MichaelHyman.jpgThe firm’s Michael L. Hyman wrote an article that appeared in today’s edition of the Daily Business Review, South Florida’s only business daily and official court newspaper, about the recent decision by the First District Court of Appeal in the case of Silver Shells v. St. Maarten at Silver Shells Condominium Association. His article reads:

The First DCA’s decision in the case of Silver Shells v. St. Maarten at Silver Shells Condominium Association stems from a lawsuit by the Destin condominium association for one of the towers in a multi-building property against the developer.

The suit sought to require the developer to turn over control of the master association to the unit owners and convey a “beach property” that was initially included in the common properties which it was required to convey to the master association at the time of turnover.

The appellate court found that the association’s claim that the developer improperly amended restrictive covenants to effectively remove the beach property in question from the common properties is barred by the statute of limitations.

The opinion held that the five-year limitations period began to run when the association for the building was turned over to the unit owners, and the association’s action had not been filed within five years of that date.

Michael’s article concludes:

The takeaway from this ruling for this condominium association as well as other new condo associations in similar master-association communities is that the clock starts ticking on their limitations period to challenge any of the developer’s actions on the date in which their building’s association is turned over by the developer to the unit owners.

The developer will continue to have the “power of the pen” to implement any amendments that it sees fit to the covenants for the master association while it maintains control during the build out of the community, so it is incumbent on the associations for the individual towers that have already been turned over to the unit owners to maintain a careful eye on all of the developer’s amendments and, when necessary, challenge them before their limitation periods expire.

In this case, the association’s challenge to the developer’s amendment that enabled it to retain ownership of the beach property, which apparently included a lucrative ongoing revenue stream for the rental of beach chairs and umbrellas, may have prevailed had it been filed before the five-year limitations period had expired.

Our firm congratulates Michael for sharing his insight on this new appellate decision with the readers of the Daily Business Review. Click here to read his complete article in the newspaper’s website (registration required).

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GaryMars.jpgThe firm’s Gary M. Mars was one of only three South Florida community association attorneys whose analysis was featured in a front-page report in today’s edition of the Daily Business Review headlined “Law Cracks Down on Owners Harboring Fake Service Pets.” The article by reporter Samantha Joseph of the DBR, which is South Florida’s exclusive business daily and official court newspaper, focuses on the new state law that creates penalties for association members who try to pass off their pets as service animals. It reads:

Thanks to the new law that now makes it a misdemeanor to lie about an animal’s skill-set as a designated helper to a disabled owner, condo associations have fresh ammunition to enforce their pet policies.

The law, unanimously approved by state legislators, took effect July 1. It amends existing legislation by elaborating on the tasks performed by service animals.

. . . The new legislation redefines “service animal,” for the purposes of public accommodation and limits the term to a dog or miniature horse.

It seeks to protect a broader cross section of people by expanding the existing state law’s definition of disability “deaf, hard of hearing, blind, visually impaired or otherwise physically disabled.”

The new law covers “physical or mental impairment that substantially limits one or more major life activities,” like walking, seeing, hearing, speaking, breathing, learning and working.

It protects people with physical, sensory, psychiatric, intellectual, and mental or psychological disorders specified in the most recent edition of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders.

It also goes one step further than its predecessor to require the animal’s tasks be directly related to the handler’s disability.

“What the legislation really did was provide some clarification,” said Gary Mars, shareholder at Siegfried Rivera Hyman Lerner De La Torre Mars & Sobel. “As association lawyers, it gives us a better definition of service pets, which prior to this legislation had less definition.”

Our firm congratulates Gary for being called on by the editors and reporters of the Daily Business Review for his insight into this important new legislation for community associations. Click here to read the complete article in the newspaper’s website (registration required).

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Our firm’s other community association attorneys and I are often asked by condominium association board members about the rights of tenants who are renting units in a condominium to use the common elements – as well as their ability to participate and vote in meetings and elections.

The Condominium Act provides that tenants who are leasing units in communities “shall have all use rights in the association property and those common elements otherwise readily available for use generally by unit owners.” This means that associations must allow renters to have the same use rights as unit owners to the pool, fitness center, clubhouse, tennis court, etc. Renters may also use the parking spaces designated for their unit.

