community association | Rembaum's Association Roundup

October 3, 2023October 3, 2023

Board Member Certification

Board Member Certification: Should It Be Just The Beginning?

The Florida legislature requires board members to be “certified” in order to be properly qualified to serve on the board of a residential community association. By now you might think that the requirements are exactly the same for condominium boards as compared against homeowner associations’ boards, but they differ with regard to how long the association is obligated to keep the proof of director certification.

The Florida Condominium Act, more specifically §718.112(2)(d)4.b., Florida Statutes, and the Florida Homeowners’ Association Act, more specifically §720.3033(1)(a), Florida Statutes, require the following:

Within 90 days after being elected or appointed to the board of an association of a residential condominium, each newly elected or appointed director shall certify in writing to the secretary of the association that he or she has read the association’s declaration of condominium, articles of incorporation, bylaws, and current written policies; that he or she will work to uphold such documents and policies to the best of his or her ability; and that he or she will faithfully discharge his or her fiduciary responsibility to the association’s members.
In lieu of this written certification, within 90 days after being elected or appointed to the board, the newly elected or appointed director may submit a certificate of having satisfactorily completed the educational curriculum administered by a division-approved condominium education provider within one year before, or 90 days after the date of election or appointment.
The written certification or educational certificate is valid and does not have to be resubmitted as long as the director serves on the board without interruption.
A director of an association who fails to timely file the written certification or educational certificate is suspended from service on the board until he or she complies with this sub-subparagraph. The board may temporarily fill the vacancy during the period of suspension.
Failure to have such written certification or educational certificate on file does not affect the validity of any board action.
The Condominium Act requires that the secretary shall cause the association to retain a director’s written certification or educational certificate for inspection by the members for five years after a director’s election or the duration of the director’s uninterrupted tenure, whichever is longer, while the Homeowners’ Association Act requires that the association retain each director’s written certification or educational certificate for inspection by the members for five years after the director’s election.

While requiring certification is a good start in regard to providing board members the necessary tools to do their job, there are issues which need to be addressed, such as the following:

The ability of a board member to be certified simply by signing an 8 ½ x 11 piece of paper that they read the governing documents, will uphold the governing documents, and will faithfully discharge their duty should be eliminated. How many board members actually read their respective governing documents; and even if they do, what did they learn about corporate governance and the ever-growing body of statutory law, judicial decisions, and intricacies of ensuring that their fiduciary responsibility is being met?
The ability to be certified simply by watching a pre-recorded webinar should also be modified or, better still, fully eliminated. Not only do attendees benefit from the one-on-one instruction in a live classroom or webinar setting, but when viewers have the ability to watch from home, well, did they really do so? At present the Department of Business and Professional Regulation (DBPR) does not regulate or police the pre-recorded board certification webinar. These pre-recorded certification courses allow the viewer to cheat the system by simply fast forwarding to the end to make it appear as though the viewer watched the entire presentation, but in reality, they did not! Most importantly, the laws governing community associations are in a constant state of flux. The legislature is continually revising and adding new laws, and appellate courts continually author new opinions affecting community associations. Only by attending a live class, be it in person or by webinar, will a board member have the best opportunity to be fully updated.
The information covered in the certification class is primarily of a legal nature emanating from the Florida Statutes and relevant case law. Therefore, only lawyers who are board-certified specialists in this body of law and other lawyers with a sufficient number of years of daily experience in community association law matters should be permitted to teach the initial board certification classes.
Continuing education for those board members serving multiple years should be strongly considered, even if it is only one or two hours per year. The continuing education component courses could be led by board-certified specialists in this body of law, or by other lawyers with a sufficient number of years of daily experience in community association law matters, or perhaps even experienced, licensed managers demonstrating sufficient knowledge in the field, regarding a variety of subjects. Also, during the typical initial board member certification course, the variety of subjects needing discussion can only be summarized. Therefore, in-depth analysis of the myriad of issues and subjects discussed is practically impossible given the time constraints, which could be addressed by requiring continuing education. Potential subjects include the following:

- - Contract pitfalls
  - Budgets and reserves
  - Internal controls
  - Elections
  - Conflicts of interest
  - Approval and screening requirements
  - Fair housing laws
  - Covenant enforcement
  - How to run a board meeting
  - Conflict resolution and de-escalation techniques for angry homeowners.

