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(2-8-12)
A
Guide on the Turnover Process for Community Associations
By
Laura Manning
Community
associations may only have to go through it once, but the
turnover of the association from the developer to the unit
owners is of critical importance for the long-term financial
health of associations. Here is a helpful overview for the
community associations that are now undergoing the process:
Pursuant
to Florida law, the developer has to "turnover" all
of the association’s documents to the unit-owner controlled
association. These include, but are not limited to, the
original recorded declaration of condominium, articles of
incorporation and bylaws, the minute books, financial records,
bank accounts and statements, personal property of the
association (e.g., indoor and outdoor furniture, office
equipment, computers, etc.), and all of the construction plans
and specifications including a list of names and addresses of
all of the contractors, subcontractors and suppliers utilized
in the construction or remodeling of the condominium. The
developer must also provide copies of all of the insurance
policies, certificates of occupancy, permits, warranties,
unit-owner roster, and all of the contracts that the developer
controlled association may have executed for services such as
for management, cable, telephone, security and other services.
Two
of the most critical items that must be provided by the
developer to the unit owner controlled association are an
inspection report, which must be completed and signed by an
architect or engineer, and a financial audit, which must be
prepared by an independent certified public accountant. The
inspection report must consist of a detailed list of the
required maintenance, useful life and replacement costs for
the roof, structure, fire protection systems, elevators,
heating/cooling systems, electrical, plumbing, pool, pavement,
drainage, irrigation, and paint. If the unit owners are
already seeing problems with any of these elements as the
report is being issued, they must immediately compare what
they are actually seeing and experiencing with the information
in the report in order to determine if there is a defect.
If
the association disagrees with the developer’s financial
audit or wishes to verify the sums that it shows, the
association should immediately retain its own accountant to
evaluate the audit. This should also be the same approach with
the inspection report, as associations that believe there is a
defect that is overlooked in the developer’s report should
hire their own engineer to complete inspections and submit a
report that addresses the construction issues.
In
general, associations would be well advised to immediately
address any construction or financial issues with the
developer during the turnover process rather than afterwards.
The longer that an association waits before addressing any
construction issues, the easier it becomes for the developer
to be able to claim that the problem may be due to improper
maintenance rather than a defect for which it could be liable.
***
(1-25-12)
Service
Animals and Your Community
By
Roberto C. Blanch
The
governing documents of many community associations contain
provisions banning or restricting pets, including limitations
on the number of pets, their weight and types of animals
allowed. However, despite these restrictions, many community
associations find that some of their residents are determined
to have pets in their homes and will find a way around the
rules. One of the strategies that is often used by these pet
owners is claiming that they are entitled to have the pet due
to a disability.
The
Fair Housing Amendments Act of 1988 (FHA) prohibits various
forms of discrimination against handicapped persons in
connection with a dwelling. As a result, community
associations may be required to provide disabled individuals
with reasonable accommodations or exceptions to certain rules,
regulations or policies, including pet restrictions.
When
presented with a request for a reasonable accommodation for a
disability, community association boards should not feel
threatened to automatically grant the request. Unfortunately,
some non-disabled residents seek to take advantage of the
provisions of the FHA in order to obtain permission to
maintain a pet. They submit a written request or even a doctor’s
note under the guise that their pet is required as a service
animal to assist them with their disability. However,
community association boards have the right to make reasonable
inquiries of the disabled individual and their medical
provider in order to evaluate whether to grant the exception.
In
evaluating such requests, boards must determine whether the
person requesting the accommodation is actually
"handicap" and whether the accommodation is
necessary to afford the resident an equal opportunity to use
and enjoy the dwelling. For instance, the association is
justified in requesting information from the member’s doctor
that is reasonably required to evaluate whether the
accommodation should be granted. Courts have recognized
associations’ ability to request expert evidence under oath
as to the nature of an allegedly disabled person’s
impairment, the manner in which such impairment substantially
limits one or more of the resident’s major life functions or
activities, and how the requested pet is necessary to afford
an equal opportunity to use and enjoy the dwelling.
Of
course, if the accommodation is granted, safeguards should be
implemented to ensure that the pet is not a threat to the
safety of others in the community and does not unreasonably
interfere with the rights of other residents or their guests
to use the community’s facilities. The directors of
community associations should work closely with their
management and legal counsel to ensure that their community’s
pet restrictions are upheld while simultaneously granting
reasonable accommodations when necessary.
