Author: rembaumlaw

But for the abrupt ending of the 2015 legislative session, Florida’s government would already have caused another wrinkle in our free market economy by passing a law regulating the cost of goods in the stream of commerce. The worst bill to affect Florida’s community associations is back and could be become law unless you tell your legislators to “VOTE NO”. Florida’s House of Representatives and Senate seek to regulate both the cost and process of the issuance of the “association estoppel”. There are two bills at play: House Bill 203 and its companion, Senate Bill 722.

The “association estoppel” is a legally binding document that sets out the assessment monies that remain due and owing. There exists tremendous liability for its issuance. The buyer is only responsible for the monies set out as due in the estoppel letter. If completed incorrectly and a lesser amount due is stated, well, too bad. Apparently, lobbyists, title companies and other real estate professionals have just about convinced Florida’s legislators, albeit falsely, about the great harm being caused by Florida’s community associations, a state wide epidemic of disastrous consequence stemming from an association’s otherwise lawful right to create a process of issuance and to charge reasonable fee for providing its estoppel.

This atrocious legislation, that is expected to become law (unless you do something about it), dictates that the estoppel is due within ten business days of the request, no matter what. And, if it is issued after ten business days, no matter what the reason – good cause or otherwise – no fee may be charged! To make matters worse, the request for an estoppel can arrive via email. Based on a plain reading of these bills, rather than having to comply with standard procedures to ensure proper delivery of the request, the person requesting the estoppel can email a board member or manager at their personal email address to start the ten day clock.

According to the House version of the bill, the fee for the estoppel certificate may not exceed $200.00 if, on the date the certificate is issued, no delinquent amounts are owed to the association. If an estoppel certificate is requested on an expedited basis and delivered within three business days after the request, the association may charge an additional fee of $100.00. If delinquent amounts are owed to the association for the applicable unit, an additional fee for the estoppel certificate may not exceed $200.00. The Senate’s companion bill only mentions a reasonable fee.

In the past, an estoppel certificate only inured to the benefit of the party requesting it. Now, according to these bills, after issuance of the estoppel it is binding on every Tom, Dick or Harry who can be considered a successor or assign of the person who requested it. That means that Tom, Dick and Harry gets the benefit of the previously issued estoppel, and they do not even have to pay for it!

Pursuant to these bills, an association cannot require the payment of any fees as a condition for the preparation or delivery of an estoppel. Imagine going to the grocery store, loading up your friend’s car with your groceries to get them home and not having to pay the store until you eat the food. If you don’t eat the food, then you don’t have to pay for the groceries. But, your friend, whose car delivered the groceries for you must pay in your stead. This is exactly how the new estoppel legislation works.

No one who requests the estoppel has to pay for it when they receive it. In other words, the person or company who does the work for the association by preparing the estoppel has no lawful right to get paid at the time of performing their service. Rather, this decade’s worst association related legislative initiative provides that the fee can only be paid from the proceeds of the closing. If the closing does not occur, the person who requested the estoppel has no liability whatsoever. But, the burden for payment then shifts to the seller. How many months will that take?

It is expected that the estoppel legislation will become the law of the land with an effective date of July 1, 2016. This situation is the perfect example of a series of laws being adopted to fix a problem that only exists in the minds of a select few and even then for an extremely short period of time. Back during the uptick of the prior real estate crisis, there were a few bad apples who charged way too much for the issuance of the estoppel. Rather than going after these bad apples, the bad acts of the very few are being used to create hysteria and to hurt Florida’s community associations to the very real benefit of Florida’s realtors and title companies. It is shameful how easy our legislators are being deceived to believe that they are fixing a problem that, in reality, doesn’t even exist. Once again, our legislature to the rescue. Ugh!

To learn more visit, “smashthehometax.com”

Providing community association management services to community associations is highly competitive. Because of this competitiveness and the substantial financial investment made by a community association management company in its managers, many community association management companies require their managers to sign non-compete agreements as a condition of their employment. Often, once signed, the non-compete agreement is not thought of again until the manager decides to work for a different community association management company.

