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The New Jersey Condo Blog

Q&A: Enforcement of Violations

09/21/2017 Martin Cabalar

BY: J. DAVID RAMSEY

Q. One resident constantly complains about another resident who is in violation of a HOA rule. As a board we are aware of the violation but allow the situation because of the personal situation involved. We have communicated to the complaining resident we do not wish to discuss why we allow this violation. Do we have to provide an answer?

A.  Very often, seemingly small changes in the facts of a matter can make a significant difference in the correct legal advice.  For instance, your question indicates that a resident is complaining about a violation of a “rule.”  It makes a difference whether the rule is a restriction contained in your HOA’s declaration, or a rule that the governing board adopted.  Generally, the board has a higher duty to enforce the declaration’s restrictions, then it does in connection with its own rules, with respect to which it has greater flexibility. 

Further, you indicate that board would prefer not to aggressively pursue the rule violation because of a personal situation impacting the owner against whom a violation is alleged and you prefer not to divulge the reason for the board’s inaction to the complaining owner.  The nature of the personal situation may be meaningful in providing an answer to your inquiry.  For example, assuming, hypothetically, the rule in question involves a restriction against creating excessive noise, but the resident making the noise needs to have temporary medical equipment that is the cause of the noise.  Depending on all the facts, it may be that the person causing the noise is entitled to an accommodation under the Federal Fair Housing Act.  In such a case the board would be obligated to allow an accommodation in the enforcement of the restriction if it is “reasonable” to do so.  Further, the law concerning making accommodations to people who are disabled prohibits the disclosure of confidential information concerning the disability – although it doesn’t prohibit the board from stating that it is obligated to make an accommodation because there is a claim of disability, without providing details. 

Another example might be that the HOA has a restriction against conducting any business from a home.  Perhaps the owner is out of work and is a professional who can’t afford to rent an office. Therefore, the owner opens her business from her home.  As a result, that owner starts seeing clients from her home and has a secretary working from the house.  In that case, there is no law that protects that activity and the board has a duty to take reasonable action to enforce the restrictions.  In order to avoid a costly legal dispute with the owner conducting the business, the board may lawfully provide the offending owner with a reasonably short period of time – say, for instance, 30 days – thereby giving that owner an opportunity to earn some income but also require that she find another location for his or her business. 


While the board may be empathetic to an owner facing personal difficulties, it still has a duty to enforce the restrictions contained in a declaration.  The law doesn’t mandate that a board show no humanity to their fellow residents by temporarily allowing a violation, particularly if the violation is technical in nature and does not cause any harm to the welfare of the other residents.  Ultimately, however, the board has the duty to enforce the use restrictions, particularly where another owner is validly complaining about a violation and no law protects the violating owner.  Because these situations can be nuanced and the correct answer depends on an analysis of all of the facts, we urge you to discuss this with an attorney who specializes in community association law.

Q&A: Mandatory Evacuation During a Hurricane?

09/19/2017 Martin Cabalar

BY: J. DAVID RAMSEY

Q.  Can we order our residents to evacuate our association in cases of things like hurricanes? Does a state emergency order play a role? If the state orders a mandatory evacuation can we fine residents who remain?
A.  Generally, if the State or local authorities have not issued an evacuation order, the answer is no.  Unless your governing documents had an unusual provision granting the board the authority to issue an evacuation order, absent a government order of evacuation, the board would not have the authority to issue such an order.  Typically, the powers of a board are far greater with respect to the use of the common elements as opposed to the use of the units.  A board cannot unilaterally tell an owner that he or she must leave their own home, when the governmental entity hasn’t made that determination.  If the State has issued a mandatory evacuation order and your governing document require an owner to comply with all law, then it might be possible to fine an owner for failing to evacuate. If, though, an owner didn’t evacuate and it did not cause the association or fellow owners any harm, it would appear to be an overreaction to a situation where the association’s efforts might be better targeted towards recovering from the hurricane, rather than seeking to fine owners who failed to evacuate.