Requiring an initial board certification was a really good start. However, the process of education must continue. In our opinion, a one-time board certification course is simply not sufficient! Since the law already contemplates that board members will serve multiple years, the law should also contemplate continuing education requirements.

(Written by Jeffrey Rembaum (Kaye Bender Rebaum) and reprinted with permission from the October 2023 edition of the “Florida Community Association Journal“.)

September 2, 2023September 2, 2023

Fiduciary Duty: What It Means to Your Association

FIDUCIARY DUTY: What it Means to Your Community Association

What duty does a community association board member owe to their association? What happens if that duty is breached? During the 2023 legislative session, legislation was proposed that would have made directors criminally liable for failure to timely respond to official record requests, among other provisions. The legislation in House Bill 919 was proposed by Representative Porras in response to the alleged $3.4 million dollar embezzlement scheme that took place at the Hammocks Community Association, located in Miami-Dade County. Parts of this proposed bill were well-intentioned; however, several provisions were commonly viewed as too broad and expansive.

On November 15, 2022, the Miami-Dade State Attorney’s Office announced charges related to the Hammocks’ criminal case, including racketeering, organized scheme to defraud, money laundering, grand theft, and fabricating physical evidence against five board members. These board members have been accused of the following:

i) running a scheme in which they used HOA checks and HOA credit cards from 55 bank accounts to pay for “no-show” work by shell companies or vendors, who would funnel money back to the directors for their personal use;

ii) withholding official records from members; and,

iii) failure to hold valid elections, among other bad acts.

If found guilty these board members overtly breached their fiduciary duty to their association.

During the 2023 legislative session, House Bill 919 initially contained significant criminal penalties to punish board members who failed to provide official records when they otherwise should have, criminal penalties for kickbacks, and criminal penalties for improper election interference, among other provisions. Such laws, while well intended, went overboard as evidenced by the creation of criminal penalties for failure to provide official records, as such severe criminal penalties for operational matters would likely only deter good people from running for the board. Recognizing this potential issue, parts of HB 919 were tempered a bit prior to it becoming law. That said, in the opinion of this author, new laws with new criminal penalties are not the answer. Bad people do bad things, and no amount of laws will likely significantly change that. So, what is the answer?

One answer is to shore up the educational and certification requirements for board members. At present, there are two ways to be certified as a board member. One method is to take a State-approved class, which provides an overview of the voluminous information board members need to know in order to perform their duties. The other method is to sign a piece of paper that the board member has read the governing documents, will abide by them, and will faithfully discharge their duties. This second method should be eliminated as there is no method to confirm compliance, and this method does not have any educational component. In addition, continuing education requirements should be required for any board member serving consecutive years.

During a board certification class, time should be spent discussing the term “fiduciary duty.” While the term is repeatedly used in Chapters 718 and 720 of the Florida Statutes, it is not expressly defined in these statutes. Section 718.111, Florida Statutes, makes reference to Section 617.0830, Florida Statutes, which provides for general standards for directors of not-for-profit corporations, such as community associations.

Section 617.0830, Florida Statutes, provides the following:

1. 1. A director shall discharge his or her duties as a director, including his or her duties as a member of a committee i) in good faith; ii) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and iii) in a manner he or she reasonably believes to be in the best interests of the corporation.
  2. In discharging his or her duties, a director may rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: i) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented; ii) legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the persons’ professional or expert competence; or iii) a committee of the board of directors of which he or she is not a member if the director reasonably believes the committee merits confidence.
  3. A director is not acting in good faith if he or she has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) unwarranted.
  4. A director is not liable for any action taken as a director, or any failure to take any action, if he or she performed the duties of his or her office in compliance with this section.

Still, though, there is no express definition of the term “fiduciary duty.” The purpose of studying fiduciary relationships is to identify the areas where it exists and gain an insight into the duties of a fiduciary. After all, every board member is a fiduciary for their community association. Common definitions of the term “fiduciary” include:

- - A fiduciary relationship is a relation between two parties wherein one party (fiduciary) has the duty to act in the best interest of the other party (beneficiary or principal).
  - A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Typically, a fiduciary prudently takes care of money or other assets for another person.
  - A fiduciary duty is a relationship in which one party places special trust, confidence, and reliance in and is influenced by another who has a fiduciary duty to act for the benefit of the party.
  - Most importantly, and germane to this discussion, a fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interests ahead of their own, with a duty to preserve good faith and trust.

