rembaumlaw | Rembaum's Association Roundup

June 9, 2021October 14, 2022

Should Emails Between Board Members & Managers Be Considered Official Records Subject to Members Inspection?

Disclaimer: In January 2022 the The Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation issued an opinion which drastically alters the information provided herein. Please consult with an attorney of your choosing to obtain the latest guidance in this ever evolving area.

In today’s instant world, email allows us to express our thoughts anytime, anywhere. So often, emails serve as a substitute for making phone calls. If a phone call is made from a board member to a manager, absent a deposition of either party or a contemporaneous note documenting the conversation, the content of the communication remains private. But, if the board member sends an email rather than calling the manager, that email is considered a written record of the association and is required to be produced as a part of a member’s official record request, with limited exception as discussed below.

With the sheer volume of emails received by a manager from owners, board members, purchasers, contractors, and lawyers, etc., there is no practical method of separating the emails which must remain confidential. This includes emails with respect to attorney-client privileged matters, personnel matters, information obtained in connection with a sale or lease, social security numbers, and medical information, etc., and separating these emails cannot occur without the manager or hired professional spending hours and hours and hours preparing such records for a member’s requested official record inspection primarily at the association’s expense. Moreover, if an outside professional is needed to prepare the emails for inspection, then the association will not be able to recoup the expenditure. While a condominium association cannot charge any amount to prepare for the inspection, a homeowners’ association is limited to $20.00 per hour for administrative time expended to retrieve requested records. Clearly, this needs a legislative remedy!

Generally speaking, for an association’s needs to be met, there must be solid communication between the board and the manager. However, requiring all but privileged and confidential emails to be official records subject to membership inspection stifles that free flow of communication. That said, it is understandable that some emails should be subject to a member’s inspection request, such as with regards to a bid package or contract.

More often than not, the emails to and from the manager are actually the property of the management company by whom the manager is employed. Absent discovery that takes place during litigation, typically a company’s emails are the private property of the company. A shareholder of General Mills’ stock cannot demand to see the president’s emails to its manager, so why should the community association president’s email to the manager be required to be produced? After all, overwhelmingly, community associations are “not-for-profit” corporations. At the end of the day, the need for transparency needs to be balanced against the practicality and costs of producing the emails.

There is limited guidance from the State of Florida Office of the Attorney General and the Division of Florida Condominiums, Timeshares, and Mobile Homes regarding the production of such emails. Let us take a look at the limited guidance we do have.

On March 6, 2002, the then-Chief Assistant General Counsel of the Department of Business and Professional Regulation (“DBPR”) issued an opinion that “[c]ondominium owners do have the right to inspect e-mail correspondences between the board of directors and the property manager as long as the correspondence is related to the operation of the association and does not fall within the… statutorily protected exceptions… [The DBPR does not have] regulations expressly requiring archiving e-mails, but… if the e-mail correspondence relates to the operation of the association property, it is required to be maintained by the association, whether on paper or electronically, under Chapter 718, Florida Statutes.”

In Humphrey v. Carriage Park Condominium Association, Inc., Arb. Case No. 2008-04-0230 (Final Order / Campbell / March 30, 2009), an arbitrator of the Division of Florida Condominiums, Timeshares, and Mobile Homes held that “…e-mails… existing… on the personal computers of individual directors… are not official records of the association… Even if directors communicate among themselves by e-mail strings or chains about the operation of the association, the status of the electronic communication on their personal computer would not change. Similarly, an e-mail to an individual director or to all directors as a group, addressed only to their personal computers, is not written communication to the association.” The arbitrator reasoned that “[t]his must be so because there is no obligation to turn on [the] personal computer with any regularity, or to open and read emails before deleting them.”

In Harbage v. Covered Bridge Condominium Association, Inc., Arb. Case No. 19-03-6413 (Emails Are Written Records of Association Order Re-Framing Affirmative Defenses / Simms / January 2, 2020), an owner challenged an association’s failure to provide records requested pursuant to §718.111(12), Florida Statutes. The owner requested to inspect emails between the association and its property manager from 2017–2019. The association refused to provide the records, arguing that the emails were not written records subject to disclosure nor were they written records that are printed in the ordinary course of business. The arbitrator in the case dismissed the association’s argument that the emails were not written records, citing Black’s Law Dictionary, 11th Edition (2019), which explicitly includes emails in the definition of a “writing.” Additionally, the arbitrator pointed to the fact that emails are accepted in litigation as records of regularly conducted business activity pursuant to §90.803(6)(a), Florida Statutes, to dismiss the association’s claim that the emails are not subject to inspection because they are not printed in the ordinary course of business. The arbitrator held that the association’s position was “untenable on both counts,” finding that “emails are a written record subject to disclosure to unit owners.”

Simply stated, if one were to rely on the guidance cited herein, then emails solely between board members, even a board majority, are not part of the official records, but emails between a board member(s) and the manager are part of the official records and subject to member inspection unless containing information that is otherwise privileged or confidential. All other emails not protected by privilege or other duty of confidentiality are also subject to member inspection.

Where does it end? What about text messages and WhatsApp? Will they, too, one day be subject to inspection? Why one without the other? Better still, if text messages are not subject to member inspection, why should emails be subject to inspection? If emails remain subject to inspection, should not phone calls between board members and managers be statutorily required to be recorded? Why not? Because such a requirement is absurd.

In addition, what is missing from today’s legislation are laws protecting the free flow of communication between board members and the manager. Also patently missing from today’s legislation is the ability of the association to require the member requesting the record inspection to prepay for the actual time and cost necessary to prepare the records for inspection.

So, while it may make sense for certain vendor emails to remain as records of the association subject to member inspection, it is this author’s opinion that emails between the board and the association’s manager should remain private property of the sender and recipient, most especially if the manager’s computer is provided by the management company and not the association. However, if emails between board members and managers are going to remain as records which must be produced, absent privilege and confidentiality requirements, then at a minimum the association should at least be allowed to fully recover its expenses incurred in the record inspection. Perhaps a present or future Florida legislator will sponsor a long overdue bill to provide the association the lawful right to do so.

(Reprinted with permission from the May 2021 edition of the Florida Community Association Journal)

June 1, 2021August 30, 2021

Assistance Animal Requests | It Could Not Get Any Worse, Could It?

