Author: rembaumlaw

Long before the Condominium Act, more specifically, section 718.110(13) of the Florida Statutes, was amended to include that “an amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment” there was Beachwood Villas Condominium v. Poor, et. al., a 1984 Fourth District Court of Appeals (4^th DCA) case where several owners challenged rules enacted by their association’s board of directors which regulated both unit rentals and occupancy of units by guests. The trial court invalidated the rules, while the 4^th DCA reversed the trial court’s ruling and reinstated the board adopted rules.

The 4^th DCA noted that there could be two sources of use restrictions, those set out in the declaration of condominium and those adopted by the board. As to the use restrictions set out in declaration, such restrictions are “clothed with a very strong presumption of validity,” as initially provided in Hidden Harbor Estates V. Basso, a 1981 4th DCA case. Since the rules that are set out in the declaration of condominium are recorded in the public records, all purchasers, prior to becoming owners, have notice of these rules. But this is not the case for board adopted rules.

In examining board adopted rules, the court first determines whether the board acted within its scope of authority, in other words, whether the board had the power to adopt the rule in the first place and, then if so, whether the rule reflects reasoned or arbitrary and capricious decision-making. The board’s exercise of its reasonable business judgment in adopting a rule is generally upheld so long as the rule is not “violative of any constitutional restrictions[] and does not exceed any specific limitations set out in the statutes or condominium documents.”

It is interesting to note that the 4^th DCA discarded an argument that use restrictions adopted by the board must be clearly inferable from the declaration of condominium. In so doing, the 4^th DCA decided that such a test would be too stringent. The resulting test to determine the validity of board adopted rules as applied by the 4^th DCA is relatively simple: “provided that a board-enacted rule does not contravene either an express provision of the declaration or a right reasonably inferable therefrom, it will be found valid, within the scope of the board’s authority. This… test safeguards the rights of unit owners and preserves the unfettered concept of delegated board management.”

In examining board adopted rules ask yourself:

1) Did the board have the power to adopt the rule?

2) Does the rule conflict with the declaration?

3) Is the rule reasonable as measured by being rationally related to the objectives of the association?

If the answer to these three questions is “yes,” then the rule is valid and would quite likely be found enforceable upon owner challenge.

Remember that rules prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment of the declaration of condominium and unit owners who acquire title to their units after the effective date of that amendment, the Beachwood Villas Condominium test to determine the validity of board adopted rule is still good law.

Florida’s next big real estate problem is that the covenants recorded against the commercial real estate comprising the commercial association are, in many instances, about to have no operative affect thanks to the unintended, yet very real,  consequence of Florida’s Marketable Record Title Act, Chapter 712, Florida Statutes, created in 1963 by an act of the Florida legislature. It is referred to as ‘’MRTA” in short.

Florida’s commercial associations are formed for a variety of reasons.  It could be to empower a board of directors to protect commercial property values of the real property subjected to the commercial association’s declaration of covenants, to create a single body to administer the surface water drainage permit, or to generally provide for the overall welfare of the entire commercial association, or a combination of above and more. Some commercial associations are as small as your local shopping center, others can be the size of a small city.

No good deed goes unpunished and MRTA is no exception.  It was created to help title examiners of real property determine which “interests, claims, estates, or other charges” whatsoever recorded against the real property being examined remain in effect. MRTA is used to help eliminate older title considerations which arose prior to what is referred to as the “root of title.” The “root of title” is determined by looking back at least 30 years to identify a deed that meets certain statutory criteria set out in Chapter 712, Florida Statutes. In other words, MRTA operates to eliminate older covenants to prevent real property from being so overly burdened that the property is no longer marketable. MRTA also helps shorten the period of review a title examiner must examine during the conveyance of real property.

As an overly simplistic explanation, MRTA operates such that covenants recorded more than 30 years earlier can begin to expire on a lot-by-lot basis unless such covenants fit squarely into one of the exceptions to MRTA or unless action is otherwise taken to preserve the covenants from being extinguished. That is, if an option to preserve the covenants is even available which is not the case in all instances. Exceptions to MRTA are both statutorily provided and have been developed through case law. Due to differing practices, and preservation language in MRTA, a declaration of condominium, a homeowners’ association declaration of covenants, and a commercial association’s declaration of covenants can have very, very different results. It is the latter category, the commercial association’s declaration of covenants, which is in great peril.