For unit owners who are leasing their residences, the law also provides that they “shall not have such rights except as a guest, unless such rights are waived in writing by the tenant.” The law further provides: “The association shall have the right to adopt rules to prohibit dual usage by a unit owner and a tenant of association property and common elements otherwise readily available for use generally by unit owners.” tenright.jpg This means that owners who rent out their units may not also come by to swim in the pool whenever they want!

With regard to association meetings and voting, tenants do not typically have the right to attend meetings because they are not owners, however, tenants who are conferred with a Power of Attorney by their unit owners may attend and speak at the association meetings. Voting rights and requirements for board membership are generally document specific and can be found in the association’s bylaws.

Another issue that often arises is whether condominiums can prohibit tenants from having pets even if the governing documents allow unit owners to have pets. The issue turns on the exact language in an association’s governing documents. Many board members are surprised to learn that they may adopt rules that restrict tenants from having pets based on the language in their recorded documents – but this is not always the case. Many association documents require a unit owner vote to amend the documents in order to restrict tenants from having pets.

Finally, if a tenant or their landlord/unit owner violates the association’s rules and regulations or other governing documents, the Condominium Act has empowered the association to restrict the tenant’s ability to use the common elements. This also applies to the tenants of unit owners who become more than 90 days delinquent in the payment of their association dues.

With so many investor-owned units in South Florida condominium communities, significant percentages of tenants under short and long-term leases are likely to be a permanent characteristic. Associations should bear in mind that laws do exist to protect tenants’ rights in order to help ensure that associations avoid the possibility of unforeseen legal liabilities.

LisaLerner.jpgThe firm’s Lisa A. Lerner authored an editorial feature about the nuances of construction contracts for condominium associations that appears in the July/August issue of Brickell Magazine, one of South Florida’s premier lifestyle magazines. Her article discusses the protections for associations that experienced attorneys recommend and include in their clients’ construction contracts.

Our firm congratulates Lisa for sharing her insight into this important topic with the readers of Brickell Magazine. Click here to read her feature in the magazine’s website.

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MichaelChapnicksrhl-law.jpgFor the second consecutive day, an article on important issues for community associations authored by one of our firm’s partners appeared today as a guest column in the Daily Business Review, South Florida’s only business daily and official court newspaper. Partner Michael E. Chapnick with our West Palm Beach office wrote the article in today’s edition of the newspaper about the new electronic voting law for community associations. His article calls for the state’s Division of Condominiums to establish an approval and certification process for the e-voting systems providers. It reads:

“Properly implemented, electronic voting may enable associations to overcome the significant challenges created by so many investor-owned units and part-time residents who frequently do not participate in association votes, making it difficult for many associations to achieve quorum at members’ meetings and elections so that membership action can be taken.

However, there are some important and necessary measures that were built into the new law which will make the initial implementation of electronic voting extremely challenging for many associations.

With the voter identity verification and security protocols that are called for under the new law, online voting for associations will not be as simple as using an existing off-the-shelf electronic survey provider and adapting it for an association vote.

In fact, the vetting process for the vendors purporting to comply with all of the requirements under the new law will take some time, and the state’s Department of Business and Professional Regulation Division of Condominiums should move quickly to develop a vetting and certification process in order to help all of the associations in Florida to identify the providers that are in compliance with the statutory requirements.”

Michael’s article concludes:

“However, rather than leaving it up to every community association to conduct its own vetting process in order to determine which providers meet all of the law’s requirements, the onus should be on the state agency that oversees and enforces association election regulations as well as the other laws governing associations in Florida to create and implement a new vendor approval and certification process for the providers. The state’s Division of Condominiums is better equipped with the technical resources and expertise that is necessary to properly review and determine whether these online software application providers are implementing e-voting systems that meet all of the requirements and should be certified by the state for use by associations.

Electronic voting will not be a panacea for all of the issues caused by unit owner apathy and absenteeism in association votes and elections. There are many voters who will decline to use it and will wish to continue mailing in the completed ballots or voting in person at the meetings, so it is unlikely to completely replace the traditional voting methods, at least in the near future. It will, however, give the associations an important new tool for their toolbox that should greatly enhance their ability to conduct annual elections and obtain votes regarding alterations, amendments, reserves and other important association matters that require membership approval.