CondoMundoUSA

Votación Por Linea - Video

10/18/2016 Martica Miguez Platts



Si usted vive en una comunidad residencial que está dirigida u operada por una asociación, o si usted sirve en la junta directiva de la comunidad, quizás desee obtener la comodidad de votación por línea.   Nuestra firma de abogados acaba de lanzar un breve video de instrucción sobre nuestro producto por línea llamado BPBALLOT.   Dedíquele unos minutos a este video.
La votación por línea le permitirá a su comunidad aumentar la participación de su membrecía a la vez que reducirá la posibilidad de fraude electoral.  Estamos seguros que usted disfrutará y obtendrá beneficios del video.  Si tiene cualquier pregunta, por favor envíenos un correo electrónico a condomundousa@bplegal.como llámenos al 561-820-2870. 

Martica y Marilyn
Sus amigas de CondoMundoUSA






Estudio de Votación y Fraude en las Asociaciones / Community Association Voting and Fraud Survey

06/17/2016 Martica Miguez Platts
CondoMundoUSA les trae el Estudio de Votación y Fraude.  Este estudio tiene el propósito de identificar las preocupaciones relacionadas con el proceso de votación de los miembros de las asociaciones de comunidades.  Los resultados ayudarán a crear materiales educativos y ayudarán a encabezar cambios en las disposiciones legales que gobiernan el método de votación en las comunidades.

Solamente le tomará 5 minutos haga "click" en el idioma que prefiera. 

Español                       Inglés

Gracias, 

Martica y Marilyn


***************


CondoMundoUSA has created a survey intended to help identify concerns of community association members related to voting. The results will help create educational materials and help spearhead changes in statutory provisions governing voting in communities.

It should only take 5 minutes, please click on your preferred language.

Spanish                       English



Thank you, 


Martica & Marilyn

The Community Association Law Blog

Community Association Questions Post Hurricane Irma

09/17/2017 Donna DiMaggio Berger
   


As with many Florida communities, my HOA Board had questions in the aftermath of Hurricane Irma. Would FEMA pay to pick up all our debris, when should the security guards be asked to return to duty and could we tap into reserves without a membership vote to pay for storm repairs?  Here are a few other questions, I've received from associations statewide who are grappling with the issues presented by a storm like Irma.


Q: We signed up with a Public Adjuster right after Irma but we are now not happy with his contract. It looks like we are being charged 15% of any recovery we receive. Are we stuck?

A: Under section 626.854(6), F.S., you have five (5) business days to to cancel a Public Adjuster contract without penalty or obligation. Also under section 626.854(10)(b)(1), a public adjuster cannot charge more than 10% of the amount of the insurance claim for events that are the subject of a declaration of a state of emergency by the Governor. The Governor declared a state of emergency for all 67 counties prior to Irma.

Q: One of our board members who always is a problem wants to hire someone she knows who is "great" to handle several repairs we need post Irma but this contractor is not licensed to perform work in Florida. What can we say to shoot this idea down?

A: Here are some of the risks associated with hiring unlicensed contractors:

The contractor lacks proper qualifications and, as a result, performs poor quality work in your community.
The contractor lacks insurance and thus provides no protection for your association should individuals be injured or property damaged during the course of the contractor's performance.
The contractor may have a criminal background which explains the lack of licensure.
The contractor may not comply with applicable building codes.

The DBPR also says to watch for "red flags" that indicate you may be dealing with an unlicensed contractor. Some of these include:
A claim to be "licensed and insured" but the contractor cannot produce a license
The contractor wants all or most of the money up front or will only accept cash
The contractor wants a check written to them individually or to "cash"
The contractor wants to proceed with an oral agreement only
The contractor simply showed up at your property to solicit your business.
For the complete list of red flags, please visit:  http://www.myfloridalicense.com/dbpr/reg/ula-consumer-tips.html

It is noteworthy that hiring an unqualified contractor and potentially squandering your insurance proceeds exposes the individual board members to potential personal liability.  Please be sure to visit your City's website to confirm whether or not the contractor you are considering is properly licensed in both Florida and in your City.  

Q: We have a number of units in our building which we believe have water damage thanks to Irma. We would like to go in and inspect these units and dry them out. However, we have several uncooperative owners who are refusing to allow us in and to pay for these services. What should we do?