A declaration of condominium is never affected by MRTA because reference to the official record book and page of the declaration of condominium is clearly set out in every deed which conveys each unit of the condominium. This practice fits squarely into one of the exceptions to MRTA and amounts to an express preservation of the declaration of condominium. However,  this is not the case for a homeowners’ association declaration of covenants because the deed that evidences the conveyance of a lot in a homeowners’ association references the official plat book and page of the property, but rarely includes a reference back to the official record book and page of the homeowners’ association’s declaration. Nevertheless, under MRTA, the HOA has the ability to “preserve” it’s declaration of covenants prior to the expiration of 30 years from the date of its initial recordation in the county’s official records books. If the homeowners’ association misses its opportunity to follow the process to “preserve” its covenants, then it has an opportunity to “revitalize” its covenants through a time-consuming and expensive process, but nevertheless it is attainable, albeit with difficulty.

The problem facing the State of Florida is that there is no express statutory mechanism for a commercial association to “preserve” its declaration of covenants.  Moreover, if 30 years have already elapsed since its original date of recordation in the county’s official records, a commercial association’s covenants have already been extinguished under MRTA, there is absolutely no statutory process to revitalize those covenants.

If the commercial association’s declaration of covenants was recorded more than 30 years from the date you are reading this article, then it is quite likely those covenants have already begun to expire on a lot-by-lot basis. At times, there is an applicable exception which will act to prevent the covenants from expiring. It is as simple as a reference to the official record book and page of the commercial association’s declaration of covenants on a recorded plat. However, many commercial associations are comprised of tens or even hundreds of parcels all referenced to a different plat. So, only those very few properties whose plat references the official record book and page of the commercial association’s declaration would be saved from the effects of MRTA. But for that, or some other exception to MRTA, the commercial association covenants may no longer be enforceable starting as early as 30 years from the date of initial recordation of the declaration in the county’s official records. The fact that the commercial Association declaration may contain text which provides that the declaration remains valid for a period of years and is then self renewing thereafter, is completely meaningless in the context of a MRTA examination.

There is, however, an argument that, pursuant to section 712.05, Florida Statutes, “any ‘person’ (which term includes corporations) claiming an interest in the land that desires to preserve a covenant or restriction may preserve and protect the same from extinguishment by the operation of MRTA by filing, for record, during the 30 year period immediately following the root of title, a written notice in accordance with this Chapter, referring to the MRTA, Chapter 712, Florida Statutes.” The problem with this text is that it is not clear whether the association may do so on behalf of all owners, or does each parcel owner need to file the preservation notice? Obviously, the parcel owners who no longer opt for enforceability of the covenants would choose the latter argument. Furthermore, once 30 years have passed from the initial recording of the covenants, and the effects of MRTA begin to operate to extinguish the covenants on a lot-by-lot basis, there is no process for the commercial association to revitalize its covenants.

Florida’s commercial associations are charged with great responsibility. They are often responsible for the operation of the surface water drainage system pursuant to a permit from the local water management district, they have maintenance responsibility for conservation tracts and other common areas, and generally ensure each owner maintains their property consistent with the provisions of the commercial association’s declaration of covenants.  If the Florida legislature does not take immediate action to provide a legislative remedy from the deadly effect of the Marketable Record Title Act as it relates to Florida’s commercial associations, then who will ensure the properties are maintained to a consistent standard, who will ensure the surface water drainage permit is being properly maintained (which affects the Association’s neighbors as well), and who will ensure the common areas and conservation tracts are being maintained?

The 2016 Regular Session of Florida’s Legislature ended without any substantial piece of community association legislation becoming law. However, there are a few bills that passed into law that are of interest to community associations.

Every board and manager should be aware of new requirements in regard to an application for lease submitted by a servicemember, community residential homes, and private residential elevators.

Application for Tenancy by a Servicemember:

• If an applicant for lease is a servicemember, ALL Florida community associations must, within a seven-day period, notify the servicemember in writing of an application approval or denial and, if denied, the reason for denial. Absent a timely denial of the rental application, the landlord must lease the rental unit to the servicemember if all other terms of the application and lease are complied with. This requirement is not waivable under any circumstances whatsoever – even by the parties themselves! A “servicemember” is defined as “any person serving as a member of the United States Armed Forces on active duty or state active duty and all members of the Florida National Guard and United States Reserve Forces.”

Requirements for “Community Residential Homes”:

• A “community residential home” is a dwelling licensed to serve residents who are clients of the Department of Elderly Affairs, the Agency for Persons with Disabilities, the Department of Juvenile Justice, or the Department of Children and Families or licensed by the Agency for Health Care Administration which provides a living environment for 7 to 14 unrelated residents who operate as the functional equivalent of a family, including such supervision and care by supportive staff as may be necessary to meet the physical, emotional, and social needs of the residents. This new law establishes site requirements for community residential homes and provides that a community residential home may not be licensed within 1,200 feet of an existing community residential home.

Private Residential Elevators:

• All new elevators installed in private residences must have a clearance of no more than three (3) inches between the hoistway doors and the edge of a hoistway landing and must have certain doors and gates to withstand a specified amount of force and to reject a sphere of a specified size under certain circumstances.

