Author: trisha

If your association has ever considered filing an eviction lawsuit against a unit owner’s tenant, then you need to know about a recent Third District Court of Appeal case, Shteyn vs. Grandview Palace Condominium Association, decided September 24, 2014. This case is so fresh that the ink isn’t dry yet. In fact, the decision is not final until the 30 day period in which either party may decide to appeal further has lapsed. It is unlikely, but remotely possible. So, let’s take a deeper look.

In Shteyn, the association sought i) to “evict” the tenants, ii) to “eject” the tenants and iii) an injunction (meaning, to force through court order) to prohibit the tenants from violating the association’s rules and regulations. An “ejectment” action is a lawsuit brought by the property owner to remove a party who is unlawfully occupying the property. It differs from an “eviction” in that an eviction requires a landlord-tenant relationship whereas an ejectment does not. For example, if the occupant claims they are not paying rent, then an eviction action may not be the right cause of action. By including both claims for eviction and ejectment, the plaintiff-association covered all of its bases.

After the association filed its lawsuit, the tenants moved out. As a result, the claims for eviction and ejectment were rendered moot. The tenants also argued that the association’s cause of action for injunctive relief should be rendered moot, too. Typically, in order for an association to maintain standing against an owner or tenant, that individual must still maintain their relationship as a resident within the association. Because the tenants moved out, that relationship no longer existed, and thus, the tenants argued they were no longer subject to the court’s jurisdiction in so far as the association’s claim for injunctive relief was concerned. The Court disagreed.

The Court looked to section 718.303 (1)(b)(e), Florida Statutes (2013), which provides, in part, that “[a]ctions for… injunctive relief… may be brought by the association against… [a] unit owner… [a]ny tenant leasing the unit, and any other invitee occupying a unit.” However, the prior tenants admitted that at the time the lawsuit was brought, they were occupying the unit. Therefore, the Court found that the circuit court had subject matter jurisdiction at the time the association filed its lawsuit and that the fact that the tenants moved out after the lawsuit was filed in no way divested the circuit court of its jurisdiction. The Court, quoting another case, provided that “a defendant cannot automatically moot a case simply by ending its unlawful conduct once sued.” In addition to seeking an injunction to enjoin the tenants from violating the association’s rules and regulations, the association also sought an injunction to permanently enjoin the tenants from ever again residing at the condominium. Therefore, the Court determined that the circuit court continued to have subject matter jurisdiction to decide the association’s claim for injunctive relief.

Remember too that ultimately, when an association prevails in a lawsuit against an owner’s tenant, so long as the unit owner was included as a party defendant in the litigation, the unit owner-landlord will ultimately be responsible for the association’s prevailing party attorney’s fees incurred in the lawsuit against the owner’s tenant. With that in mind, a well-educated owner will always intercede and resolve their association’s concerns with the owner’s tenant because it is far less expensive to handle the matter then than it is to be sued as a co-defendant along with the tenant and be responsible for all of the association’s fees and costs. It is like going out to dinner, not eating and then being fully responsible to pay for everybody else’s meal! It is a no-win situation.

Remember those funny Seinfeld episodes when Jerry’s father, Mort, served on the board of directors of that fictitious and loony community, Del Boca Vista, that was supposedly in Boca Raton, Florida? Well, apparently, in Miami there is condominium named Del Vista Towers. While there is no relation between the two, we will soon know if Del Vista Towers earns the reputation of that fictional association with a similar name. Reporter Samantha Joseph, in the August 1, 2014 edition of the Daily Business Review, reported that Miami’s Del Vista Towers is being sued by one of its unit owners for failing to permit an owner, who suffers from post-traumatic stress disorder (“PTSD”) and severe depression, to have his assistance animal in accordance with the Fair Housing Act (“FHA”) – a pit bull.

During a motion for summary judgment hearing, Del Vista Towers argued that a Miami-Dade ordinance prohibits pit bulls; therefore, the condominium association did not have to grant the owner’s request. According to reporter Joseph, and to the contrary of the association’s arguments, Judge Jose Martinez agreed with the owner’s position that the U.S. Department of Housing and Urban Development allows reasonable accommodation without regard to breed, that emotional support animals do not require any training and that if the county ordinance were enforced, it would violate the FHA by permitting a discriminatory housing practice in that by denying the owner’s request to keep his pit bull, he is not afforded an equal opportunity to use and enjoy his dwelling. The Judge’s rulings appear consistent with prior FHA decisions. While there is no such thing as a sure thing in any court case, it will be quite a surprise if the owner does not ultimately prevail in this one.

