Author: rembaumlaw

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.

Members of a Florida community association have a statutory right to access their community association’s “official records”, subject to limited exceptions, including for example, records protected by the attorney-client privilege and records containing a member’s medical information. Both Chapter 718 and Chapter 720 of the Florida Statutes, regarding condominium associations and homeowners’ associations, respectively, provide that association members have the right to inspect the official records of the association, which includes the right to make or obtain copies, often at the member’s expense. The failure to timely respond to such a request can lead to statutory damages.

In the event a community association fails to timely make its official records available to a requesting member within 10 days of the request, a rebuttable presumption of the association’s willful failure to comply with an official records request is created which can subject the association to a claim for damages, too. That said, many times the same mistake is made when seeking to obtain copies of desired official records – the member requests the association send them copies of the desired official records rather than requesting an inspection of the official records.

Imagine this scenario, a member of a condominium association sends a letter to the manager of their condominium association requesting copies of the association’s repair records regarding repairs which were recently conducted by the condominium association to the member’s balcony, be sent to him within the statutory timeframe. Weeks pass, and the unit owner never received the copies of the requested official records. Using the force of Chapter 718, Florida Statutes, as his sword, the member sends the manager of the condominium association another letter, this time erroneously demanding the copies be provided to him together with the full amount of statutory damages for failing to timely respond which can be $50.00 per day up to $500.00, or actual damages.

While the member’s frustration is understandable, because damages for the association’s failure to timely make its official records available to the member are statutorily provided, the language of the statute regarding the inspection and copying of an association’s official records must be “strictly construed,” meaning that the statute is interpreted solely based upon the language of the statute.

Due to this strict construction of the statute, many arbitration decisions of the Division of Florida Condominiums, Timeshares, and Mobile Homes (the Division) have held that when request is only made for copies of official records, instead of requesting access to inspect the official records, then the request is not in compliance with the requirements of Chapter 718, Florida Statutes, and therefore, is not subject to the timing requirement and monetary penalty of the statute. A few examples of the Division’s arbitration orders follow:

• The demand by the unit owner’s attorney for minutes, accounting records, receipts and expenditures, and financial reports of the association was not a request for inspection; therefore, the arbitration case was dismissed. Franklin v. Village Square Condominium Association, Inc., Arb. Case No. 2012-02-1447, Final Order Dismissing Petition without Prejudice (May 16, 2012).
• The unit owner’s e-mail request to provide copies of specified documents was not a request for inspection of official records; therefore, the arbitration case was dismissed. Federico v. Mariner Pointe Condominium Association, Inc., Arb. Case No. 2011-04-1330, Final Order of Dismissal (Aug. 23, 2011).
• The plain language of the statute does not require condominium associations to provide copies on demand or any particular form of copies; it is limited to providing access upon request, with an opportunity for the requestor to make copies. Lee v. Winston Towers 100 Association, Inc., Arb. Case No. 02-4897, Final Order (Jan. 3, 2003).
• In order to fall within application of the statute, a unit owner must request an opportunity to inspect official records. The unit owner requested that certain documents be mailed to him which did not comply with the statute; therefore, the unit owner’s request for statutory damages was denied. Bolt v. Bayshore Terrace Condominium Inc., Arb. Case No. 2010-04-6107, Summary Final Order (November 10, 2010).

Further, an association is not required to research its official records and cherry-pick those records requested by members. Notwithstanding the form of the member’s official records request, an association may comply with a member’s request by having a copy of its official records available for inspection or copying within the community, within 45 miles of the community, or within the county in which the community is located, or the association may offer the option of making the records available to a member on the internet or by electronic format on a computer screen and printed upon request. Remember, too, that an association can adopt reasonable rules and regulations governing the inspection such as where the request must be delivered, and the length of a member’s inspection so long as the inspection is not limited to less than one, eight hour day per month.

Anyone who believes that big government does not already intrude too far into the lives of the citizenry of the United States of America will be even more disgusted with the U.S. Department of Housing and Urban Development’s (“HUD”) General Counsel’s April 4, 2016 advisory opinion where HUD most clearly provides felons more rights than non-felons under the Federal Fair Housing Act (the “Act”). That’s right, the same Federal Agency that has allowed an ever growing, over-abundance of assistance animals into your “no-pet” or otherwise restricted pet community has thrown us another curve ball aimed at further restricting the right of a community association to determine its newest residents.