Under Florida law, non-compete agreements may be enforced by the prior employer so long as they are reasonable in time, geographical, line of business and are in place to protect a legitimate business interest of the employer as defined by section 542.335, Florida Statutes. Typically, non-compete agreements lasting up to two years in duration and covering geographical areas where the employer actually conducts business will be considered enforceable by a court. Further, pursuant to section 542.335(g)1., Florida Statutes, in determining the enforceability of a non-compete agreement, a court cannot take into consideration “any individualized economic or other hardship that might be caused to the person against whom enforcement is sought.”

However, this express prohibition against considering the hardship created on the former employee may be losing its sting based upon the unpublished August 27, 2015 opinion of the Eleventh Circuit Court in TransUnion Risk and Alternative Data Solutions, Inc. v. MacLachlan, No. 15-10985.

In the MacLachlan case, the employee, MacLachlan, signed a non-compete agreement which provided that MacLachlan could not engage in the same or any similar business for one year. MacLachan was recruited by a rival company and began employment with this rival company three days after issuing his resignation to TransUnion Risk and Alternative Data Solutions, Inc. (“TRADS”). In an effort to enforce the non-compete agreement, TRADS then filed an action with the court for an injunction to prohibit MacLachlan from working for its rival company. During litigation, MacLachlan argued, among other defenses, that TRADS was not entitled to receive an injunction because the harm of the injunction to MacLachlan would outweigh any damage to TRADS. On appeal, the Eleventh Circuit Court, a Federal court with jurisdiction over Alabama, Florida and Georgia, found in favor of MacLachlan.

In doing so, the Eleventh Circuit Court analyzed the construction of section 542.335, Florida Statutes. The Court found that the express prohibition against considering the hardship which might be caused to the former employee as set out in section 542.335(g)1., Florida Statutes, was only with regard to determining whether or not a non-compete agreement is enforceable, and not with regard to the enforcement of the non-compete clause.

Once a non-compete agreement is deemed enforceable, the statute then sets out certain rules for enforcement. Because TRADS was seeking enforcement of the non-compete agreement and not a determination of whether or not the non-compete agreement was enforceable, the Court determined that it was permitted to take the hardship caused to the former employee into consideration when determining the manner of enforcement of the non-compete agreement.

While the MacLachlan case is not exactly binding on Florida state courts because it is a Federal court ruling and is an unpublished decision, it can be used as persuasion in other cases where the non complete agreement creates a hardship on the prior employee. In other words, if successful, this means that courts may begin to consider the financial and other hardships caused to the former employee through strict enforcement of a non-compete agreement.  Whether this case will have significant impact on managers who sign non-compete agreements that prevent them from seeking employment with a competitor is something that only time will tell.

There can be real consequences if a community association and its manager overlook areas of the community that are in need of maintenance, as required either by the community association’s own covenants or by the local code of ordinances. Recently, the failure of a community association and its management company to properly maintain the association’s hedges led to a $12 million damage award. The story was the subject of an October 8^th, Palm Beach Post article by Staff Writer Jane Musgrave.

Based upon a 2013 verdict by a Palm Beach County jury, a Town of Jupiter condominium association was found negligent for failing to properly trim its hedges contributing to the death of a 9 year old boy. As a result, the boy’s parents were awarded $12 million by jurors. As reported, the hedges located at the entrance to the condominium community were approximately 56 inches in height. However, the Code of Ordinances for the Town of Jupiter required that such hedges be no taller than 30 inches in height. Therefore, the hedges of this condominium association were nearly twice the height permitted by local code. In addition to the height of the hedges, a stop sign, which stood 37 inches tall, was nearly four feet shorter than the height required by the Florida Department of Transportation. The height of the hedges and the height of the stop sign together became a “fatal obstruction,” the parent’s attorney told jurors during the trial, as report by Ms. Musgraves. As to the fatal incident, Ms. Musgraves report that:

The youth, who was riding bicycles on the sidewalk with his father, Andre Kovacs, was killed when an elderly condo resident, who couldn’t see over the hedges, plowed into him as she was driving out of the complex on U.S. 1 just south of Indiantown Road in 2011.

After the verdict of the trial court finding in favor of the boy’s parents was upheld by Florida’s Fourth District Court of Appeal, the jury found that the condominium association was 30 percent responsible, that the community association management was 60 percent responsible, and that the driver of the vehicle which struck the boy was 10 percent responsible for the death of the boy. While the parents settled with the driver for $100,000, the limits of the driver’s insurance policy, as reported by Ms. Musgraves, the parents may receive a total of $12.5 million in damages from the condominium association and its management. Sadly, the death of this young boy and the devastating financial hit to the condominium association’s owners and the condominium association’s manager could have been avoided.