The Fair Housing Act (FHA) provides for two distinct types of assistance animals: (i) the service animal and (ii) the emotional support animal. In general, the FHA makes it unlawful for a housing provider, which includes condominium and homeowners associations, to refuse to make a reasonable accommodation in rules, policies, practices, or services on behalf of a person with a disability where such accommodation is needed in order to provide the disabled person an equal opportunity to enjoy and use their dwelling. One of the most common requests that an association receives is an accommodation to the association’s pet restrictions, whether such restriction is a weight or breed limitation or a total prohibition on pets. While there is a real need for such accommodations, there also appears to be considerable fraud in the context of the emotional support animal request.

In the context of the emotional support animal, the association has the right to know if the person requesting a reasonable accommodation for an emotional support animal has a disability, most often defined as a mental or physical impairment that substantially limits one or more major life activities, and whether the animal helps ameliorate the disability. However, the same is not true when it comes to the other classification of assistance animal, the service animal. The Department of Housing and Urban Development (HUD) refers to the American Disabilities Act in defining the term “service animal” as:

any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability. Other species of animals, whether wild or domestic, trained or untrained, are not service animals for the purposes of this definition. The work or tasks performed by a service animal must be directly related to the individual’s disability.

Recent guidance issued by HUD in FHEO-2020-01 on January 28, 2020, has made it easier than ever for residents to claim a need for an accommodation for a service dog without having to provide meaningful documentation to evidence their claim. The information presented below is provided to educate board members and managers of these somewhat absurd changes to HUD’s guidance and should not be relied upon by a disingenuous owner seeking an accommodation because, sooner or later, the fraud will present itself. The January 28, 2020, HUD notice can be found at kbrlegal.com. Once there, click “Resources,” then click “Links.” Associations should rely on this guidance when evaluating any request.

It is important to note that assistance animals are not pets. Rather, they are animals that work, assist, perform tasks, and/or provide emotional support for the benefit of a person with a disability. Not a single “pet” rule applies to assistance animals. As discussed above, under the FHA there are two types of assistance animals: (i) service animals that do work, perform tasks, and provide assistance, and (ii) those animals that provide therapeutic emotional support for individuals with disabilities, referred to as emotional support animals. HUD provides a completely different analysis for the association to follow depending on whether the applicant claims that the animal at issue is a service animal or an emotional support animal.

The remainder of this article will focus on the appropriate analysis in the event a resident requests an accommodation for a service animal. The analysis discussed below only applies to requests for a service animal and does not apply to a request for an emotional support animal, which is briefly addressed above.

A service animal is narrowly defined as any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability. The animal must be a dog, and the work or tasks performed by the dog must be directly related to the individual’s disability. Therefore, if the association receives a request for an accommodation for a service animal, it must follow the following analysis as provided by the HUD guidance which is word-for-word quoted below:

Is the animal a dog?
1. If “yes”, proceed to the next question.
2. If “no”, this is not a service animal but may be a support animal.
Is it readily apparent that the dog is trained to do work or perform tasks for the benefit of an individual with a disability? (for example, the individual is blind and the dog is a clearly trained guide dog)
1. If yes, grant the accommodation, no further inquiries necessary.
2. If no, proceed to the next question.
Ask the following questions: (1) is the animal required because of a disability? (2) what work or task has the animal been trained to perform?
1. If the person answers yes to the question (1) and the work or task is identified in response to question (2), grant the accommodation because the animal qualifies as a service animal.
2. If the answer to either question is no or none, the animal does not qualify as a service animal but may be a support animal or other type of assistance animal. The analysis regarding emotional support animals would then apply.

In accordance with the HUD guidance, if the individual claims the dog is required because of a disability and asserts the work that the dog has been trained to perform, the association is not permitted to ask about the nature or extent of the person’s disability or to even ask for documentation to corroborate the person’s claim!

In other words, if a resident claims that their dog is a service dog, even if it is not readily apparent that the dog is trained to do work or perform tasks for the benefit of the resident with a disability, the guidance from HUD suggests that the association is fully restricted to asking only the questions above. Thus, the association must grant the accommodation request if the person claims to have a disability and identifies the work that the dog has been trained to perform. This applies even if the disability is not readily apparent and even if the dog’s training is not apparent. The inquiry stops there. The association has no authority whatsoever to request any further documentation to corroborate the person’s claims in any way. In fact, if the association does ask for documentation—for example, a doctor’s note or evidence of the dog’s training to perform the identified task—the association, and the board members in their individual capacity, may be liable for violating the FHA. Oddly, a plain reading of this latest guidance could be interpreted to mean an association could be in very hot water, indeed, in the event the association probes the need for the service dog and/or its training, even if it turns out in the end that the claim was fraudulent, albeit that would be an absurd result. This situation is analogous to having to file a homeowner insurance claim due to a lawsuit brought by a thief who broke his leg while breaking into your home. In plain English, it stinks.

This change in the guidance from HUD regarding service animals clearly even further opens the doors for individuals to abuse the process. As the association is not permitted to request documentation to confirm the disability-related need for the animal, associations have no way to evaluate the truth of the claims made by the residents. As discussed above, this analysis is only applicable if the resident requests an accommodation for a service dog.

If your association receives a request for an assistance animal, whether a service animal or an emotional support animal, I strongly recommend that the board consult with the association’s legal counsel before requesting more information or denying the request. Do not be penny wise and pound foolish. In today’s ever-litigious society, being able to hide behind “advice of counsel” is priceless.

(Reprinted with permission from the June 2021 edition of the Florida Community Association Journal)

May 4, 2021May 4, 2021

Implications of Governor’s Newest Executive Order on Florida’s Community Associations

Effective May 3, 2021 at 4:06 P.M., Governor DeSantis, by way of Executive Order 21-102, suspended all remaining local government mandates and restrictions based on the COVID-19 State of Emergency.

In short, this Order provides that all local government COVID-19 restrictions and mandates on individuals and businesses are hereby suspended. However, this Order does NOT address private rules enacted by Florida’s community associations.

Remember that in order for a community association to use the statutory emergency powers, there must be a State of Emergency declared by the Governor. Therefore, since the Governor’s declared State of Emergency remains in effect through June 26, 2021, community association boards of directors may still rely on the use of the statutory emergency powers. However, please remember that in order for a community association to use the statutory emergency powers there must be a nexus between the power being utilized and the actual conditions taking place at the association. In other words, a community association cannot just exercise the emergency powers because it is convenient. There should be a nexus.

Executive Order 21-102 can be viewed by clicking HERE.