Generally, the Act prohibits discrimination in the sale, rental, or financing of residences, and in other housing-related activities, on the basis of race, color, religion, sex, disability, familial status or national origin. As recently upheld by the United States Supreme Court, a claim for a violation of the Act based on “disparate impact” is permissible. Such a claim occurs where the application of a seemingly neutral policy or procedure has a discriminatory effect on a particular group of people on the basis of race, color, religion, sex, disability, familial status or national origin.

HUD’s most recent opinion begins by providing statistics such as “100 million U.S. Adults (1/3 of the population) have a criminal record of some sort, the prison population of 2.2 million is the largest in the world, 650,000 individuals are released from prison each year, and over 95% of those incarcerated will be released at some point. African Americans and Hispanics are convicted and incarcerated at rates disproportionate to their share of the general population.” Therefore, HUD reasons that criminal record-based barriers to housing are likely to have a disproportionate impact on minority home seekers.

On April 4, 2016, HUD issued guidance from its Office of the General Counsel regarding the application of the Act on the use of criminal arrests and convictions by housing providers, which includes community associations, to screen potential purchasers and renters. This guidance issued by HUD provides, in its conclusion, that:

Because of widespread racial and ethnic disparities in the U.S. criminal justice system, criminal history-based restrictions on access to housing are likely disproportionately to burden African Americans and Hispanics. While the Act does not prohibit housing providers from appropriately considering criminal history information when making housing decisions, arbitrary and overbroad criminal history-related bans are likely to lack a legally sufficient justification. Thus, a discriminatory effect resulting from a policy or practice that denies housing to anyone with a prior arrest or any kind of criminal conviction cannot be justified, and therefore such a practice would violate the Fair Housing Act… Selective use of criminal history as a pretext for unequal treatment of individuals based on race, national origin, or other protected characteristics violates the Act.

In arriving at this conclusion, HUD discusses the three element standard by which criminal history-based screening provisions are evaluated:

1) Whether the Criminal History Policy or Practice Has a Discriminatory Effect: Under this element, an aggrieved person must show that the application of criminal history-based screening results in a disparate impact on a group of people based on their race or national origin. Typically, this is shown by the use of statistical data and is determined on a case-by-case basis.

2) Whether the Criminal History Policy or Practice is Necessary to Achieve a Substantial, Legitimate, Non-discriminatory Interest: A community association is responsible for promoting the health, safety, and welfare of its members. Most, if not all, board members would agree that keeping criminals out of their communities is in furtherance of this responsibility. However, in the event of challenge, HUD will require that the association present “reliable evidence that its policy or practice of making housing decisions based on criminal history actually assists in protecting resident safety and/or property.” As such, HUD will require an association to prove a negative, meaning an association will have to somehow show that its community is safer because its criminal-history based screening has kept the criminals out. How HUD expects an association to prove this remains a mystery.

3) Whether There Is a Less Discriminatory Alternative: In this final element, an aggrieved person must show that the association’s interest (established in the second element) could be served by a less discriminatory practice, meaning is there a way the interest can be met by further limiting and qualifying the use of criminal history information? HUD provides that these qualifying factors may include, “the facts or circumstances surrounding the criminal conduct; the age of the individual at the time of the conduct; evidence that the individual has maintained a good tenant history before and/or after the conviction or conduct; and evidence of rehabilitation efforts.”

An Exemption: A community association will not be liable under the Act for refusing a sale or lease to a person with a prior conviction for “drug manufacturing or distribution” regardless of any discriminatory effect it may create. Why? Because section 807(b)(4) of the Act does not prohibit conduct taken against a person who has done so. This exemption does not lend itself to mere “possession” crimes.

