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The dog barks, and the parrot squawks. A neighbor is cooking with too much garlic, again. An owner is smoking non-stop on their balcony making it unpleasant for everyone else. A neighbor, several neighbors, or even many neighbors are complaining to the board. What is a community association board to do?

In dealing with any possible nuisance, the board should first decide whether or not the activity in question constitutes a “nuisance.” Bear in mind, an individual’s personal hypersensitivity to another’s activity is not a nuisance. Ask yourself, if you were the ordinary person, a judge or a member of the jury, do you believe that the conduct in question is so noxious that it truly rises to causing a nuisance? Is it only one person, or family, that is bothered by the alleged noxious activity or is it half of the community? Singular neighbor to neighbor disputes are not a matter for the board to contend. The board should not put itself into a position as the “referee.” Arguably, the only time a board may be obligated to act in a neighbor to neighbor dispute is when a Fair Housing Act violation occurs or when the board has actual knowledge of a life-threatening activity taking place.

In the event the board determines that a nuisance is actually occurring, then it is time to act. The board, typically through the manager, should first send a letter to the offending owner alerting them to the nuisance behavior, explain how the behavior is creating the nuisance and importantly, provide the specific relief sought. The letter should be firm, but not over-the-top. Ask yourself, if you were the owner causing the nuisance behavior and you received the letter from your association, would you respond in a positive manner? Remember the golden rule, to treat others as you wish to be treated.

After sending the initial letter, the dog still barks, and the parrot still squawks. Now what? Well, it is time to consider other measures such as fining and use right suspensions. Pursuant to legislation first enacted in July 1, 2015, the board, at a properly noticed board meeting, must set the fine or use right suspension. However, before a fine or suspension can be imposed against the offending owner, a 14-day written notice and opportunity to appear in front of the grievance committee (a/k/a the “fining committee”, the “rules committee”, the “violations committee”, etc.) must be sent to the owner. If the grievance committee does not agree exactly with the board’s prior decision to fine and/or suspend use rights, then the fine or suspension may not be imposed. If the grievance committee does so agree, then the offending owner must be provided with written notice of such decision.

If the nuisance continues, another tool that is available to community associations is the filing of a lawsuit against the owner causing a nuisance. In some instances, it may be necessary for condominium associations to file an arbitration action with the Division of Florida Condominiums, Timeshares, and Mobile Homes. For a homeowners’ association, before filing a lawsuit, the association must comply with mandatory mediation requirements set out in Chapter 720, Florida Statutes.

If the arbitration or mediation, as the case may be, is not successful in curbing the nuisance behavior, then it is time to seek relief by filing a lawsuit in the local Circuit Court asking for an injunction to curtail the behavior. Obviously, the board will need to discuss this situation, in advance, with the association’s legal counsel.

There appears to be some confusion surrounding the compliance date of the Engineered Life Safety System for those condominium associations that previously voted to opt out of the requirement to install condominium fire sprinkler retrofit. What is not confusing is that the safety of all occupants living in high-rise condominiums is paramount. No one wants to be responsible for death or injury caused by an incident that can be minimized with necessary precautions. How should the board of directors of a “high-rise” condominium balance the needs for fire safety against the considerable expense incurred in the implementation and installation of fire safety systems?

A high-rise building is a building where an occupiable floor is greater than seventy-five feet (75’) above the lowest level of fire department vehicle access. Pursuant to Florida law, condominiums that are considered high-rise buildings are required to have, or otherwise install, a fire sprinkler system, unless the condominium association had previously opted out, or is otherwise exempt, as further addressed below, by following the proper statutory protocol for which the deadline to do so has long since passed. However, for those high-rise condominiums that did successfully opt out, the association is still responsible for the installation of an Engineered Life Safety System (the “ELSS”).

A caveat, and for some condominium associations, a blessing, is that the fire sprinkler system (or ELSS) is not required if every unit in the condominium has exterior walkway access. Therefore, if the only access into the condominium unit is through an interior hallway, the condominium association would need to install a fire sprinkler system (or have already opted out and thereby need to comply with the requirements of the ELSS).

Section 718.112(2)(l), Florida Statutes, is quite clear on the requirements to install a fire sprinkler system, but the statute does not address the condominium association’s requirements for the implementation of the ELSS – that comes from the Florida Fire Prevention Code (the “FFPC”). The FFPC defines an ELSS as a system which contains any or all of the following systems:
1) partial automatic sprinkler protection,
2) smoke detection alarms,
3) smoke control,
4) compartmentation, and/or
5) other approved lifesaving systems.

An ELSS must be developed by a registered professional engineer experienced in fire and life safety system design and authorized by the local compliance authority. Typical examples of ELSS within a high-rise condominium building could be a partial fire sprinkler system that serves the common areas, fire and smoke alarms that are in compliance with the local fire authority standards, and fire proof walls, floors and corridors designed to prevent the flow of the fire and smoke throughout the condominium building.