In other words, a good community association board member puts the interest of their association above their own personal interests. Thus, while we may not be able to stop bad people from doing bad things, through continuing education we can help good people do better.

To recap, there are three things that can be readily accomplished that would make a positive difference for Florida’s community associations.

1. 1. Remove the ability of a board member to be “certified” by signature alone.
  2. Require continuing education for board members serving continuous years.
  3. Amend Florida Statutes, Chapters 718 and 720, to include express definitions of fiduciary duty so that it is made patently clear that every board member must put their community association above and ahead of their own personal interests.

(Written by Jeffrey Rembaum (Kaye Bender Rebaum) and reprinted with permission from the September 2023 edition of the “Florida Community Association Journal“.)

June 19, 2023June 19, 2023

Guns in the Clubhouse: What Can a Community Association Do?

The right of the people to carry and bear arms without governmental infringement is a right which stems from both the United States Constitution and the Constitution of the State of Florida. The State of Florida recently adopted new gun legislation, effective July 1, 2023, which allows the everyday citizen to carry a concealed weapon without first obtaining a concealed weapons permit. This raises interesting questions for community associations such as, is the right to carry a concealed weapon absolute? Can a community association adopt a rule that prohibits the carrying of concealed weapons in the clubhouse or other common area facilities?

Before we get too far in our analysis, it is important to point out that the intent of this article is not to advocate for gun control or the right to carry. Rather, the intent of this article is to examine the rulemaking authority of a board of directors of a community association to prohibit concealed weapons in the clubhouse and other common areas. In short, is it possible for a community association to adopt such a rule? Yes, subject to the cautions and explanations explained below. Is the adoption of such a rule risk free? No!

As the starting point, in order for a board-made rule of this nature to have validity, we must examine whether it violates either the United States Constitution or the Constitution of the State of Florida. As to when constitutional protections apply within a community association, this is an interesting question. In prior cases, courts have found that recorded covenants restricting home ownership based on race will subject the covenants to a constitutional examination, and in the end, such covenants were deemed to violate the equal protection clause of the Fourteenth Amendment to the United States Constitution.

Another method by which courts may find application of constitutional protections to community associations is if there is significant governmental action associated with the community association. For example, an argument would exist that if a community association were built with federal monies, the covenants of such a community association would be subject to all the protections afforded by both the United States Constitution and the Constitution of the State of Florida. Often, multiple community associations that exist within a sprawling master association are built in community development districts (CDD). The CDD is a quasi-governmental entity established to govern and control what would otherwise be the common areas of the master association. The creation of the CDD allows many of the hard costs associated with the community’s build-out, such as the roads and drainage systems, to be immediately passed on to the first-time home buyers. By utilizing a CDD, long-term bonds can be issued, which are paid back through ad valorem tax obligations allowing the costs to spread out over a significantly longer period of time. As quasi-governmental entities, constitutional protections which limit powers of government would likely apply to CDDs. Therefore, should a CDD adopt rules to prohibit concealed weapons in the common areas, such a rule would likely be found to violate constitutional protections. However, the same analysis is not applicable if the community association itself adopted such a rule.

It should be remembered that courts have long held that owners give up certain individual rights and liberties when living in a community controlled by a community association. In 2002 the Florida Supreme Court held, in Woodside Village v. Jahren, 806 So. 2d 452 (Fla. 2002), that certain individual rights must be compromised when one chooses to live in a condominium association (and by analogy, in a homeowners’ association, too). But, on occasion courts have found that certain constitutional protections apply within a community association; however, such application is somewhat rare.

Thankfully, we do have some limited guidance. In 1989 the Florida Supreme Court held, in Quail Creek POA v. Hunter, 538 So. 2d 1288 (Fla. 2d DCA 1989), that neither a homeowners’ association’s recording 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 Amendment and the Fourteenth Amendment of the United States Constitution would apply. By analogy, such logic could be applied to defending the right of a community association to adopt a rule prohibiting concealed weapons in the clubhouse. Thus, there is no reason to believe that such arguments would not also apply to the application of the Second Amendment of the United States Constitution within community associations. That said, it would not at all be surprising for an owner to challenge such a rule; so, any association that adopts such a rule should be prepared to be a possible test case, which could have national implications associated with it.