Because the jury found the association’s management more responsible for the accident than the association, itself, this case may be quite troubling for management companies. Clearly, if the manager suggests action based on the community’s declaration or the local code of ordinances and the board ignores such advice, a record should be kept by management. In addition, board members need to understand and recognize their duty to ensure that their association complies with both its maintenance and repair obligations set out in the association’s declaration and the local code of ordinaces, too.

To read Ms. Musgrave’s October 7, 2015 Palm Beach Post article, titled Parents to get $12M verdict in son’s 2011 bicycle death in Jupiter, in its entirety please visit http://bit.ly/1hstP8K.

An association has decided to change its legal counsel and transfer all existing matters to its new lawyer. The management company sends the request to the prior law firm only to be told that a retaining lien has been asserted. Until the lien is satisfied, the law firm refuses to transfer the files. Is that legal? Can the lawyer really do that? In short, you bet they can. A Florida attorney can enforce their rights to be paid before transferring the association’s files through asserting a retaining lien, a charging lien or both under the right circumstances.

A retaining lien is a passive lien and rests entirely on the right of an attorney to retain possession of the association’s documents, money and files as security for payment of the fees and costs earned by the law firm. A retaining lien covers the balance due for all legal work done on behalf of the client, regardless of whether the property is related to the matter for which the money is owed to the attorney. Further, a retaining lien cannot be impaired by the client securing the right to inspect and copy the papers or compelling their production by subpoena.

An attorney’s retaining lien was the subject of a recent condominium association case in Florida’s Third District Court of Appeal in the case of Conde & Cohen, P.L. v. Grandview Palace Condominium Association, Inc., 2015 WL 4637285 (Fla. 3d DCA 2015). In Conde & Cohen, the law firm was retained by the association over a period of years to represent it in a number of matters. Following a change in the association’s board of directors, new counsel was retained to represent the association. Upon learning of this action, the law firm asserted retaining liens in five lawsuits. Unable to convince the law firm to release its files in these five cases, the association filed an action against the law firm seeking injunctive relief and a declaration that the law firm’s retaining liens were invalid and that the association’s new counsel should be allowed to copy the law firm’s files.

The Court, squashing the order of the trial court which held in favor of the association, held that an attorney has a right to a retaining lien on all of the client’s property in the attorney’s possession, whether related to only one specific matter, until the attorney is paid where a valid retaining lien has been asserted. The attorney asserted it may retain the property subject to the lien until that attorney has been paid, or, if the client can demonstrate a pressing need for the property, then they can be required to post adequate security, such as a bond, for the amount in controversy. In this case, because the association did not provide any evidence as to the requisite showing of pressing necessity and did not post adequate security, the court held that the trial court’s order compelling the law firm to hand over its files was improper.

A different type of lien is referred to as a charging lien which attaches onto any monetary recovery due to the client at the conclusion of a lawsuit. Unless the client pays what is owed to the attorney prior to the conclusion of the lawsuit, the attorney will be entitled to recover such amounts from any monetary recovery received by the client in the lawsuit. To impose such a charging lien, the attorney must show the following four requirements:

1. An express or implied contract between the attorney and the client (in the case of a community association, this requirement will more likely than not be satisfied because Florida Statutes requires that all association contracts for services must be in writing);

2. An express or implied understanding for payment of the attorney’s fees out of the recovery;

3. Either an avoidance of payment or a dispute as to the amount of fees; and

4. Timely notice.

Often times a charging lien is asserted in a personal injury case where the client changes lawyers mid-stream. Because in this type of case, the attorney’s fees are typically only received when the client receives a settlement or wins at trial, if the client changes lawyers, the previous lawyer wants to be paid for their efforts. So, they assert the charging lien. In the context of a community association, a charging lien could result should the attorney prevail in one or more assessment collection cases, and they remain unpaid.

The easiest way to avoid a retaining lien and/or charging lien is to be sure to ask if any legal fees are due as a part of the attorney transfer process.

