Category: Articles

When it comes to service dogs and assistance animals, people often confuse the Federal American with Disabilities Act (ADA) with the Federal Fair Housing Act (FHA). The ADA laws apply only to commercial (non-residential) settings. They apply to specifically trained service dogs (and the very occasional miniature horse). The ADA laws specifically exclude emotional support animals of any kind. On the other hand, the FHA laws apply to residential communities and apply to pretty much all domestic animals, including dogs, cats, pot belly pigs, etc. The FHA laws allow a person living in a residential community access to both specifically trained and untrained animals and, importantly, include the sub-category of the much beloved emotional support animal, especially when they might be otherwise prohibited by the community’s governing documents. While the ADA uses the term “disability” and the FHA uses the term “handicap”, these two terms are, for all intents and purposes, interchangeable.

What is missing from both the FHA and the ADA are penalties to prevent against fraudulent misuse of both acts. In trying to create conformity with FHA and the ADA protections and greater protection against fraud, the Florida Legislature has brought the definition of an “individual with a disability” as set out in Chapter 413, Florida Statutes, into conformity with both the definitions for the terms “disability” and “handicap” as set out in the ADA and FHA, respectively. Florida’s newest legislation also defines the term “service animal” similar to the ADA legislation to mean an animal that is trained to do work, or perform tasks, for an individual with a disability and clarifies that the crime- deterrent effect of an animal’s presence and the provision of emotional support, well-being, comfort, or companionship do not constitute work or tasks for purposes of this definition. But, a service animal does include a dog (or miniature horse) trained to assist mentally and emotionally disabled individuals with such tasks as helping an individual with a psychiatric or neurological disability by preventing or interrupting impulsive or destructive behaviors, reminding an individual with mental illness to take prescribed medications or calming an individual with posttraumatic stress disorder during an anxiety attack. The important distinction is the dog’s training.

It is important for community associations to remember that, although this new State law exists, community associations must ensure that they do not run afoul of the Federal Fair Housing Act by requiring that an “assistance animal” be a dog or be specifically trained to assist with the disability. If so, then FHA penalties will apply.

Chapter 413, Florida Statutes, also provides that a disabled person is entitled to rent, lease or purchase any housing accommodations offered for rent, lease or purchase in this state as any other member of the general public would be entitled and is entitled to full and equal access to all housing accommodations and cannot be required to pay an extra fee for the service animal, which is in conformity with its Federal counterparts, the ADA and the FHA.

What has really gotten people talking is that this new law makes it a second degree misdemeanor offense for a person to knowingly and willfully misrepresent herself or himself, through conduct or verbal or written notice, as using a service animal, being qualified to use a service animal or as a trainer of a service animal. Those who are found to have done so may serve up to 60 days imprisonment or pay a fine of $500.00 and must perform 30 hours of community service for an organization that serves individuals with disabilities or for another organization selected by the court to be completed in not more than six months. So, what does all this mean? It means that while there is a penalty for misrepresentation where it concerns a trained service dog or miniature horse, there is still no penalty ascribed for the one major area where the most abuse occurs, that of the qualification to own an emotional support animal! In summary:

• As to residential settings inclusive of Florida’s community associations, if the dog is specifically trained to assist its owner with a handicap or disability, then the FHA and the laws set out in Florida’s Chapter 413 apply. Fraudulent penalties apply.

• If an animal is not trained and otherwise qualifies as an emotional support comfort animal, then only the FHA applies. No fraudulent penalties apply.

• As to non-residential settings, if the animal is a dog or miniature horse and is specially trained, then the ADA and Florida’s Chapter 413 apply. Fraudulent penalties apply.

With all that in mind, I’m still waiting to see a miniature horse riding in the elevator of a commercial condominium who is specially trained to alert its owner to take his or her medications. One day, I fully expect the elevator doors to open and a miniature version of Mr. Ed to look up and say, “Hello Willllllbur”.

Prior to recent amendments to the procedures for fining and use right suspensions for non-monetary violations, which amendments became effective on July 1, 2015, there was a gap in the Florida Statutes regarding the manner in which a community association’s board of directors and its fining and suspensions committee coexisted, meaning there was no clear guidance with regard to whether the fining committee would first meet and then the board would levy the fine or if the board would first meet, determine the amount of the fine and then the fining committee would meet to provide the offending owner his opportunity to appear. That said, it was clear that if the fining committee did not agree with the fine, then the board could not authorize its levy against the offending owner. Well, now there is great clarity as to the procedural requirements.