With the help of an effective approval and certification program for the e-voting system providers by the state, associations will be able to turn to electronic voting to help overcome some of the challenges that have plagued their votes and elections for decades.”

Our firm congratulates Michael for sharing his insight with the readers of the Daily Business Review on this important new law for community associations and calling on the state to enact an approval and certification process for the e-voting systems providers. Click here to read the complete article in the newspaper’s website (registration required).

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RobertoBlanch2013.jpgFirm partner Roberto C. Blanch wrote an article that appeared in today’s edition of the Daily Business Review, South Florida’s only business daily and official court newspaper, about the recent decision by the Second District Court of Appeal in the case of Andrews v. Shipps’s Landing Condominium Association. His article reads:

“. . . The Second DCA found that the association did not conclusively establish that the removal of the drywall ceiling resulted in a violation of the association’s declaration of condominium.

The association asserted that the owners did not obtain its approval before removing the ceiling drywall from the interior of the unit and demanded that the owners reinstall the drywall. In turn, the owners responded by filing a lawsuit against the association for declaratory and injunctive relief.

While the trial court record indicates that the owners requested and obtained association approval for certain alterations to the unit, it appears that the nature of the alterations were not precisely described by the owners when seeking the association approval.

Furthermore, while the appellate opinion indicates that the owners opted to remove the ceiling drywall during the performance of the previously approved alterations, it appears that the association did not provide any testimony to counter the testimony proffered on behalf of the owners interpreting that the declaration of condominium establishes that the drywall ceiling is within the unit’s boundaries.”

Roberto’s article concludes:

“Association representatives should also consider standardizing the process for unit owner requests for alteration approval, should it be determined that the association’s directors have the authority to grant such approval. For instance, it appears from the opinion that the association in question did not have a clear procedure or form for the requests for renovation approvals requiring detailed descriptions of the proposed alterations.

A form with detailed questions regarding all of the elements that will be renovated should be employed, and the approvals should include stipulations that only the renovations detailed in the form by the owners are being approved and no other elements may be altered without the association’s prior written approval.

. . . It is also imperative for associations to act promptly when seeking recourse or corrective actions against an owner if it is determined that an alteration has been made in a manner that is inconsistent with the design approved by the association. An association’s failure to do so may adversely affect its ability to successfully do so in the future.”

Our firm congratulates Roberto for sharing his insight on this new appellate decision with the readers of the Daily Business Review. Click here to read the complete article in the newspaper’s website (registration required).

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JeffreyBerlowitz.jpgThe firm’s Jeffrey S. Berlowitz, who has focused much of his work on helping community associations to contend with unit owners who attempt to wipe away association liens by filing for bankruptcy, was quoted extensively in an article in today’s edition of the Daily Business Review on the implications of the recent ruling by the U.S. Supreme Court in the case of Bank of America v. Caulkett. The court ruled that homeowners who are underwater on their first mortgage cannot void second mortgages by filing for Chapter 7 bankruptcy, and the ruling also appears to apply to other secured lienholders including community associations.

The article reads:

Jeffrey Berlowitz is optimistic that within the risky realm of second mortgages, the Supreme Court’s ruling may help refresh the lending stream that dried up in the market crash.

“You may see second mortgages being extended if there’s equity,” said Berlowitz of Coral Gables-based Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, which represents community associations.

Still, a divisive footnote in the decision suggests if only the debtors had asked the court to overrule its 1992 decision in Dewsnup v. Timm, the court would have obliged. Three justices didn’t join Thomas’ footnote, meaning they could be outvoted 6-3 if the right case came along.

Dewsnup rejected one form of lien-stripping. The footnote quotes Thomas’ concurrence in a 1999 opinion: the “methodological confusion created by Dewsnup has enshrouded both the Courts of Appeal and … Bankruptcy Courts.”

Berlowitz said, “Thomas’ comments could lead us to believe the court could overrule Dewsnup down the road.” Then lien-stripping would be available in Chapter 7 cases, allowing debtors to void wholly unsecured mortgages. And partially unsecured mortgages could be stripped down to the property’s market value.

