Author: rembaumlaw

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 jrembaum@kbrlegal.com.

Florida law is patently clear. 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. So, if your condominium association does not want to incur this expense, then the association must act now, before it is too late, by presenting an option to its members to opt-out of this requirement by the December 31, 2016 deadline which will be here before you know it.

Section 718.112(2)(l), Florida Statutes allows an association to vote to forego the retrofitting of the fire sprinkler system upon the approval of a majority of the entire membership (not a majority of a quorum). The vote may be undertaken at a duly-noticed membership meeting or by the written consent process in lieu of having a membership meeting. Voting by written consents or written agreements may be utilized by an association regardless of whether the bylaws or the declaration specifically permit voting by written consents or written agreements. On the other hand, if a membership meeting is held, fourteen (14) day advance written notice must be sent to the entire membership by mail or hand-delivery. If the vote is successful, then the vote to forego the retrofit is only considered effective when the certificate attesting to the vote is recorded in the public records of the county where the condominium is located.

In addition, if the vote to forego the retrofit is approved by the unit owners, the condominium association must also send written notice to the entire membership of the outcome within 30 days of the vote. Further still, the providing of this notice must be evidenced by an affidavit executed by the person sending the notice and kept with the condominium association’s official records. As the last step to this process to opt out of the need to retrofit, the condominium association must also report the results of the vote and recording of the certificate to the Division of Florida Condominiums, Timeshares, and Mobile Homes (the “Division”).

If by December 31, 2016, a majority of the members of the condominium association do not vote in favor of approving to forego the retrofit, the association must submit a building permit application with the applicable local governmental authorities on or before December 31, 2016 regarding its intent to comply with the applicable fire and life safety codes. Then, the retrofit of the condominium must be completed by December 31, 2019. In addition, if a condominium association undertakes retrofitting of its condominium, then the condominium association is also statutorily required to report the per-unit cost of the retrofit work to the Division.

In the event a condominium association has previously voted to forego the retrofit, and now wants to reverse that decision, the membership has the ability to vote to require the retrofit at a membership meeting. The affirmative vote of all of the members is needed in order to require the retrofit. The vote to require the retrofit may only be called once every three (3) years, and electronic transmission cannot be used to provide notice of the membership meeting.

In rendering your decision to retro fit or to not retrofit, ask yourself whether you would rather live in a condominium building with up-to-date life safety equipment. Even though it might be a costly project, in the rare circumstance it is needed, it is worth more than a billion dollars when your life is at stake. In fact, some might say that the decision to go ahead with the fire sprinkler retrofit is priceless.

When Florida’s legislature is in session, there is never a shortage of topics to write about. House Bill 1357 (“HB 1357”) is no exception. It is another overreaching piece of legislation that will only serve to make assessment debts harder to collect and will cause association assessments to increase in order to comply with its overreaching and micro-managing requirements. HB 1357 is inartfully conceived. There is no intent to criticize anyone that participated with HB 1357, but rather to point out the many problems that will be created should such an ill-conceived legislative effort be passed into law.

Statutorily Required Websites: Condominium associations with 500 or more units and homeowners’ associations with 7,500 or more parcels must create and maintain a legislatively required website which mandates stringent, onerous, and, quite candidly, obnoxious requirements as to what must be contained and continually updated therein. If a community desires to spend its assessment revenues in this manner, then that should be a decision for each individual community and not mandated by the State. Unnecessary litigation will ensue by every unhappy association member who believes that their association’s website does not contain the information as required by statute. This legislation will require associations to engage the service of yet another professional requiring significant payment for services rendered. In some instances, it could even require a full-time dedicated IT/website employee in order to maintain HB 1357’s ongoing posting requirements. If passed into law, it would only be a matter of time until some other legislature makes these requirements applicable to each and every community association in the State, regardless of their size.

Impediments to Collection of Past Due Assessments: Regarding the collection of past due assessments by condominium and homeowners’ associations, the decision of the association to take legal action to collect unpaid assessments or to use a third-party to collect unpaid assessments should not be dependent upon whether the Association has complied with new statutory obligations that require newly written collection policies that mandate when payment plans can be considered, their terms, inclusive of a mandated six month payment plan. The entire scope of the association’s collection regime should be set out in its declaration and not by way of a separate statutorily required written collection policy. The ability of a community association to offer a payment plan is unique as to each request made by an association member. The association must have complete flexibility in terms of structuring such payment plans and the factors for consideration of such plans and should not be subject to stringent requirements as would be required by this legislation which clearly removes the ability of an association to have the necessary discretion needed to create flexible payment plans. In and of itself, this legislation will impede the ability of an association to readily collect past due debts and will increase every association’s legal fees by requiring the adoption of yet another collection policy. It will create significant impediment to the collection of past due assessments.