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Remember too, that on Monday, March 29, Governor DeSantis signed SB 72 into law granting liability protection to businesses and entities, such as religious institutions and community associations, from lawsuits related to COVID-19 exposure if they made a good faith effort to follow all federal, state, and local public health guidelines. To establish liability, the defendant must have acted with gross negligence or intentional conduct; clear and convincing evidence is required to establish liability, rather than a mere preponderance of the evidence; and there is a shortened statute of limitations.

April 29, 2021April 29, 2021

Emergency Order Extended | Omnibus Legislation Affecting Associations | CAM CE Breakfast Returns

Governor Extends Emergency Order

On April 27th, 2021, The Governor extended the State of Emergency through June 26, 2021. You can view the document filing HERE.

Omnibus Legislation Affecting Community Associations May Have Huge Impact

Senate Bill 630, which is referred to as this year’s community association omnibus bill because it contains so many changes to Chapters 718, 719, and 720 of the Florida Statutes, sailed through the Florida House and Senate. Presently, it is on the way to the Governor to sign into law. Once that happens, unless otherwise provided in the Bill, the legislation will take effect in July 1, 2021. While Kaye Bender Rembaum will be publishing summaries of all of the new laws, for those that cannot wait to read the Bill it can found by clicking https://kbrlegal.com/links/.

In case you missed it, please check out Rembaum’s Association Roundup ‘The 2021 Florida Legislative Preview, as Related to Community Associations | The Good, The Bad and The Ugly’.

Join KBR’s Peter Mollengarden on May 19th, 2021 for Legal Update CE Course

Kaye Bender Rembaum’s own Peter C. Mollengarden, a Board Certified Specialist in Condominium & Planned Development Law, will be the instructor for the 2021 Legal Update, taking place at the Holiday Inn Palm Beach Airport.

This course offers the updates from the 2020 legislative session that are now in effect, and how they directly affect managers and their community associations. After the core material is covered, there will be a discussion about pending legislation, some of which is noted above.

Wed., May 19th | 7:30am – 10:15am
Course # 9630638 | Provider # 0005092
2 CE credits for CAMS in LU

A free hot breakfast will be served.

RSVP HERE

April 5, 2021April 5, 2021

Vaccination ID’s; To Require or Not to Require | Association Liability Protection | Upcoming Events

Vaccination ID’s: To Require or Not to Require, That Is The Question

Florida’s community association board members are wrestling with many amenity re-opening decisions these days. One such decision is whether or not to open the community clubhouse including the card rooms, bingo, and even off-Broadway like shows. As a part of that decision making process, board members may be considering requiring proof of vaccination as a pre-requisite to such use.

While ultimately a decision within the business judgment of the board, requiring proof of vaccination prior to allowing use of an association amenity is not recommended. Do you remember the ol’ adage, “no good deed goes unpunished?” Well, requiring proof of vaccination from the members prior to allowing use of the clubhouse, no matter how well intended, could likely lead to significant and costly problems for the association who fails to heed the warnings set out in this article.

When acquiring medical information of members, the board’s duty, pursuant to relevant law, is to keep such acquired medical information confidential. Requiring proof of vaccination to use amenities will no doubt lead to a significant breach of that duty.

Another reason not to require proof of vaccination is that doing so will lead to creating two classes of members. The vaccinated members who are allowed to use the amenities and the unvaccinated members who are not allowed to use the amenities. Yet, all members pay for access to use the amenities in proportion to their assessment obligation. Therefore, this practice could expose the association to adverse litigation from the upset unvaccinated members.

If the aforementioned two reasons are not sufficient to dissuade you, then consider this: A member may choose not be vaccinated for religious reasons. In this situation, by requiring proof of vaccination the association will be exposing itself to a claim of religious discrimination.

If the association opens an amenity, then the amenity should be available to all members for use without consideration of vaccination. If that is a concern, then perhaps waiting a short while longer to open the clubhouse or other amenity makes the most sense. Remember, too, that when you do re-open to adhere to CDC protocols as may be appropriate for your community such as mask wearing, social distancing, and sanitizing. As a part of the re-opening procedure, please consult with your association’s attorney regarding the do’s and don’ts.

Community Associations Protected by Limited Liability Law

[As presented by Community Associations Institute Florida Legislative Alliance]

On Monday, March 29 Governor DeSantis signed SB 72 into law granting liability protection to businesses and entities, such as religious institutions and community associations, from lawsuits related to COVID-19 exposure if they made a good faith effort to follow all federal, state, and local public health guidelines.

The protections provided in this bill are important to CAI Florida Legislative Alliance (CAI-FLA). CAI is honored to have been a part of the Florida RESET task force, a coalition of organizations dedicated to reopening Florida safely that assisted in drafting and passing this legislation. In August of 2020, this working group announced their three priority legislative proposals, each of which were included in SB 72 which has been signed into law.

Specifically, the RESET Task Force’s draft legislation authorized limited cause of action for COVID-19 related claims with:

a heightened culpability standard: to establish liability, the defendant must have acted with gross negligence or intentional conduct;
a heightened evidentiary standard: clear and convincing evidence is required to establish liability, rather than a mere preponderance of the evidence; and
a shortened statute of limitations.

Upcoming This Week

April 6 | 9:00am-4:45pm
KBR Legal at the Palm Beach Expo Booth 23

We will also present two CE courses:
10am: Updating Your Government Documents. With Allison L. Hertz, Esq., BCS
2:45pm: 2021 Legal Update. With Michael S. Bender, Esq., BCS

RSVP HERE

April 7 | 12:00-1:00pm
Association Insurance: Top FAQ’s & Concerns
With Allison L. Hertz, Esq., BCS and Brendan Lynch, EVP of Plastridge Insurance.

RSVP HERE

April 8 | 11:00am-12:30pm
Top 10 Common Mix-ups and Misperceptions of Condominiums and HOAs.
With Allison L. Hertz, Esq., BCS and Shawn G. Brown, Esq., BCS.

RSVP HERE

April 9 | 10:00am-12 Noon
Condominium Board Member Certification
Course # 9630075 | 2 CE credits in IFM or ELE. Fulfills Florida requirement for new condominium board members. With Andrew Black, Esq., BCS.

RSVP HERE

March 12, 2021October 14, 2022

The 2021 Florida Legislative Preview, as Related to Community Associations | The Good, The Bad and The Ugly

Welcome to Rembaum’s Association Roundup’s 2021 legislative preview. The 2021 legislative session began on March 2 and ends April 30. Not only are all of the Bills discussed below subject to multiple changes, whether any of the Bills discussed below will become the law of the land remains to be seen. Unless otherwise clarified, the proposed legislation discussed below applies to condominium, cooperative, and homeowners’ associations.