Pursuant to the recent amendments to Chapters 718, 719 and 720 of the Florida Statutes, regarding condominiums, cooperatives and homeowners’ associations, respectively, the association’s board of directors must first levy the fine or use right suspension for non-monetary violations at a properly noticed board meeting. After the board of directors has levied the fine or use right suspension for non-monetary violations, the person who is to be fined or suspended must be provided with at least fourteen (14) days’ notice and an opportunity for a hearing before a fining and suspensions committee. The fining and suspensions committee must be comprised of other owners who are neither board members, nor persons residing in a board member’s household. The role of the fining and suspensions committee is limited to determining whether to confirm or reject the fine or use right suspension for non-monetary violations levied by the board of directors.

If the fining and suspensions committee does not approve the fine or use right suspension for non-monetary violations EXACTLY as levied by the board of directors, the fine or use right suspension for non-monetary violations cannot be imposed. If the fining and suspensions committee does approve the fine or use right suspension for non-monetary violations, which must be done by a majority vote, the association must then provide the person to be fined or suspended with written notice of the fine or use right suspension by mail or hand delivery.

Although the association may suspend the right to use the common areas, common elements, common facilities and association property, generally a use right suspension, whether for monetary or non-monetary violations, does not apply to that portion of common areas, common elements, common facilities and association property used to provide access or utility services to the owner’s property.

With specific regard to homeowners’ associations, prior to the recent amendments to the fining and use right suspensions for non-monetary violations provisions, a suspension of use rights could not impair the right of an owner or tenant to have vehicular and pedestrian ingress to and egress from their property, including, but not limited to, the right to park. However, as of July 1, 2015, this language has been revised to provide that a use right suspension may not prohibit an owner or tenant from having vehicular and pedestrian ingress to and egress from their property, including, but not limited to, the right to park.

The change from “impair” to “prohibit” in the Homeowners’ Association Act is significant in that the 2015 statute suggests that a homeowners’ association can impair vehicular and pedestrian ingress to and egress from the owner’s or tenant’s property so long as such impairment does not prohibit such access. For example purposes only, in gated communities, this new language lawfully allows a homeowners’ association to force the owner or tenant to use the guest lane, instead of the resident’s lane, at the community’s entrance gate.

For condominiums and cooperatives, a use right suspension does not apply to limited common elements intended to be used only by that unit, parking spaces, or elevators. Additionally, as of July 1, 2015 for condominium associations only, a use right suspension applies to a unit owner who owns multiple units even if the delinquency or violation that resulted in the use right suspension arose from less than all of the multiple units owned by that owner. This means that if an owner, who owns three units, has his use rights suspended due to a continued delinquency associated as to only one of the units, then, nevertheless, the suspension would apply to all of the units and not just the unit associated with the delinquency.

On Saturday, June 20, 2015, Palm Beach Post staff-writer, Tony Doris, reported that condominium owners in Century Village’s “Sheffield O” condominium are under the very real threat of a condominium termination from an investor who is continually purchasing units in the condominium. Century Village is a 600 building, 55 and older (better) community. Century Village was developed in the 1970’s by H. Irwin Levy, a real life condominium superhero. Not only did he develop the community that combines affordable home ownership and community based activities for seniors, but 40 years later, he is ready to don a red cape and be a superhero by defending those seniors who chose to purchase units in his community and cannot afford the battle that may need to be fought to continue to live there.

Imagine moving to the Sunshine State and purchasing what you hope is your last home in an affordable community geared for seniors. Then, imagine being told your home is being sold against your will and you’ll receive only the present fair market value of your home, likely leaving you in debt to your mortgage company. How can such a thing happen you ask? Florida’s legislation regarding termination of condominium, section 718.117, Florida Statutes–that’s how.

The condominium termination legislation was primarily enacted to deal with several problems which include destruction due to casualty and circumstances which may create “economic waste, areas of disrepair, or obsolescence of a condominium property for its intended use and thereby lower property tax values.” Nowhere in the legislation does it address terminating the condominium for the benefit of a private investor. But, like any other piece of legislation, there are always unintended consequences. And, such an unintended consequence is why owners in the Sheffield O Condominium are justifiably worried.