Discharge of a Firearm:

• Any person who recreationally discharges a firearm outdoors in a residential area with a density of one (1) unit or more per acre commits a first degree misdemeanor, unless the discharge was to lawfully defend life or property, in performing official duties requiring the discharge of a firearm, the discharge does not pose a risk to life, safety, or property, or the discharge was accidental.

Repeal of Cohabitation Prohibition:

• Although not enforced in some time, the prohibition of cohabitation by unmarried men and women that was previously contained in Section 798.02, Florida Statutes, of the State’s criminal code, has been officially removed.

Changes Related to the Building Code and the Fire Prevention Code:

• Combined Local Appeals Board. Local boards created to address issues arising under the Florida Building Code or the Florida Fire Prevention Code may combine their respective appeals boards to create a single, local board. The combined local appeals board may grant certain alternatives or modifications through procedures outlined in NFPA 1, Section 1.4, but may not waive the requirements of the Florida Fire Prevention Code.

• Appealing Decisions. Any decision by the local fire official regarding application, interpretation, or enforcement of the Florida Fire Prevention Code or by the local building official regarding application, interpretation, or enforcement of the Florida Building Code, or the appropriate application of either code or both codes in the case of a conflict between the codes, may be appealed to a local administrative board.

• Joint Committee. All decisions of the local administrative board in regard to the application, enforcement, or interpretation of the Florida Fire Prevention Code, or conflicts between the Florida Fire Prevention Code and the Florida Building Code, are subject to review by a joint committee composed of members of the Florida Building Commission and the Fire Code Advisory Council, and decisions of the local administrative board related solely to the Florida Building Code are subject to review as set forth in Section 553.775, Florida Statutes.

• Minimum Radio Signal Strength for Fire Department Communications in High Rise Buildings. The local jurisdiction must determine the minimum radio signal strength for fire department communications in all new high-rise and existing high-rise buildings. Existing buildings are required to comply with minimum radio strength for fire department communications and two-way radio system enhancement communications by January 1, 2022.

• Minimum Fire Safety Standards for Existing Buildings. The local fire official may consider the fire safety evaluation systems found in NFPA 101A, Guide on Alternative Solutions to Life Safety, adopted by the State Fire Marshal, as acceptable systems for the identification of low-cost, reasonable alternatives. It is also acceptable to use the Fire Safety Evaluation System for Board and Care Facilities using prompt evacuation capabilities parameter values on existing residential high-rise buildings.

 

Each week, I receive a multitude of calls and e-mails from condominium association clients, and non-clients alike, regarding the fire safety retrofit requirements. The confusion arises because of a 2010 amendment to section 718.112 of the Florida Statutes which, prior to 2010, provided an opportunity to condominium associations whose condominium building was greater than 75 feet in height, to opt-out of the requirement to retrofit the condominium with fire safety sprinklers. Effective July 1, 2010, this legislation was amended to remove the 75 feet in height requirement, meaning that, at least insofar as Florida law is concerned, a plain reading of the legislation means that all condominium associations must either be prepared to undergo a fire sprinkler system retrofit, or opt-out of this requirement.

On the other hand, the Florida Fire Protection Code has continually provided that the Life Safety Code requires high-rise buildings (meaning buildings 75 feet in height or higher) to either undergo a fire sprinkler system retrofit or implement an Engineered Life Safety System.

While many learned association counsel, with whom I have discussed this matter, and I agree that the requirement to install the fire safety system retrofit and the ability to  opt-out was intended to apply to high–rise condominium buildings, the post 2010 legislation set out in chapter 718, Florida Statutes, more commonly referred to as the Condominium Act, requires all condominiums to be prepared to opt-out of the requirement to install the fire sprinkler system retrofit or initiate a permit application for the fire sprinkler system retrofit with local government showing that the retrofit will be complete by December 31, 2019. It is generally agreed that this was not the intended result.

Read the statute below and see what you think. Section 718.112(2)(l) of the Florida Statute provides, in relevant part, as follows:

Notwithstanding chapter 633 or of any other code, statute, ordinance, administrative rule, or regulation, or any interpretation of the foregoing, an association, residential condominium, or unit owner is not obligated to retrofit the common elements, association property, or units of a residential condominium with a fire sprinkler system in a building that has been certified for occupancy by the applicable governmental entity if the unit owners have voted to forego such retrofitting by the affirmative vote of a majority of all voting interests in the affected condominium. The local authority having jurisdiction may not require completion of retrofitting with a fire sprinkler system before January 1, 2020. By December 31, 2016, a residential condominium association that is not in compliance with the requirements for a fire sprinkler system and has not voted to forego retrofitting of such a system must initiate an application for a building permit for the required installation with the local government having jurisdiction demonstrating that the association will become compliant by December 31, 2019.