House Bill 72 provides for relief from liability for Covid -19 related claims. This Bill provides protection from claims for damages, injuries, or death. While community associations are not specifically named in the legislation, corporations not- for- profit are included as are for profit business entities and charitable organizations. Corporations not- for- profit include the overwhelming majority of Florida’s community associations. At the time a plaintiff files a lawsuit at the courthouse, the plaintiff must also submit an affidavit signed by a physician actively licensed in the state of Florida which attests to the physician’s belief, within a reasonable degree of medical certainty, that the plaintiff’s Covid – 19 related damages, injury or death occurred as a result of the defendant’s acts or omissions. At this very early stage of the proceedings, admissible evidence is limited to the evidence demonstrating whether the defendant made a good faith effort to substantially comply with authoritative or controlling government issued health standards for guidance at the time the cause of action accrued. If the court determines that the defendant made such a good faith effort, then the defendant is immune from civil liability. If the court determines that the defendant did not make such a good faith effort, then the plaintiff’s case may proceed. However, absent at least gross negligence proven by clear and convincing evidence, the defendant is not liable for any act or omission relating to a Covid – 19 related claim (a very difficult burden for the plaintiff to accomplish).

Senate Bill 1638 provides for a new condominium fraud investigation pilot program to be created within the Florida Division of Condominium, Timeshares and Mobile Homes of the Department of Business and Professional Regulation. The pilot program’s purpose is to facilitate the Division’s investigation of condominium related to fraud and corruption and is being initially tested only in Broward, Miami-Dade, and Monroe Counties. As a part of the legislation, the Division will be required to hire three financial investigators, five investigators with law enforcement experience and three clerical employees. For the purposes of the pilot program all monies are to be made available from the Division’s existing funds. From this writer’s point of view, the Division already needs additional funding to carry out its current duties and responsibilities. This Bill, while no doubt well intended, creates additional financial burdens on the Division with no clear funding source available.

Senate Bill 56 provides for yet another opportunity for a delinquent owner to bring their delinquent account current and avoid having to pay attorney’s fees. If the association sends out a statement of account, the association is required to provide a statement of account that designates the name of the owner, the due date and amount of each assessment, the amount paid on the account, and the balance due. In essence, this Bill adds additional financial burdens on the rest of the association’s membership who timely pay their assessments. A careful reading of this legislation suggests that while attorneys’ fees cannot be collected for sending such a letter, management companies may be able to do so because they are specifically not precluded in the legislation from doing so.

This particular legislation is somewhat surprising because everyone who lives in an association is aware that assessments are due for the overwhelmingly most part, either monthly or quarterly. As a matter of course, management companies routinely send out late notices as well. This legislation accomplishes nothing more than creating additional legislative and financial hurdles prior to the Assocation being able to proceed in collections against delinquent owners. The only members who benefit from this legislation are the delinquent owners while it punishes those who timely pay their assessments.

Senate Bill 1998 provides for additional rights of owners pertaining to value adjustment board decisions and disputes with the Association. Should the association initiate such a challenge, by way of this legislation, the affected association members are not necessarily considered indispensable parties to the action. This is important protection so as to protect the association from unfair dismissals of such actions when all members are not names in the litigation.

This Bill also makes patently clear that any officer director or manager who knowingly solicits, offers to accept or except anything or service of value or kickback commits a felony of the 3rd degree which is punishable by up to five years in jail.

To the itemized list of what comprises the “official records” of the association, this Bill adds all bank statements, cancel checks and credit card statements, all invoices transaction receipts, deposit slips or other underlying documentation that substantiate any receipt or expenditure of funds by the association. In addition, this legislation provides that all official records must be maintained in a manner and format prescribed by Division rule so that they are easily accessible for inspection.

Presently, even if electronic records are stored on the website of the association, in the event of a member request for official records, pointing the requesting person to the records on the association’s website does not satisfy the current requirements making records available to owners. Senate Bill 1998 changes this to provide that the association may fulfill its obligations of providing access to the official records by directing the individual to the website of the association’s so long as the records are posted on the website.

Of great concern is this next item set out in Senate Bill 1998 that will consume an inordinate amount of the manager’s (or a board member’s) time as related to each and every record request. In short, in response to a statutorily compliant written request to inspect records, the association must simultaneously provide an itemized list to the requester of all records made available for inspection and copying and provide a sworn affidavit in which the person facilitating the association’s compliance with the request attest to the veracity of the itemized list. The itemized list must also identify any of the associations records not made available. This list must be maintained by the association for seven years. The delivery by the Association of such an itemized list and affidavit creates a rebuttable presumption that the association complied with these requirements. As if it were not hard enough to find qualified board members to hold office, if this Bill passes into law, any director or member of the board or manager who knowingly, willfully, and repeatedly violates the aforementioned requirements will commit a misdemeanor of the second- degree. Repeatedly means two or more violations within a 12 month period. Moreover, any person who willfully and knowingly refuses to release or otherwise produce Association records with the intent to avoid or escape detection, arrest, trial or punishment for the commission of a crime or to assist another person with such avoidance or escape commits a felony of the 3rd degree punishable by up to five years in jail.

Senate Bill 630 primarily refers to condominium associations though, in a few instances it also references both cooperative and homeowners’ associations, too. This bill revises residential condominium unit owner insurance requirements by providing that if the condominium association’s insurance policy does not provide for rights of subrogation against the unit owner responsible for a casualty event, then the unit owner’s insurance policy MUST not contain subrogation rights against the association. There are those who believe that at present unit owners can subrogate claims against the condominium’s insurance policy which then results in higher insurance fees to all owners. On the other hand, it can be argued that this particular piece of legislation will drive up the cost of insurance for all residential condominium unit owners because in many instances, they will not be in a position to subrogate their insurance claims against those actually responsible for having caused the damage.

The fee charged by a condominium association as related to the transfer of a unit will increase from a maximum of $100 to $150 and future increases in the fee that can be charged are now tied to the Consumer Price Index. This may offer some relief to Associations although it would be preferred that the bill allow the Association to charge the actual cost of the background check so as to ensure the Association was not out any money to conduct the background check

In addition to making provision for electric vehicles, natural gas fuel vehicles are now included too. This Bill provides rights of owners to not only have a electric charging stations, but also natural gas charging stations.