All that it takes to terminate a Florida condominium is 80% of the owners to vote in favor of a plan of termination and not more than 10% of the owners to formally object to it. This process is referred to as an “optional termination.”

In the present version of the condominium termination legislation there is no requirement for the owners to be made, at least minimally, financially whole. So, the condominium termination plan could be put into effect and an owner could be forced to move out and still be on the hook for thousands of dollars still owed to their lender. One small silver lining is that, effective July 1, 2015, if the condominium is terminated under the optional termination process, all mortgages for those who homesteaded their home must be fully satisfied. While that won’t solve every problem, such as securing a new home for those forced out and coming up with a new down payment, at least the unfortunate owners being forced out against their will who are homesteaded in Florida will not end up upside down to their lender while having to find a new home. But there is no such benefit if the owner has not homesteaded their home.

According to the Palm Beach Post, the investor, “a Palm Beach Gardens resident who owns 15 of the 24 units in Sheffield O and has an interest in two more, wrote to the remaining owners in the Sheffield O Condominium that he plans to dissolve its condominium association and force them to sell to him at the price the Palm Beach County Property Appraiser puts on the units.” H. Irwin Levy was quoted as saying, “We’re going to take on this man, have a letter written to him, and whether he backs off…, we’ll see what happens but we’ll take on the cost so these people aren’t penalized for trying to protect their interests.”

To prevent problems, such as what may occur to the owners in the Sheffield O Condominium, the condominium termination legislation needs further amending to provide clear authority to the court to deny the optional termination when it’s clear that the termination is being undertaken to inure to the benefit of a private investor to extreme detriment of existing owners, unless the investor undertakes financial responsibility to secure new housing equal to or better than the terminated condominium plus moving costs for the powerless minority opposing the termination. In addition, the same benefits should be available to those who have homesteaded their property as to those who have not done so.

Here is a real brain teaser to consider: Recently, the Fourth District Court of Appeal in Pudlit 2 Joint Venture, LLP v. Westwood Gardens Homeowners Association, Inc., Case No. 4D14-1385 (Fla. 4th DCA May 27, 2015), held that the safe harbor legislation (section 720.3085, Florida Statutes) adopted in 2008, which was before a borrower entered into its mortgage and before a third party investor acquired the property, did not take priority over the language set out in the homeowners’ association’s declaration, which provided that neither the lender nor a third party purchaser who acquires the property as a result of the foreclosure has any assessment liability for past due assessments. So, reasoning by analogy, given that condominiums are purely creatures of the legislature, meaning that without Chapter 718, no condominium would exist, how can the condominium termination legislation, which is relatively recent legislation, disturb the rights of condominium unit owners by terminating the condominium in a way not foreseen by the purchaser upon acquiring the unit and certainly not foreseen when the condominium was created? This is the point Levy was making when he was quoted by Tony Doris as saying “[the investor] certainly can’t change people’s rights to their homes retroactively.”

By now, it should be self-evident why H. Irwin Levy is deserving of Rembaum’s Association Roundup’s very first Award of Excellence. Not only did he develop the Century Village community over 40 years ago, but, more importantly, he is standing by its residents some 40 years later to try to prevent what he sees as an extreme injustice and apparently willing to fund it, too.

Kudos to Tony Doris for writing the story that appeared in the June 20, 2015 edition of the Palm Beach Post; kudos to the Editors who not only published this story, but put it on the first page; and most of all kudos to H. Irwin Levy for standing up for and standing with the owners of Sheffield O.

On May 27, 2015, Florida’s Fourth District Court of Appeal entered its whirlwind decision in Pudlit 2 Joint Venture, LLP v. Westwood Gardens Homeowners Association, Inc., Case No. 4D14-1385 (Fla. 4th DCA May 27, 2015). This case rocks the boat in what was considered the “safe harbor,” referring to the limitation of a first mortgagee’s liability for assessments which result from the first mortgagee obtaining title as a result of its mortgage foreclosure action or by deed in lieu of foreclosure as set out in section 720.3085, Florida Statutes (the “Safe Harbor Statute”).