A: Sections 718.1265, 719.128 and 720.316, Florida Statutes, grant boards emergency powers so long as an official state of emergency exists in Florida. Among those powers is the right of the Board to enter into units/homes to assess water damage, to remove water-soaked items such as carpeting, furniture, etc. and to seek reimbursement from the owners for those costs. Should an owner refuse to properly reimburse the association for those costs, the association may enforce its right of access, perform the required repairs, and lien the unit for any costs advanced.

Q: Our high-rise condominium recently transitioned from developer control. We have not yet hired an Engineer to confirm whether or not we have any construction defects in our building. Now that Irma has done some damage to our roof and windows, is our construction defect claim going to be impacted?

A: Developers and contractors will certainly use the hurricane as the cause of any and all exterior wall/window/roof issues. Conversely, if the building manifested no problems as a result of the storm, the developers and contractors will point to the building's performance to prove that there are no defects.  If your building was only minimally impacted by the hurricane, you should proceed expeditiously with your Engineer's Report to document your building's condition particularly as we are still in the midst of hurricane season.

If your building was impacted by the storm and  a claim is made then construction defects may be an exclusion in the policy. There's some recent case law that says that such an exclusion may not be applicable in a concurrent causation setting but the analysis would have to be very carefully done on a policy-by-policy basis. 


Q: I read that the IRS is extending the time for filing a tax return for individuals in certain areas impacted by Hurricane Irma. Would this apply to our HOA as well?

A: The IRS announced an extension for victims of the storm in parts of Florida and elsewhere who will now have until January 31st, 2018, to file certain individual and business tax returns and make certain tax payments. This includes an additional filing extension for taxpayers with valid extensions that run out on October 16th, and businesses with extensions that run out on September 15th, 2017.  Even though most community associations file relatively simple tax returns, your Florida HOA should have additional time to file under this program.
Please note, however, that this extension does not apply to the payment of taxes which were originally due on April 15th, 2017.


Q: I am the Treasurer for my HOA . We took out a $2.3 million dollar loan for a clubhouse renovation project. We've been paying off that loan.  Should we start including some sort of forbearance period when a state of emergency has been invoked? Associations in SW FL and elsewhere will also experience slower than usual assessment payments. Some of those communities might run into a default with their loan repayments as a result for the first time in their history. I don't want to have to rely on a bank's goodwill in this kind of situation.

A: Irma has taught many of us painful lessons not the least of which is the need to address possible hurricane damage in your more important contracts/agreements. Most loan documents grant a very tight grace period after which significant interest and late fees start accruing but do not grant an association forbearance in terms of making loan payments in the event of a disaster. However, as impacted associations know, Irma will likely delay timely payment of regular and special assessments for weeks or months to come as owners grapple with the costs associated with necessary storm repairs.

Most banks want to work with their customers and do not want to deal with defaults so If your loan documents do not address this challenge, I would suggest you contact your banking representative to have a discussion.  Failure to pay on time, however, without specific approval from the Bank will likely result in a default under the loan documents, potential acceleration of the balance, and an increase in interest rate to the default rate.

 For associations who are currently negotiating loan agreements, I suggest including a clause clarifying that the late fees and interest incurred be different for willful nonpayment vs. nonpayment resulting from a state of emergency. That's not an unreasonable request. Boards shouldn't have to hope that their bank has a heart after the storm; it should be memorialized in their loan docs.

If your community has a question about how to deal with conditions post-Irma, please email me at dberger@bplegal.com.



Associations dealing with unique problems post Hurricane Irma

09/12/2017 Donna DiMaggio Berger


Thankfully Floridians heeded the call and evacuated where necessary and prepared one and all for the monstrous Hurricane Irma. While Irma was a lengthy and dangerous storm, the effects on Florida were not as devastating as had been feared. However, for thousands of shared ownership communities, volunteer boards, professional managers and residents will be dealing with the aftereffects of this storm for weeks or months to come.

For some communities, these repair and reconstruction projects will be complicated by other issues that pre-dated Irma's arrival. Let's discuss three different scenarios which might complicate your post-Irma recovery.