Other than election and recall disputes, prior to institution of court litigation a party to a dispute must either petition the Division for non-binding arbitration or initiate a new process, pre-suit mediation. Arbitration is binding on the parties only if all the parties to the arbitration agree to be bound to it, in writing. A new mediation process will be available for parties in dispute to present the parties with an opportunity to resolve the underlying dispute in good faith and with a minimum expenditure of time and resources. The mediation proceedings must generally be conducted in accordance with the Florida Rules of Civil Procedure and can be used in lieu of the otherwise required mandatory non-binding arbitration process. This new type of pre-suit condominium mediation process follows the process set out in the homeowners’ association act. Remember, however, election and recall disputes are not available for mediation as those disputes have to be arbitrated by the Division or are subject to being heard in a local court of competent jurisdiction.

As to cooperative associations, a cooperative association may not require a member to demonstrate any purpose or state any reason for an official record request. A cooperative board member or committee member participating in a meeting via telephone, real time video conferencing or similar real time electronica or video communication counts toward quorum and such member may vote as it physically present.

As to homeowners’ associations, in addition to any of the authorized means of providing notice of a board meeting, the association may, by rule, adopt a procedure for conspicuously posting the meeting notice and agenda on the association’s website or an application (meaning an “app”) that could be downloaded on a mobile device. The meeting notice is also required to be physically posted on the Association property. Any rule adopted must in addition to other matters, must include a requirement that the association send an electronic notice to the members whose email addresses are included in the association’s official records (meaning the member opted in to receive their official notices from the association via email). The homeowners’ association ballots, sign in sheets voting proxies, all other papers, and electronic records relating to voting by partial owners must be maintained for at least one year after the date of the election, vote, or meeting. In addition, the homeowners‘ association must include in it with its official records, information the association obtains in a gated community in connection with guests visits to parcel owners or any other residence in the community.

Of interest, is a change in the manner in which a homeowners’ association can create restricted reserve accounts. The only method available will require the affirmative vote and approval of a majority of the total voting interests of the association. No longer included is the possibility that a developer could have initially created restricted reserves.

Also, as related to homeowners associations, should Senate Bill 630 become law, then any amendment to a governing document, rule or regulation which prohibits a parcel owner from renting his or her parcel, alters the authorized duration of a rental term, or specifies or limits the number of times the partial owner may rent his or her partial during a specified period, applies only to the parcel owner who consents, individually or through a representative, to the amendment, or a new parcel owner acquires title to the parcel after the effective date of the amendment. Notwithstanding, an association may amend its governing documents to prohibit or regulate rental durations that are for terms of less than six months and to prohibit a parcel owner from renting his or her parcel more than three times in a calendar year which amendments would apply to all parcel owners. In addition, none of the aforementioned would apply if the association has 15 or fewer parcels.

Recall actions for condominium, cooperative, and homeowner associations can be brought either to the Division of Condominium, or a court of competent jurisdiction.

As to emergency powers, as related to condominium, cooperative, and homeowners’ associations, the emergency powers are clarified to apply to a broader range of events such as the present Covid – 19 pandemic. In addition to board meetings, committee meetings, elections and membership meetings can be conducted in whole or in part by telephone, real time video conferencing or similar real time electronica or video communications. Associations can implement a disaster plan or emergency plan before, during or following the event village the state of emergency is declared. In addition to the advice of emergency management officials, now, associations can rely on advice from public health officials to determine whether the association property can be safely inhabited, accessed or occupied. In addition to taking action to mitigate further damages, the board can take action to mitigate further injury or contagion. Additional clarification is provided that during the state of emergency, the association cannot prohibit owners, their guests and agents or invitees from accessing a unit or the common elements for the purpose of ingress to an egress from the unit and when necessary in connection with the sale, lease or other transfer of title to a unit or for the health and safety of such person unless a governmental order or determination or public health directive from the centers for disease control and prevention has been issued prohibiting such access to the unit.

House Bill 21 provides that a person or party may not bring a cause of action for a material violation that exists within a completed building structure or facility which may reasonably result or has resulted in physical harm to a person or significant damage to the performance of a building or a system unless the party has submitted a claim for the alleged material violation under an applicable warranty and the warranty provider denies the claim or offers a remedy that is unsatisfactory to the person for a party within the time limit provided for in the warranty.

Senate Bill 1966 would effectuate a change to qualifications to be a board member. Presently, if a potential candidate is delinquent in a monetary obligation, they are not qualified to be a candidate. If this bill becomes a law, then being delinquent in any monetary obligation is no longer relevant. Rather, the potential candidate would have to be delinquent in the payment of an “assessment”. In addition, in an effort to describe when an owner is actually delinquent, if payment is not made by the due date as specifically identified in the declaration of condominium bylaws or articles, then the payment is delinquent however if it due date is not specified then, the due date is the first day of the assessment period. On a different note, the condominium association’s annual budget must be proposed to the unit owners and adopted by the Board of Directors no later than 30 days before the beginning of the fiscal year.

Senate Bill 1490 is perhaps the most risky piece of legislation this entire legislative session, in this author’s sole opinion, in that it allows condominium associations, through a vote of the owners, the ability to invest the otherwise sacrosanct restricted reserve accounts with an investment advisor. While the legislation attempts to minimize risk by requiring the association to adopt a written investment policy annually, it nevertheless allows the investment advisor to invest funds not deposited into depository accounts. While the investment advisor is held to the high standard of being a “fiduciary” nevertheless the reserve monies will be at a much higher risk of loss.

Stay tuned to learn if these Bills become law. Remember, there is a lot of time left in the legislative session to further turn these Bills into legislative sausage.

March 1, 2021March 1, 2021

Selective Enforcement: A Grossly Misunderstood Concept

Without exception, the affirmative defense of “selective enforcement” is one of the most misunderstood concepts in the entire body of community association law. How often have you heard something like this: “The board has not enforced the fence height limitation, so it cannot enforce any other architectural rules”? Simply put, nothing could be further from the truth.

When a community association seeks to enforce its covenants and/or its board adopted rules and regulations, an owner can, under the right circumstances, assert an affirmative defense such as the affirmative defense of selective enforcement. An affirmative defense is a “yes I did it, but so what” type of defense. In civil lawsuits, affirmative defenses include the statute of limitations, the statute of frauds, waiver, and more. However, it’s just not as simple as that. For example, a fence height limitation is a very different restriction than a required set back. Under most if not all circumstances, the failure to enforce a fence height requirement is very different from the failure to enforce a setback requirement. Ordinarily, the affirmative defense of selective enforcement will only apply if the violation or circumstances are comparable, such that one could reasonably rely upon the non-enforcement of a particular covenant, restriction, or rule with respect to their own conduct or action.