Let us assume that the board understands and accepts such a risk and is ready to move forward to adopt a rule prohibiting the carry of concealed weapons in the clubhouse. Certainly, we recommend that counsel for the association be consulted prior to adopting these types of rules. For the purposes of our analysis, let us also assume that the community association at issue does not have a sufficient nexus to the federal or state governments that would, in and of itself, render such a rule unconstitutional. Under these circumstances, the analysis can then shift to the ordinary rulemaking criteria necessary to withstand judicial challenge, as follows:

1. 1. Does the board have the necessary rulemaking authority set out in the governing documents or by statute to adopt such a rule?
  2. Does the rule conflict with any rights afforded by governing documents of higher priority, whether they are considered express or implied rights?
  3. Is the rule reasonable? Reasonableness is difficult to define, but case law provides that the rule must be rationally related to a legitimate association objective. The rule cannot be arbitrary or capricious.
  4. Does the rule contravene existing laws or compelling public policies?
  5. Was the rule adopted in a procedurally correct manner that is provided by both the governing documents and existing law?

Of course, even if the association adopts such a rule, enforceability is an entirely different issue. Assuming the association is not using some type of full body scanner, then so long as the possessor of the concealed weapon does not brandish the weapon, and thus it remains fully concealed, no one will be the wiser. In addition, such a rule would not apply to certain individuals who have an absolute right to carry a concealed weapon, subject to very few limitations, such as an off-duty police officer.

As an aside, just because a person may not need to have a concealed weapon permit to carry a concealed weapon, this does not mean that the still-available concealed weapon permit does not have value. It certainly does when it comes to traveling outside the State of Florida to one of the many states, over 26, that have reciprocity with Florida, meaning that the other states recognize Florida’s concealed weapons permit. With that in mind, obtaining a concealed weapons permit may still make sense.

While a properly drafted rule prohibiting guns in the clubhouse stands a decent chance of validity, remember that even if your association

i) fully analyzes whether it has any type of federal governmental nexus which would provide for clear application of constitutional protections and such analysis is answered in the negative, ii) meets the rule adoption criteria listed above, and iii) consults with the association’s lawyer who helps draft such a rule, the association could still find itself as a defendant in a lawsuit seeking to have such a rule invalidated by the court.

(Written by Jeffrey Rembaum and reprinted with permission from the June 2023 edition of the “Florida Community Association Journal”.)

June 5, 2023August 31, 2023

Sunshine With a Chance of Screaming Children? Not in My Community

Sunshine with a Chance of Screaming Children? Not in My Community! “55+” Communities Under the Housing for Older Persons Act

Florida’s “55+” communities are no longer required to be registered with the Florida Commission on Human Relations, an agency created by the Florida Legislature in 1969 to enforce the Florida Civil Rights Act, which includes Florida’s Fair Housing Laws. However, a community association qualifying as housing for persons 55 years of age or older must still have and follow procedures to determine the occupancy of the homes within the community every two years to maintain the community’s status as a “55+” community.

With Florida’s sunshine, sandy beaches, and countless activities, it is easy to understand why the Sunshine State attracts seniors from colder climates and why Florida residents approaching retirement continue to live here. For those who prefer to be surrounded by their generational peers, there are many communities to choose from that prohibit or restrict occupancy of the homes within the community by children, and more and more are being created every day. If you are an avid reader of this publication, you are already familiar with the Fair Housing Act, and may be asking yourself, “How is this possible when the Fair Housing Act prohibits discrimination in housing against families with minor children?” The answer is, there is an exception for that.

Under the Housing for Older Persons Act, housing providers, including community associations, are exempt from liability for familial status discrimination so long as certain requirements are met and maintained. Although there are three types of housing for older persons exemptions, the most prevalent exemption is for housing intended and operated for occupancy by persons 55 years of age or older. As such, “55+” communities are the focus of this article.

In order for a community to qualify as a “55+” community, the community must comply with the following requirements:

1. At least 80% of the occupied homes must be occupied by at least one person who is 55 years of age or older; and
2. The community must publish and adhere to policies and procedures which demonstrate the community’s intent to be a provider of housing for persons 55 years of age or older; and
3. The community must comply with rules established by the U.S. Department of Housing and Urban Development (“HUD”) for age verification of the community’s residents.

