Florida HOA Lawyer Blog

Community associations often fail to comply with the requirement under Florida law to provide owners with timely access to official records or responses to inquiries, and these violations can expose the associations to costly penalties and legal expenses. The applicable laws provide that association official records shall be made available to owners within days of the submission of a written request (5-10 days depending on the type of community). Failure to provide access to the records within the time specified by the applicable laws may create a rebuttable presumption of a willful failure to comply with the law, which can subject an association to damages.

Florida statutes include the following among the list of records that associations are required to maintain: a copy of the plans, permits, warranties, and other items provided by the developer; photocopies of the declaration, by-laws, articles of incorporation and rules and regulations; a current roster of all owners; insurance policies; and financial records. Condominium associations must maintain these official records within the state for at least 7 years and make them available for inspection to a unit owner within 45 miles of the condominium property or within the county in which the condominium property is located.

There are also several types of association records which are not accessible to owners, such as: records protected by the lawyer-client or work-product privilege; information obtained by an association in connection with the approval of the lease, sale, or other transfer of a unit; personnel records of association or management company employees; medical records of unit owners; and certain personal information of the owner, when consent for disclosure is not provided by the owner (e.g., social security numbers, driver's license numbers, credit card numbers, e-mail addresses, telephone numbers, and other contact information). Boards should ensure that protected records are not disclosed during records inspections.

With regard to responses to written inquiries, Florida law requires condominium and cooperative boards to respond within 30 days of receipt with either a substantive response or a reply indicating that a legal opinion or advice from the Division of Condominiums has been requested. If the board requests advice from the division, the board shall, within 10 days of its receipt of the advice, provide in writing a substantive response to the inquirer. If a legal opinion is requested, the board shall, within 60 days after the receipt of the inquiry, provide in writing a substantive response to the inquiry. Costly consequences may result from a failure to provide a timely substantive response to the inquiry.

Associations may adopt reasonable rules regarding the frequency, time, location, notice and manner of record inspection and copying. Boards may also adopt reasonable rules regarding the frequency and manner of responding to inquiries, and association governing documents may also contain additional restrictions governing the possible rules to be imposed.

Community associations should consult with experienced legal counsel to avoid the pitfalls of untimely responses to records requests or improper responses to owner inquiries.

Five years ago, it was rare to see community associations take title to properties using their lien and collection rights. In years past, it was also rare to see community associations leasing newly acquired units in order to recoup past-due fees and assessments from delinquent owners. In light of the increase in association foreclosure actions however, it has now become commonplace to see associations become unit owners, as bank foreclosures are constantly delayed and properties that could yield significant rental income are sitting idle in foreclosure limbo. Community associations that foreclose their claims of liens and take ownership of residences in their communities should be mindful of these helpful guidelines when considering whether to offer these residences for lease.

Prior to entering into lease agreements with tenants, it is important for community associations to review the provisions of their governing documents in order to determine whether there are any restrictions governing rentals. Once a community association acquires title to a unit or home, the association assumes the responsibilities and obligations in the governing documents that apply to property owners. Therefore, associations that become property owners are not exempt from complying with the leasing rules and restrictions set forth in the governing documents. Community associations should be careful to follow the leasing restrictions promulgated for property owners in order to avoid challenges from owners alleging selective enforcement. If, for example, the community association has a tenant approval process that includes a background check, application, screening fee and common-area security deposit, the community association should follow and document each and every step in the screening process prior to approving and entering into a lease agreement with a prospective tenant.

Community associations should also work with experienced legal counsel who is able to draft a lease agreement that incorporates sufficient protections for the association in the lease transaction. For instance, if an association intends to lease property that is subject to a pending lender foreclosure or a superior mortgage lien, the lease agreement for the property should disclose the superior lien interest. The lease agreement should also include releases of liability in order to protect the community association from legal action by the tenant in the event the lender foreclosures its superior lien and the tenant is required to vacate the residence. Although the "Federal Protecting Tenants at Foreclosure Act" provides that foreclosing lenders must give tenants at least 90 days prior notice if the lender intends to terminate the tenancy once it takes possession of the property, an association could be exposed to liability if the potential foreclosure is not disclosed to the tenant and proper safeguards are not in place in the lease agreement to protect the association's interests.

The lease agreement should also include provisions addressing tax certificates that may be issued for outstanding property taxes. Since governmental tax liens are superior to community association liens, these tax liens are not extinguished by association foreclosure actions. Although a community association is not liable for delinquent taxes that accrue prior to the association acquiring title to the property, the unpaid property taxes could lead to tax certificates being issued and sold through tax sales or auctions. If the tax certificate is not redeemed within two (2) years after it is issued (i.e., satisfactions of all delinquent taxes, including interest and costs), the purchaser of the tax certificate can apply for a tax deed to the property. Once a tax deed is issued, the grantee of the tax deed is entitled to the immediate possession of the property, and the tenant will most likely be required to vacate the residence. Therefore, it is essential that the terms of the lease agreement also incorporate adequate disclosures to the tenant and provisions to protect the community association in the event of a tax sale.

It is also important for community associations to maintain adequate property and casualty insurance for the residences that the association intends to lease. Community association boards should consult the association's insurance agent in order to ensure that the association has a landlord insurance policy or some other level of insurance coverage to protect it against damages to the improvements within the residence, personal injuries that may occur within the residence, and damages and claims arising due to the acts or omissions of the tenant. Community associations leasing properties should also require that their tenants maintain renter's insurance policies, and that the association is named as an additional insured and certificate holder on the tenant's policy. Furthermore, evidence of the tenant's insurance should be kept as part of the community association's records.