I have read articles on this subject whose authors take the position that condominiums below 75 feet in height need not be concerned with the requirement set out in section 718.112 (2)(l), above. Nevertheless, only judges have the ability to interpret Florida Statutes in this manner. Therefore, it is important for the board of directors of each condominium association to make their own decision as to whether they want to adhere to the requirements set out in Florida law. At a minimum, before a non-high-rise condominium (below 75 feet) decides that the relevant provisions of section 718.112, Florida Statutes, is not applicable to their condominium association, they should consult with both the association’s attorney and the local jurisdiction’s fire official. At the end of the day, there is no harm to the non-high-rise condominium choosing to take the opt-out vote. In the meantime, a committee of several attorneys is seeking clarification from the Division of Florida Condominium that the need to install the fire sprinklers or opt-out, etc., is applicable to only high-rise condominiums and not those below 75 feet.

IMPORTANT: Clearly, high-rise condominiums are affected by the requirement to retrofit or opt-out. But, here is what you may not realize and absolutely need to know: if your high-rise condominium votes to opt-out of the need to retrofit with a fire sprinkler system, then the Life Safety Code will require that condominium association to prepare an Engineered Life Safety System commonly referred to an “ELSS.” Therefore, before opting out of the need to retrofit the condominium with a fire sprinkler system, the association might consider comparing the costs.

Finally, some good news, according to the Life Safety Code, if your high-rise condominium building has exits from all of the units that lead directly to an outdoor corridor, then the condominium will not be required to install the fire sprinkler retrofit or an ELSS.

In an all too familiar story, the association’s board of directors has decided to authorize repairs due to neglected maintenance. Of course, not every association member is happy with the board’s decision. The rumor-mill is all a flutter and accusations are rampant. While the board knows it is doing the right thing, the “members group and opposition” is up in arms and out for blood. An official record request is received by the association. A member of the opposition group demands copies of all engineering opinions which provide that the maintenance is required along with all contracts associated with the project. The member writes in his request that he will call for an appointment to come by and pick up these records. The member doesn’t call. The association does not provide the records. In response, the member sues the association for failing to provide the records within the statutorily required time. Has the association done anything wrong?

In a court case similar to the above facts, Ridge Groves Condominium Association v. Misserville, a 2016 Florida Second District Court of Appeal case, a condominium unit owner, Michael Misserville, requested an appointment to inspect and copy a roster of all residents as well as the association’s insurance policies and stated that he would call sometime within the next five days to set the appointment. However, he never called to set the appointment to inspect and copy the requested records, and the association did not send him a copy of the records requested. Nevertheless, Misserville sued the association claiming that the association violated Florida law, more specifically, section 718.111(12)(c) of the Florida Statutes, which provides that if the association fails to provide a unit owner with records within ten business days of the request, then a rebuttable presumption is created that the association willfully failed to comply and damages can be awarded in favor of the aggrieved member.

It should be noted that all associations have the lawful right to adopt reasonable rules and regulations governing the frequency, time, location, notice, and manner of record inspections and copying. In the Misserville case, the association had adopted an official records request form which provided that the member must call for an appointment.

During the trial court portion of this case, the trial court found that there was no evidence that the association had adopted the rule governing the need for the member to set the appointment and, rather shockingly, found that the association was legally obligated to deliver the records. How the trial court could reach such a conclusion is beyond words because it is rather elementary that an association is never required to provide copies of requested records in response to a member’s official record request unless, somehow, the association had obligated itself to do so. Rather, the association’s only obligation is to provide a reasonable opportunity for the member to inspect the official records and make available for copying those records specifically requested within the statutory time period. The appellate court took notice that the association had actually copied all of the records requested and set them aside in the association’s office in anticipation of Misserville’s call. Further, the appellate court found that the trial court’s conclusion that the association failed to comply with the official record request was unsupported by both evidence and law and, therefore, that portion of the judgment was reversed in favor of the association.

While the Misserville case analyzed official records requests under Chapter 718 of the Florida Statutes, more commonly known as the Condominium Act, there are a few subtle differences between the official record request provisions set out in the Condominium Act as compared to the Homeowners’ Association Act under Chapter 720 of the Florida Statutes.

As to condominium associations, the records of the association must be made available to a unit owner within 45 miles of the condominium property or within the county in which the condominium property is located and within five business days after receipt of a written request by the board or its designee. The records can also be made available to the member on the property or the association may offer the option of making the records available to a unit owner electronically via the Internet or by allowing the records to be viewed in electronic format on a computer screen and printed upon request. The failure of the association to provide the records within ten business days after receipt of a written request creates a rebuttable presumption that the association willfully failed to do so in which case the owner is entitled to actual damages or minimum damages for the association’s willful failure to comply in the amount of $50 per calendar day for up to ten days beginning on the 11th working day after receipt of the written request.