In considering the delicate nature of requests for emotional support animals there is a minefield of mistakes that community associations can trip over. Some of these mistakes were recently made by Bhogaita v. Altamonte Heights Condominium Association, Inc., Case No. 13-12625; 13-13914 (11th Cir., August 27, 2014) in which a judgment against the association, in favor of the unit owner, was upheld by the U.S. Court of Appeals for the Eleventh Circuit. In this case, the unit owner, who suffers from PTSD that developed as a result of a sexual assault which occurred during the unit owner’s military service, purchased a dog, “Kane,” whose weight exceeded the association’s 25-pound pet weight restriction. Two years after acquiring the dog, the association demanded the dog’s removal due to the weight violation. In response, the unit owner provided two letters from his treating psychiatrist which provided that, due to mental illness, the unit owner had limitations regarding social interaction and coping with stress and anxiety and that an emotional support animal would help the unit owner cope with the disability.

In response to the doctor’s letters, the association made its first mistake, some might say, the association really stepped in it (pun intended) by requesting detailed information regarding the unit owner’s disability and the dog’s training – the association requested additional information when the minimum threshold to establish entitlement to an emotional support animal had already been reached by the unit owner. The Court found that such threshold had been met by the letters from the unit owner’s psychiatrist because they (i) described the nature and cause of the unit owner’s PTSD diagnosis, (ii) provided that the unit owner was substantially impaired in the major life activity of working and (iii) explained that the dog alleviated the unit owner’s disability related symptoms. Additionally, although not discussed by the Court, it is worthy to note that the FHA, unlike the Americans with Disabilities Act, does NOT require specific training for emotional support animals or service-type animals.

Nevertheless, despite having met the minimum threshold, the unit owner responded to the association’s request for additional information by providing a third letter from the psychiatrist and a personal response answering each of the association’s questions in turn. In this response, the psychiatrist and the unit owner described the unit owner’s PTSD and how it affects major life activities. In addition, the unit owner mentioned a physical disability related to multiple knee surgeries and knee injuries suffered during his military service.

After obtaining this response and learning of the newly claimed physical disability, the association made its second and third mistakes (twice and in addition to committing the first mistake again!) by requesting very detailed information regarding the unit owner’s disabilities and demanding that if the unit owner failed to respond by a certain deadline, he had to remove the dog!

The Court provided that, although the association is empowered to conduct a “meaningful review” of the unit owner’s request for a reasonable accommodation, “[t]he failure to make a timely determination after meaningful review amounts to constructive denial of a requested accommodation.” The Court also provided that a “meaningful review” is for the association to gather “information necessary to apprise [the board of directors] of the disability and the desired need for an accommodation” and that requesting information outside what is minimally required by the FHA is beyond the scope of a “meaningful review.”

Remember that any information sought must be relevant to the request and must be within the scope of a “meaningful review” and that, once the association has the information to satisfy the minimum requirements of the FHA, the association should approve the requested accommodation within a timely manner. It is important to note that an evaluation of a request for a reasonable accommodation under the FHA is a highly fact-specific analysis and must be reviewed on a case-by-case basis. Community associations should seek the assistance of their legal counsel when in receipt of such a request.

Your neighbor’s front yard sign supporting their favorite political candidate may be upsetting. But that alone is not a reason to spray paint over it, yell obscenities every time you see your neighbor leaving to go to work or for the association’s board or directors to demand the sign’s removal.

This begs the question, “Can a homeowners’ association or condominium association prohibit the display of political yard signs?” In short, “yes, it likely can.” The reason the word “likely” is used is due to the fact that, as yet, there are no Florida cases that directly answer this inquiry. However, given other existing cases, a well-crafted and properly adopted rule prohibiting such signs is likely lawful and enforceable.

In examining an association’s “no sign” rule, let us first address the argument heard during every presidential, state and local election seasons, “This is America! The First Amendment protects the right of all homeowners to display political signs on their property.” RIGHT? WRONG! The right to freedom of speech as provided by the First Amendment is not an absolute right and, moreover, the First Amendment concepts of freedom of speech and freedom of expression apply only to governmental settings. As such, the First Amendment acts as both a shield and a sword to prevent the government from stifling your free speech rights.