In the seminal case of Chattel Shipping and Investment Inc. v. Brickell Place Condominium Association Inc., 481 So.2d 29 (FLA. 3rd DCA 1986), 45 owners had improperly enclosed their balconies. Thereafter, the association informed all of the owners that it would thereafter take “no action with respect to existing enclosed balconies, but prohibit future balcony constructions and enforce the enclosure prohibition.” As you might have already predicted, nevertheless, thereafter an owner of a unit, Chattel Shipping, enclosed their unit; and the association secured a mandatory injunction in the trial court requiring the removal of the balcony enclosure erected without permission. The owner appealed. In the end, the appellate court disagreed with the owner who argued that the association decision to enforce the “no enclosure” requirement only on a prospective basis was both selective enforcement and arbitrary. The court held that the adoption and implementation of a uniform policy under which, for obvious reasons of practicality and economy, a given building restriction will be enforced only prospectively cannot be deemed “selective and arbitrary.”

In Laguna Tropical, A Condominium Association Inc. v. Barnave, 208 So. 3d 1262, (Fla. 3d DCA 2017), the court again used the purpose of the restriction in its determination of whether the association engaged in selective enforcement. In Laguna Tropical, a rule prohibited floor covering other than carpeting unless expressly permitted by the association. Additionally, the rule provided that owners must place padding between the flooring and the concrete slab so that the flooring would be adequately soundproof. In this case, an owner installed laminate flooring on her second floor unit and the neighbor below complained that the noise disturbed his occupancy. As a result of the complaint, the association demanded that the owner remove the laminate flooring. However, the owner argued selective enforcement because the association only enforced the carpeting restriction against the eleven exclusively upstairs units in the condominium. The court noted that the remaining units in the condominium were either downstairs units only, or were configured to include both first-floor and second-floor residential space within the same unit.

Again, the court looked to the purpose of the prohibition on floor coverings other than carpet and found that the prohibition was plainly intended to avoid noise complaints. Therefore, no selective enforcement was proven because no complaints were shown to have arisen regarding any units except the eleven exclusively upstairs units.

What about cats and dogs? In another case, Prisco v. Forest Villas Condominium Apartments Inc., 847 So. 2d 1012 (Fla. 4th DCA 2003), the Fourth District Court of Appeals heard an appeal alleging selective enforcement regarding the association’s pet restrictions. The association had a pet restriction which stated that other than fish and birds, “no pets whatsoever” shall be allowed. In this case, the association had allowed an owner to keep a cat in her unit, but refused to allow another owner to keep a dog. The association argued that there was a distinction between the dog and the cat. However, on appeal, the court found that the restriction was clear and unambiguous that all pets other than fish and birds were prohibited. Therefore, the court reasoned that the facts which make dogs different from cats did not matter because the clear purpose of the restriction was to prohibit all types of pets except fish and birds. In other words, the court held that the plain and obvious purpose of a restriction should govern any interpretation of whether the association engaged in selective enforcement.

If an association has a “no pets” rule and allows cats, must it allow dogs, too? There is a long line of arbitration cases that have distinguished dogs from cats and other pets for purposes of selective enforcement. For example, in Beachplace Association Inc. v. Hurwitz, Case no. 02-5940, a Department of Business and Professional Regulation Division of Florida Condominium Arbitration case, the arbitrator found, in response to an owner’s selective enforcement defense raised in response to the association’s demand for removal of a dog, that even though cats were allowed, that comparison of dogs to cats was not a comparative, like kind situation. Further the arbitrator found that cats and dogs had significant distinctions such as barking versus meowing, and therefore the owner’s attempted use of the selective enforcement argument failed.

But, in Hallmark of Hollywood Condominium Association Inc. v. Andrews, Case 2003-09-2380, another Department of Business and Professional Regulation Division of Florida Condominium Arbitration case, the learned arbitrator James Earl decided that because the association has a full blown “no pets of any kind” requirement and since cats were allowed, then dogs must be allowed, too. In other words, the defendant owner’s waiver defense worked. But, the arbitrator wisely noted in a footnote as follows: “The undersigned notes that there is a long line of arbitration cases that have distinguished dogs from cats and other pets for purposes of selective enforcement. However, the fourth district court of appeal has ruled that where the condominium documents contain particular language prohibiting all pets, any dissimilarity between dogs and cats is irrelevant and both must be considered. See Prisco.” The distinction between the two arbitration cases could be explained because of timing in that the 4th DCA’s decision in Prisco was not yet published when Hurwitz was decided.

From these important cases, it can be gleaned that

(i) even if an association has ignored a particular rule or covenant, that by giving written notice to the entire community that it will be enforced prospectively, the rule or covenant can be reinvigorated and becomes fully enforceable once again (though of course, prior non-conforming situations may have to be grandfathered depending on the situation),

(ii) if an association or an owner is seeking an estoppel affirmative defense, they must be sure all of the necessary elements are pled,

(iii) at times a court will look to the purpose of the rule itself where it makes sense to do so, and

(iv) dogs and cats are different, but they are both considered “pets.”

Remember to always discuss the complexities of re-enforcement of covenants and rules and regulations that were not enforced for some time with your association’s legal counsel in an effort to mitigate negative outcomes. The process (commonly referred to as “republication”) can restore the viability of a covenant or rule that may have been waived due to the lack of uniform and timely enforcement.

(Reprinted with permission from the March 2021 edition of the Florida Community Association Journal)

February 1, 2021October 13, 2021

Community Association Leasing | Act Now Before It Is Too Late!

If your homeowners association has not adopted leasing restrictions or wants to amend existing leasing restrictions, and you want any new restrictions to be effective against 100 percent of the members, then the board should consider taking steps to amend the declaration of covenants, right now! Well, in any event, prior to the date the proposed legislation may, if approved by the legislature and governor, become law, which is typically July 1, 2021. As discussed in greater detail below, if the Florida Legislature adopts leasing legislation into Chapter 720, the Homeowners Association Act, similar to that which is currently in Chapter 718, the Condominium Act, you will want to be sure that your HOA has properly approved and recorded any desired leasing amendments into your community’s declaration to ensure equal enforceability against all owners in the community.

We are aware that some homeowners associations have leasing restrictions only set forth in the board-made rules. In our opinion, having leasing restrictions only set out in the rules make such rules far more vulnerable to a successful legal challenge than if such restrictions were set out in the declaration. This is because the authority to adopt such rules must be readily identifiable from the authority set out in the declaration. If you have leasing restrictions in your association’s rules, then it is recommended that you have them reviewed by legal counsel to provide further guidance on their enforceability.