For now, Berlowitz is happily sharing the ruling with his condo board clients. They’ve been frustrated by homeowners who fail to pay their fees through months or years of foreclosure and bankruptcy while the association maintains the community.

“There’s such animus for the folks who aren’t paying while their neighbors are,” he said. “I had to explain to our clients this is the law, I’m not making it up.”

Our firm congratulates Jeffrey for sharing his insight into this ruling and its implications for community associations with the readers of the Daily Business Review, which is South Florida’s exclusive business daily and official court newspaper. Click here to read the complete article in the newspaper’s website (registration required).

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The firm’s Lindsey Thurswell Lehr wrote an article that appeared in today’s edition of the Daily Business Review, South Florida’s only business daily and official court newspaper, about the implications of the recent decision by the Fourth District Court of Appeal in the case of Pudlit 2 Joint Venture v. Westwood Gardens HOA. Her article reads:

. . . Pudlit had acquired two lots in the Westwood Gardens community via foreclosure, for which the association demanded payment for the past-due assessments that had accrued while Pudlit held the titles to the properties as well as all assessments due from the prior owner, as stipulated under Florida law.

Pudlit made the payment to the association but filed suit against the association seeking its money back by claiming that it was exempted from liability for the prior owners’ association debts due to the express language contained in the association’s own declaration of covenants, which read:

“The lien of the assessments provided for herein shall be superior to all other liens save and except tax liens and mortgage liens, provided said mortgage liens are first liens against the property encumbered thereby (subject only to tax liens). Sale or transfer of any lot which is subject to a mortgage as herein described, pursuant to a decree of foreclosure thereof, shall extinguish the lien of such assessments as to payments thereof which become due prior to such sale or transfer. No sale or transfer shall relieve such Lot from liability for any assessments thereafter becoming due or from the lien thereof.”

Lindsey’s article concludes:

The appellate panel found that the state law (Florida Statute §720.3085) could not impair or supersede a pre-existing declaration provision, as that would infringe on the prohibitions against the impairment of contract rights and freedom to contract under the state’s constitution. The appellate court found that as a successor to the mortgage holder, Pudlit is a third-party beneficiary of the HOA’s declaration and the protections which it provides.

The court also noted that the language under Chapter 720 of the Florida Statutes indicating that it is “not intended to impair such contract rights” that were “effective before the effective date of the act” made the existing law inapplicable in this case.

. . . In assessing the implications of this ruling, community association directors and managers should bear in mind that most associations do not have the restrictive language in their declarations nullifying a successor’s liability for the previous owner’s fees that was at issue in the Pudlit case. In addition, most association governing documents include a provision stating that all new state laws governing condominiums and homeowners associations are deemed to be expressly incorporated into their declarations.

However, this new appellate opinion, which is the first of its kind at the appellate level in the state, should serve as a notification to all community associations in Florida to review their declarations in order to determine if the language that was at issue in this case is found in their governing documents. If it is, they would be well-served to seek the guidance of qualified legal counsel in order to amend their governing documents through the membership meeting and voting process.

Our firm congratulates Lindsey for sharing her insight on this important new appellate decision with the readers of the Daily Business Review. Click here to read the complete article in the newspaper’s website (registration required).

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In 1996, the Florida Supreme Court issued an advisory opinion regarding the activities of licensed community association managers (CAM) that would constitute the unlicensed practice of law. In 2013, The Florida Bar weighed in on the issue when its Standing Committee on Unlicensed Practice of Law submitted a report to the state’s highest court for its consideration. On May 14, 2015, the Court filed its final opinion based on the Bar’s submission.

The Court upheld its findings from the 1996 opinion and adopted all of the recommendations provided by the Bar in its 2013 report. The Court found that the following tasks performed by CAMs are not considered the unlicensed practice of law:

  • Preparation of a certificate of assessments due once the delinquent account is turned over to the attorney for the association
  • Preparation of a certificate of assessments due once foreclosure against the unit has commenced
  • Preparation of a certificate of assessments due once the member disputes in writing to the association the amount alleged as owed
  • Drafting pre-arbitration demand letters

The Court ruled that the following tasks performed by CAMs are considered the unlicensed practice of law:

  • Drafting of amendments to the declaration, bylaws, and articles of incorporation that are recorded in the public records when such documents are to be voted on by the members
  • Preparation of construction lien documents
  • Preparation, review, drafting and/or substantial involvement in the preparation/execution of contracts, including construction contracts, management contracts, cable television contracts, and others
  • Any activity that requires statutory or case law analysis to reach a legal conclusion

flasupcourt.jpgThe Court found that the following tasks performed by CAMs may or may not be considered the unlicensed practice of law, depending upon the facts and circumstances involved in each case:

  • Determination of the number of days to be provided for a statutory notice
  • Modification of limited proxy forms
  • Preparation of documents concerning the right of the association to approve new prospective owners and/or tenants
  • Determination of affirmative votes needed to pass a proposition or amendment to recorded documents
  • Determination of votes needed to establish a quorum
  • Identifying, through the review of title instruments, the owners who are to receive pre-lien letters

The Court’s ruling includes examples that help to clarify whether or not these activities constitute the unlicensed practice of law. Click here to read the complete ruling and the examples that are provided for each of these tasks.

With the upsurge in collections and the issuance of demand letters and claims of lien by associations, many CAMs have responded to their association’s needs by taking on the preparation of these documents rather than turning to the association attorney. This has led to cases in which demand letters and claims of lien have been invalidated due to mistakes in legal descriptions and recording errors. Association boards should bear in mind that the preparation of demand letters, claims of lien, Notices of Commencement and other legal documents do not typically incur significant attorney fees, but the ramifications of errors in these documents can prove to be very costly. If The Florida Bar determines that a property manager has engaged in the unlicensed practice of law, that manager could face the imposition of fines as well as the possibility of having their CAM license revoked or suspended. It is simply not worth the risk for associations or their managers to prepare these documents in order to avoid the relatively nominal legal fees, and thereby risk exposure to their managers of potential fines and license issues.

Yogi Berra once said “it ain’t over ’till it’s over.” That statement perfectly describes the most recent decision to come out of Florida’s Fourth District Court of Appeal dealing with a unit owner’s request for a reasonable accommodation under the Fair Housing Amendment Act of 1988 (FHAA) to keep an emotional support animal despite her association’s restrictions.

The case of Carolyn Hoffman v. Leisure Village, Inc. of Stuart, Fla. actually involved two dogs. As to the first dog, Hoffman and her association ended up in litigation which resulted in a settlement agreement whereby the association allowed her to keep the dog, with the understanding that she would not get another dog after it passed away, and if she did get another one she would have to move from Leisure Village.

Upon the death of her dog in 2010, Hoffman was diagnosed with chronic depression and her psychiatrist recommended that she get another dog to support her emotionally. Her attorney made a request to Leisure Village for an accommodation under the FHAA, but the request was denied. She got the dog anyway.

esupdog.jpgThe association then went back into court and asked the judge to enforce the settlement agreement. At the same time, Hoffman filed a complaint with the U.S. Department of Housing and Urban Development (HUD) claiming that she was wrongfully denied an accommodation of her disability under the FHAA, and her complaint was ultimately sent to the Florida Commission on Human Relations (FCHR) for investigation. Before FCHR could finish its investigation, the trial court ordered Hoffman to remove her dog from the association.

When FCHR completed its investigation three months later and found cause to believe that a fair housing violation had occurred, Hoffman first tried to file a claim in federal court, and then back in state court, claiming discrimination. The court dismissed her case, saying that she had waived her right to bring a new claim and all of the issues had already been decided in the case relating to her first dog.

The Fourth DCA found that the trial court did not even have the authority to decide Hoffman’s discrimination claim because while she had started the process of filing complaints with HUD and FCHR, FCHR did not even complete its investigation of the claim until three months after the court dismissed her claims. The court examined the law and found that Hoffman was required to exhaust the administrative process (i.e., filing a discrimination claim with HUD and having that claim investigated to conclusion) before she was entitled to file a lawsuit. The appellate panel reversed the dismissal of her discrimination claim, thereby allowing her to pursue it back in the trial court.

The lesson to be learned from Hoffman and Leisure Village is even when it appears that a fair housing dispute has been resolved by agreement, it is not necessarily over . . . “until it’s over.”