Practical Application of HUD’s April 4, 2016 Opinion: When drafting sales and leasing approval rights for an association, consider including a list of factors that “may” be considered. The word “shall” should be avoided to provide better decision making flexibility. As to convictions, to stay on the safer side of HUD’s latest opinion, boards of directors should only consider disapproving a sale or lease to recent convictions of only the most egregious crimes, otherwise known as crimes of moral turpitude, such as a felony involving violence to persons or property or a felony demonstrating extreme dishonesty.  If your community’s governing documents assert an outright ban against approving a sale or lease for anyone with a criminal history, then such language should be amended as soon as possible.

Why HUD does not take into account the personal choices that led to the person’s incarceration will always be a mystery. We do not need HUD to go out of its way to protect the rights of convicted felons. What we need are criminal justice laws that make better sense.

Which residential condominium associations are required to install a fire sprinkler system in their condominium building or, in the alternative, hold a vote for the members to opt out of the requirement to install the fire sprinkler system? Does the requirement to install the fire sprinkler system apply to all residential condominium buildings regardless of height, or does it refer to only those residential condominium buildings that are considered “high-rise” buildings? Rarely has there been so much confusion.

First, some background. The Florida Fire Prevention Code, as further discussed in Florida Statute Chapter 633, is based, in large part, upon the National Fire Protection Association Fire Code (referred to as “NFPA 1”) along with the Life Safety Code (referred to as “NFPA 101”). Chapter 31, Section 3.5.11 of the Life Safety Code, as amended by the Florida Fire Prevention Code, requires all “high-rise” buildings to be protected by an approved, automatic fire sprinkler system no later than December 31, 2019. The Florida Fire Prevention Code allows an “Engineered Life Safety System” as an alternative to the fire sprinkler system.

The section of law that is causing confusion is Florida Statute section 718.112 (2)(l). As you read the following provision, ask yourself whether you believe it applies to all residential condominiums, or only to “high-rise” buildings. This section of Florida law provides, in relevant part that, “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.” Sadly, and candidly quite obvious given the number of reader emails I received on the subject, this section of the Condominium Act does not provide the necessary clarity to answer this question: Must every residential condominium either install fire sprinkler systems or hold a vote of the owners to opt out, or do the fire sprinkler requirements only apply to condominium associations whose residential condominium building(s) are considered “high-rise” buildings?

Simply put, while this section of the Condominium Act does not provide that it specifically applies only to “high-rise” buildings, the actual requirements, as set out in the Life Safety Code, more specifically the NFPA 101 Chapter 31, Section 3.5.11, only requires the installation of the fire sprinkler system in what is referred to as “high-rise” buildings. The NFPA 101 defines the term “high-rise building” as any building where the floor of an occupiable story is greater than 75 feet above the lowest level of fire department vehicle access. In other words, without directly saying so, it appears that Florida Statutes section 718.112 (2)(l) was designed to function in parity with the relevant provision(s) of the Florida Fire Prevention Code. When section 718.112(2)(l) is read together with Chapter 31, Section 3.5.11 of the Life Safety Code, it is pretty obvious that the fire sprinkler system requirements and the condominium association opt-out procedures only apply to “high-rise” buildings.

Adding to the confusion is that earlier versions of section 718 112 (2)(l) provided, “[f]or purposes of this subsection, the term ‘high-rise building’ means a building that is “greater than 75 feet in height where the building height is measured from the lowest level of fire department access to the floor of the highest occupiable story.” Later, this text was amended out of the statute.

So, what is the bottom line? Does a condominium association whose buildings are not considered “high-rise” buildings have to install fire sprinkler systems or opt out by taking the necessary vote prior to December 31, 2016? While it seems clear that the fire sprinkler provisions do not apply to non -“high-rise” buildings, any unqualified person’s opinion may or may not be a correct opinion when later judicially challenged. Sometimes even the clearest points of law become all muddled up in the courtroom. Imagine a situation where a non-“high-rise” building experiences a catastrophic fire, and great harm is caused to both person and property. It would not be at all surprising for any resulting lawsuit brought by the injured’s attorney to include a claim for breach of fiduciary duty against the association and its board members for failure to install the fire sprinkler system or to have taken the requisite vote of the owners to opt out of the installation requirement. With that in mind, there is only one way to gain the clarity needed.