1. Associations that had contractual obligations (renovation or restoration projects) prior to the storm.  Some communities were in the midst of large and costly repair and renovation projects prior to Irma. I had several clients who were undergoing concrete restoration, lobby and clubhouse renovations and painting projects.  If your community started another project during the summer that has now been impacted due to the hurricane then the Board will need to evaluate if that project needs to be delayed pending completion of necessary storm repairs. Certainly, repairing a roof damaged by Irma now takes priority over that new Lobby renovation. While most force majeure clauses in repair and renovation projects allow the contractor to put the project on hold if the contractor's operations are impacted by a storm or other disaster, the contractor handling your association's renovation project may be ready, willing and able to proceed with a project that is no longer a priority for you and pushing you to continue with the project and your payment obligations. You will need your association attorney to evaluate the contract to see what options are available to you in terms of delaying the project's progression or modifying the scope of work.

2. Associations with fiscal constraints. Did your association head into the path of Hurricane Irma lacking reserves and without a line of credit in place? If so, you will be working under financial constraints when trying to obtain the funds necessary to make any repairs you suffered. At this point, you should discuss with your association attorney how quickly you can levy special assessments (knowing that it will be weeks or months before those funds start coming in and that you are not guaranteed to collect 100% of those special assessments from all owners. You should also explore the possibility of obtaining government assistance in the form of SBA loans, FEMA debris removal, etc.  Homeowners who need financial assistance to repair their primary residence, temporary shelter, or medical assistance should apply for FEMA Individual Disaster Assistance. FEMA asks those with internet access to register for aid at DisasterAssistance.gov. If you can’t get online, call 800-621-3362 or 800-462-7585 (TTY). Registering will enable FEMA to begin the process of determining eligibility for aid and services.  Businesses, associations, and homeowners may be eligible for Disaster Loan Assistance through the Small Business Administration. Visit https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs for more information.

3. Associations with significant ongoing collection challenges. If your community had units in the collection process prior to Hurricane Irma's arrival, it may be tempting to forget about those collection efforts post-storm. After all, you have more pressing things on your mind at present. However, I would urge you to continue with those collection efforts as the Board's ability to undertake necessary storm repairs depends on your ability to collect assessments. Abating or delaying your ongoing collection efforts sends the worst possible message when you need to assemble resources to pay for repairs. 

Hopefully our Florida communities will ride out the rest of Hurricane Season (we're finished on November 1st) without incident. I am sure the rest of you share my opinion that the following visitors are most unwelcome:
Jose
Katia
Lee
Maria
Nate
Ophelia
Philippe
Rina
Sean
Tammy
Vince
Whitney



Biz Law Today

What Is “Product Hopping” and Why Should You Care?

08/04/2015 Becker & Poliakoff

ThinkstockPhotos-97429646This post was authored by Ann Marie Effingham, an intern for Becker & Poliakoff who is based out of the firm’s Red Bank, New Jersey office.

New Jersey is home to 14 of the world’s 20 largest pharmaceutical companies so when our sister circuit—the Second Circuit Court of Appeals—issued a decision of first impression regarding pharmaceutical patents, we should take notice. To summarize, the state of New York brought an antitrust action against Actavis PLC claiming the manufacturer’s introduction of the once-daily capsule that treats Alzheimer’s disease at the end of the manufacturer’s patent exclusivity period for the twice-daily tablets impeded competition in violation of the Sherman Act. The Southern District of New York granted a preliminary injunction barring Actavis PLC from restricting access to the twice-daily version until after generic competition entered the market, and the Second Circuit Court of Appeals affirmed the injunction.

The Second Circuit Court of Appeals explained that neither product withdrawal nor product improvement alone is anticompetitive. However, when product withdrawal is combined with some other conduct—the overall effect of which coerces consumers and impedes competition—a manufacturer’s actions are anticompetitive under the Sherman Act.

The Actavis PLC case is an example of “product hopping”—whereby a manufacturer introduces a “second-generation” formulation of a drug and removes the previous formula that is nearing the end of its patent lifecycle which then restarts the regulatory approval process for the generic manufacturer. In theory, a manufacturer could keep reformulating its patented product if it can show that continuous improvement in the drug is being made. However, under some circumstances this type of behavior is anti-competitive. Generic manufacturers enter the market at the end of the brand name’s patent lifecycle so when a brand name manufacturer engages in “product hopping” it keeps generic manufacturers from entering the market—which could ultimately lead to a monopolization.