***
(1-11-12)
Suspension
of Common Element Use Rights
By
Roberto Blanch
Directors
and managers of Florida community associations seem to be on a
never-ending search for effective tools to compel unit owners
or their tenants and guests to comply with the association’s
rules and restrictions. Until not too long ago, Florida
condominium association boards were practically limited to
filing lawsuits or imposing fines in order to address
violations.
During
the last several years, condominium associations have gained
the ability to suspend the rights of an owner, tenant or
invitee to use common elements, common facilities or any other
association property, in the event that the owner of the unit
is delinquent more than 90 days in paying a monetary
obligation to the association. In addition, condo associations
may now also suspend, for a reasonable period of time, the
right of a unit owner, or a unit owner’s tenant, guest or
invitee, to use the common elements, common facilities or any
other association property for the failure to comply with any
provision of the declaration, the association bylaws or
reasonable rules of the association.
While
not required for suspensions of use rights for non-payment,
suspensions for violations of the governing documents may only
be imposed if the association provides the owner with at least
14 days’ written notice and an opportunity for a hearing. If
applicable, the unit’s occupant, licensee or invitee must
also receive such notice. The hearing must be conducted and
held before a committee of other unit owners who are neither
board members nor persons residing in a board member’s
household. If the committee does not agree, then the
suspension may not be imposed.
Ultimately,
the success of this remedy may depend upon various factors,
including whether the community has the ability to enforce the
suspension, whether there are community facilities that are
worthwhile suspending, and whether there are qualified owners
who are willing to serve on the committee that is required to
impose the suspension. Lastly, when implementing the
suspension, board members should be aware of what the
association may be required to do in order to enforce the
suspension in the event that the suspended individual defies
it.
In
light of the implications and procedural considerations
related to the suspension of use rights, we encourage board
members and managers alike to work closely with their
association’s legal counsel in order to determine the best
course of action to address violations in their community.
***
(12-28-11)
Use
Eviction Proceedings Effectively Against Tenants Who Refuse to
Comply with Rent Payment Demands
By
Laura Manning
Community
associations throughout Florida have benefited greatly from
last year’s amendments to the Condo Act enabling
associations to collect rent payments directly from tenants of
delinquent owners. Associations are now able to quickly and
effectively evict tenants who refuse to comply with their
demands for rent. However, some associations needlessly delay
filing for eviction against tenants with creative excuses for
nonpayment.
Many
renters who refuse to comply with an association’s demand
for rent are residing in units that are in foreclosure. They
usually have short-term or month-to-month leases, and are
often paying reduced rental rates because of the pending
foreclosure. When they receive the association’s demand,
they reply by indicating that they are no longer paying rent
to the owner, or that the owner has agreed to let them remain
in the residence until the foreclosure is over.
For
many associations, this type of reply from a tenant causes
them to question their ability to evict. However, the
association simply needs to follow the procedures set out in
the Condo Act by sending an initial letter requiring the
tenant to make their monthly payments to the association. If
the tenant does not comply, then the association has the right
to commence eviction proceedings as if it were the landlord by
sending a three-day notice of nonpayment. If payment is still
not made, the association can immediately file a complaint for
eviction. After being served, the tenant has five days to
respond or make the rent payment into the court registry.
Failure to do either results in an immediate default judgment
for removal of the tenant with a writ of possession.
Once
the eviction process is underway, the association should bear
in mind that it is still possible to negotiate with the tenant
to try and get them to start making some sort of a monthly
payment. Sometimes tenants agree to pay an amount equal to the
monthly maintenance fee.
As
the slow pace of the foreclosure crisis continues in South
Florida, cases of tenants refusing to comply with rent demands
by associations are bound to also continue. For the
associations that hope to recover from the housing market
meltdown as quickly as possible, using eviction proceedings
offers them a powerful new collection tool.