The older your association may be, the more likely it has engaged the services of a contractor, engineer, architect or other construction or design professional to perform a maintenance, repair, replacement or capital improvement project. The process can be very daunting. Even the smallest of projects can have unexpected and disastrous consequences, such as the electrician hired to make a small repair who accidently started a fire caused by an electrical short. In any contract review, the lawyer’s job is to help the association plan for the unexpected. Because most contracts will be prepared by the contractor and then presented to the association for execution, they will favor the contractor. The association should always rely on its legal counsel to review the contract and minimally provide an addendum whose terms are superior to that of the contract prepared by the contractor. Following are few contract terms that should be addressed in the addendum if they are not already addressed in the contract:

Scope of Work. The scope of work section of the contract is the core of the contract itself. It describes the work to be undertaken. It should be supplemented with specific repair protocols prepared by the requisite professional. A carefully drafted scope of work can help the association avoid later disputes.

Change Orders. In the event a change in the work is needed, such as adding or deleting aspects of the project or changing the selected materials, the construction contract should provide a mechanism by which the association and the contractor can make these changes. Change order provisions should minimally require that a change order be in writing, approved and agreed to by the association and the contractor and specify the effect the change order will have on completion of the work. It should also provide for any additional fees that will be charged as a result.

Authorized Contact. The contract should provide for a specific individual to act as liaison between the association and the contractor.

Payments. Any payment provisions should include “retainage” which allows the association to withhold a percentage of the monies due to the contractor from each payment until satisfactory completion of the work including the punch list. On the one hand, the contractor deserves to get paid, on the other hand the contractor needs to be sufficiently motivated to come back at the end of then job to compete the punch list. Five to ten percent is a reasonable retainage.

Notice of Commencement Process. To protect the association from paying twice for the same work, a Notice of Commencement must be completed and recorded so that those contributing services or supplies for the work must first give notice to the association. Before a construction or remodeling project may begin, the association must require the contractor to assist it with completing the Notice of Commencement process. Only by doing this can the association protect itself from subcontractors and suppliers who claim they have not been paid. The Notice of Commencement must be recorded with the county clerk of court and posted at the job site in the form of a certified copy. Prior to filing a lien, a lienor who does not have a direct contract with the association, must serve the association with a Notice to Owner before commencing, or within forty five (45) days of commencing, the furnishing of services or materials. A lien cannot be enforced unless the lienor has served the Notice to Owner. In order to prevent the filing of a lien against your property and to prevent having to pay twice for the same work, before making any payment (partial or full), the association must be sure to receive a Partial or Full Release of Lien from whomever and for whatever the payment is being made.

Indemnification. Imagine if your construction contract provided for a full indemnity for any damage and injury whatsoever that the contractor or anyone employed or contracted by the contractor caused – This has to be too good to be true… It is! Pursuant to section 725.06, Florida Statutes, any construction contract where the contractor promises to indemnify or hold harmless the association for liability for damages to persons or property caused in whole or in part by any act, omission or default of the contractor arising from the contract or its performance is void and unenforceable UNLESS the contract provides a specific monetary limitation (often not less than $1 million per occurrence) on the indemnification which must bear a reasonable commercial relationship to the contract. You should also be aware that disputes over the enforceability of the indemnification clause do not include prevailing party attorney fees unless the indemnification provisions also specifically provide that, in the event of a dispute concerning the applicability of the indemnification, the prevailing party must indemnify the other for its attorneys’ fees, costs and expenses in enforcing the right to be indemnified.

Termination. While most construction contracts provide that an association may terminate the contract for cause by providing the contractor with reasonable notice and the opportunity to cure, the association should strive for a without cause termination provision. A without cause termination may require the association to pay the contractor liquidated damages, which is an amount the parties agree upon during the formation of the contract for the contractor to collect as compensation. Minimally, the contractor will want to be paid through the date of termination.

Generally speaking, a contract that cannot be performed within one year must be in writing. The opposite is true, too. So, if the contract can be performed within one year, then it does not necessarily have to be in writing. In other words, it can be an oral contract. But, if the other party does not perform their obligations, then you’ll likely need the courts to help sort the mess out. You can guess what happens next. One party says they had a contract and the other party denies it. It sure would have been simpler if the parties took a few minutes to sign a contract. Let’s say, for example, a few board members decide to buy lottery tickets and split the winnings. Then, as fate would have it, they win, but two weeks prior they disagreed with each other over an association matter, are at each other’s throats, and the holder of the winning tickets refuses to share the proceeds. “Preposterous,” you say? Not so fast.