So what does this mean for the biopharmaceutical and medical device industry? The timing and rationale behind product reformulation is key. When product redesign is done simply to coerce consumers and impede competition, it is anticompetitive under the Sherman Act. The Second Circuit Court of Appeals noted that Actavis PLC’s own CEO admitted that the Defendants were “trying to . . . put up barriers or obstacles” to generic competition. Conversely, a large market share that is gleaned from natural growth, development of a superior product while simultaneously giving consumers the option of choice between products, or exceptional business acumen are all justifiable explanations for why a manufacturer may control a significant portion of the market.

A second product hopping case has arisen in the Third Circuit Court of Appeals. There, the Federal Trade Commission (FTC) has filed an amicus brief strongly supporting antitrust causes of action against companies that product hop. Hopefully the Third Circuit can provide more insight as to how to evaluate product hopping cases.

Employers Beware: You May Be Liable to Whistleblowers Without the SEC Ever Getting Involved

07/28/2015 Becker & Poliakoff

ThinkstockPhotos-184747120 (1)This post was authored by Peter Wojcik, an intern for Becker & Poliakoff who is based out of the firm’s New York office.

On June 17, the Second Circuit U.S. Court of Appeals heard oral arguments in Berman v. Neo@Ogilvy, LLC, making it the latest court to venture into the arena of interpreting Dodd-Frank’s whistleblower provision. In Berman, U.S. District Judge Gregory H. Woods of the Southern District of New York held that, before a whistleblower may be protected under Dodd-Frank’s whistleblower anti-retaliation provision, he or she must report securities violations to the SEC. This stands in stark contrast to other district court decisions that have allowed individuals to sue if they only disclosed the violations to their employers.

In Berman, the plaintiff alleged that he was fired after complaining to his employer about seeing transactions that he believed to violate U.S. securities laws, including Sarbanes-Oxley and Dodd-Frank. Never having reported these violations to the SEC, the plaintiff sued his former employer, alleging violations of Dodd-Frank’s whistleblower provision. The provision essentially prohibits an employer from retaliating against a “whistleblower” who:

  • Provides information to the SEC concerning violations of securities laws;
  • Initiates, testifies in, or assists in any investigation or judicial or administrative action of the SEC; or
  • Makes disclosures that are required or protected under the Sarbanes-Oxley Act and any other law, rule, or regulation subject to the SEC’s jurisdiction.

However, the provision also defines a “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the Commission . . . .” The plaintiff in Berman argued that he was entitled to protection because, although subsections (i) and (ii) protect disclosures to the SEC, subsection (iii) includes disclosures to supervisors. Judge Woods remained unpersuaded. In dismissing the plaintiff’s claim, Judge Woods noted that the provision’s language was clear: In order to be a “whistleblower” under the Act, the individual must provide the information “to the Commission,” i.e., the SEC.

District courts that have allowed Dodd-Frank whistleblower protection for individuals who report violations to their employers have essentially followed the plaintiff’s reasoning. Despite the plain language definition of a “whistleblower” under the statue, they have held that subsection (iii) is a narrow exception to the definition and encompasses protection for individuals who report to supervisors.

The Second Circuit is expected to hand down its decision later this year. Although the Fifth Circuit is the only circuit to already decide the issue (holding that whistleblowers must report violations to the SEC in order to sue), district courts across the U.S. are in disagreement. Regardless of how the court in one’s jurisdiction rules, however, the law is still subject to change. If courts continue to disagree, it is likely that the Supreme Court will take up the issue in the future. Until the High Court decides the issue, employers must be aware of the fact that they may be subject to liability under Dodd-Frank’s whistleblower provision once their employees report violations internally.

Construction Law Authority

Review of Legislation continues – Part 5

08/02/2017 Joseph Adams

2017 Legislation Changes Financial Reporting Requirements

Today’s column is the final installment of our annual review of legislation affecting Florida community associations.