Most, if not all, homeowners’ associations throughout Florida take the position that the Safe Harbor Statute takes priority over any conflicting terms set out in the association’s declaration. However, at odds with this notion is that the declaration is a contract between the members of an association and the association itself. The substantive law in effect at the time a contract is made is a part of the contract as if it were written therein. Associations take the position that the Safe Harbor Statute is a procedural law and therefore controlling over any provisions to the contrary set out in the declaration, especially to mortgages entered after July 1, 2008 which was when the present Safe Harbor Statute became law. Lenders and third party bidders who acquire property as a result of the lender’s mortgage foreclosure take the position that the Safe Harbor Statute is substantive, and therefore, to apply the Safe Harbor Statute to a declaration that provides otherwise is an impairment of contract prohibited by the Constitution itself.

In this case, which will no doubt muddy third partly assessment liability quite a bit, Pudlit 2 Joint Venture, LLP (“Pudlit”) purchased two properties at foreclosure sales that were located within communities maintained by Westwood Gardens Homeowners Association, Inc. (“Westwood Gardens HOA”). As a result, Westwood Gardens HOA then demanded that Pudlit pay all assessments, including all assessments which came due before Pudlit acquired title to the properties. Pudlit paid the assessment arrearage amounts demanded, however it did so “under protest and with full reservation of all rights and remedies.” After which, Pudlit sued Westwood Gardens HOA seeking recovery of the monies paid, asserting breach of contract, referring to Westwood Gardens HOA’s declaration of covenants which is in and of itself a contract between the owners and the association, and for declaratory relief. In the end, the Court ruled in favor of Pudlit and, in so doing, held that the terms of Westwood Gardens HOA’s declaration controlled over the Safe Harbor Statute.

Had Pudlit not clearly and overtly established that it paid the assessment arrearage under protest and with a full reservation of rights, then it very well may have not been in a position to file its lawsuit. This is because when a person, the payor, freely pays an alleged debt due, without a reservation of rights of any kind and later files a lawsuit seeking a recovery of its monies from the payee, the payee can defend the case by arguing that the payor voluntarily paid the debt freely and voluntarily and thus waived any later right of protest. (We will have to see how these competing arguments resolve themselves in future court battles.)

Of relevance to the Pudlit case, Westwood Gardens HOA’s declaration of covenants provided that:

“The personal obligation for delinquent assessments shall not pass to [an owner’s] successors in title unless expressly assumed by them.

Sale or transfer of any Lot which is subject to a mortgage as herein described, pursuant to a decree of foreclosure thereof, shall extinguish the lien of such assessments as to payments thereof which become due prior to such sale or transfer.”

Such language is in conflict with the Safe Harbor Statute, which provides that a first mortgagee’s liability for assessments which accrued prior to the first mortgagee obtaining title as a result of its foreclosure action or by deed in lieu of foreclosure is limited to one percent of the original mortgage debt or twelve months assessments which accrued prior to the first mortgagee obtaining title. The Safe Harbor Statute, additionally provides that all other successors in interest are jointly and severally liable for all past due assessments, with exception for assessments charged during an association’s ownership of the property.

Applying a constitutional principal which prohibits the impairment of contracts, the Court held that the Safe Harbor Statute, could not impair (meaning, override) the provisions of Westwood Gardens HOA’s declaration of covenants, unless the plain language of the statute requires such application or the declaration of covenants contains “Kaufman” language, which has the effect of making amendments to the Florida Statutes automatically applicable to an association’s declaration of covenants as the Florida Statutes are “amended from time to time.” The Court further held that the provisions of Westwood Gardens HOA’s declaration of covenants expressly created rights for third party purchasers who are “intended third party beneficiaries” to such provisions which rights cannot be impaired pursuant to the same constitutional principal.

Although the Pudlit case is with regard to a third party’s liability for assessments which accrued prior to the third party obtaining title at a foreclosure sale, this decision will impact the manner in which assessments due on a property are analyzed in the “safe harbor” context. Pudlit essentially provides that, unless the statute provides for automatic application or unless the declaration contains “Kaufman” language, the terms of the declaration will prevail over the provisions of the statute.

As with many declarations which have not been amended since their creation by the community’s developer, declarations may provide for a wipe out of all assessments that accrued prior to the first mortgagee obtaining title as a result of its foreclosure action or by deed in lieu of foreclosure. The Pudlit case further emphasizes the importance of reviewing and updating your association’s declaration to ensure that it provides for necessary and available protections for the association and its members which includes the importance of including “Kaufman” language.

If your association’s declaration does not contain language similar to the following sentence, then the board should consider further discussing this important matter with the association’s legal counsel:

This Declaration is subject to Chapter 720, Florida Statutes, as it is amended from time to time.

