is more stringent, the provisions of the Federal Protecting Tenants at Foreclosure Act giving tenants more time to vacate residential property after it is acquired by a new party through foreclosure will apply to transactions in Florida despite the shorter time frame provided by state statute.