As to homeowners’ associations, section 720.303(5), Florida Statutes, requires that the records must be made available to a member for inspection or photocopying within 45 miles of the community or within the county in which the association is located. Similar to the Condominium Act, the official records can also be made available for inspection in the community or at the option of the association, by making the records available to the owner electronically via the Internet or by allowing the records to be viewed in electronic format on a computer screen and printed upon request. After receipt by the board, or its designee, of a written request for official records, the official records must be provided within ten business days (as opposed to five business days for condominium associations).

As to another point of distinction, in order for a homeowners’ association member to be entitled to a rebuttable presumption that the association willfully failed to comply with the requirements regarding official record requests, the member MUST make their request by certified mail, return receipt requested. Note that there is no similar requirement for “certified mail, return receipt requested” in the Condominium Act. Similar to the Condominium Act, the homeowners’ association member who is denied access to the official records is entitled to actual damages or minimum damages in the amount of $50 per calendar day for up to ten days, beginning on the 11th business day after the board’s receipt of the written request.

While the Condominium Act does not have statutorily set costs that a condominium association can charge for providing copies of official records to a unit owner, the Homeowners’ Association Act provides that a homeowners’ association may impose fees to cover the cost of providing copies of the official records including the cost of copying and cost required for personnel to retrieve and copy the records if the time spent retrieving and copying the records exceeds one half hour and if the personnel costs do not exceed $20 per hour. Personnel costs may not be charged for record requests that result in the copying of 25 or fewer pages. The association may charge up to $0.25 per page for copies made on the association’s photocopier.

Both condominium and homeowners’ associations allow a member, or their authorized representative, to use a portable device including smart phone, tablet, portable scanner, or other technology capable of scanning or taking photographs to make an electronic copy of the official records in lieu of the association providing the member, or the member’s authorized representative, with a copy of the records and, in such event, the association cannot charge a fee to the member or the member’s authorized representative for use of the portable device.

With all of the above in mind, remember that your community association has the lawful right to adopt reasonable rules and regulations governing the frequency, time, location, notice, and manner of record inspections and copying of its official records. If your association hasn’t, why not?! It is simple enough to do and typically not very expensive. Any association that hasn’t already done so should reach out to the association’s lawyer for further discussion.

Like people, associations can have good days and bad days. Not too long ago, in December 2012, as a result of the Florida’s Fourth District Court of Appeal (4^th DCA) decision in U.S. Bank National Association v. Quadomain Condominium Association, Florida associations experienced a very bad day. By way of an overly simplistic explanation, the Quadomain case has been applied to effectively block an association from initiating an assessment foreclosure after a lender’s recording of its lis pendens, a notice of a pending foreclosure, where the association had not yet recorded its assessment lien. This was disastrous because, in practical application, it means that if the association had not yet recorded its lien before the lender’s recording of its lis pendens, the association was barred from foreclosing its assessment lien. In plain English, the recording of a lis pendens places the world on notice of the litigation concerning real property such that, if the property is transferred, the buyer takes the property subject to the outcome of the litigation.

Then, on June 29, 2016, Florida community associations had a very good day because of the 4^th DCA’s opinion in the case of Jallali v. Knightsbridge Village Homeowners Association, Inc., in which Kaye Bender Rembaum was instrumental as legal counsel for the appellee, Knightsbridge Village Homeowners Association, Inc. In Jallali, the 4^th DCA recognized that the association’s recorded interest related back to the date the association’s declaration is recorded, and once again, perfected an association’s right to foreclose, in spite of the lender’s recordation of its lis pendens.

Although the 4^th DCA’s judgment in Jallali is not yet final (because the appellant, Jallali, has 15 days to file a motion for rehearing), Kaye Bender Rembaum successfully argued that the association’s assessment lien foreclosure action was not barred by the lender’s pending mortgage foreclosure action, despite being commenced after the lender’s mortgage foreclosure action and thus, after the recordation of the lender’s lis pendens, because the association’s claim of lien relates back to the recordation of the declaration, which was recorded before the lender’s notice of lis pendens, and because the association’s assessment lien foreclosure action was against the owner and member of the association and not the superior interest of the lender.

In order to understand the 4^th DCA’s discussion and determination in Jallali, it is necessary to know what happened in Quadomain. In Quadomain, the lender recorded its lis pendens and commenced foreclosure of its mortgage. While the lender’s mortgage foreclosure action was underway, the owner of the property died, and the unit transferred to the owner’s heirs. Once the lender found out about the owner’s passing, the lender recorded a supplemental notice of lis pendens to name the new owners in the mortgage foreclosure action. After the lender recorded the supplemental notice of lis pendens, the association recorded its assessment lien against the lender (who had obtained a certificate of title against the deceased owner) and commenced foreclosure of its assessment lien against the lender.