As to any high-rise building required to install the automatic fire sprinkler system that did not opt out, the FFPC requires that any condominium that meets the definition of a high-rise building, must, by December 31, 2019, have installed the automatic fire sprinkler system. As to those who opted out, the exact date for ELSS compliance is anything but clear. The Condominium Act does not provide a date, and while the FFPC provides a clear deadline for the installation of the automatic fire sprinkler system, the FFPC does not patently provide a similar date for the installation of the ELSS. Some lawyers and fire safety professionals take the position that, because the ELSS is a substitute for the automatic fire sprinkler system, December 31, 2019 is, therefore, the ELSS compliance date. However, others may take the position that the lack of patent clarity in the FFPC means no deadline is provided.

Whether the local fire safety authorities will actually interpret and enforce the Florida Fire Prevention Code to require an ELSS approved plan, or ELSS completed installation by December 31, 2019 or even still, take the position that no ELSS deadline is provided at all is anyone’s guess. The answers might even vary by jurisdiction. What is clear is that:

1) The Florida legislature needs to address the ELSS compliance deadline to provide clarity for the betterment and safety of all of Florida’s high-rise communities; and

2) Any board member of a high-rise condominium association with questions regarding any of the issues addressed herein needs to consult with both their association’s legal counsel and with the local fire safety officials with jurisdiction for enforcement of the ELSS.

The ability to impose a fine on an owner who has violated the conditions and regulations of a community association is one of the tools an association may use to bring about compliance with its governing documents. Notwithstanding the provisions regarding the fining process that may be set out in the association’s governing documents, the association must also follow the fining procedures as provided by Chapters 718, 719, and 720 of the Florida Statutes, governing condominiums, cooperatives, and homeowners’ associations, respectively. Particularly, these fining procedures require that the association’s board of directors provide the violator with at least 14 days’ written notice to appear at a hearing before an impartial committee prior to imposing any fine. However, what if only 13 days’ written notice is provided to the violator? Surely, one day less would make no difference, especially where the violator has failed to respond to multiple requests for correction of the violation? But, it does make a tremendous difference, as the homeowners’ association in the case of Dwork v. Executive Estates of Boynton Beach Homeowners Association, Inc., decided by Florida’s Fourth District Court of Appeal, learned the hard way.

In this case, the owner’s property needed maintenance and repairs to its roof, driveway, and fence, which are the responsibility of the owner pursuant to the association’s governing documents. The association gave the owner numerous notices providing the owner with multiple opportunities to conduct the necessary maintenance and repairs in order to avoid the imposition of fines. Despite the association’s efforts, the owner ignored the association’s many notices. As a result, the board sent the owner a written notice informing the owner that, in 13 days, a hearing would take place before the association’s fining committee to consider the owner’s maintenance violations. At the hearing, the committee voted to approve the fine for each of the owner’s violations, which was thereafter imposed by the board. Written notice of the imposition of the fines was sent to the owner. However, the owner never responded and the fines began to accrue. After written demands to the owner for payment of the fines were sent and similarly not responded to, the association recorded a lien against the owner’s property for the accrued amount of the fines and the fees and costs incurred by the association, totaling $8,135.00, and ultimately sued for foreclosure of the lien and for money damages. (Please note that the events in this case occurred before recent legislative changes to the fining process that now requires the board to first set the fine at a properly noticed board meeting followed by providing the offender a 14 day advance notice to appear before the fining committee who can only approve the board’s action of imposition of the fine. If the committee takes any action other than approval, such as modification of the fine, then such activity operates to fully negate the fine.)

At trial, the court denied foreclosure of the lien because the 13 days’ notice provided to the owner by the association did not comply with the strict 14 days’ notice requirement set out in the Florida Statutes. However, the trial court ruled in favor of the association regarding the claim for money damages because the “equities of this case were with the association and against the owner.” Due to the trial court’s determination in favor of the association for money damages, the owner appealed the trial court’s decision.

In defense of the owner’s appeal, the association argued that substantial compliance with the notice requirements set out in the Florida Statutes, was sufficient, especially since the owner was not prejudiced by the lack of an extra day’s notice. Not persuaded by the association’s argument, Florida’s Fourth District Court of Appeal held that the association could not enforce its lien for fines against the owner because the association failed to provide the requisite 14 days’ notice. The Court found that the 14 days’ notice requirement is a condition precedent to the attachment of a lien and must be strictly construed because Florida law is clear and unambiguous and does not allow for any discretion in compliance with its provisions. Without proper notice, the owner is deprived of due process rights and is unable to have sufficient time to prepare a defense to a claim of violation. As a result, any lien recorded due to the violation is invalid. For these same reasons, the appellate Court reversed the trial court’s determination in favor of the association for money damages, too, without regard to the appellate court’s agreement with the trial court that the equities in this case favored the association.