Conflicts of Interest: Regarding condominium and homeowners’ association director and officer conflicts of interest, all sorts of new disclosures and procedures are creating conflicts of interest that may occur when the association may hire an officer, director or other relative of a director or officer. The use of the term “relative of a director or officer” is fully undefined and most problematic. Does this mean that a board member’s wife’s fourth cousin once removed on her grandmother’s uncle’s side of the family is included within the scope of the term “relative”? In terms of the board’s ability to remove a director or officer who violates the conflict of interest legislation, HB 1357 provides the board the unquestionable and incontestable ability to remove a sitting board member without any avenue of redress for that board member to dispute the findings of the board. This will create an unjust, unfair result. It is only a matter of time until an a board of directors majority, unhappy with a fellow board member, makes false accusations against such board member and removes them using this legislation as a pretext to do so.

HOA Committee Meetings: This part of HB 1357 completely revamps the homeowner associations’ need to notice committee meetings. At present, the need to notice committee meetings is quite different for condominium versus homeowner associations. In short, all condominium association committee meetings must be noticed unless there’s an exemption in the bylaws. This is not so for homeowner associations where it is only necessary to notice committee meetings when final expenditure of association funds are considered or architectural decisions are made. This has provided great flexibility to homeowner associations to operate more efficiently. For example the condominium association has to notice its bake sale committee meetings, while the homeowners’ association bake sale committee does not similarly need to do so. This legislation will change this requirement so that homeowners’ association committee meetings of every nature must be noticed, minutes taken, etc. This is just another example of bad, ill-conceived legislation likely caused by one or two unique circumstances rather than looking at the good of the whole.

Safety on the Roadways: There should be no impediment to an association’s ability to create a safe environment for its members. Rarely is speeding within a homeowners’ association not problematic. Yet, HB 1357 makes it unlawful for a homeowners’ association to enforce and impose statutorily imposed traffic laws as provided in Chapter 316, Florida Statutes. The ability of a homeowners’ association to take measures to reduce speeding within the community should not be prohibited. Oftentimes, community association roads have speed limits posted below the minimum speed that would otherwise be allowed by law and therefore, lower than that as would be enforced by law enforcement. As a result, community associations with speed limits, such as 15 miles per hour, need the ability to adequately control speeding on their roadways. This legislative initiative will cause serious injury and likely death if passed into law… it is just a matter of time.

Leasing: Investors’ leasing rights should not be paramount to owners’ rights to protect their community from becoming a rental community. However, the legislature wants to create an unfair regime for homeowners’ associations, as it did for condominium associations to protect the investors. As to a member’s rental of their property within a homeowners’ association, HB 1357 makes effort to mirror existing condominium association legislation that requires all rental restrictions to be set out within the declaration of condominium. What the legislature does not seem to understand is that community associations are not rental communities but rather are first and foremost communities for owners to live in. Therefore, it is extremely important for community associations to easily amend their community’s rental requirements. The fact that investors choose to gobble up homes in a homeowners’ association is the unique individual decision of the investor, but the investor does so with the understanding and risk tolerance that the board of directors or members could later change the rental requirements. Complete flexibility is needed to protect the lifestyle for those members who live within the community. In other words, the rights of the members living in the association’s community should be paramount to offsite investor owners seeking rental income.

HB 1357 requires homeowners’ association voting to take place from 7 AM to 7 PM. It is ridiculous. It is also diametrically opposed to the absentee balloting process.

The likely unintended consequence, yet very real occurrence, that will be created if this legislation is adopted will be significantly increased assessments for all association members in order to comply with the requirements of the legislation in terms of hiring requisite technology personnel to create and administer the association’s statutorily required websites and fees to legal counsel to create the necessary written collection policies for collection of assessments. Removing the ability of a community association to control speeding on its roadways is ill-conceived and, simply put, reckless.

Sometimes bizarre results occur from otherwise mundane laws. The arena of a lender’s mortgage foreclosure versus an association’s foreclosure of its assessment lien can certainly be characterized as one such example. Nothing is worse than a lender who refuses to take their foreclosure to final judgment and sale, or a litigious homeowner who knows how to use the legal system to stall the lender’s foreclosure case. In both cases, it is the association that suffers greatly because, more likely yet than not, the owner is not paying assessments during the pendency of the lender’s foreclosure action. Because of the owner’s failure to pay assessments, the association should be permitted to foreclose, especially when the lender’s foreclosure case is dragging on and on. Right? Well, not according to a few recent appellate cases.