Community associations should be very aggressive in their approach to using their lien and foreclosure remedies to take title to properties and rent them in order to recover past-due fees and assessments. By using these guidelines and working with experienced counsel to develop and negotiate the lease agreements, associations can effectively lease these residences in order to help to recover from the foreclosure crisis.

One area of the law which our community association lawyers get asked about on a regular basis is the notice requirements for the various types of condominium association board meetings. Condo associations must strictly follow the statutory requirements for noticing board meetings in order to avoid potential legal complications. This article will serve as a refresher for condominium association board members and unit owners on compliance with the basic laws governing notification of association board meetings.

There are two levels of notification which are required by law for different types of condominium association board meetings. For all general board meetings that must be open to the unit owners, the minimum standard requirement is that the notice with the corresponding meeting agenda ("Notice") be posted at least 48 hours immediately prior to the meeting. The association must post and maintain the Notice in a conspicuous place on the condominium property, and the Notice must specifically identify the agenda items that are slated for discussion.

However, some board meetings must be noticed 14-days in advance. The notice for such meetings must be posted on the condominium property as well as delivered to each owner. While Section 718.112, Florida Statutes, does not require the Notice to be mailed, we highly recommend it given that the post office may provide proof of the mailing, which may become necessary if the distribution of the notice is called into question. Further, many owners do not reside in the building and have provided another address for all association correspondence, making personal delivery impossible in some instances. This 14-day Notice is required for board meetings involving discussion and voting of proposed annual budgets of an association or revisions to such budgets, non-emergency special assessments, establishment of the deductible for property/casualty insurance, or changes to the association's rules regarding unit use.

Exceptions to the above-described meeting notice requirements may apply for emergency board meetings. However, these meetings are generally limited to emergencies that may result in harm to persons or property.

Closed meetings of the board which are not open to unit owners are limited by law only to meetings with the association's attorney with respect to proposed or pending litigation, when the meeting is held for the purpose of seeking or rendering legal advice, or meetings of the board alone to discuss personnel matters. While the law allowing for such closed meetings does not speak to a notice requirement, as a conservative measure, we recommend that the Notice be posted in a conspicuous place on the condominium property at least 48 hours prior to the meeting. The notice for such meetings should clearly indicate that it is a closed and private meeting of the board.

Should the board fail to notice meetings in accordance with the requirements of The Condominium Act, the board may be required to re-convene any meetings which are found to be non-compliant with the statutory requirements, and any votes and decisions made during such meetings may have to be repeated. Boards found to be repeat offenders may be fined by the state's Division of Condominiums. Additionally, decisions that are made during the improperly noticed meetings can be called into question, and owners who have been adversely affected by board actions can mount challenges. Such unit owner challenges may result in litigation, which is time consuming and costly to associations. There is also the potential that prospective owners will look into the complaints filed with the Division of Condominiums against the association, possibly raising a red flag in the minds of potential buyers as to the desirability of owning a unit in the condominium.

Associations and their boards should bear in mind that the majority of their board meetings will only require the 48-hour posted Notice, so compliance with that aspect of the meeting procedures should be fairly simple and straightforward. However, there will be instances in which Notice of a meeting must be posted conspicuously on the condominium property and mailed to each unit owner at least 14 days prior to the meeting, or in which the association's governing documents require a different procedure regarding the issuance of a board meeting notice. If uncertain as to which notice requirements are applicable, it is advisable to contact the association's legal counsel for guidance.

Our community association lawyers write about important legal matters for condominium associations and HOAs in this blog, and we encourage association directors and members as well as property managers to enter their e-mail address in the subscription box at the top of our blog in order to automatically receive all of our future articles.

Before commencing a new project or improvement to an association's property, it is essential for community association board members to review and follow the procedures which are required. Florida statutes restrict the ability of board members to authorize certain alterations to their community's property. For instance, the applicable statutes provide that condominium board members in Florida cannot effectuate material alterations to the common elements without the approval of 75 percent of the voting interests, unless otherwise provided in the association's governing documents.

Condominium associations in Florida have been required to obtain unit owner votes for improvements as minor as painting the bottom section of columns in a garage in order to make them more visible to the drivers. Other precedential examples of "material alterations" requiring unit owner votes have included the redecorating of common-element facilities, painting the exterior of buildings, and changes to roofs or pool-deck flooring.

The governing documents for most community associations will contain provisions addressing how to proceed with making alterations. Some documents may provide that the association's board alone is authorized to proceed with making the alteration. Others may set monetary limits as to alterations that may be effectuated by board vote alone, and some require a unit owner vote but at a lower approval percentage than what is statutorily required.

However, in certain situations, material alterations have been permitted without unit owner votes, such as alterations which are required to protect the safety of residents. In such example, a condominium was permitted to have a fence installed in order to protect against a high volume of documented criminal activity. Material alterations have also been permitted without unit owner votes to provide for the installations of "better systems." For example, a condominium association was allowed to install a new pool deck surface because it was heralded as being a more economical system to maintain and repair, and it would make repairs to underlying common-element components more affordable and practical.

To a great extent the restrictions pertaining to material alterations do not apply to homeowner associations, given that the Florida Statutes governing HOAs do not contain these same types of restrictions. However, some homeowner association governing documents do contain restrictions to alterations of common areas and association property.

Community association boards should consult with legal counsel to ascertain the extent to which they are required to obtain a vote of the owners with regard to a project, and if so, whether any recognized exceptions exist. This will help them to avoid the consequences of not getting the required vote, which may include having to get the vote and/or revert the alterations to their pre-alteration condition if the vote is not obtained.