It is important to note that this case is with regard to a homeowners’ association, not a condominium or cooperative. Pursuant to Chapter 720, Florida Statutes, a fine may exceed $1,000 in the aggregate only if so provided in the declaration, and a fine of $1,000 or more can become a lien against the owner’s property only if provided for in the declaration. Such was the circumstance for the association in the above discussed case. However, under Chapters 718 and 719, Florida Statutes, a fine levied by a condominium or cooperative association respectively, cannot exceed $1,000 in the aggregate and cannot become a lien against the owner’s property.

Although not addressed by the Dwork case, what if your association’s declaration provides that monies expended by the association on behalf of a member who fails to perform a maintenance obligation can be collected in a manner akin to an assessment, or what if the declaration converts the monies expended, in one manner or another, to a special assessment against the lot? If so, this process is not exactly provided for in the Florida Statutes and thus raises an interesting question as to the notice procedures required to provide to the member. Let’s say the declaration provided the association with a self help remedy in the event a member fails to keep their driveway clean so that the association performs the task and after repeated requests the owner fails to reimburse the owner. Now it is time to treat the monies expended as an assessment levied against the lot, but how?

Some might say no further activity is necessary. But, a clever defendant could argue an extra step was necessary because the levy of any assessment, be it regular or special, requires a separate 14 day notice to be provided to the owner(s) subject to the assessment. Therefore, the board, at its next board meeting should take the extra step of converting the monies due into an assessment by adding a line item to the agenda for the consideration of conversion of the monies due(s) by member into an assessment and by sending the violator a 14 day advance notice of the board meeting where the board will act to consider this issue. In such a circumstance, before filing a lawsuit against a member of the association who failed to reimburse the association, be sure to get guidance from your association’s attorney as to how best to deal with this issue.

Many Floridians live within a community operated by an association of some kind, be it a community of single-family homes under the jurisdiction of a homeowner’s or property owner’s association, or a condominium building maintained by a condominium association. These owners should be well-aware that many aspects of life within these communities are subject to restrictions outlined in a set of governing documents, which include a declaration, articles of incorporation, bylaws, and rules and regulations. While the declaration, articles of incorporation, and bylaws are typically recorded among the public records of the county in which the community is located, the rules and regulations are typically not recorded.

Because rules and regulations are usually amendable by the approval of the board of directors only (as opposed to the additional approval of the membership), allowing rules and regulations to be unrecorded provides the board of directors with the flexibility to amend the rules and regulations as the need arises without the added expense and time required to record these rule amendments among the county’s official records. However, this option has changed for homeowner’s associations as a result of recent legislative changes which took effect on July 1, 2018.

How has this changed? Pursuant to new provisions set out in Section 720.306(1)(e) of F.S., “[a]n amendment to a governing document is effective when recorded in the public records of the county in which the community is located.” While this has certainly always been the case for a declaration, articles of incorporation, and bylaws, this is new as to rules and regulations of a homeowner’s association because they were added to the definition of the term “governing documents” as set out in Section 720.301(8), F.S. when the Statute was amended in 2015, effective on July 1st of that year.

Due to the fact that many homeowner’s associations have not recorded their rules and regulations in the public records of the county, consideration should be given to record the all of the rules and regulations, particularly if there are plans to amend them. Failing to record the rules and regulations prior to (or at the same time as) recording an amendment will possibly create what is termed a “wild” amendment, which is not connected in the public records to the document it is trying to amend. Additionally, if an amendment to the rules and regulations must be recorded in order to be effective, it is logical to conclude that the initial rules and regulations must also be recorded in order to be effective. Under Section 720.303 F.S., all governing documents are required to be recorded in the public records. Therefore, a homeowner’s association should record its rules and regulations in the public records in order to avoid this possible claim against the legal effectiveness of the rules when it becomes necessary for the association to enforce its rules against an owner.

As with any other amendment to a homeowner’s association’s governing documents, within thirty (30) days after recording an amendment to the governing documents, the homeowner’s association must provide either a copy of the recorded amendment to the members or, if a copy of the amendment was provided to the members before they approved it (for those communities with owner approval requirements for rules) and the amendment was not changed before the vote, a notice providing that the amendment was adopted, identifying the official book and page number or instrument number of the recorded amendment, and that a copy of the amendment is available at no charge to the member upon written request to the association.

While the consequences of this new legislation may have been unintended, it is the law until amended otherwise or an appellate court makes a contrary ruling. Although this will likely result in some minor additional costs to homeowner’s associations, this is a good opportunity for a board of directors to examine their existing rules and regulations and update them prior to recording them among the public records.