As a prerequisite to filing a lawsuit over real property, a lis pendens is recorded in the county’s public records, the purpose of which is to place the public on notice of the pending litigation so that if the property is sold, the new owner knows that they have acquired the property subject to the outcome of the pre-existing litigation. According to section 48.23, Florida Statutes, once the lis pendens is recorded, any person with an unrecorded interest or lien against the property, must intervene in the lawsuit within 30 days of the recording of the lis pendens or else they are time barred from doing so. This can have a significant chilling effect on an association’s right to otherwise lawfully collect the past due assessments that accrued against the property through the date the lis pendens was recorded. Sadly, it gets worse.

The problem is not in the appellate court’s application of the law, but rather the problem lies within the law itself. As things stand today, if a lender forecloses and the association does not bring its assessment foreclosure case by intervening in the lender’s foreclosure within 30 days of the date of the lender’s filing of its lis pendens, then the association is barred from bringing its assessment foreclosure lawsuit that includes assessments due up to the time of the recording of the lender’s lis pendens.

Recall that an association must first send its intent to lien and intent to foreclosure letters to the non-paying owner before it can foreclose. What if the owner timely paid assessments right up until the commencement of the lender foreclosure? This means that the association cannot timely intervene in the lender’s foreclosure because it is statutorily prohibited from filing an assessment foreclosure until the time periods for both the intent to lien and intent to foreclose letters have fully run. The real world consequence of this “mishigas” (legal word for crazy nonsense) is that the association is left with no legal remedy, cannot foreclosure and must, at least for the time being, allow the dead-beat to remain in the association because it is legally prohibited from foreclosing the association’s assessment lien, unless it did so within 30 days of the lender’s recording of its lis pendens, which the association cannot do unless it sent both the intent to lien and foreclose letters and waited the statutory prescribed times by which time the 30 days in which to bring the association’s claim has expired.

In U.S. Bank National Association v. Quadomain Condominium Association Inc., decided in 2012 by Florida’s 4^th District Court of Appeals, the Court held that the lower court presiding over the lender’s foreclosure action which created the lis pendens had exclusive jurisdiction to adjudicate any interest in the subject property from the date the lis pendens is recorded to the date it enters final judgment. Therefore, to foreclose the association’s lien, the association was statutorily required to intervene in the lender’s foreclosure case within 30 days of the lender’s recording of the lis pendens and not by way of foreclosing in a different court. Since the association had foreclosed in a different court, its previous successful foreclosure was reversed.

On January 27, 2015 the 4^th DCA, in Jallali v. Knightsbridge Village HOA, Inc., again ruled against an association who did not move to intervene in a lender’s stalled foreclosure within 30 days of the lender’s recording of its lis pendens and reversed a different lower court’s judgment in favor of the association. That said, in this case, the association’s claims did not accrue for more than three years after the lis pendens was recorded, so how could the Association comply with the statutory requirement? Attorney Robert Kaye adds, “this is an unjust, inequitable result relative to innocent associations when lenders do not timely complete foreclosures.”

It is hard to fathom that the legislature intended this strange and financially devastating consequence, especially when both the Condominium Association Act and the Homeowners’ Association Acts, Chapters 718 and 720 of the Florida Statutes, respectively, provide for joint and several liability for the recovery of assessments against a new owner that were not paid by the predecessor owner. A simple solution to this complex problem can be found by excluding association assessment lien foreclosures from the requirements of section 48.23, Florida Statutes. When Florida’s legislature takes the time to enact this simple cure, then associations will have the lawful right to once again foreclose their assessment liens without regard to the lender’s stalled foreclosure action pending against the same property.

Florida, with its warm winters and sandy beaches, is a refuge from the bitter cold. It is one of our State’s best attributes and is so very welcoming to our Northerly neighbors. But when you combine the heat with levels of high humidity, unwelcome guests arrive in the form of mold – some of it toxic, too! The likelihood of mold is even more so for those units which have been abandoned. With no power being supplied to the unit, the air conditioning cannot run and thus, the overall wetness factor can increase dramatically. In this situation, the condominium association is often left with the burden of remediating and repairing the damages caused by the mold.