The 4^th DCA in Quadomain held that the association’s assessment lien foreclosure action was barred due to the lender’s pending mortgage foreclosure action based upon the 4^th DCA’s application of section 48.23 of the Florida Statutes, which provides that the recording of an active notice of lis pendens against a property constitutes a bar to the enforcement of an unrecorded interest in the property unless the holder of the unrecorded interest intervenes in the pending foreclosure action within 30 days after the notice of lis pendens is recorded. Because of the length of time it may take for lender mortgage foreclosure actions to reach final conclusion, the use of the decision in Quadomain has been problematic for associations whose assessments have gone unpaid during the lender’s mortgage foreclosure action.

However, to the sheer happiness of associations throughout this great State, the Quadomain decision was clarified (some folks might say, “corrected”) by the 4^th DCA in Jallali. Similar to the facts in Quadomain, in Jallali, the lender recorded a notice of lis pendens and commenced foreclosure of its mortgage. While the lender’s mortgage foreclosure action was pending, the association recorded its assessment lien against the owner and successfully foreclosed its assessment lien against the owner. On appeal, the owner, relying on Quadomain, argued that the association’s assessment lien foreclosure action was barred because of the lender’s pending mortgage foreclosure action. The 4^th DCA, distinguishing the Jallali case from the Quadomain case, and rightfully so, held that the lender’s recording of a notice of lis pendens does not bar the association’s subsequent assessment lien foreclosure action against the owner where the association’s lien is imposed under the association’s declaration which was recorded before the lender recorded its notice of lis pendens. Additionally, the 4^th DCA provided that section 48.23 of the Florida Statutes was intended to protect the lender, not the delinquent homeowner.

Germaine to the 4^th DCA’s decision was language in the Knightsbridge Village’s declaration that all liens, once recorded, relate back to the date that the declaration was initially recorded. Not all declarations contain this relation back language. Does yours? If not, the board should discuss amending the declaration to include the “relation back” language with the association’s lawyer.

Pursuant to section 83.683 of the Florida Statute, if an applicant for lease is a servicemember ALL Florida community associations must, within a seven-day period, notify the servicemember in writing of an application approval or denial and, if denied, the reason for denial. Absent a timely denial of the rental application, the landlord must lease the rental unit to the servicemember if all other terms of the application and lease are complied with. This requirement is not waivable under any circumstances whatsoever – even by the parties themselves! A “servicemember” is defined as “any person serving as a member of the United States Armed Forces on active duty or state active duty and all members of the Florida National Guard and United States Reserve Forces.”

On a different note, Florida law is very specific in terms of a condominium association’s ability to charge an application fee to prospective owners and tenants. As of late, the news is reporting that, as to those condominium associations and management companies that have been charging more than allowable fee, they could find themselves a named defendant in a class action lawsuit in the not-too-distant future. Here is what you need to know.

 

Apparently, more than a few condominium associations believe that they can charge additional fees for such things as, to name just a couple, credit reports and criminal background checks. Even certain management companies, acting as the agent of the condominium association, believe that they can charge a separate fee, too. This is simply not the case, and such action violates Florida law.

Section 718.112(i) of the Florida Statutes is patently clear. No charge shall be made by a condominium association in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless i) the association is required to approve such transfer and ii) a fee for such approval is provided for in the declaration, articles, or bylaws. Any such fee may be preset, but in no event may such fee exceed $100 per applicant other than husband/wife or parent/dependent child, which are considered one applicant. However, if the lease or sublease is a renewal of a lease or sublease with the same lessee or sublessee, no charge shall be made. In addition, the condominium association may, if the authority to do so appears in the declaration or bylaws, require that a prospective lessee place a security deposit, in an amount not to exceed the equivalent of one month’s rent, into an escrow account maintained by the association.

If the condominium association’s expenses in obtaining credit and criminal history reports exceeds the $100.00, the association bears the additional expense. Adding insult to injury, some management contracts provide that any fee charged by the association in connection with the sale or lease application is fully earned by the management company. In those instances, the condominium association does not even gain the benefit of the $100.00 fee to offset its expenses. What does your association’s management contract provide?

Until now, failing to make timely assessment payments could lead to additional charges for late payment fees, interest charges, collection fees, and may even result in the filing of a lien against your property and foreclosure of the recorded lien. However, delinquent assessments rarely show up in the member’s credit report, unless the debt becomes a matter of public record (e.g., an assessment foreclosure) or the debt is reported to the credit bureaus by a collections agency.