By way of background, in 2004 the Florida Legislature substantially revised the ability of a condominium association to enact and otherwise amend leasing restrictions by enacting §718.110(13), Florida Statutes, which, having been since amended, presently provides the following:

An amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment. [emphasis added]

So, after this legislation became effective, if a condominium association had not yet adopted leasing covenants or desired to amend existing rules that

prohibited rentals,
altered the duration of the rental term, or
limited the number of times the owners could lease during a specified period of time, such amendments were required to be set out in the declaration of condominium and would only be enforceable against those who voted in favor of adopting the amendment and those owners who took title to their unit after the amendment had passed and taken effect.

Another important consideration, albeit at times mildly confusing, is the effect of having Kaufman language in the declaration. To understand this concept, it is important to first understand what the term Kaufman language means and how to identify it. When Kaufman language is included in a declaration, in the simplest of terms, it means that all new legislation applies to that entire declaration even if it changes existing substantive rights. An example of Kaufman language follows: “This Declaration is subject to Chapter 718, Florida Statutes, as it is amended from time to time.”

(The Kaufman language is the latter emphasized phrase.) Of course, a declaration associated with a homeowners association would reference Chapter 720, Florida Statutes.

If the declaration for your homeowners association includes Kaufman language, then if the proposed legislation is enacted into law, having leasing restrictions that were amended into the declaration might be problematic and subject to challenge unless the new legislation makes it crystal clear that it only applies in the future or prospectively, which is a concept that has to be balanced against the standard of statutory interpretation that legislation is not applied retroactively unless the legislation expressly provides for such retroactive interpretation. In other words, including Kaufman language in the declaration may allow a member to assert that their association’s prior leasing amendments that had applied to all members are now only enforceable against those members who voted in favor of it, as required by the new legislation (assuming it is actually signed into law). Whether such an argument would prevail in a court of law is difficult to predict. In any event, hopefully, this concern will be alleviated in the legislation.

As an aside, by inclusion of Kaufman language in the declaration, then all of the changes to the Florida Statutes, including changes to substantive rights, will apply to the declaration without regard to whether the changes are beneficial or detrimental to the association and its unit owners. However, Kaufman language can also be inserted into a declaration on a provision-by-provision basis, such as for fining and lender assessment obligations upon taking title to a home through foreclosure, which is far superior in that only certain substantive legislative amendments will apply as compared against each and every legislative change.

What does all of this mean? At a minimum, it is patently clear that the leasing legislation will apply to all homeowners associations. For those homeowners associations without Kaufman language in their declaration, then the legislation would apply prospectively, meaning it would only apply against those who voted in favor of the leasing restrictions until title to the home changes. If, however, Kaufman language exists in the declaration, providing for retroactive application of the new legislation, and the new legislation does not clarify it is only effective prospectively, then upon member challenge the association may have the burden of proving which members did and which members did not vote in favor of the previously enacted leasing restrictions.

The bottom line is, if your homeowners association has not yet adopted leasing restrictions into the declaration, then consider doing so ASAP. If the declaration contains Kaufman language, then to avoid possible retroactive application of the proposed leasing legislation, the Kaufman language can also be amended at that time. Please consult with your association’s legal counsel to review your current declaration and rules regarding any leasing restrictions before taking any action to proceed with leasing amendments, as this information is intended as summary only, and there are additional considerations to take into account as well.

January 25, 2021January 25, 2021

Discriminatory Practices: Is Your Association Prepared?

On September 26, 2016, Rembaum’s Association Round Up published an extremely important article regarding a community association’s potential liability when allegations by one member accuse another member of a discriminatory practice. (Click HERE to view the 2016 article). On September 13, 2016, HUD made clear that a housing provider is responsible for discriminatory practices that may take place. In its Rules and Regulations set out in Chapter 24, Part 100 of the Code of Federal Regulations, effective which further interprets the Federal Fair Housing Act, HUD explained that it believes that, “we are long past the time when racial harassment is a tolerable price for integrated housing; a housing provider is responsible for maintaining its properties free from all discrimination prohibited by the Act.” Those regulations became effective on October 14, 2016.

In this author’s opinion, HUD went way too far by mandating that housing providers act as the investigator, police, judge and jury in cases of alleged discrimination. After all, there are countless Fair Housing offices in each state where complaints can be filed and are actively investigated, often times with only a bare inference. Community association board members are volunteers with no required special training other than to be “certified” within 90 days of taking office, which certification can be met by signing a one-page form acknowledging duties or taking a two-hour class. Neither the individual board members nor the community as a whole should have to bear liability for its board of directors not taking action in a neighbor to neighbor dispute. Afterall, the court room is the proper setting where such matters should be resolved.

In the January 25, 2021, edition of the Palm Beach Post reporter Mike Diamond Special to Palm Beach Post USA TODAY NETWORK, authored an article titled “Judge Won’t Dismiss HOA Religious Bias Suit.” In the article the judge was quoted as follows: ““the La-Grassos [the plaintiff’s] have plausibly alleged a claim against the association for its failure to respond to or seek to control Ms. Tannenholz’s allegedly discriminatory conduct.” Amongst other things, the allegation is that Tannenholz’s told La-Grassos, “you do not belong in a community that is 80% Jewish and that La-Grassos should “move the F… out and go to a white supremist community.”

But for HUD’s position that a housing provider can have liability for discriminatory practices of the residents it is unlikely the association would be a defendant in this lawsuit. By forcing housing providers, such as Florida’s countless condominium, homeowners’ and cooperative associations, to interject themselves into what should be private disputes amongst neighbors, HUD is providing the deepest of pockets to the plaintiff’s attorneys. At the end of the day, it is just another reason to sue the innocent community association to create liability where there should not be any in the first place.

Practical Tip no. 1: In light of this lurking danger, be sure to check in with your association’s insurance agent to be sure the association has proper liability coverage for accusations of discrimination.

Practical Tip no. 2: Also, given that there can even be personal liability in such actions, board members would be wise to speak to their own personal insurance agents too… Afterall you never know when that umbrella policy may come in handy. Remember this, too: if one board member has knowledge about an event, then such knowledge can be imputed to all board members as if they are all similarly aware. In other words, when one board member knows, then the association itself is on notice.

Practical Tip no. 3: Consider formally adopting a “no discrimination” type of rule. It could be as simple as “discrimination of any kind will not be tolerated”.