NON- “HIGH RISE” CONDOMINIUMS: In order to have certainty as to whether your non-“high-rise” condominium is required to install a fire sprinkler system or take the vote to opt out, an opinion of a qualified professional is needed. In this instance, it would be miraculously wonderful if the State Fire Marshall would issue a public statement. Absent that, an association should make inquiry to the Bureau of Fire Prevention, Division of State Fire Marshall, or their local Fire Marshall. Your association’s attorney should be able to assist in facilitating this communication for you.

“HIGH RISE” CONDOMINIUMS: By December 31, 2016, the “high-rise” condominium that is not in compliance with the requirements for a fire sprinkler system and that 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. The automatic sprinkler system is not required if the members voted to opt-out. It is also not required when every dwelling unit has exterior exit access which can include balconies, porches, and rooftop decks under certain circumstances. In addition, the automatic sprinkler system is not required in buildings having an approved engineered life safety system designed by a professional engineer that specializes in fire and life safety design. If a board believes their condominium is exempt for the forgoing reasons, then it should consult with a qualified fire safety engineer, State Fire Marshall or other qualified individual to render such opinion.

What started with a loud bang, ended on March 11, without so much as a fizzle.

The 2016 legislative session which ended on March 11, started out 60 days earlier with a flurry of activity insofar as Florida’s community associations are concerned. This year’s proposed legislation included such measures as capping estoppel fees, strict requirements as to when estoppels must be issued and how they were to be paid for, mandatory websites for condominium associations with greater than 500 units and homeowners’ associations with greater than 7,500 parcels, requirements for delinquent assessment agreements that served to only protect the deadbeat owner who failed to pay their fair share of assessments, new requirements for director and officer conflicts of interest, requirements for homeowners’ associations to notice all of its committee meetings, requirements that would have prohibited associations from enforcing speed limits on association property, new requirements that would have made it significantly more difficult for homeowners’ associations to regulate leasing of parcels, strict requirements for the time of day in which a homeowners’ association election could take place, requirements that all future legislative amendments to Chapter 718 would apply to all condominiums throughout the state, new certified written inquiry requirements for condominium associations, prohibitions against a condominium association’s approval of transfer of title unless there was evidence of a significant security interest, and finally, a massive bill which would have revamped all of the community association legislation presently in existence to mirror one another and which would have required homeowners’ associations to come under the jurisdiction of a Florida agency to be retitled the Division of Florida Condominiums, Homeowners’ Associations, Timeshares, and Mobile Homes.

Lawyers and lobbyists on both sides of the aisle worked to have these measures passed into law, to temper many of these unreasonable proposed legislative initiatives, and in many instances, to defeat these initiatives, too. Yet, during this year’s legislative session it seemed as though many of the aforesaid proposals were destined to become law. Surprisingly, Florida’s legislators, to the significant benefit of association members everywhere, got bogged down in other more pressing matters, such as the Governor’s proposed tax cuts, and none of the these community association initiatives were passed into law.

Yes, I’ll say it again, NONE OF THESE INITIATIVES WERE PASSED INTO LAW!

Of possible interest to condominium associations is a new law set out in House Bill 535 which provides that “the local fire official can consider low-cost reasonable alternatives” but it is debatable whether it is applicable to the already existing requirement that by December 31, 2016, a residential condominium association that is not in compliance with the requirements for a fire sprinkler system and that has not voted to forego retrofitting of such a system must initiate an application for a building permit for the required fire sprinkler system retrofit installation with their local government demonstrating that the association will become compliant by December 31, 2019. Associations should contact their legal counsel to discuss whether your association is required to address the fire sprinkler retrofit by December 31, 2016 because it likely will require a vote of the membership by December 31, 2016 to opt out of the retrofit requirement.

Your chance to make a difference: As to the 2017 Legislative Session, it is time to revisit a condominium association’s ability to require hurricane protection and the process governing such procedures. Please provide me with any comments you may have regarding the requirements legislating a condominium association’s ability to require hurricane shutters such as, for example, whether an owner can install different protection, whether an owner should be forced to pay for new protection if they already have code compliant protection where the association opts to install different code compliant protection, etc. Most especially, if your condominium association installed hurricane protection throughout the condominium, please provide me with any comments that you may have as to what would have made the process a better experience. Please direct all of your comments and suggestions directly to me at [email protected].