While residential in character, operating a community association is still a business. In fact, the Community Association Institute reported in its 2014 Statistical Review that of the approximately 333,000 community associations in the United States, community associations and property management companies collect approximately $70 billion in assessment payments each year. Until now, a member could miss a $30.00 minimum credit card payment and be penalized with a lower credit score, but if that same member was thousands of dollars delinquent in his or her assessment payments, it would not negatively affect their credit score, unless formal collections actions are taken by the association, such as turning over the delinquent account to a collections agency which reports the debt to the credit bureaus or a judgment of foreclosure is ordered against the owner. Well, this great injustice is about to change.

Typically, reporting debts to credit reporting agencies requires membership to the credit bureaus. This is a strict and costly process. However, it is sometimes possible for community association related debts to appear on a member’s credit report because the credit reporting agencies have employees which comb the public records for this type of information, including accounts with collections agencies, civil money judgments, and foreclosures. Once this debt appears on the member’s credit report, their credit score is severely lowered by as much as 300 points in the case of an assessment foreclosure.

Until recently, late assessment payments did not affect a member’s credit report or credit score. However, non-traditional credit data sources, including community association assessment payments, will soon begin to regularly appear on credit reports, and a missed payment will negatively affect credit scores. Equifax Inc. (“Equifax”), one of the three major credit reporting agencies, has recently entered into an agreement with Sperlonga Data & Analytics (“Sperlonga”), a data aggregation business for non-standard credit data sources, and will soon take into account community association assessment payments.

Homeowners who are late on assessment payments should expect to see a negative effect on their credit report and credit score. Similarly, homeowners who make timely assessment payments may soon see a positive effect on their credit report and credit score. A test run of the new community association assessment reporting will begin in August 2016 with full reporting planned for October 2016.

As stated by Matt Martin, chairman and founder of Sperlonga, “Until now, HOA payments have gone largely unreported to the national credit reporting agencies. Our service will help elevate association payments to the same level of importance as the consumer’s other financial obligations like residential mortgages, auto loans and credit card payments. Property owners that pay HOA fees on time should begin to see the similar impact to their credit reports as they would with other payment obligations traditionally found in a credit report, while associations and property management companies should begin to see reduced delinquencies and improved cash flow. Our goal is to empower homeowner associations and management companies with the same credit reporting tool that banks and lenders already use to manage consumer debt and credit-related payments.”

Mike Gardner, senior vice president and sales leader at Equifax, has stated, “Equifax is committed to providing consumers with additional means for building their credit histories. Introducing new sources of data beyond what has traditionally been found on credit files can provide additional insight into a consumer’s financial behavior and help deliver expanded credit access.”

Critics of the new community association assessment reporting argue that assessments are not the same types of debt as mortgages or other loans because associations do not provide financing for purchased goods, they provide property maintenance and services only. In this instance, the critic’s arguments of this new aspect to credit reporting is completely meritless. Simply put, if a member does not want to see their credit score go down, then they should pay their assessments on time. This type of credit reporting is long overdue and should be welcomed by community associations throughout Florida and the rest of the United States.

Both Chapter 373, Florida Statutes, regarding Florida’s water resources, and Chapter 720, Florida Statutes, regarding homeowners’ associations, provide for the use of Florida-friendly landscaping in promoting the efficient and clean use of water resources. “Florida-friendly landscaping,” otherwise known as “xeriscaping,” means using low-maintenance plants and environmentally sustainable practices to save residents money and to protect Florida’s natural resources by creating quality landscapes that conserve water, protect the environment, are adaptable to local conditions, and are drought tolerant. The principles of Florida-friendly landscaping include planting the right plant in the right place, efficient watering, appropriate fertilization, mulching, attraction of wildlife, responsible management of yard pests, recycling yard waste, reduction of storm water runoff, and waterfront protection. Additional components include practices such as landscape planning and design, soil analysis, the appropriate use of solid waste compost, minimizing the use of irrigation, and proper maintenance. But this does not entitle a homeowner to ignore their community’s architectural approval provisions.

Both Chapters 373 and 720, Florida Statutes, provide that a covenant cannot prohibit or be enforced so as to prohibit any owner from implementing Florida-friendly landscaping on their land or create any requirement or limitation in conflict with any water consumption provision, rule, or regulation. Occasionally, a homeowner may interpret this language to mean that their homeowners’ association cannot enforce the landscaping covenants set out in their community’s declaration. However, this is simply not the case.

Let’s get something straight, the Florida-friendly landscaping provisions of Chapters 373 and 720, Florida Statutes, do not prohibit a homeowners’ association from enforcing its architectural review and approval procedures as proscribed by its declaration of covenants, nor do they prohibit a community association from limiting or prohibiting the use of certain landscaping materials, including the use of turf alternatives, for example, rock lawns and wooden decks, in furtherance of its obligations to promote the ascetic quality and value of its community.