Fairly recently, the Supreme Court of Florida in the case of Browning v. Poirier, Case No. SC13-2416 (Fla. May 28, 2015), reviewed a very similar fact pattern. Browning and Poirier lived together as a couple between 1991 and 2009. In 1993, the couple orally agreed that they would split the winnings of any lottery tickets purchased by either of them while they remained in a relationship. In 2007, Poirier purchased the winning ticket and received $1 million dollars less taxes. Despite their agreement, Poirier refused to give Browning half of the proceeds. Browning in turn sued for breach of an oral contract and unjust enrichment, seeking his half of Poirier’s winnings. Poirier defended the claims by arguing that the agreement could not be enforced against her because it did not comply with the statute of frauds. Because the contract could have been completed within one year at the time the agreement was made, the Supreme Court of Florida decided in Browning’s favor and held that the oral agreement between Browning and Poirier fell outside the “Statute of Frauds” providing that unenforceable oral contracts are only those which cannot be performed within one year.

By way of summary, the Statute of Frauds, as set out in section 725.01, Florida Statutes, requires that, in addition to other types of agreements, contracts which cannot be performed within one year from the making of the contract must be in writing and signed by the party against whom the contract is being enforced. Thus, in Browning v. Poirier, the Court held that an oral agreement to share equally in the proceeds of any lottery winnings, which could have been terminated by either party at any time, was not required to be in writing in accordance with the “Statute of Frauds” where the agreement could have been performed within one year.

So, while this case is seemingly unrelated to community associations, condominium, cooperative and homeowners association are subject to their own version of the Statute of Frauds as set out in sections 718.3026, 719.3026 and 720.3055, Florida Statutes, respectively. Similar to the Statute of Frauds analyzed by the Supreme Court of Florida, these laws provide that all contracts described in these statutory sections and any contract that is not to be fully performed within one year after the contract is made for the purchase, lease or renting of materials or equipment to be used by the association in accomplishing its purposes must be in writing. In addition, these laws require that all contracts for the provision of services must be in writing, regardless of whether or not the contract could be performed within one year.

Remember, too, that in addition to the written agreement requirement as set out in sections 718.3026, 719.3026 and 720.3055, Florida Statutes, these statutory sections also require that an association obtain competitive bids for contracts for the purchase, lease or renting of materials or equipment, or for the provision of services, which require payment by the association that exceeds, in total, a certain percent of the total annual budget of the association, including reserves. For condominium and cooperative associations, the percent of the total annual budget at which competitive bids must be obtained is five percent. For homeowners associations, the percent of the total annual budget at which competitive bids must be obtained is ten percent. While an association is required to obtain competitive bids in these instances, the association is in no way required to accept the lowest bid and may select the winning bid using its reasonable business judgment.

Based on the interpretation by the Supreme Court of Florida of the Statute of Frauds as set out in section 725.01, Florida Statutes, a community association’s board of directors should be ever mindful of the oral promises they make.

“Pursuant to the New Legislation Effective July 1, 2015”

On July 1, 2015, new provisions which clarify the procedures for fining and use right suspensions for non-monetary violations became effective. The term “non-monetary violations” refers to such things as failing to pressure clean roofs and driveways, to remove dead trees, to bring in the garbage cans and to pick up after your pet, etc., and obviously excludes delinquent monetary obligations.

These new provisions were put into place to clarify the manner in which an association’s board of directors and its fining and suspensions committee coexist. Prior to these provisions, there were some who were unsure as to whether the fining and suspensions committee would first meet and then the board of directors would levy the fine, or if the board of directors would first meet, determine the amount of the fine, and then the fining committee would meet to provide the offending owner with the opportunity to be heard. Now, it is patently clear. The board must take action first.

According to these recent amendments to Chapters 718, 719 and 720 of the Florida Statutes, regarding condominiums, cooperatives and homeowners’ associations, respectively, an association’s board of directors must first levy the fine or enact a use right suspension for a non-monetary violation at a properly noticed board meeting. After, the person who is to be fined or suspended must then be provided with at least fourteen days’ notice and an opportunity for a hearing before the fining and suspensions committee. If the fining and suspensions committee does not exactly agree with the board, then the fine or use right suspension may not be enacted.