A community association is not an extension of our government. Though homeowners’ associations and condominium associations do provide a system of governance, they are not governmental entities and have no nexus to local or federal government. In 1987, the Florida Supreme Court held, in Quail Creek POA v. Hunter, that neither a homeowners’ association’s recordation of its covenants in the public records, nor the enforcement of its covenants in state court, created a sufficient nexus to evidence “state action” such that the First and Fourteenth Amendment would apply. Thus, any homeowner would be hard-pressed to argue otherwise. Admittedly, there are occasions when the Florida Supreme Court applies other rights set out in our Federal Constitution, but not in this instance.

Courts have long since held that owners give up certain liberties when living within a community association. In 2002, the Florida Supreme Court held, in Woodside Village v. Jahren, that certain individual rights must be compromised when you choose to live in a condominium. With this in mind, any sign prohibition should be artfully drafted to help ensure enforceability and must be equally enforced. There is no margin for error. The dispositive court cases regarding rule enforceability make clear that a sign restriction must be “clear and unambiguous” to be enforceable against each owner. Remember, a declaration of covenants is a contract between an association and an owner. A basic principal of contract interpretation is that ambiguous terms are held against the drafting party. This means that in the event the rule is even slightly confusing, then the homeowner will likely receive the benefit of the doubt. Also, any covenant or rule must be applied fairly to avoid selective enforcement rebuttals.

That rules prohibiting signs must be artfully drafted was a point made very clear to the homeowners’ association in Shields v. Andros Isle Property Owners Association, Inc. in which the Fourth District Court of Appeal of Florida decided in favor of the homeowner who displayed a sign in her car window despite the association’s sign prohibition. The association’s rules prohibited the display of signs “on any lot”, except a “for sale” sign of a certain size, and prohibited signs on a vehicle. The Court, using the definition of a “lot” in the association’s declaration, interpreted these rules to mean that no sign, except a “for sale” sign, may be on the land or on the exterior of a vehicle. However, there was no prohibition for signs displayed from within a vehicle.

In consideration of the above, a homeowners’ association could, more likely than not, enforce its “no sign” policy which includes prohibiting political signs. Also, as a general rule, courts favor covenants adopted by the membership over rules adopted by the board of directors; meaning, a “no sign” rule approved by the membership serves to increase the association’s chances of prevailing should the rule be challenged.

Upon legal challenge, a court might also be more inclined to uphold a “no sign” rule that does not include an absolute prohibition, but rather, that regulates the length of time the sign can be displayed, its size, where it can displayed and when it must be removed. Before demanding that an owner remove their political sign, the board should review its community association’s sign rules. If the rule at issue is not patently clear, then it is likely time to consider amendment before enforcement. Consider also, election season is short. By the time a lawsuit for an injunction to enforce the “no sign” rule is fully resolved, it might be time to consider the next electoral candidate!

What does your association do when an owner sends the association their assessment payment for less than full amount due? Say the owner owes $1,000.00, and only sends in $100.00 and on their check writes “paid in full.” Do you deposit the check and bill the owner for the difference? If you answered yes, then you are likely in the majority. But, given Florida’s Second District Court of Appeal, August 8, 2014, opinion in St. Croix Lane Trust (the “St. Croix Trust”) & M.L. Shapiro, Trustee (the “St. Croix Trustee”) v. St. Croix at Pelican Marsh Condominium Association, Inc. (the “Association”), you might seriously reconsider depositing that check in favor of sending it back to the owner and demanding full payment, instead. The answer will depend on whether the owner disputed the amount due.

In this case, the St. Croix Trust acquired its unit as a result of a foreclosure. Upon talking title, the Association demanded $38,586.11 as the assessments that remained due and owing. The St. Croix Trustee disputed the assessment amount and argued to the Association that it only owed $840.00. The St. Croix Trustee then sent its check in the amount of $840.00 to the Association and in so doing, wrote a restrictive endorsement on their check, “paid in full.” While the Association continued to seek the difference from the St. Croix Trustee, the attorney handling this collection matter for the Association deposited the $840.00 check. The Court held that the St. Croix Trust did not owe the balance due because the restrictive endorsement written on its check combined with the Association’s lawyer’s act of depositing the check was a de facto acceptance of the St. Croix Trust’s $840.00, a process in legal terms referred to as an “accord and satisfaction.”

An “accord and satisfaction” is discussed in section 673.111, Florida Statutes, more commonly known as the “Condominium Act.” This section provides, in relevant part, that:

“(1) If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, the following subsections apply.

(2)…[T]he claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.”