In prior columns, we reviewed Senate Bill 398 dealing with “estoppel certificates,” and House Bill 1237 which only applies to condominiums and contains changes to the statute including board member term limits, the use of debit cards, recalls, mandatory websites for certain associations, suspension of voting rights, year-end financial reporting, the imposition of criminal penalties pertaining to certain conduct involving condominium elections and finances, and changes to the “conflict of interest” provisions of the statutes. Both SB 398 and HB 1237 became effective July 1, 2017.

The final piece of legislation we will review is House Bill 6027, which applies to condominium, cooperative, and homeowners’ associations. This law also became effective July 1, 2017.

HB 6027 deletes the year-end financial reporting exemption for associations that operate fewer than 50 units or parcels. Under previous law, these associations were not required to prepare a year-end annual financial report based on revenues, but rather, could prepare a report of cash receipts and expenditures.

Now, all associations must prepare a financial report based on annual revenues, regardless of the number of units or parcels. As a reminder, the following thresholds are contained in the law:

  • An association with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements.
  • An association with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements.
  • An association with total annual revenues of $500,000 or more shall prepare audited financial statements.
  • An association with total annual revenues of less than $150,000 is only required to prepare a report of case receipts and expenditures.

Further, for condominium and cooperative associations, HB 6027 also deleted the limitation on the number of times an association can waive its financial reporting requirements. Previously, condominium and cooperative associations could not waive the statutorily required financial reports for more than three consecutive years. This provision has now been deleted, although there is a bit of a glitch in the statutes since HB 6027 removed the provision, while HB 1237, which also amended these sections, left them intact. It remains to be seen how the official version of the Florida Statutes, which is due to be released in the next couple of months, will address this conflict.

This concludes our review of legislation that was enacted this year. It is also worthwhile to note that one Bill affecting condominiums that the Legislature approved was vetoed by Governor Scott.  House Bill 653 contained a number of provisions that affected community associations, many of them similar to the provisions of HB 1237 concerning condominium associations, which we have previously discussed.

HB 653 also addressed the obligation of certain high-rise buildings to retrofit fire sprinklers and/or an “engineered life safety system.” HB 653 allowed high-rise condominium buildings to opt out of the obligation to retrofit an engineered life safety system (usually required when the building has opted out of a full sprinkler retrofit) upon approval of two-thirds of all voting interests. In vetoing HB 653, Governor Scott noted the recent deadly apartment building fire in London, England, and stated his view that life safety concerns outweigh the cost burden placed on some condominium associations.

The post Review of Legislation continues – Part 5 appeared first on Florida Condo & HOA Law Blog.

Community Association Legislative Guide, 2017

07/31/2017 Yeline Goin

CALL’s Florida Community Association Legislative Guide 2017 (“Guide”) is now available online.

The 2017 Legislative Session ended with several bills passing that will have a significant effect on community associations: HB 1237, Relating to Condominiums; SB 398, Relating to Estoppel Certificates, and HB 6027, Relating to Financial Reporting. In addition to these three bills, there were over 25 other bills filed which sought to amend the Condominium Act, the Cooperative Act, and/or the Homeowners’ Association Act. Most of the bills did not pass, but the many bills that were filed show that legislators are interested in community association legislation and how it impacts their constituents. There was, of course, one bill that did pass the House and Senate but was vetoed by Governor Scott – HB 653, which would have allowed older high rises to opt out of an engineered life safety system (ELSS). We address that issue in-depth in the Guide.

The 2017 Guide features the following:

  • An overview letter from me
  • A special report from Ellyn Setnor Bogdanoff, Esq., former State Senator who led our targeting lobbying effort to pass the ELSS legislation, addressing the Governor’s veto and outlining our thoughts about how to approach the 2018 Session
  • A summary of the community association bills that were signed into law
  • A summary of the community association bills that did not pass
  • A list of actions we recommend that you, as a community association board member, should take to comply with all of the new laws
  • A letter from Donna DiMaggio Berger, a shareholder with the firm and CALL’s Founding Executive Director
  • A list of upcoming CALL events and community association classes

The post Community Association Legislative Guide, 2017 appeared first on Florida Condo & HOA Law Blog.

Florida Condo & HOA Law Blog

Review of Legislation continues – Part 5

08/02/2017 Joseph Adams

2017 Legislation Changes Financial Reporting Requirements

Today’s column is the final installment of our annual review of legislation affecting Florida community associations.