With that in mind, the role of the fining and suspensions committee is strictly limited to determining whether to confirm or reject the fine or use right suspension levied by the board of directors. The committee cannot make any changes whatsoever to the fine or use right suspension enacted by the board as any such change would constitute a rejection of the fine or use right suspension levied by the board.

As a matter of practicality, if the fining and suspensions committee rejects the fine or use right suspension, the board could start its decision making process anew or the fining and suspensions committee could make a recommendation to the board as to what it would approve. In either event, it begins the fining and use right suspension process anew. This means that the offending member should also be provided another fourteen days’ notice and opportunity to appear in front of the fining and suspensions committee before the recommended fine or use right suspension becomes effective.

Condominium and cooperative associations can only file a lawsuit seeking a money judgment in order to collect unpaid fines. While homeowners’ associations can also similarly seek a money judgment, if the homeowners’ association’s declaration provides for fines exceeding a total of $1,000.00 and also allow a fine to become a lien, then the homeowners’ association may use the foreclosure process to collect an unpaid fine. In all cases, in any action to recover a fine, the prevailing party is entitled to recover their reasonable attorneys’ fees and costs from the non-prevailing party, as determined by the court.

Fines apply to the owner and, if applicable, to any tenant, licensee or invitee of the owner. Use right suspensions apply to the property’s occupant, licensee or invitee, which includes tenants, and still applies even if the violation that resulted in the suspension arose from less than all of the multiple properties owned by a member. Also, the terms of the association’s declaration likely provides that the owner is ultimately responsible for the acts of their tenants, guests and invitees.

For condominium and cooperative associations, the fining and suspensions committee is comprised of unit owners who are neither board members nor persons residing in a board member’s household. For homeowners’ associations, the fining and suspensions committee is comprised of at least three members who are not officers, directors or employees of the association, or the spouse, parent, child, brother or sister of an officer, director or employee.

Although Florida’s 2015 Legislative Session ended earlier than expected when the House of Representatives abruptly adjourned prior to the scheduled end of the Session, some new legislation affecting community associations was passed and subsequently signed into law by the Governor and became, for the most part, effective July 1, 2015. Following is a brief summary of these new laws.

ELECTRONIC VOTING
Electronic voting is now available for condominium, cooperative and homeowners’ associations. Under these new provisions, an association, through resolution of the board, may conduct its elections and any other owner votes through an online voting system.

1) The advanced written consent of the owner is required in order to participate in online voting.

2) The association is required to provide:

(a) a method to authenticate the owner’s identity to the online voting system;
(b) a method to confirm, at least 14 days before the voting deadline, that the owner’s electronic device can successfully communicate with the online voting system;
(c) for condominium and cooperative elections of the board, a method to transmit an electronic ballot that ensures the secrecy and integrity of each ballot; and
(d) for homeowners’ association elections of the board, a method that is consistent with the homeowners’ association’s election procedures as set out in its bylaws.

3) The online voting system must be able to authenticate the owner’s identity and the validity of each electronic vote to ensure that the vote is not altered in transit.

4) A receipt for the vote received through the online voting system must be provided to the owner.

5) For board member elections, the electronic voting system must be able to permanently separate any authentication or identifying information from the electronic election ballot so that it is impossible to tie an election ballot to a specific owner.

6) The voting system must also be able to store and keep electronic votes accessible for recount, inspection and review purposes.

7) In order to use this voting procedure, the board of directors must adopt a resolution containing specific requirements, including notices to the owners of the option, requirement of their consent and opportunity to opt out. If the resolution is to be considered at a board meeting, written notice of that meeting must be mailed, delivered or electronically transmitted to the owners and posted at the property.

8) Once an owner consents to online voting, the consent is valid until the owner opts out.

FINING AND SUSPENSION OF USE AND VOTING RIGHTS
Clarification is provided to condominium, cooperative and homeowners’ associations regarding the order of the proceedings that are necessary for imposing a fine or use right suspension for non-monetary violations. First, the board must levy the fine or use right suspension, and then the offending owner must be provided at least 14 days’ notice of the fining/suspension committee’s meeting where it will hold a hearing to approve or disapprove the fine or use right suspension for non-monetary violations levied by the board. If the committee does not agree with the fine/suspension, then it cannot be imposed against the offending owner.