Property insurance policies differ in kind and scope from insurer to insurer with regard to whether or not mold damage is a covered peril under the policy. Without a specific mold rider, the chances are slim that mold would be a covered peril. Whether mold contamination is covered under your association’s policy will depend on the specific policy language, the cause or causes of the mold contamination, and the timelines of notification to the insurance company. Today’s mold policies typically require notice within 14 days of the onset of the mold, and not 14 days from when the association discovered the mold. Therefore, it is important that the board of directors carefully read and understand their association’s insurance policy obligations. Generally, most insurers attempt to exclude coverage for mold damage associated with long-term leaks, water intrusion from a construction defect, normal wear and tear, deferred maintenance, or poor repairs. As such, some insurers may deny a claim for mold damage arguing that the damage took place over a long period of time, meaning greater than two weeks, rather than damage from a sudden and accidental water damage event, meaning a leak that happened within two weeks.

This being the case, Floyd Nichols, Vice President at Insurance Office of America, recommends that condominium association boards check each of their condominium units which are abandoned or unoccupied for extended periods of time on a biweekly basis. This is not only so the condominium association can timely remediate any mold damage before the remediation becomes extensive but also in an effort to avoid the association’s insurer’s denial of a mold damage claim.

While mold might begin to grow in the unit, it will quickly spread to the common elements. The duty to repair the condominium’s common elements will fall to the association without regard to the owner who may have caused the problem. This is not to say that the association might not be able to subrogate its claim against the owner, but because the Florida legislature removed the requirement for all unit owners to have force placed insurance, subrogation on claim could prove quite problematic.

Because mold typically develops in areas which are likely the condominium association’s responsibility to maintain, repair, and replace (for example, drywall), the condominium association may use its irrevocable right of access to a unit, found in section 718.111(5)(a), Florida Statutes, to enter the unit during reasonable hours to conduct the necessary repair or replacement. Advance notice should be provided whenever possible.

A condominium association has additional rights regarding access to an abandoned unit under relatively new provisions set out in section 718.111(5)(b), Florida Statutes. Pursuant to this section, a condominium association can enter an abandoned unit to inspect the unit and the adjoining common elements, to make repairs as needed, to turn on the utilities to the unit and to otherwise maintain and protect the unit and adjoining common elements. A unit is considered abandoned under the following circumstances: (i) the unit is under foreclosure and no tenant appears to have lived at the unit for four consecutive weeks without prior written notice to the condominium association, or (ii) no tenant appears to have lived at the unit for two consecutive months without prior written notice to the condominium association and the condominium association is unable to contact the owner or determine the owner’s whereabouts after reasonable efforts. Prior to entering an abandoned unit, the condominium association must send two days’ notice of its intent to enter the unit to the owner at their last known address.

Any expense incurred by the association in inspecting the unit and the adjoining common elements, in making needed repairs, in turning on the utilities to the unit and in otherwise maintaining and protecting the abandoned unit and adjoining common elements are chargeable to the owner of the abandoned unit. These expenses are also assessable against the abandoned unit. What will prove very interesting is what effect the lender’s safe harbor assessment benefits as set out in section 718.116, Florida Statutes, or other legal arguments which limit assessment recovery will have on the condominium association’s ability to recover its expenditures. As a different tact, the condominium association can request that the court appoint a receiver to lease the abandoned unit. The rent collected is credited against the monies due to the association and the receiver.

Welcome 2016! While the expression “out with the old and in with the new” comes to mind, remember, too, that this is a great time for review. Start off the new year by reviewing your association’s insurance policies to better understand the perils that it does, and does not, cover. Of particular concern to Florida’s community associations, especially condominium associations, is how casualties stemming from slow leaks and resulting mold are handled. Sadly, I see coverage denials for this type of damage as commonplace.

Absent a “rider,” mold damage is typically excluded from today’s property and casualty insurance policies. While limited coverage may be available in the form of a “rider,” they come with significant strings attached. Most mold riders provide for a strict period of time that if missed will forever bar the association’s recovery. More specifically, and according to insurance agent-broker, Floyd Nichols of the Insurance Office of America, commercial property insurance will not cover “continuous or repeated seepage or leakage of water or the presence or condensation of humidity, moisture, or vapor that occurs over a period of 14 days or more.” It’s important to note that notice must be provided to the insurance company within 14 days of the beginning of the leak and not within 14 days of its discovery.

According to Nichols, “on a regular basis we see claims that occur because the unit owner has been away from their property for a period of time that exceeds 14 days. On many occasions we will see a denial of coverage due to the 14 day provision. Most frequently we are seeing the issue arise on older properties because, even though we want to think our buildings will last forever, leaks do occur for a variety of reasons although the problem can happen in newer properties as well (think of a leaking ice maker line, a toilet that continues to run or broken washing machine hoses). What could be mitigated as a small claim will many times become a claim that can cost tens of thousands of dollars to repair. Additionally, the association might very well find itself responsible to mitigate and repair the problem without regard to who must bear the ultimate responsibility for the damages in order to protect other owners in the building from being exposed to mold, etc.” In addition, an association can be required to effectuate the repair as a requirement set out in its declaration, too.