As provided above, a housing provider must publish and adhere to policies and procedures that demonstrate its intent to operate as a “55+” community. For community associations, these policies and procedures are best placed in the homeowners’ association’s declaration of covenants or the condominium association’s declaration of condominium. The Housing for Older Persons Act sets out the following nonexclusive factors that demonstrate a housing provider’s intent to operate as an older persons’ community:

The following factors, among others, are considered relevant in determining whether the housing facility or community has complied with this [demonstration of intent to operate as an older persons’ community] requirement:

1. 1. The manner in which the housing facility or community is described to prospective residents;
  2. Any advertising designed to attract prospective residents;
  3. Lease provisions;
  4. Written rules, regulations, covenants, deed or other restrictions;
  5. The maintenance and consistent application of relevant procedures;
  6. Actual practices of the housing facility or community; and
  7. Public posting in common areas of statements describing the facility or community as housing for persons 55 years of age or older.

The community association must be able to produce, in response to a complaint filed under the Fair Housing Act, verification of compliance with the 80% occupancy requirement, discussed above, through reliable surveys and affidavits. A community association’s failure to survey its list of occupants in accordance with its age verification procedures does not demonstrate intent to be housing for older persons and could jeopardize the community’s status as a “55+” community.

In performing the required occupancy survey, any of the following documents are considered reliable documentation of the age of the occupants of the homes within the community to ensure that at least one occupant of at least 80% of the homes within the community is 55 years of age or older:

1. 1. Driver’s license;
  2. Birth certificate;
  3. Passport;
  4. Immigration card;
  5. Military identification;
  6. Any other state, local national, or international official documents containing a birth date of comparable reliability; or
  7. A certification in a lease, application, affidavit, or other document signed by any member of the household age 18 or older asserting that at least one person in the unit is 55 years of age or older.

Now that we know the survey must be done every two years to ensure that at least one occupant of at least 80% of the homes within the community is 55 years of age or older, what about the remaining 20% of the homes? The remaining 20% of the homes may be occupied by persons under the age of 55, and the community may still qualify as a “55+” community. Notwithstanding this 20% allowance, a community association may require that 100% of the homes be occupied by at least one person 55 years of age or older, or that 80% of the homes be occupied exclusively by persons 55 years of age or older. Although up to 20% of the homes within a “55+” community may be occupied exclusively by persons under the age of 55, a community association allowing this occupancy needs to plan with care any attempt to permit the entire 20%, or a large portion of the 20%, of the remaining homes to be occupied exclusively by persons under the age of 55 because doing so could endanger the community’s housing discrimination exemption, particularly in the event a qualifying occupant who is over the age of 55 dies when all the remaining occupants of the home are under 55 years of age.

Community associations should also be aware that local laws may provide for additional protected classes against which housing discrimination is prohibited, including, for example, discrimination based upon age, sexual orientation, marital status, and gender identity or expression. Therefore, a community association should contact its attorney before establishing policies and procedures restricting occupancy based on age or affecting survivors’ rights to property.

Similarly, although the Housing for Older Persons Act provides an exemption from liability for familial status discrimination for those communities that comply with its requirements, the Housing from Older Persons Act does not protect housing providers from liability for housing discrimination because of race, color, religion, sex, disability, or national origin under the Fair Housing Act.

May 4, 2023May 4, 2023

Requiring Workers’ Compensation | Why it is So Very Important to Consider Its Inclusion in Every Contract and More

Requiring Workers' Compensation

Why it is so very Important To Consider Its Inclusion In Every Contract and More

It is surprising to hear from so many community association board members and managers looking to protect their community association that, when asked if they require all vendors to have workers’ compensation insurance as a required term in all of their contracts, it can be like looking at a deer in the headlights. In addition, for reasons explained below, if your community association provides services on a regular basis, such as valet, concierge, fitness programs, etc., then you may also want to consider amending the declaration of covenants or declaration of condominium to include a requirement that the association is contractually obligated to provide such services to its owners because this can help provide liability protection in favor of the association. However, this approach can lead to other problems if the association does not actually provide the required services.