Board members of an association subject to Chapter 720, Florida Statutes, should discuss the implications created by this recent legislative change with their association’s lawyer. It is recommended that you have experienced association counsel review any existing rules and regulations prior to recording them to ensure that they are enforceable and do not unnecessarily expose the association to liability (e.g., Fair Housing violations). As to any proposed rules not yet adopted the same holds true. Experienced association counsel should review them to both ensure enforceability and to steer clear of unintended negative consequences.

The use of automobiles in Florida can be a source of pure enjoyment, but often results in stress and frustration. This is especially true as you witness a neighbor speeding recklessly on the association roads. Safety should always be paramount. Unfortunately, not every driver operates their automobile in a responsible, safe manner leading to all sorts of dangers to pedestrians and property, alike. Local law enforcement can only enforce traffic laws within the public streets of its jurisdiction. So, how can your association be included in that jurisdiction?

When it comes to accessing roads within a community association, there are two types; communities with publicly dedicated roads and communities with private roads, which are commonly referred to as “gated communities”. Enforcement of traffic regulations in a community association with public roads falls under the same mandates for local law enforcement as any other public street of its jurisdiction. The more difficult situation is when a gated community association wants law enforcement to enforce traffic regulations within its private roads. Who has authority to enforce traffic safety? Does local law enforcement have an implied right to enforce traffic laws within the private roads of a gated community?

The Florida Attorney General, in advisory legal opinion AGO 2009-16, addressed whether local law enforcement has the authority to enforce traffic within the private roads of a gated community. The Florida Attorney General determined that local law enforcement has the authority to enforce speed limits and other traffic regulations in a gated private community as long as the association has entered into a traffic control agreement with the municipality pursuant to section 316.006(2), Florida Statutes.

As a quick summary, section 316.006(2), Florida Statutes, provides that a municipality may exercise jurisdiction over any private road located within its boundaries if the municipality and the parties owning or controlling such road enter into a written agreement that is also approved by the governing body of the local municipality. Pursuant to the traffic control agreement, the owner of the private road must agree to provide i) reimbursement for actual costs of traffic control and enforcement, ii) insurance and indemnification for liability, and iii) such other terms as are mutually agreeable. Because the traffic control agreement is an extension of the authority of the local municipality to enforce traffic, any traffic control agreement will also require traffic signage conforming to the Florida Department of Transportation’s specifications. In addition, however, there can be minimum speeds imposed by the Florida Department of Transportation’s traffic laws as well. For example, a gated community in Palm Beach County that wanted local law enforcement’s assistance with enforcing a speed restriction against leaded footed drivers was unsuccessful because its speed limit of 15 MPH was simply too slow for enforcement under state traffic laws. In any event, if all of the aforementioned are accomplished, then the Board, by majority vote, may elect to have state traffic laws enforced by local law enforcement agencies on the private roads controlled by the association.

In addition to the above requirements, Palm Beach County also requires an original certified traffic survey completed by a licensed consultant or engineering firm stating that all traffic and regulatory signs on the property comply with Florida Department of Transportation and Florida Statutes and that the speed limit (included on the survey) complies with Florida Statutes; a map of the subdivision; and an affidavit, executed by a director of the association, stating the association owns the roads.

As to the situation where a Palm Beach County gated community could not enter into such an agreement for local enforcement to enforce traffic regulations in their gated community, the association is not without relief. In that instance, the homeowners’ association could fine the speeding drivers by adopting the requisite rules and regulations and following the provisions set out in Florida’s fining laws, section 720.305, Florida Statutes. For more information on how to do so, please contact your association’s attorney.

With the ever-increasing urban development in Florida, especially in South Florida, we are sometimes reminded that we live in close proximity to a number of native and exotic invasive wild animals.

What can and should happen when your community association is confronted with that unexpected wild animal that causes a ruckus, or even worse, the wild animal has become a source of imminent danger to the members of the association or their guests? In the case of Hanrahan v. Hometown America, LLC, decided on June 20, 2012 by Florida’s Fourth District Court of Appeal, the personal representative of a deceased resident, Ms. Hanrahan (“Hanrahan”), sought damages for the negligent death of Mr. Hanrahan, who died from fire-ant bites sustained on the common areas of Pinelake Gardens and Estates, a mobile home park (“Pinelake Gardens”).

By way of background, Mr. Hanrahan was walking his dog in the common area of Pinelake Gardens known as the “Preserve”. Mr. Hanrahan claimed that he brushed up against a bush, at which point the fire-ants gained access to his body. Mr. Hanrahan attempted to wash the fire-ants off of his body but collapsed on the shower floor. He died two days later.
During the trial, the Pinelake Gardens community manager testified that she was not aware of any resident in Pinelake Gardens being attacked by fire-ants on the premises, nor was she aware of any fire-ants in the area of Pinelake Gardens where the incident allegedly occurred. She testified that Pinelake Gardens regularly contracted with an exterminator to spray insecticide, which included killing ants (not specifically fire-ants). She further testified that maintenance employees would treat observed ant mounds with granules and would contact the exterminator if there was anything out of the ordinary observed.