***
(12-14-11)
Associations
Should Carefully Consider the Effects of Suspending a Member’s
Voting Rights
By
Laura Manning
In
addition to a condominium’s or HOA’s right to suspend a
delinquent member’s rights to use a community’s shared
amenities, the legislature has also enabled associations with
the right to suspend the voting rights of its delinquent unit
owners. However, unlike with the suspension of the rights to
use the pool or the fitness center, there are some potential
drawbacks for associations to carefully consider when it comes
to suspending a member’s voting rights.
Both
HOAs and condominium associations have the ability to suspend
the voting rights of owners who are delinquent in the payment
of any monetary obligations exceeding 90 days. These
suspensions are automatically lifted upon the payment in full
of all monetary obligations currently due and overdue by the
member.
In
order to suspend the voting rights of a delinquent member, the
law does not require notice or a hearing (as is required for
suspension of use rights for violation of the governing
documents). Associations only need to adopt a collection
policy which includes the suspension of voting rights as a
remedy, and this policy should be communicated to the
membership in writing. An association that wants to adopt this
suspension policy will typically establish it at a regular
board meeting where a 48-hour notice will have gone out to the
membership indicating that the board "will be voting to
adopt a policy whereby unit owners who are delinquent more
than 90 days will have their voting rights automatically
suspended until they become current in their monetary
obligations to the association."
While
seemingly easy enough to adopt, unfortunately the use of this
remedy against delinquent members has the potential to
backfire on associations that may rely on the votes of their
large numbers of owners (whether they are delinquent or not)
on a regular basis. Voting suspensions serve to reduce the
pool of potential voters on any issues that require membership
votes. Further, the statute provides that the number of owners
who would be needed to constitute a quorum is reduced by the
number of units with suspended voting rights. There remains
some debate as to whether this was the true intent of the
revision to the statute by the legislature. This uncertainty
therefore creates the potential for votes to be challenged by
recalcitrant members on the grounds of whether the association
achieved the required number of voters to fulfill the quorum.
In
light of the issues that potential voting suspensions may pose
to communities that have a hard enough time getting votes in
the first place, the most prudent policy for associations that
rely on the votes of all of their members in order to carry on
with business would be to avoid the suspension of voting
rights. Condominium associations and HOAs in the state should
carefully consider these suspensions and utilize them as well
as all of the other collections remedies and measures that the
law permits.
***
(11-30-11)
Community
Associations Should Effectively Utilize Florida Division of
Condominiums Arbitration Program to Enforce Violations
By
Laura Manning
Welcome
to the first edition of my new Community Association Counselor
column in The Condo News. I have helped hundreds of
community associations over the last 13 years as an attorney
in my firm’s Coral Gables and West Palm Beach offices, and I
look forward to making this column an excellent source for
information on the most important issues affecting condominium
associations and HOAs throughout Palm Beach County and the
Treasure Coast.
One
of the primary areas of my practice has been helping
condominium associations enforce their rules against violating
unit owners. Condo associations have the option of using the
Division of Condominium’s Mandatory Non-Binding Arbitration
Program for quick and fair resolutions to the vast majority of
disputes involving the enforcement of restrictions found in an
association’s governing documents. In fact, condo
associations are not allowed to take disputes involving pets,
unapproved construction/modifications, nuisance violations,
elections and meetings to the local courthouse without first
filing a petition for arbitration under this state program.
All
appearances with the arbitrators in these cases are via
telephone, or for the rare, complicated case, a live
web-conference is used. Arbitrations typically take from two
to six months from start to finish, depending on the nature of
the violation and the owner’s defenses, if any.
In
the case where the arbitrator’s decision is favorable to the
association but the owner still refuses to comply, the
association is required to file a complaint in county or
circuit court to confirm the arbitration award, which is
routinely quickly confirmed since the award is admissible into
evidence for the court to consider. With a judgment entered by
the court, the association is then able to impose all of the
penalties and consequences that its policies allow, including
recovery of its attorney’s fees and costs from the owner.
In
general, condominium associations would be well advised to
take advantage of the arbitration program to enforce their
policies and restrictions when they are disregarded by rogue
owners. The arbitration process is designed to be inexpensive
and expeditious for both the association and its members.
However, many associations are still reluctant to use this
process to enforce the rules against owners who are in
violation, even when the owner blatantly refuses to comply.
For these associations, not enforcing the restrictions may
result in the waiver or loss of the right to enforce those
restrictions in the future, which would be unfair to all other
members who follow the rules.
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