According to the Florida Office of Insurance Regulation, workers’ compensation insurance is coverage purchased by the employer/business that provides benefits for job-related employee injuries, with a few exceptions. Florida law requires most employers to purchase workers’ compensation coverage. Under a workers’ compensation policy, employees are compensated for occupationally incurred injuries regardless of fault. This coverage makes employers immune from some injury lawsuits by employees, as the workers’ compensation policy will limit the type of recovery available to the employee.

However, there are many exceptions afforded to employers in which the employer is not required by statute to have workers’ compensation coverage. For example, a construction-related company is allowed up to three exemptions, and a non-construction-related company is allowed up to ten exemptions. If the employer is exempt from having to provide workers’ compensation coverage, then should an employee be injured on the association’s property, the association could bear the financial brunt of the liability for the injury.

Why is requiring workers’ compensation so very important? Because it helps protect the association from liability claims when an employee of a vendor is hurt on the association’s property. While Florida’s workers’ compensation laws do not guarantee protection, they sure go a very long way in helping to protect the association from claims by employees of vendors when they get hurt in your community.

Why is it a good idea to consider including regularly provided services as a requirement within the declaration of condominium or declaration of covenants? Because, under certain circumstances, the association can be considered a “statutory employer” under the workers’ compensation rules, meaning that the association is entitled to the same immunity protection that the injured employee’s employer is afforded.

In a recent case, Bal Harbor Towers Condominium Association, Inc. v. Martin Bellorin, 351 So.3d 96 (Fla. 3d DCA Oct. 19, 2022), the employee, Martin Bellorin, was injured while delivering luggage when a plastic panel fell from the ceiling of the elevator and hit his head. Subsequently, he filed a lawsuit against the association, alleging negligence based on a premises liability theory, and sought damages for his injury. During the trial court proceedings, the association sought to defend the case by arguing during its motion for summary judgment that it was entitled to workers’ compensation immunity because it was a “statutory employer.” The trial court disagreed and held that the workers’ compensation immunity did not apply to the association because, in this case, the declaration of condominium and bylaws were not a contract and, therefore, did not impose a contractual obligation upon the association to provide the valet services. However, the association appealed the trial court decision and prevailed.

On appeal, the association argued that its declaration of condominium was a contract and, in fact, provided a contractual obligation to provide the valet services to the unit owners at the condominium, and therefore it was entitled to the workers’ compensation immunity as a “statutory employer.” Pursuant to §440.10(1)(b), Florida Statutes,

in cases where a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment.

Stated differently, a “statutory employer” is entitled to vertical immunity. A vertical relationship exists when a contractor (in this case, the association) sublets any part(s) of its contracted work to a subcontractor (in this case, the valet company). Thus, in the Bal Harbor Towers Condominium Association case, the association argued it should be deemed the “statutory employer” of the employees of the valet company.

As pointed out by the Appellate Court, for the Association to be a contractor under §440.10, it must show that it has a contractual obligation to provide the services to the unit owners, and that it sublet any part of the contract work to a subcontractor… to be considered a contractor under §440.10 the association’s primary obligation in performing a job or providing a service, must arise out of a contract… well-established Florida law provides that a declaration of condominium operates as a contract, thus the trial court erred in finding that the Association did not have a contractual obligation to provide valet services to unit owners under its declaration of condominium, thereby determining that the Association was not entitled to worker’s compensation immunity as a statutory employer.

Therefore, the Appellate Court reversed the trial court’s non-final order denying the association’s motion for final sum-mary judgment and remanded the case back to the trial court for further proceedings.

The takeaway from the Bal Harbor Towers Condominium Association case is if the association is going to provide serv-ices on a regular basis to its members, then amending the declaration to require providing such services will further help shield the association from liability claims from the association’s vendor’s employees. In addition, the association should consider requiring all vendors servicing the association and its members to have workers’ compensation insurance and provide proof of coverage prior to commencing work. Remember, the fact that a vendor may tell you they are exempt from workers’ compensation only means that if they or their employees are hurt on the association’s property, then the association is exposed to liability for damages. Be sure to talk about these important issues with the association’s legal counsel, and always, no matter the value of the contract, strongly consider asking association counsel to prepare the appropriate addendum to help better protect the interests of the association.

(Written by Jeffrey Rembaum and reprinted with permission from the May 2023 edition of the “Florida Community Association Journal”.)

April 7, 2023April 7, 2023

Is There Liability for Dangerous Wild Animals in Your Community?