The trial court ruled in favor of Pinelake Gardens. The trial court determined that Pinelake Gardens was not on notice of a fire-ant infestation at the area of the alleged incident, and therefore did not have a duty to Mr. Hanrahan to guard against the fire-ants. As a result, Hanrahan appealed. On appeal, Hanrahan claimed that the trial court improperly determined whether Pinelake Gardens could foresee the specific injury that actually occurred, instead of, as Hanrahan claimed, whether Pinelake Gardens’ conduct created a foreseeable zone of risk.

The general rule in regard to wild animals in Florida, as explained by the appellate court citing to another case, Wamser v. City of St. Petersberg, provides, the law does not require the owner or possessor of land to anticipate the presence of, or guard, an invitee against harm from animals “ferare naturae” (which is a common law doctrine where wild animals are considered owned by no one specifically but by the people generally) unless such owner or possessor harbors such animals or has introduced wild animals to the premises which are not indigenous to the locality. Wamser involved a shark attack, in which the city did not have any knowledge of prior shark attacks and therefore did not have any foreseeability of shark attacks nor a duty to guard against shark attacks. As in Wamser, the appellate court ruled that there was no evidence in the record to show Pinelake Gardens had any knowledge of a “ferae naturae” attack in the alleged area.

The appellate court held that the presence of the fire-ants was not caused by any act of Pinelake Gardens and that Pinelake Gardens did not harbor or introduce them. Furthermore, Pinelake Gardens regularly attempted, by maintenance staff and exterminators, to treat the ant mounds and other manifestations of fire-ants.

To add a further caveat to its ruling, the appellate court added quoting to another case, “we do not say a landowner can never be negligent with regard to the indigenous wild animals found on its property. A premises owner could be negligent with regard to wild animals found in artificial structures or places where they are not normally found; that is, stores, hotels, apartment houses, or billboards, if the landowner knows or should know of the unreasonable risk of harm posed by an animal on its premises, and cannot expect patrons to realize the danger or guard against it.” The appellate court ruled that there was no evidence that Pinelake Gardens knew or should have known of the unreasonable risk of harm posed by the fire-ants.

Even though the Hanrahan case primarily concerned fire-ants, the case could be applied to any number of wild animals that you could encounter in your community association, with the most notorious wild animal being the alligator. If you believe an alligator poses a threat to people, pets or property you can call the Nuisance Alligator Hotline at 866-392-4286. Remember, the basic rule is that if the association is aware of a dangerous animal which is within, or may be within, the lands governed by the association, the association has a duty to act. If you have further questions please contact your association lawyer.

“A stitch in time saves nine”. This is a well known phrase which implies that a little work now, will save you from a lot of work, later. Remembering this phrase can go a long way in the management and operation of your community association. The Florida Legislature has amended numerous statutes affecting our community associations. This third article in our 2018 Legislative Update Series will address changes to Chapter 712, Florida Statues, a/k/a The Marketable Record Title Act and section 197.582, Florida Statutes, regarding surpluses resulting from tax deed sales.

The Marketable Record Title Act (“MRTA”):

If you live in a homeowner’s association that is nearing its thirtieth (30th) anniversary, then you should be aware of MRTA. It was created to help title examiners of real property determine which “interests, claims, estates, or other charges” were still effective against the property. MRTA is used to help eliminate restrictions recorded prior to what is referred to as the “root of title”. The “root of title” is determined by looking back at least 30 years to identify a deed or other muniment of title that meets certain statutory criteria set out in Chapter 712, Florida Statutes. In other words, MRTA operates to eliminate restrictions so as to prevent real property from being so overly burdened with covenants that the property is no longer marketable. MRTA also helps shorten the period of review a title examiner must examine during the conveyance of real property.

In a simplistic explanation, MRTA operates such that covenants recorded more than 30 years earlier can begin to expire on a lot by lot basis unless such covenants fit squarely into one of the exceptions to MRTA or unless action is otherwise taken to preserve the covenants from being extinguished. Under MRTA, the homeowner’s association would file the statutorily required notice and filings pursuant to section 712.06, Florida Statutes to preserve the HOAs’ declaration from MRTA’s negative effect.

Effective October 1, 2018, the Florida Legislature expands the methods for protection from the effects of MRTA pursuant to section 712.05(2)(b), Florida Statutes, to include instances in which the homeowner’s association records an amendment to the declaration of covenants and restrictions that is indexed under the legal name of the homeowner’s association and references the proper recording information of the covenant or restriction to be preserved. In other words, and in plain English, the new MRTA legislation allows extends the 30 year MRTA deadline with every amendment to the association’s declaration of covenants and restrictions. Therefore, the recording of an amendment to the association’s declaration serves the dual purpose of enacting the underlying amendment and also extends the life of the declaration. A homeowner’s association may also record a new, shorter notice of preservation, to preserve its covenants and restrictions. A copy of the notice must be included in the next notice of meeting or other mailing sent to all members.