While there are a few exceptions to subsection (2), above, the Court found that none of them applied to this situation. The Court also held that none of the stated exceptions to the application of subsection (2) applied and thus, “[i]f the Association did not wish to accept the $840 check in full settlement of its claims in accordance with the [St. Croix] Trust’s tender, then it should have returned the check instead of negotiating [depositing] it.”

Being an astute reader of this column, you are already aware that that section 718.116(3) of the Condominium Act (as well as a similar provision set out in the Chapter 720, also known as the “Homeowners’ Association Act”) provides, in relevant part, that:

“…. Any payment received by an association must be applied first to any interest accrued by the association, then to any administrative late fee, then to any costs and reasonable attorney’s fees incurred in collection, and then to the delinquent assessment. The foregoing is applicable notwithstanding any restrictive endorsement, designation, or instruction placed on or accompanying a payment.” [emphasis added]

The Court looked to the legislative history and staff analysis of the legislation and found that it meant that, even if a check contained a restrictive endorsement which provided some other formula for the application of a payment, that nevertheless the monies were to be applied first to the accumulated interest, followed by late fees, attorney’s fees and costs and then to the delinquent assessment. In the Court’s opinion, the staff analyses confirmed that the pertinent language was added to invalidate restrictive endorsements that provide a formula for the application of payments other than as set forth in the statute. The Court found “nothing in the staff analyses suggesting that the amendment was intended to make section 673.3111 [the accord and satisfaction statute, above] inapplicable to condominium associations or that the amendment would otherwise alter Florida law concerning accord and satisfaction solely for the benefit of condominium associations.”

The key to understanding this outcome is that the St. Croix Trustee, an association member, had first disputed the assessment amount due, and then sent in the St. Croix Trust’s $840.00 check that contained the restrictive endorsement, “paid in full” which was deposited by the Association (or in this case, its attorney). With this in mind:

1) If the debt is disputed and less than the full amount due is provided with the written endorsement “paid in full,” do not deposit the check. Instead, send it back to the debtor and demand that the full amount past due be remitted.

2) If there is no dispute and less then the full amount due is sent in by the debtor and the check provided by the debtor contains written endorsement “paid in full,” then if the association deposits the check, it can argue that there was no “accord and satisfaction.” However, it may not be worth the risk, which leaves us with the safest alternative set out in No. 3 below.

3) Any time the association receives a check containing the written endorsement “paid in full,” then, unless the check actually represents the full amount due, do not deposit it but rather send it back and demand the debtor resubmit their check, this time in full.

With this newest wrinkle to association assessment collections, the Florida legislature should come to the aid of associations and clarify that if a debtor writes “paid in full” on their check, it is fully and unequivocally meaningless.

Recently, several new laws went into effect that only affect commercial condominiums. While only a few of these changes make sense, most do not and illustrate the significant misunderstanding of the need to protect all condominium unit owners without regard to whether the condominium is residential or commercial.

Remember, before you get too excited, this article only addresses changes to COMMERCIAL, and NOT residential condominium associations.
Why our Florida legislators have determined that unit owners of commercial condominiums are not entitled to the same protections as owners of residential condominiums shall forever remain a mystery. If you own a unit in a commercial condominium, you need to be aware of these important changes. There is no longer any protection for an owner of a minority of units in a commercial condominium, WHATSOEVER! In other words, there is no equality – whoever owns the most units or the most square footage is “King of the Condo”, FOREVER AND EVER AND EVER AND EVER AND EVER!!!

The changes affecting only commercial condominium associations include:

• Board members can serve for unlimited terms.

• If there is more than one owner of the commercial condominium unit then all of the owners can serve on the board at the same time thereby completely obliterating fair representation on the board.

• Board members do not have to sign a “loyalty oath” that they have read the condominium documents and will discharge their fiduciary duties in a responsible manner. In effect, this means the controlling owners/board members can do what is best for them, personally, and not what is best for the condominium association.

• The election requirements for running and voting for the board as set out in Chapter 718, Florida Statutes (the “Condominium Act”), are no longer applicable to commercial condominiums.

• Voting by “general proxy” is permitted for all matters, even elections of the board. A “general proxy” allows the proxy holder to vote however he or she sees fit on ANY matter that may be undertaken, while a “limited proxy” lists the issues that a proxy holder may cast a vote for on behalf of a voting interest and instructs the proxy holder on how to vote on those issues. Until this new law went into effect, even owners of commercial condominiums had to vote by limited proxy. Now that this requirement has been removed for commercial condominiums, once a commercial unit owner appoints their proxy, that person can cast the vote of their choosing on any and every matter under consideration. If you add the right of the general proxy holder to the new board member rights, you can begin to understand the dangers. Most unit owners end up appointing a board member to act as their proxy. Given the board will now be fully controlled by the owners who own the largest or the most units, commercial condominium unit owners who do not understand these new UBER-dangers, will soon find themselves completely and utterly powerless to stop the board from doing what is best for their own individual interests.