The legislation also clarifies that the role of the committee is only to confirm or reject the fine or use right suspension (non-monetary) levied by the board. This means that if the committee wishes to impose a fine of a different amount, it is powerless to do so. Rather, the modification of the fine would have to be done at a properly noticed board meeting first.

As to cooperative associations, the qualifications for those who serve on the fining committee must be “other owners who are neither board members nor persons residing in the board member’s household.”

Both the Condominium Act and Homeowners’ Association Act were amended to clarify that:

1) the “monetary obligations” that qualify for suspension of use rights include a fee, fine or other monetary obligation;

2) when the voting rights of an owner are suspended, the total number of eligible units is reduced for the purpose of calculating the necessary percentage to pass a proposal;

3) any authorized suspension applies not only to the member, but also to the tenants, guests or invitees, and even if the delinquency or failure that resulted in the suspension arose from less than all of the multiple units or lots owned by a member. This means that if an owner owns three units and is delinquent more than 90 days on one of the units, the voting rights on all three units may be suspended.

PROXIES
As to condominium, cooperative and homeowners’ associations, a complete copy, facsimile transmission or other reliable reproduction of the original proxy may be used instead of requiring the original proxy. This change appears to formally legalize a process already in existence by many associations and applies to all not-for-profit corporations, which includes condominium, cooperative and homeowners’ associations.

INSURANCE
As to condominiums, if there is no insurable casualty event that caused the damage, the maintenance provisions of the governing documents are to be used to provide for the determination of responsibility for the repairs caused by events other than casualty.

OFFICIAL RECORDS
As to condominiums, relative to the “catch-all” provision of what is identified as the Official Records of a condominium association, open to inspection to owners or their authorized representatives, has been modified to add the word “written” regarding such records.

MEETING NOTICES
It is no longer required to have the authority in the association’s bylaws to use electronic mail (e-mail) for association notices. As a result, all meeting notices, including for condominium, homeowners’ and cooperative board and committee meetings, may be provided by e-mail. However, the requirement that owners provide their advanced written consent to receive such notices by e-mail, remain. So, the owners must still opt-in to receive electronic notices.

ANNUAL BUDGETS
As to condominiums, statutory provisions regarding the annual budget have been revised to clarify that minimally, the items listed in section 718.504(21), Florida Statutes, must be included in a proposed budget. Although no substantive provisions were made, the provisions addressing reserves have been split into two parts, with subsection (a) addressing the reserves in general, and subsection (b) addressing reserves before the turnover of control of the association by the developer to the non-developer owners. Subsection (b) further clarifies the ability of the developer to vote its units to waive reserves.

ASSESSMENT PAYMENTS
As to condominium and cooperative associations, a legislative fix was provided in response to St. Croix Lane Trust v. St. Croix at Pelican March Condominium Association, Inc., 144 So.3d 639 (Fla. 2d DCA 2014) regarding the application of accord and satisfaction to a restrictive endorsement placed on an assessment payment. These sections have been revised to clarify that the application of payments made on a delinquent account are to be applied in the manner specified within the Florida Statutes, notwithstanding any purported “accord and satisfaction” or settlement agreement claimed by the payer by delivery of the payment. These provisions also state that they are intended to clarify existing law, which makes the application of the change retroactive. Noticeably lacking is a similar amendment to the Homeowners’ Association Act.

BULK BUYERS
This legislation applies to the condominium bulk assignee or bulk purchaser of units, and extends the period of time for qualification from July 1, 2016 to July 1, 2018. In plain English, this means an investor can acquire seven or more condominium units without concern of acquiring the predecessor developer’s liability for such things as construction defects and other obligations.

HOA RULES AND REGULATIONS
The rules and regulations of the homeowners’ associations are now included within the definition of the “governing documents.”

CHAPTER 720, FLORIDA STATUTES
This new statute appropriately names Chapter 720, Florida Statutes, as the “Homeowners’ Association Act.”

TENANT PROTECTION
A new section 83.561, Florida Statutes, has been added, entitled “termination of rental agreement upon foreclosure.” This new Statute creates certain rights and entitlements in tenants following the foreclosure sale.

The tenant is allowed to remain in possession of the premises for a 30 day period following the date that the purchaser at the foreclosure sale delivers the 30-day notice of termination. The Statute also provides a form of suggested language that the 30-day notice should include. A writ of possession may only be applied for after the expiration of the 30-day period.