With the ever-increasing development in Florida, especially in South Florida, we are once again reminded that we live in close proximity to a number of native, exotic, invasive, and at times dangerous wild animals. Tragically, and all too recently, in St. Lucie County an 85-year-old woman died while trying to rescue her dog from an alligator. Whether her community association will be held liable will largely depend upon what the association knew and when they knew it regarding the existence of alligators within the association’s property.

Simply put, if there is a foreseeable zone of risk, then the association’s members should be made aware of it. Phrased differently, where the association, acting by and through its board of directors, is aware or should reasonably be aware of a dangerous animal within association property, then there is a duty to act. Such action should minimally include notice to the entire community, and for those situations where reoccurrence is a likely possibility, then posting signs could be warranted, too.

What can and should happen when your community association is confronted with that unexpected wild animal that causes a disturbance or, even worse, the wild animal has become a source of imminent danger to the members of the association or their guests? Guidance is presented from Hanrahan v. Hometown America, LLC, 90 S.3d 915 (Fla. 4th DCA 2012), decided on June 20, 2012, by Florida’s Fourth District Court of Appeal. In this case, 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 exposed to or 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 sufficient 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 or otherwise take action in this situation. 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 another case, Wamser v. City of St. Petersburg, 339 So.2d 244 (Fla. 2d DCA 1976), is that

…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.

The Wamser case 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 the possibility of shark attacks nor a duty to guard against shark attacks. As in Wamser, the appellate court in Hanrahan v. Hometown America, LLC, 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 quoted from another fire-ant case, State of Texas, Nicholson v. Smith, 986 S.W,2d 54 (Tex. App. 1999), in which it was stated:

…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. [emphasis added]

Thus, in the end, 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 concerned fire ants, the case could be applied by analogy to any number of wild animals that you could encounter in your community association, including, without limitation, alligators.

When it comes to injuries caused by wild animals, the board of directors should examine whether there is a foreseeable zone of danger. The question is not whether an injury occurred (as strict liability does not exist), but rather was it foreseeable that an injury could occur? If so, then the board has a duty to act. Remember, the basic rule is that if the association is aware of a dangerous animal or if it is foreseeable that a dangerous wild animal could be within the lands governed by the association, then the association has a duty to act. Importantly, please be certain to discuss the situation with the association’s legal counsel for proper guidance.

(Written by Jeffrey Rembaum and reprinted with permission from the April 2023 edition of the “Florida Community Association Journal”.)

March 3, 2023March 3, 2023

Release of Liability and “Hold Harmless” Agreements

Release of Liability and "Hold Harmless" Agreements

If Your Association Requires One, Then You Must Read This…

Many communities offer a host of amenities for their residents and guests to enjoy, such as clubhouses, fitness centers, playgrounds, swimming pools, tot lots, tennis courts, etc. One of the upsides to providing such amenities is that the residents and their guests have a variety of activities to choose from, which enhances the quality of life within the community. However, one of the potential significant downsides to offering such benefits is that the association often incurs liability if a resident or guest is injured while using one of the amenities.

Accordingly, it has become commonplace for associations to require that residents and guests sign a document that releases the association from liability and holds the association harmless when a resident or guest uses the amenities. Although the title of the document may vary—“Hold Harmless,” “Indemnification Agreement,” “Release of Liability,” or “Waiver and Release”—there is usually language included within the document along the lines of the following:

“I, Mr. Owner, on my own behalf and on behalf of all other occupants and guests to my home, for and in consideration for use of the association’s facilities, equipment, etc. hereby release and hold harmless the association, its members, officers, directors, agents, etc. from any and all liability which may arise out of or in connection with my participation or use of the foregoing facilities, equipment, etc.”

This language is often referred to as an “exculpatory clause,” which is a clause that is designed to relieve a party from blame or liability. Such language has traditionally served to help prevent an association’s liability to an owner or guest when he or she is injured while using the amenities. It may have been a while since anyone has taken a good look at the specific language included in the association’s release, and it may be taken for granted that such language will automatically protect the association from liability. Many such form documents do not provide the protection you might think they should. A recent Florida appellate court case dealing with such exculpatory clauses highlights this potential issue and offers pause.

