REMBAUM'S ASSOCIATION ROUNDUP | The Community Association Legal News You Can Use

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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”.)

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Is There Liability for Dangerous Wild Animals in Your Community?

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”.)

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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”.)

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

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

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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.

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Kaye Bender Rembaum