I am also very pleased to report that for the first time ever, commercial property owner associations can also avail themselves of preserving and revitalizing their covenants and restrictions, too. While it took an army of people, several years and review of one draft Bill after another to get this accomplished, I am proud to have assisted in this worthwhile endeavor.
TAX DEED SURPLUS:

From time to time, community associations are served with a notice from the Clerk of Court that a unit or lot owner has not paid their property taxes and, as a result, the home will be sold at a sale with open bidding. By way of over simplification, delinquent tax obligations are auctioned to buyers that pay the delinquent tax on behalf of the owner and charge the owner interest. The buyers receive what is known as a tax certificate. After several years, the tax certificate holder can apply for a tax deed. The tax certificate holder can bid at the tax deed sale in the amount of the delinquent tax.

If the winning bid at the tax deed sale is in excess of the tax certificate holder’s bid amount, then any excess amount of surplus proceeds, after the tax certificate holder is made whole, will be held by the Clerk of Court. The Clerk of Courts must now issue, to all known lienholders, a notice to file a claim for the surplus. The Clerk of Court determines the priority of the claims based on the information provided by the claimants and pays out from the surplus accordingly. A new hard deadline of 120 days from the date of the Clerk of Court’s notice of surplus is now imposed to file a claim for surplus funds, except for claims by a property owner. (Believe it or not, there was no such deadline in the past.) The new requirement will apply to tax deed applications filed on or after October 1, 2018. Since many declarations impose a lien for assessments, it remains to be seen whether an association will need to record an assessment lien to ensure entitlement to surplus, or if the declaration itself will suffice for receiving notice of surplus.

Community associations have an interest in the safety and integrity of their communities. Generally speaking, boards of community associations would like to be reasonably certain that potential owners, renters and other occupants have the financial capability to meet their financial obligations. Also of concern are potential purchasers’ and tenants’ criminal backgrounds, if any, so as to avoid endangering the overall safety and welfare of the community.

To address these concerns, many associations have purchaser and tenant approval procedures set out in their governing documents, usually the declaration, which often authorize the association to obtain “consumer information reports” on all applicants as part of the screening process. This leads to the question of when and how a community association can utilize a background check that includes both a credit report and criminal history.

The first step is to determine if the governing documents provide for the approval process. The second step is to ensure there is meaningful criteria by which to evaluate the results of the consumer information report. The consumer information report (a/k/a the background check) is typically compiled by a consumer reporting agency or company, which is engaged in the business of gathering credit scores, reports on previous rental history, criminal background information, employer history, and verification of income amongst other information. The consumer information report cannot be used for any other purpose other than for the determination of approval. Importantly, it cannot be used in a discriminatory manner to reject housing based on race, color, religion, national origin, sex, disability, or familial status.

If the community association makes an unfavorable determination on the applicant’s status based on information contained in the consumer report, then the association MUST provide certain information to the applicant pursuant to the terms of the Federal Fair Credit Reporting Act.

1. The association must provide the applicant verbal or written notice that the applicant was denied based on the information supplied in the consumer report.
2. The verbal or written notice of adverse determination must include:
a) the name, address, and phone number of the consumer reporting company that supplied the report,
b) a statement that the company that supplied the report did not make the decision for the unfavorable action and cannot give reasons for the denial;
c) a notice of the applicant’s right to dispute the accuracy and completeness of the information in the credit report and that the applicant may request a free report from the credit reporting company within 60 days.

For the protection of the association, this notification should always be done in writing so as to provide proof positive of compliance with the Fair Credit Reporting Act. Additionally, there are local Broward and Miami-Dade County Ordinances requiring that a written notice be mailed to the rejected applicant which provides with some degree of specificity the basis for the disapproval, in addition to the notice required by the Federal Fair Credit Reporting Act.

The information that the association relied on in making the adverse determination CANNOT be released to the applicant, but the applicant may request from the credit reporting agency to see the information in the consumer information report and correct any inaccurate information. Even if the information provided a small role in the total determination of the application, the applicant must be provided the required notice by the association.

What is to be done with the consumer information report after a decision has been made? The general rule is that all information in the consumer report must be destroyed in such a manner that it cannot be reconstructed. But arguably, Florida law requires community associations to keep such records, as all written records of an association must generally be kept for seven years. Therefore, the association will want to store the consumer report in the applicant’s file, which will need to be designated as confidential with restricted access. It is NOT part of the official records open to inspection and, thus, not available upon a request to inspect the association’s official records.

If a declaration has general language providing for the purchaser and tenant approval but does not provide the standards and procedures necessary to make such a decision, then on all likelihood the association’s approval is on thin ice and subject to challenge. This is a good time to check your declaration and seek advice from the association’s lawyer as to whether your association’s declaration approval process needs to be updated.