Practical Tip no. 4: If your association is made aware of an alleged discriminatory practice, then a written record of such allegation and the association’s efforts to remedy the situation should be made.

Be sure to discuss each and every alleged discriminatory practice brought to the attention of the board and/or its manager with the association’s attorney to obtain the proper guidance needed.

January 10, 2021January 25, 2021

Financial Screening of Purchasers: How Far Is Too Far?

A few months back a case came before the county court in the 20th Judicial Circuit for Collier County, wherein a prospective buyer challenged the validity of a board-adopted rule which required that all prospective buyers provide two years of tax returns with their application for ownership approval. This requirement was in addition to the background check and credit check that were also required. While this is only a county court case and, therefore, has no precedential value other than to the parties themselves, there are principles addressed of which associations and managers should be aware; even though many learned attorneys would opine that the conclusions of the court are legally flawed under the facts of the case and, if appealed, would likely be overturned. Nevertheless, there are still nuggets of knowledge that can be gleaned from this case.

In this case, Mech v. Crescent Beach Condominium Association, Inc., Case No. 19-SC-3498, decided June 2020, the purchaser, who was the plaintiff, was seeking to buy a unit at Crescent Beach Condominium for $400,000, which was to be paid in cash. The purchaser purportedly had a clean background and a credit score of 800. Nonetheless, the board required that, like all other prospective purchasers at the condominium, this purchaser needed to produce his tax returns in order for the association to approve the transfer. The purchaser refused to provide his tax returns and cited his good credit score and clean background as evidence enough for approval. Eventually, an impasse was reached, and the purchaser canceled the contract. Then he brought the county court lawsuit challenging the requirement. (Generally speaking, typically under current Florida law, the purchaser would not have legal standing to even bring the claim against the association; but it does not appear that this legal infirmity was raised by the association, which allowed the case to proceed.)

The purchaser challenged the rule, arguing that the rule was not within the scope of the association’s authority to adopt, nor did it reflect reasoned decision-making. (It is noteworthy to point out that, after the initiation of the lawsuit, the association amended its declaration of condominium to provide that the association may require tax returns in an application for approval of a sale. However, this is not relevant to the conclusions of the Court in this case since it occurred after the litigation was filed.)

The association argued that the tax returns are necessary because they provide more information than a credit report and could help ensure that the potential purchaser is “a good credit risk.” The Court, however, did not agree, calling the argument “nonsensical.” The Court goes on to identify what this judge considers to be the best indicator of a person’s financial history, and as a result, it is the only information the association is allowed to seek. (We note that this conclusion is also without a stated legal basis.)

In the final judgment, some might argue that the Court goes way beyond what proper judicial consideration and conclusions typically contain and indicates that she could find “NO justification for the invasive requirement that a full, or even partial, return would be required when, in fact, the board already requires a full background check and credit check.” While no legal support for the conclusion was provided, the Court held that the request for tax returns was invasive and unnecessary and that the requirement was “shocking.”

The Court objected to the blanket requirement that applied to every applicant regardless of the results of their background and credit checks. Had the tax returns only been required when an applicant’s credit history showed a history of financial instability or delinquencies, the rule may have been upheld by the Court. How-ever, the Court held that “to take a position that ‘every person’ who applies to be a member at [the association] is patently unreasonable and shall be stricken.” Lastly, also without a legal basis or ability, the Court ordered the association to strike all reference in its condominium documents which require potential purchasers to produce tax returns unless the association can show good cause to request the information.

A brief discussion regarding the adoption of rules and regulations is necessary to highlight lessons that can be learned from this case. Generally, both condominium and homeowners association governing documents will typically provide that the board of the directors has the authority to adopt rules and regulations for the community. While some governing documents may contain restrictions requiring a membership vote to approve new rules, it is common for the governing documents to provide the board with the authority to adopt rules and regulations. (Careful review of the documentary authority for each community is recommended as some may limit the rule-making authority to common areas only and not to the residential property within the community.) Although the board is generally authorized to adopt rules and regulations, those rules and regulations must not conflict with any provision expressly set out in the governing documents or reasonably inferred from them, and they must be reasonable. (This should be contrasted with covenants recorded in the County’s official records, which may be unreasonable and still be legally enforceable under long-standing Florida case law.)

In Beachwood Villas Condominium v. Poor, et. al., a 1984 Fourth District Court of Appeal (4th DCA) case in which several owners challenged rules enacted by their association’s board of directors, the Court noted that there could be two sources of use restrictions: (i) those set out in the declaration of condominium and (ii) those adopted by the board. As to the use restrictions set out in the declaration, the court held that such restrictions are “clothed with a very strong presumption of validity,” as initially provided in Hidden Harbor Estates v. Basso (a 1981 4th DCA case).

In examining board-adopted rules, the court first must determine whether the board acted within its scope of authority—in other words, whether the board had the express authority in the documents to adopt the rule in the first place. If the answer is “yes,” the second question to determine is whether the rule conflicts with an express provision of the governing documents or one that is reasonably inferred. (If the documents are silent on an issue, the inference is that it is unrestricted. Adopting a rule to restrict a topic that the declaration is otherwise silent about would conflict with the inferred unrestricted use and therefore be unenforceable.) If these first two issues are found to exist, the court will then determine if the rule is reasonable. The board’s exercise of its reasonable business judgment in adopting a rule is generally upheld so long as the rule is not “violative of any constitutional restrictions and does not exceed any specific limitations set out in the statutes or condominium documents.”

In examining your own board-adopted rules, ask the following:

Did the board have the power to adopt the rule?
Is the rule in accord with with the declaration, articles of incorporation, or bylaws?
Is the rule reasonable under the circumstances? (While ultimately only a court can make this final determination, the board should use its best judgment, with assistance of its counsel, to reach this decision.)

If the answer to these three questions is “yes,” then the rule should be found to be valid and enforceable by the court upon an owner challenge.

Ultimately, what can be gleaned from Mech v. Crescent Beach Condominium Association Inc. is that even if the association acts reasonably when adopting rules and even when amending the declaration, a lower court judge can reach almost any decision it wishes. Had the provision at issue only required tax returns when the background or credit checks revealed that the prospective purchaser had a history of financial irresponsibility, the provision may have withstood judicial challenge by this particular judge. Additionally, had the provision requiring tax returns been set out in the declaration before the initiation of the lawsuit, the outcome may have been different under existing, well-established case law.

Bottom line, whenever the board is considering new rules, it is recommended that the board consult with the association’s legal counsel before adopting them.

(Reprinted with permission from the September 2020 edition of the Florida Community Association Journal)