Specifically, The Estate of Nicholas Adam Blakely, By and Through Michele Wilson, as Personal Representative v. Stetson University, Inc., WL 17997526 (Fla. 5th DCA 2022), involved the tragic death of a young man who played football at Stetson University. As described in the written appellate opinion, the young man pulled himself out of an afternoon football practice complaining to an assistant athletic trainer that he felt dizzy and that his chest felt tight. Although the trainers continued to monitor his symptoms on the sidelines, after approximately 45 minutes the young man collapsed. Thereafter, university employees attempted various emergency medical procedures in an unsuccessful effort to revive him. The young man was transported to the hospital where, sadly, he died.

The trial court found that the two identical releases signed by the young man were sufficiently clear to bar claims brought against the university arising from his death after participating in the football practice. On appeal, however, one of the arguments focused on whether the language in the releases that the young man signed were sufficient to be enforceable. The appellate court determined it was not. Although the entirety of the written releases are unable to be reproduced here, the particular language that the court focused on is set out below. Specifically, the appellate court placed emphasis on the following:

I understand that the dangers and risks of playing or participating/practicing may include, but are not limited to: death…Because of the dangers and risks involved in participating in intercollegiate athletics, I recognize the importance of following the Coaches and Sports Medicine staff instructions regarding playing techniques, conditioning, rehabilitation/treatment recommendations and team rules, etc. and agree to obey such instructions…I hereby assume all risks associated with participation and agree to hold Stetson University…from any and all liability…of any kind or nature which may arise by or in connection with my participation in any activities related to the Stetson University athletic program. The terms hereof shall serve as a release and assumption of risk for myself, my heirs, estate, executor, administrator, assignees and for all members of my family. The terms hereof shall serve as a complete release and waiver of liability for myself, my heirs, estate, executor, administrator, assignees, and for all members of my family.

On its face, it sounds complete. But is it? In its analysis of the language included in the releases, the appellate court began by expressing that

[A]n exculpatory clause purports to deny an injured party the right to recover damages from a person negligently causing his injury. They are disfavored in the law because they relieve one party of the obligation to use due care and shift the risk of injury to the party who is probably least equipped to take the necessary precautions to avoid the injury and bear the risk of loss. Such claims are strictly construed against the party seeking to be relieved of liability. Thus, exculpatory clauses are enforceable only where and to the extent that the intention to be relieved from liability is made clear and unequivocal. The wording must be clear and understandable that an ordinary and knowledgeable person will know what he is contracting away (quoting UCF Athletics Ass’n, v Plancher, 121 So. 3d 1097, 1101 [Fla. 5th DCA 2013]).

Unlike the trial court, the appellate court took issue with the language contained within the releases because the release forms

1. failed to expressly inform the young man that he was contracting away his rights to sue the university for its own negligence,
2. used language that could reasonably lead one to believe that the university would be supervising and training [him] properly such that the young man was only being asked to sign the exculpatory clause to cover injuries inherent in a sport, and
3. used language suggesting that the terms of the releases were for the young man’s benefit.

Accordingly, the appellate court determined that the foregoing supported a determination that the releases were not clear and unambiguous. So, what does the appellate court’s decision mean for exculpatory clauses as related to an association’s release? It means that associations need to review the language in such exculpatory clauses with counsel to assist in aligning the language with the thinking of the court. For example:

1. Is the language in the release clear, unambiguous, and written in such a way that an ordinary and knowledgeable person would know that he or she is contracting away his or her right to sue the association if an injury occurs?
2. Is the language in the release free from any indication whatsoever that training and/or supervision is being provided by the association to avoid a mistaken belief by the owner or guest that he or she is merely signing away his or her right to sue for injuries inherent in a particular activity?
3. Is it unequivocally clear that the individual is giving up all rights to litigate against the association in regard to any accident that may occur, even if the association was negligent?
4. Are there terms in the release that would make it seem as though the release is for the benefit of the homeowner or guest and not the association?

If you are in doubt as to the exculpatory language included in your association’s release, do not wait until a homeowner or guest is injured, or possibly worse, to discover that the language is not appropriate for protecting the association from liability. In light of this most recent opinion, you should discuss with your association’s legal counsel when there would be a good opportunity to review and amend such release of liability and hold harmless agreements.

(Written by Jeffrey Rembaum and reprinted with permission from the March 2023 edition of the “Florida Community Association Journal”.)

March 12, 2021October 14, 2022

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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