On May 14, 2015, the Supreme Court of Florida issued an Advisory Opinion regarding which activities of community association managers are and are not considered the “Unlicensed Practice of Law” (UPL). The Advisory Opinion is No. SC13-889. In the Advisory Opinion, the State’s highest Court adopted the position of the Florida Bar’s Standing Committee on UPL which in part i) reaffirmed the Court’s 1996 advisory opinion of Florida Bar re Advisory Opinion-Activities of Community Association Managers, 681 So.2d 1119 (Fla. 1996), ii) expanded on certain activities that are considered UPL, iii) explained that certain activities may or may not be UPL depending on the circumstances, and iv) may have created some confusion which will be cleared up for the readers of this article. By way of background, Court’s adoption of the Advisory Opinion has the same force and effect of an order issued by the Court, and readers should take note that the Florida Legislature enacted laws in 2014 pertaining to this very subject that in a few instances are contrary to the Court’s adoption of the Advisory Opinion. To clear up the potential confusion, know this – the Court’s May 14, 2015 adoption of the Florida Bar’s Standing Committee Advisory Opinion on UPL trumps the 2014 legislation.

New legislation adopted on July 1, 2014 to section 468.431, Florida Statutes provided additional activities that a community association manager may perform. Of relevance to the Court’s adoption of the Advisory Opinion, section 468.431(2), Florida Statutes, provides that a community association manager may determine the number of days required for statutory notices and may calculate the votes required for a quorum or to approve a proposition or amendment. While such activities may be within the community association manager’s ability to perform, the Advisory Opinion provides that these activities may constitute the unlicensed practice of law depending on the specific factual circumstances.

Further, the changes to section 468.431(2), Florida Statutes, also adopted on July 1, 2014, provides that a community association manager may negotiate monetary or performance terms of a contract subject to approval by an association and may complete forms related to the management of a community association that have been created by statute or state agency, which includes release of lien, pre-lien notice and pre-foreclosure notice forms. However, because the Supreme Court of Florida has now ruled that the drafting a claim of lien and satisfaction of lien form and that the preparation, review, drafting and/or substantial involvement in the preparation/execution of contracts (construction contracts, management contracts, cable television contracts, etc.) constitute the unlicensed practice of law when performed by a community association manager, the related activities as provided by section 468.431(2), Florida Statutes adopted, are greatly abridged and are abrogated by the Court’s adoption of the Advisory Opinion.

The following activities when performed by a community association manager are NOT considered UPL and may be properly conducted by a community association manager:

• Completion of the change of registered agent or office for corporations form and the annual corporation report form as provided by the Secretary of State,
• Drafting certificates of assessments,
• Drafting first and second notices of the date of an election,
• Drafting ballots,
• Drafting written notices of annual or board meetings,
• Drafting annual meeting or board meeting agendas,
• Drafting affidavits of mailing, and
• Drafting a pre-arbitration demand letter required by section 718.1255, Florida Statutes.

On the other hand, the following activities are considered UPL when performed by a community association manager (or other non-lawyer):

• Completing a frequently asked questions and answers sheet (DBPR Form 33-032),
• Drafting a claim of lien, satisfaction of lien and notice of commencement form,
• Determining the timing, method and form of giving notice of meetings,
• Determining the vote necessary for certain actions which would entail interpretation of certain statutes and rules,
• Answering a community association’s questions about the application of law to a matter being considered or advising a community association that a course of action may not be authorized by law, rule or the association’s governing documents,
• Drafting amendments to the association’s governing documents,
• Preparing, reviewing, drafting and/or substantial involvement in the preparation/execution of contracts, including construction contracts, management contracts, cable television contracts, etc., and
• Any activity which requires statutory or case law analysis to reach a legal conclusion.

Those activities that may or may not be considered UPL and fall into a gray area depending on the specific factual circumstances are:

• Modification of limited proxy forms created by the state or drafting a limited proxy form – Modifying the limited proxy form to include the name of the association or to certain “yes” or “no” voting questions would not be considered the unlicensed practice of law; however, modifications which are more than ministerial in nature require the assistance of an attorney (i.e.: drafting questions which requires discretion in the phrasing or involves the interpretation of statute or legal documents).

• Drafting documents required to exercise the community association’s right of approval or right of first refusal on the sale or lease of a property – A community association manager may prepare these documents but cannot advise the association as to the legal consequences of taking a certain course of action, which can only be performed by an attorney.