• The hurricane shutter, impact glass and other hurricane protection provisions set out in the Condominium Act no longer apply to commercial condominiums. Does the legislature really believe that commercial condominiums are immune from dangers of hurricanes? Oh brother!

• The build-out of what is referred to as a “phased condominium project” occurs in phases, just as the title suggests. Until now, once the phase plan is established, early purchasers are protected from drastic development changes that could negatively affect their property value and assessment liability. As to commercial condominiums, these protections are now completely obliterated. The unsuspecting commercial condominium purchaser will, no doubt, bear the brunt of this new legislation.

There is, however, one change that does make sense.

• It is clarified that the Division of Florida Condominiums, Timeshares, and Mobile Homes, which has jurisdiction over certain disputes in residential condominiums, has no jurisdiction whatsoever over similar disputes in a commercial condominium.

While it is a commonly accepted legal principal that the purchaser of commercial property purchases such commercial property at their own risk and, for all practical purposes, has little recourse against the seller for nondisclosure, these recent changes to the commercial condominium regime are reckless and extremely dangerous. In the end, if you purchase a commercial condominium, DANGER WILL ROBINSON, DANGER!

Chapter 718, Florida Statutes, is referred to as Florida’s Condominium Act. Section 718.116 of the Condominium Act has been revised to provide that the term “previous owner” relative to the joint and several obligations to the association for unpaid assessments, does not include a condominium association that acquires title to a delinquent property through foreclosure or by deed in lieu of foreclosure. However, the liability of a present owner, such as a third party purchaser in a lender foreclosure, is limited to unpaid assessments that accrued before the association acquired title. Of great interest is that interest, late fees, attorney’s fees and costs incurred by the association in foreclosing on the unit, along with assessments obligations that came due while the association held title to the unit, will not be the present owner’s obligation. Similar changes were made to Chapter 720, Florida Statutes, otherwise known as the Homeowners’ Association Act, last year.

Section 718.111(11) of the Condominium Act regarding insurance, has once again been revised. Subsection (j) now provides that, in the absence of an insurable event, any repairs that are required will be made by the association or the unit owner, in accordance with the declaration or bylaws. This law clears up some confusion that was created by a few prior court cases which generally held that whoever had the duty to insure (the association as compared to the unit owner) also had the duty to effectuate the repair, regardless of the provisions in the declaration. Now we know to look to the declaration or bylaws to make such determinations. However, this new law does not clarify whether a casualty for which coverage is denied is considered an “insurable event” (Oh Brother!).

A great number of questions are being mulled as to board member to board member e-mail communications. Section 718.112 of the Condominium Act now authorizes board members to use e-mail as a means of communication, however, this new law also clarifies that board members may not cast their vote on an association matter via e-mail. (Sorry HOA board members, this only applies to condominium associations, for now.) So, just what can be discussed? On one end of the spectrum, clearly, setting the board’s agenda items for its next meeting would seem appropriate. On the other end of the spectrum, voting via e-mail is a “no-no” and violates the new legislation. What about everything in between? For example, can the board discuss the condition of the swimming pool and the need to acquire bids for consideration at the next board meeting? Can the board discuss via e-mail the need for a new gate? A parking garage repair? A raise for the manager? Just what can be discussed in these e-mail communications? Well, try to look at it this way. When communicating via e-mail, do not communicate any differently than if you were on the street, eye to eye with your fellow board member. In that way, you are bound to stay in the safe zone.

Associations can already publish in their community directory the address and phone number provided by a member for their official association meeting notices and the like. New legislation was passed that also permits all condominium, cooperative and homeowners’ associations to publish all of their members’ telephone numbers in the community directory, but any owner can opt-out in writing and not have their numbers listed. Additionally, subject to the affirmative written consent of an owner to opt-in, such owner can consent in writing to the disclosure of other additional contact information by the association (for example, e-mail addresses).

Homeowners’ Association Boards have been provided clear emergency powers similar to those previously provided to Condominium Association Boards. In the event of a state of emergency, a HOA board may:

• conduct board and membership meetings after notice of the meetings is provided in as practicable a manner as possible;