In fact, the Florida-Friendly Landscaping Model Covenants, Conditions and Restrictions for New and Existing Community Associations, prepared by the University of Florida, Department of Environmental Horticulture for the Florida-Friendly Landscaping Program, in conjunction with the Florida Department of Environmental Protection, proposes model covenants, conditions, and restrictions which require owners to obtain the prior written approval of the homeowners’ association prior to the installation of any landscaping, including Florida-friendly landscaping.

This being the case, in a homeowners’ association which requires that an owner obtain the approval of the homeowners’ association to make architectural changes to their lot, an owner who wishes to install landscaping, even Florida-friendly landscaping, on their lot must first obtain the approval of the homeowners’ association. Failing to get the approval of the homeowners’ association before installing the landscaping could lead to the removal of the unapproved landscaping, fines, common area use right suspensions, and individual assessments, causing unnecessary grief and expense to both the owner and the homeowners’ association.

While the Florida-friendly landscaping legislation came into being in 2009, these laws apply retroactively. The law provides that conserving and protecting the state’s water resources is a “compelling public interest” and “that the participation of homeowners’ associations and local governments is essential to the state’s efforts in water conservation and water quality protection and restoration.” When government relies on its “police powers” (a/k/a to protect the health, safety, and welfare of our citizens), then the law in question applies without regard to the otherwise necessary “impairment of existing contract” analysis.

Although the Florida-friendly landscaping laws have been effective for many years now, and have retroactive application, some homeowners’ associations have not yet adopted landscaping standards which take Florida-friendly landscaping principles into consideration. If your community has not done so, then the Board should consult its lawyer to further discuss incorporating Florida-friendly landscaping into your governing documents.

Most commonly, when a community association is faced with a Fair Housing Act complaint, it is with regard to “reasonable accommodation” issues such as a request for an emotional support animal. Less common are Fair Housing Act complaints based on failure to grant a “reasonable modification” such as the need for the construction of a ramp so a wheelchair bound person may have access to the clubhouse. While failure to grant both reasonable accommodation and modification requests continue to dominate the Fair Housing Act landscape, the presence of “sober homes” throughout South Florida, particularly in Palm Beach County, is becoming a great public concern as well.

In most instances, sober homes are afforded protection under the Fair Housing Act. They are known by other names, too, such as halfway houses, group homes, recovery residences, etc. Sober homes are homes located in single-family communities which house multiple recovering drug and alcohol addicts in, what is hopefully, their final steps to sober living. While a well-run sober home can go unnoticed, a poorly supervised sober home can cause severe disruption in an otherwise tranquil community association causing the board to deal with such issues as littering, noise, parking problems, break-ins, thefts, and even drug and suicide related deaths.

Although zoning ordinances and a community’s covenants may require that a community contain single-family residences only, these requirements are trumped by the federally legislated Fair Housing Act, which makes it unlawful for a housing provider, including community associations, to discriminate in the sale or rental of dwellings based on race, color, national origin, religion, sex, familial status, or disability. Because drug and alcohol addiction is classified as a disability, community associations may find themselves forced to make reasonable accommodations to their covenants to allow sober homes to exist within their communities.

The existence of sober homes in single-family communities, and the fear that sober homes may appear, has caused many residents to speak up and reach out to local government officials who are similarly restrained by federal laws. Although local government officials are restrained by the Fair Housing Act in this regard, hopefully the collective voices of Palm Beach County residents and government officials have been heard by the U.S. Department of Housing and Urban Development (HUD), the federal agency charged with the administration of the Fair Housing Act.

As published in the Palm Beach Post on Monday, May 2, 2016, by Staff Writer, Joe Capozzi, HUD’s Assistant Secretary, Gustavo Velasquez, recently toured some of the sober houses in Delray Beach and met with about 30 local government officials regarding the prevalence of sober homes. HUD plans to issue a Joint Statement together with the U.S. Department of Justice (DOJ) as early as August of this year to provide guidelines for towns and cities desiring to enact ordinances intended to regulate the presence of sober homes in their communities.

As reported in Mr. Capozzi’s Palm Beach Post article, Congresswoman Lois Frankel, who organized the meeting with HUD, said “We are hoping to get from them some further guidance that will allow the cities [and] local governments to craft ordinances or laws that can balance the legal protections for people with disabilities and the ability for people to live in safe healthy neighborhoods.”

While the meeting between local government officials and HUD was not open to the public, some insight was given as to what may be set out in the forthcoming Joint Statement. As reported, the guidance provided by HUD and the DOJ may provide a distinction between occupants of a sober home and the companies that operate them and may provide clarification as to what is considered to be a “fundamental change in the character of a neighborhood.” As always with Fair Housing Act issues, the determination of what is an appropriate action with regard to a sober home will likely be determined on a case-by-case basis. If your community is faced with dealing with a sober home, before taking any action, the board should discuss the situation with the association’s lawyer.