In prior columns, we reviewed Senate Bill 398 dealing with “estoppel certificates,” and House Bill 1237 which only applies to condominiums and contains changes to the statute including board member term limits, the use of debit cards, recalls, mandatory websites for certain associations, suspension of voting rights, year-end financial reporting, the imposition of criminal penalties pertaining to certain conduct involving condominium elections and finances, and changes to the “conflict of interest” provisions of the statutes. Both SB 398 and HB 1237 became effective July 1, 2017.

The final piece of legislation we will review is House Bill 6027, which applies to condominium, cooperative, and homeowners’ associations. This law also became effective July 1, 2017.

HB 6027 deletes the year-end financial reporting exemption for associations that operate fewer than 50 units or parcels. Under previous law, these associations were not required to prepare a year-end annual financial report based on revenues, but rather, could prepare a report of cash receipts and expenditures.

Now, all associations must prepare a financial report based on annual revenues, regardless of the number of units or parcels. As a reminder, the following thresholds are contained in the law:

  • An association with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements.
  • An association with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements.
  • An association with total annual revenues of $500,000 or more shall prepare audited financial statements.
  • An association with total annual revenues of less than $150,000 is only required to prepare a report of case receipts and expenditures.

Further, for condominium and cooperative associations, HB 6027 also deleted the limitation on the number of times an association can waive its financial reporting requirements. Previously, condominium and cooperative associations could not waive the statutorily required financial reports for more than three consecutive years. This provision has now been deleted, although there is a bit of a glitch in the statutes since HB 6027 removed the provision, while HB 1237, which also amended these sections, left them intact. It remains to be seen how the official version of the Florida Statutes, which is due to be released in the next couple of months, will address this conflict.

This concludes our review of legislation that was enacted this year. It is also worthwhile to note that one Bill affecting condominiums that the Legislature approved was vetoed by Governor Scott.  House Bill 653 contained a number of provisions that affected community associations, many of them similar to the provisions of HB 1237 concerning condominium associations, which we have previously discussed.

HB 653 also addressed the obligation of certain high-rise buildings to retrofit fire sprinklers and/or an “engineered life safety system.” HB 653 allowed high-rise condominium buildings to opt out of the obligation to retrofit an engineered life safety system (usually required when the building has opted out of a full sprinkler retrofit) upon approval of two-thirds of all voting interests. In vetoing HB 653, Governor Scott noted the recent deadly apartment building fire in London, England, and stated his view that life safety concerns outweigh the cost burden placed on some condominium associations.

The post Review of Legislation continues – Part 5 appeared first on Florida Condo & HOA Law Blog.

Community Association Legislative Guide, 2017

07/31/2017 Yeline Goin

CALL’s Florida Community Association Legislative Guide 2017 (“Guide”) is now available online.

The 2017 Legislative Session ended with several bills passing that will have a significant effect on community associations: HB 1237, Relating to Condominiums; SB 398, Relating to Estoppel Certificates, and HB 6027, Relating to Financial Reporting. In addition to these three bills, there were over 25 other bills filed which sought to amend the Condominium Act, the Cooperative Act, and/or the Homeowners’ Association Act. Most of the bills did not pass, but the many bills that were filed show that legislators are interested in community association legislation and how it impacts their constituents. There was, of course, one bill that did pass the House and Senate but was vetoed by Governor Scott – HB 653, which would have allowed older high rises to opt out of an engineered life safety system (ELSS). We address that issue in-depth in the Guide.

The 2017 Guide features the following:

  • An overview letter from me
  • A special report from Ellyn Setnor Bogdanoff, Esq., former State Senator who led our targeting lobbying effort to pass the ELSS legislation, addressing the Governor’s veto and outlining our thoughts about how to approach the 2018 Session
  • A summary of the community association bills that were signed into law
  • A summary of the community association bills that did not pass
  • A list of actions we recommend that you, as a community association board member, should take to comply with all of the new laws
  • A letter from Donna DiMaggio Berger, a shareholder with the firm and CALL’s Founding Executive Director
  • A list of upcoming CALL events and community association classes

The post Community Association Legislative Guide, 2017 appeared first on Florida Condo & HOA Law Blog.