A necessary duty of Florida’s community associations is to levy and collect assessments to ensure the upkeep of the community. In a perfect world, all owners would timely pay their assessments. Unfortunately, this is not always the case. When owners do not pay, their association often takes legal action including the filing of a lien and filing of an assessment foreclosure lawsuit.

In the case of Berg v. Bridle Path Homeowners Association, Inc., decided on January 20, 2002 by Florida’s Fourth District Court of Appeal, the association, Bridle Path Homeowners Association, Inc. (“Bridle Path”), sought to foreclose on Ms. Berg, the homeowner, for her failure to pay assessments since her acquisition of the property. In response, Berg asserted that Bridle Path did not comply with its own declaration of restrictive covenants or bylaws in the making and levying of the assessments.

By way of background, in 1993, Berg purchased two lots in Bridle Path. The lots were subject to the Declaration of Covenants, Conditions and Restrictions for Bridle Path and Bridle Path’s authority to make and collect assessments. In 1997, Bridle Path filed a lien foreclosure lawsuit against Berg, alleging Berg failed to pay the assessments levied against her two lots from the time of the 1993 purchase through the end of 1997.

Berg raised five affirmative defenses to the lien foreclosure lawsuit including: (1) that the property manager, and not the board, determined the budget, which act was inconsistent with the bylaws; (2) there was no evidence that board meetings were held where budgets and lot assessments were adopted; (3) there was no evidence that Berg received notice of the annual meetings; (4) there was no evidence that notice of the annual meetings were posted to the property; and (5) minutes of any meetings conducted were not kept in accordance with the bylaws. In plain English, an “affirmative defense” raised by a defendant in a civil lawsuit is a fact or set of facts other than those alleged by the plaintiff which, if proven by the defendant, defeats or mitigates the legal consequences of the allegations set forth in the complaint.

The trial court ruled in favor of Bridle Path. The trial court also determined that Berg did not prove her affirmative defenses that Bridle Path failed to comply with the recorded covenants, bylaws, and Florida Statutes. As a result, Berg appealed. On appeal, Berg claimed that the trial court erroneously shifted the burden of proof for the assertion of the proper levying of the assessments from the association, Bridle Path, to Berg. The appellate court noted that, although Berg framed her response to the complaint as affirmative defenses, those affirmative defenses were actually denials of the condition precedent that Bridle Path properly levied the assessments in accordance with the declaration.

The appellate court determined that Bridle Path was required to prove that the assessments were properly levied pursuant to the recorded covenants by a preponderance of the evidence and that Berg did not have to prove that association did not do so. In citing to another case, the appellate court noted that, “it is well-settled in Florida law that the plaintiff is required to prove every material allegation of its complaint which is denied by the party defending against the claim.”

The appellate court held that a homeowners’ association must show that it properly levied the assessment in accordance with the community’s declaration of restrictive covenants when the owner challenges the lack of compliance. This concept applies to all types of community associations. Furthermore, the appellate court also found that the trial court erred by requiring Berg to prove that Bridle Path did not comply with its governing documents rather than requiring Bridle Path that it did so comply. With that, the appellate court remanded (meaning, sent back) the case back to the trial court for a new trial consistent with the appellate court’s holding… meaning that Bridle Path would have to prove that it did, in fact, properly levy the assessments.
The general rule is that an association has the burden of proving it performed the required conditions precedent to enforce the provisions of the declaration of restrictive covenants. At any contested trial or hearing the association has to prove that it complied with all applicable provisions of its declaration. The owner being sued does not have to prove that the association did not do so. In this case, at a minimum, Bridle Path would need to prove that the board lawfully passed the budget(s) in accordance with the declaration and bylaws, that the board authorized the lawsuit to commence and that the 45 day intent to lien letter and 45 day intent to foreclose letters were sent.

The nugget of hidden gold in this case’s holding is that an association needs to keep accurate minutes and records of its activities. The minutes and records should be sufficient to show the business being conducted. The level of detail required depends on the scope of the activity the association is addressing. For instance, the minutes should at least minimally reflect that proper notice was provided, who made the motion and who seconded it, and the board’s ultimate decision on the issue at hand. This does not, however, mean that the association should be keeping overly detailed minutes such that the minutes would be a transcript of the meeting.

Golf course communities are a fact of life in south Florida. But what happens when the course becomes too expensive to maintain? Sometimes, what started out as a voluntary club membership becomes mandatory for new owners. This can have obvious negative effects on sales due to the added expenses of the mandatory club membership. To avoid that consequence, more than one golf course community has sold memberships to non-association members. Others sell the golf course to a developer for space to build new homes. This can have multiple positive effects on an association’s cash flow. It eliminates the ever increasing costs of maintaining the golf course, provides new members who will be paying assessments, and results in a huge cash infusion to the association when the sale closes. But, it’s not all a panacea as there are significant hurdles that must be first overcome. Avid golf club members might launch a legal fight to keep their club, despite the economic hurdles. Local zoning and development codes may have certain restrictions. Golf course communities may also have restrictive covenants preventing other uses for the golf course.