Nichols recommends to his association clients that the board ask their unit owners, especially snow birds and those on extended vacations, to provide for inspection of their units on a regular basis to avoid the 14 day exclusion. Although the inspection will not guarantee that the claim will be paid by the carrier, timely inspections will hopefully eliminate the implementation of this exclusion and hopefully save all parties much expense in the way of dollars and time.

An association could even develop a regular inspection schedule. Florida Statutes, section 718.111(5), provides that “the association has the irrevocable right of access to each unit during reasonable hours, when necessary for the maintenance, repair, or replacement of any common elements or of any portion of a unit to be maintained by the association pursuant to the declaration or as necessary to prevent damage to the common elements or to a unit.” Condominium associations can even require keys to all units be provided, but the association has a responsibility to ensure the keys are properly secured. Whenever possible, an association should always provide advance notice prior to entering an owner’s unit and always have at least two persons conduct inspections.

Whenever a casualty is suffered, Nichols recommends that their insured associations contact his office immediately. “We believe it is an agent’s responsibility to provide assistance and direction to them. Most often, they are not used to dealing with these types of issues and this is the time for the agent to help. We can meet with the adjusters and contractors on site and have a better understanding of the claim when it is time to deal with the insurance company.” If you have a specific insurance coverage question, Floyd Nichols can be reached at 561-721-3771.

In Part 2 of this two part series, we will discuss how a condominium association can inspect abandoned units and obtain possession in order to lease them and collect rent in accordance with Chapter 718 of the Florida Statutes which governs Florida’s condominium associations.

In my homeowners’ association, we display an oversized, festive, gloriously secular, snowflake on our entry gates. It is quite charming and does not denote any type of religious connotation. Does your association display a secular holiday symbol, too or does it display a religious symbol? Are Christmas trees, menorahs, Nativity scenes, or the Kikombe Cha Umoja (The Unity Cup displayed during Kwanza) secular or religious symbols? How can you tell the difference?

Luckily, we have some guidance from the United States Supreme Court to help associations differentiate between secular and religious symbols. In 1989, in County of Allegheny v. American Civil Liberties Union, the Court held that the determination of whether decorations, including those used to commemorate holidays (which are or have been religious in nature), are religious or not, turns on whether viewers would perceive the decorations to be an endorsement or disapproval of their individual religious choices. The constitutionality of the object is judged according to the standard of a reasonable observer.

Thus, the Court found that a Christmas tree, by itself, is not a religious symbol; although Christmas trees once carried religious connotations, “[t]oday they typify the secular celebration of Christmas,” the Court provided.  The Court also noted that numerous Americans place Christmas trees in their homes without subscribing to Christian religious beliefs and that Christmas trees are widely viewed as the preeminent secular symbol of the Christmas holiday season.

In contrast, the Court stated that a menorah is a religious symbol that serves to commemorate the miracle of the oil as described in the Talmud.  However, the Court continued that the menorah’s significance is not exclusively religious, as it is the primary visual symbol for a holiday that is both secular and religious.  When placed next to a Christmas tree, the Court found that the overall effect of the display to recognize Christmas and Chanukah as part of the same winter holiday season, has attained secular status in our society. Therefore, we can conclude that a Christmas tree and menorah, side by side, are of a secular nature.

As to the Ten Commandments, in a 1980 case, Stone v. Graham, the Supreme Court held that that the Ten Commandments are undeniably religious in nature and that no “recitation of a supposed secular purpose can blind us to that fact.” The Court stated that the Ten Commandments do not confine themselves to secular matters (such as honoring ones parents or prohibiting murder), but instead embrace the duties of religious observers.

If a member of your community wants to include their religious symbol in the association’s holiday display, remember to consider the types of symbols already being displayed by the association as compared to the member’s request. Once your community displays a religious symbol, then there is a good chance your community will need to allow other requested religious symbols to avoid a claim of religious discrimination. Use the guidance from the Supreme Court’s cases to differentiate between a secular symbol and a religious symbol. With that in mind, if an association allows a Christmas tree and menorah, the board of directors, far more likely than not, would not have to allow a members request to display a Nativity scene and Ten Commandments display, too. The rules of kindergarten work best: treat everyone fairly and treat them as you would want to be treated.