• Determining the number of days to provide statutory notice – If this requires the interpretation of statutes, administrative rules, an association’s governing documents or the rules of civil procedure, then it must be done by an attorney; otherwise, it may be performed by a community association manager.

• Determining the affirmative votes needed to pass a proposition or amendment or the owners’ votes needed to establish a quorum– If this requires the interpretation and application of statutes and an association’s governing documents, then it must be done by an attorney; otherwise, it may be performed by a community association manager.

• Identifying, through review of title instruments, the owners to receive pre-lien letters – The community association manager may make a list of all records owners, however, the community association manager cannot then use the list to determine who needs to receive a pre-lien letter.

Sometimes the right thing happens for the wrong reasons. This is one of those times. Much of our prior discussion regarding Florida’s 2015 Legislative Session was centered on the overtly draconian Estoppel Bill (House Bill 611 together with its companion, Senate Bill 736) and the financial harm it would have caused to community associations throughout Florida if passed into law. While the Estoppel Bill showed all signs of becoming law, because Florida’s House of Representatives walked out of the 2015 legislative session several days early due to a disagreement with the Senate over Medicare and the State’s overall budget, the Estoppel Bill never made it to the House Floor for final vote meaning that the rumored two million dollars of lobbying efforts expended by the title and real estate lobbies was a huge, colossal waste of money. Candidly, it serves them right for failing to meaningfully cooperate with Florida’s community associations which overwhelmingly opposed the Estoppel Bill, albeit to no avail.

Let us turn our attention to those bills as related to community associations which have survived the 2015 Legislative Session and are on their way to the desk of Governor Rick Scott to become law or vetoed, although a veto is considered by most to be unlikely.

Senate Bill 748 and House Bill 791, an Omnibus Bill: These bills provide various amendments which affect condominium, homeowners’ and cooperative associations. These bills address the following changes:

• Provides that a copy, facsimile or other reliable reproduction of a proxy is valid for the purposes of the proxy. (This makes sense, but strange in that this was already quite obvious.)

• Revises the “catchall” provision of what constitutes the official records for condominium and cooperative associations to include only written records of the association, as already provided for homeowners’ associations.

• Removes the requirement that electronic notice be authorized by the bylaws in order to use e-mail rather than U.S. Mail for official notice purposes.

• Allows associations to implement online voting through a board resolution. (This should prove to be very interesting.)

• Clarifies that partial payments may be applied to outstanding amounts due. (This makes sense, but strange in that this was already quite obvious.)

• Clarifies that the role of the fining committee is to confirm or reject the fine levied by the board.

• Clarifies that if voting rights are suspended, the voting interest allocated to the unit is subtracted from the total number of voting interests. (This makes sense, but strange in that this was already quite obvious.)

• Applies the suspension of voting rights or the right to use common elements to member and tenants and guests, regardless of number of units owned by the member.

• Extends the “Distressed Condominium Act” until July 1, 2018. (This is good for Florida’s economy in that it encourages “white knight” investors to invest in fractured condominium projects by shielding them from liability caused by their predecessor.)

• Titles Chapter 720, Florida Statutes, the “Homeowners’ Association Act”.

• Adds a homeowners’ association’s “rules and regulations” to the term “governing documents”.

• Clarifies that the failure to timely provide notice of recording an amendment in a homeowners’ association does not affect the validity or enforceability of the amendment.

House Bill 643 and Senate Bill 1172, The Condominium Termination Bill: House Bill 643 and its companion, Senate Bill 1172, address condominium termination and change the voting requirements and procedures for optional termination of a condominium. These bills provide that optional termination cannot be used until five years after the recording of a declaration of condominium, unless there is no objection to the plan of termination. Additionally, a bulk owner who owns at least 80 percent of the units must ensure that each first mortgage is fully satisfied when a condominium is terminated. In addition, all unit owners, other than the bulk buyer, must be compensated for 100 percent of the fair market value of their unit. However, if an original unit owner, who purchased their unit from the developer, together with additional conditions, votes against the termination plan, the bulk owner must promise to pay them no less than the same amount they purchased their unit.