The average 18-hole golf course comprises at least 74 acres and many modern courses are built on 150 acres. At 5 homes per acre, this means the average 74 acre course can be used to build 370 new single family homes not including other infrastructure needs such as new roads, green-space, and retention ponds, etc. That said, it does not take a rocket scientist to see the profits that can be made.
In a recent case Victorville West Limited Partnership v. The Inverrary Association, Inc., decided August 23, 2017 by Florida’s Fourth District Court of Appeal, the developer, Victorville, sought to cancel a restrictive covenant because the golf course was no longer profitable. Victorville wanted to allow non-association members into the golf club. The restrictive covenant in force since 1971, provided that,
“The [Golf Course] shall henceforth be used solely for recreational purposes, including all sports as defined herein, and for the Facilities and amenities appurtenant thereto, such as clubhouses and recreational, maintenance, and storage facilities and equipment. For the purposes of this Declaration, the term “sports” shall be deemed to include, by way of illustration and not in limitation thereof, the following:  Golf, tennis, horseback riding, swimming and all such other recreational activities as may be appropriate and in keeping with the overall development of Inverrary․ … Developer agrees that… it will not at any such time offer, sell, or admit to golf membership any persons or families not then bona fide residents of Inverrary.”
In 2006, Victorville purchased the golf course “subject to all covenants listed in the Public Records of Broward County, Florida” which included this covenant. It asked the Association to hold a membership vote to cancel the covenant. The Association refused because, even though its members were not purchasing sufficient club memberships, its members liked the golf course, even if they did not have a membership, because it provided a tranquil view, prevented overcrowding, and preserved the nature of the community.
In 2012, Victorville filed a lawsuit against the Association and argued that the covenant was an economic hardship. The trial court found that Victorville’s claim was time-barred because the statute of limitations began to run when it purchased the golf course and it did not bring its claim within the five-year statutory limit. The trial court also held that, even if the statute of limitations had not run, Victorville was not entitled to vacate the restrictive covenant because the covenant remained beneficial to the surrounding community. As a result, Victorville appealed.

On appeal, Victorville argued that the trial court should have nullified the restrictive covenant due to a substantial change in circumstances that prevented the covenant’s original purpose from being carried out and the covenant was an unlawful restraint on alienation (meaningful and unlawful restraint on the transfer of real property). The appellate court reviewed the trial court’s findings of fact under what is called “the clearly erroneous standard of review” meaning that their review was “de novo”. A de novo review allows the appellate court to review all of the evidence anew and substitute its opinion for that of the trial court.
The appellate court noted that, “in an action to cancel a restrictive covenant the test is whether or not the covenant is valid on the basis that the original intention of the parties can be carried out despite alleged materially changed conditions or, on the other hand, whether the covenant is invalid because changed conditions have frustrated the object of the covenant without fault or neglect on the part of the party who seeks to be relieved from the restrictions…although few Inverrary residents have memberships at the golf course, the golf course preserves the character of the community and provides residents with a pleasant view. These are reasonable objectives of a restrictive covenant.” Therefore, the appellate court held that, “even if the golf course is failing financially, the covenant must be enforced because it remains a substantial value to the surrounding residences, the dominant estates.”

The appellate court noted that nothing in the covenant reflected an “intent for the golf course to be a profitable enterprise…. Victorville’s financial hardships do not support cancellation of the covenant because ‘the law does not permit cancellation of property restrictions for the purpose of accommodating the best or most profitable use of a particular piece of property affected by the restriction.’” In citing to another case, the appellate court also noted that “the law does not permit cancellation of property restrictions for the purpose of accommodating the best or most profitable use of a particular piece of property affected by the restriction.”

Victorville argued that the covenant was akin to a perpetual covenant because the two-thirds vote necessary to revoke the covenant could never be obtained. The appellate court found that “the duration of the covenant is significant though not perpetual because the covenant may be removed by a two-thirds vote of surrounding homeowners.”
The appellate court did, however, differ with the trial court’s opinion that the five-year statute of limitations had run and, in fact, found that this part of the trial court’s opinion was “error.” The appellate court did not agree that the statute of limitations began to run when Victorville acquired the property. Rather, the appellate court explained that “the statute of limitations begins to run when the action may be brought…. for the statute of limitations to have begun to run when Victorville purchased the golf course, a substantial change in circumstances would have had to have taken place before Victorville purchased the property.”

To recap, while the appellate court disagreed with the trial court’s statute of limitations rational, it still agreed with the trial court’s outcome because the covenant at issue remained a substantial benefit to the surrounding homeowners and was not an unlawful restraint on alienation.