House Bill 71 and Senate Bill 414, The Service Animal Bill: These bills, among other things, provide that a person who knowingly and fraudulently represents himself or herself through conduct or verbal or written notice as requiring the need for a service animal or as being the trainer of a service animal is guilty of a misdemeanor in the second degree, punishable in the same manner as other second degree misdemeanors, and requiring the performance of 30 hours of community service for an organization which serves disabled individuals to be completed within six months. It is important to note that that these bills do not address “assistance animals” governed by the Fair Housing Act. In order to trigger the Americans with Disabilities Act (ADA) in a residential association, the association must have a nexus to the public. For example if a homeowners’ association rents out its clubhouses to the public for weddings, etc., then that association would be subject to ADA requirements as far as its clubhouse is concerned. The overwhelming majority of Florida’s community associations are subject only to the Fair Housing Act, and not the ADA. Sadly, there is no companion bill that would make such fraudulent activity unlawful as applied to fraudulent “assistance animal” requests… yet.

As today’s real estate market continues to strengthen and the economy continues to grow, lenders are foreclosing against delinquent borrowers with more and more haste. Bargain hunters continue to monitor foreclosure sales, often bidding an amount greater than the amount of the foreclosure deficiency. This result leads to surplus funds. For example, a delinquent borrower defaults on their mortgage owing a remaining $300,000 on their home whose market value is closer to $500,000. The lender forecloses. At the foreclosure sale, the highest bid is $400,000, leaving a $100,000 potential profit for the highest bidder when they ultimately sell the property. As a result of the foreclosure sale, the foreclosing lender first receives its deficiency, in this case $300,000 dollars, and the remaining $100,000 dollars is placed into the Registry of the Court as “surplus funds.” If no one claims the surplus funds within 60 days, then the defaulting borrower can claim the overage, meaning that, as applied to this example, the defaulting homeowner could receive a $100,000 windfall.

Pursuant to Chapter 45, Florida Statutes, “[t]here is established a rebuttable legal presumption that the owner of record on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.” A lis pendens is recorded in the county’s public records by the foreclosing lender. Once recorded, it means that should anyone else take title to the property, it is subject to the outcome of the present foreclosure litigation.

Also pursuant to Chapter 45, Florida Statutes, “[i]f any person other than the owner of record claims an interest in the proceeds during the 60-day period or if the owner of record files a claim for the surplus but acknowledges that one or more other persons may be entitled to part or all of the surplus, the court shall set an evidentiary hearing to determine entitlement to the surplus.”

So, what happens if a junior lienholder, who would otherwise be entitled to the surplus foreclosure proceeds, files their claim for the surplus after the expiration of 60 days? In the recent Fourth District Court of Appeal case, Saulnier v. Bank of America, N.A., decided March 25, 2015, a junior lienholder made their claim past the 60 day period. The trial count found in favor of the junior lienholder based on a theory of excusable neglect, but the appellate court reversed the trial court’s judgment in favor of the homeowners.

The junior lienholder argued, amongst other things, that its untimely claim for the surplus proceeds should be excused because it did not receive a copy of the final judgment or certificate of disbursements and that that the homeowners’ claim did not acknowledge the subordinate lienholder’s claim to the surplus. However, these arguments were found to be without merit by the appellate court. Rather, the statutory 60-day window to claim the surplus funds was strictly construed by the appellate court.

In reversing the trial court’s decision, the appellate court stated, “[w]hile we recognize the subordinate lienholder’s argument before the [trial] court that the homeowners ‘should not be permitted an inequitable windfall simply because [the subordinate lienholder] missed the 60-day deadline by a few weeks,’ we agree with the homeowners that ‘equity follows the law and cannot be used to eliminate its established rules.’” This statement from the appellate court means that when the statutory law clearly addresses an issue, the courts are not free to apply principles of equity to right an otherwise unjust situation. Simply put, the statutory law provides for a 60-day window for a junior lienholder to make a claim for the surplus funds. If the junior lienholder misses that deadline, then it has no right to claim the surplus funds.

As applied to Florida’s community associations, once the association records its assessment lien in the county’s public records, it has perfected its lien rights. This means that the association’s lien relates back to the date of the recording of the association’s declaration! While the association’s lien remains subordinate to the lender’s mortgage, it is ahead of almost every other lien. But, if the association does not timely record its motion for surplus funds within the 60-day window then, it too will miss out on any surplus proceeds and the excuse that the association was not aware of the foreclosure sale and resulting surplus carries no merit whatsoever. So, if you snooze, you lose.