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As we reported earlier this month, Senate Bill 56 was signed into law and will go into effect on July 1, 2021. The new law makes changes to the notice requirements of foreclosure actions for condominiums. Specifically, the changes require associations to send a notice to owners of unpaid assessments before an account is sent to a law firm for collections:

d) An association may not require payment of attorney fees related to a past due assessment without first delivering a written notice of late assessment to the parcel owner which specifies the amount owed the association and provides the parcel owner an opportunity to pay the amount owed without the assessment of attorney fees. The notice of late assessment must be sent by first-class United States mail to the owner at his or her last address as reflected in the association’s records and, if such address is not the parcel address, must also be sent by first-class United States mail to the parcel address. Notice is deemed to have been delivered upon mailing as required by this paragraph. A rebuttable presumption that an association mailed a notice in accordance with this paragraph is established if a board member, officer, or agent of the association, or a manager licensed under part VIII of chapter 468, provides a sworn affidavit attesting to such mailing. The notice must be in substantially the following form:

NOTICE OF LATE ASSESSMENT

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A lawsuit that was recently filed against the Promenade at Boca Pointe Condominium Association highlights the importance of properly adopting changes to an association’s governing documents and recording them in the local court registry where the association is located. If the allegations in the lawsuit hold up in court, the association for the Boca-area community could be forced to pay the plaintiff unit-owners’ lost rental income and legal bills.

According to the suit, the association is making up rules to prevent condo owners Gerardo and Ana Vizcaino from leasing their unit for a full year. The suit states that the association’s new rule, which it apparently adopted at an August 2020 board meeting after a simple vote of the board the directors, was never approved by the members by a formal vote.

Indeed, the suit alleges that the association president acknowledged in a notice to all of the unit owners that the board’s adoption of a rule restricting rentals to one tenant per 12-month period was invalid because it had not been approved by the unit owners via an amendment to the governing documents. The only restriction in the association’s recorded declaration pertaining to rentals states that owners are only restricted from renting units for terms of less than thirty days. No other restrictions are included in the recorded governing documents.

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Jason-Rodgers-Da-Cruz-002-200x300The efforts of firm shareholder Jason M. Rodgers-da Cruz, together with Patrick S. Montoya of the Coral Gables-based law firm of Colson Hicks Eidson, were the subject of a front-page article headlined “This Miami Case Was Too Big For the Courtroom: Organizing Convention Center Trial ‘Like Setting Up a Show’” in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article discusses how it was going to be impossible for all of the jurors, defendants and their legal counsel to safely hold a trial at the Miami-Dade County Courthouse under Covid restrictions for a lawsuit by firm client Latitude on the River Condominium Association against eight defendants over the property’s allegedly faulty fire-sprinkler system.  Even though the case was ultimately settled confidentially before proceeding to trial, the duo’s plans to hold the proceedings in the James L. Knight Convention Center are now serving as a blueprint for remote courtroom proceedings for large multi-party cases with adequate social distancing precautions.  The article reads:

. . . The case, which took more than five years of litigation and multiple hearings, involved a class-action lawsuit brought by Latitude On The River Condominium Association Inc. against eight defendants over an alleged faulty fire sprinkler system with incompatible components.

dbr-logo-300x57Miami-Dade Circuit Judge Jennifer Bailey allowed plaintiffs attorneys Jason M. Rodgers-da Cruz of Siegfried Rivera and Patrick S. Montoya of Colson Hicks Eidson to work with her staff to plan for the massive jury trial. Jury selection was scheduled to start at the end of April.

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berenice-m-mottin-berger-2021-300x300LTLehr-2018-Siegfried-Rivera-200x300An article authored by the firm’s Lindsey Thurswell Lehr and Berenice Mottin-Berger appeared today as the featured expert commentary column in the online edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, and will soon be appearing in the “Board of Contributors” page of the print edition.  The article, which is titled “Buyers at New S. Fla. Communities Must Diligently Protect Interests During, Post-Turnover,” begins by acknowledging that the South Florida housing market is now booming, thanks in large part to an influx of professionals relocating here and increased work-from-home opportunities under the new post-pandemic normal.  The attorneys note that many of the region’s new residential developments now rushing to completion will soon undergo the turnover process by which control of their operation and management is transferred from developers to property owners.  They write that this is a crucial stage with significant consequences for the long-term financial and administrative well-being of communities, making it essential for property owners to closely monitor the turnover process to protect their rights and investments.  Lindsey and Berenice’s article reads:

. . . Generally speaking, the turnover process presents the initial opportunity for new owners and owner-controlled boards of directors to hire independent legal counsel, financial professionals, and engineers to conduct meticulous inspections of a community’s property as well as its rules and business records. Communities at this stage will need to diligently interview and investigate prospective service providers to ensure only independent and highly qualified professionals are retained to represent the interests of all owners and hold developers to their warranty obligations.

dbr-logo-300x57As owner-controlled communities have different goals and needs than those still operating under the regime of their developer, the drafting of new rules regulating community affairs, collections policies and construction matters should be considered.

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This year’s legislative session proved to be a busy one, with a number of bills passed by the Florida Legislature that will impact community associations throughout the state. We recently covered the passing of Senate Bill 72 in our blog, also known as the Civil Liability for Damages Relating to COVID-19, which you can access by clicking here. The following are summaries of additional bills that have passed the Legislature and are pending action by the Governor:

Senate Bill 630: Community Associations

Senate Bill 630 represents sweeping changes for Florida communities. These changes include allowing condominium associations to use the demand for pre-suit mediation process; increases the amount that can be charged for a transfer fee from $100 to $150; addresses insurance subrogation by clarifying that if a condominium insurance policy does not provide rights for subrogation against the unit owners in the association, an insurance policy issued to an individual unit owner in the association may not provide rights of subrogation against the association; and clarifies that associations’ emergency powers extend to health emergencies and includes holding virtual meetings and implementing plans based on advice from health officials. The legislation also prohibits associations from requiring certain actions relating to the inspection of records; revises requirements relating to the posting of digital copies of certain documents by certain condominium associations; authorizes condominium associations and cooperatives to extinguish discriminatory restrictions; revises the calculation used in determining a board member’s term limit; and deletes a prohibition against employing or contracting with certain service providers. The bill also makes important limitations to homeowners’ association rental restrictions adopted after July 1, 2021 and provides that any governing document or amendment to a governing document enacted after July 1, 2021, in connection with certain rental restrictions will apply only to parcel owners who acquire the property after the effective date of the governing document or amendment, or to parcel owners who consent to the governing documents or amendment. The bill also brought changes to condominium association websites, allowing them to make their official records available on mobile apps and now allowing both condominiums and homeowners associations to adopt rules for posting notices on websites and mobile apps, provided that electronic notices are still emailed to members who have consented to receive electronic notices. The bill also requires that notices of intent to record a claim of lien specify certain dates. It authorizes parties to initiate pre-suit mediation under certain circumstances; specifies the circumstances under which arbitration is binding; revises requirements for certain fines; revises provisions relating to a quorum and voting rights for board members remotely participating in meetings; revises the procedure to challenge a board member recall; revises the documents that constitute the official records of an association; revises the types of records that are not accessible to members or parcel owners; revises the circumstances under which an association is deemed to have provided for reserve accounts; and authorizes certain developers to include reserves in the budget. This act shall take effect July 1, 2021.

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The Covid-19 pandemic has expanded the parameters and elevated the importance of disaster preparedness in community associations. Prior to the start of the 2021 hurricane season, community association boards of directors and property managers should reassess their disaster preparedness plans to ensure they are ready for anything and everything.

Some of the elements of a comprehensive disaster preparedness plan include detailed site plans, especially for large communities, a communications plan with all current contact information for board members and key staff/vendors, and an evacuation plan with information on public shelters as well as local gas stations and grocery stores with backup generators. Insurance information is also a must, and it should always include copies of all policies and information on claim-filing protocols.

strm-300x240The uncertainty caused by the pandemic also spotlighted the importance of unit-owner communications. Comprehensive disaster preparedness plans should include all current contact information and any other preparations necessary for outreach to residents via calls, text, email, and hand-delivered notices to all dwellings.

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MTobacksrhl-law2-200x300An article by the firm’s Michael Toback was posted today as the featured expert guest commentary column on the homepage of the website of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, and will soon be appearing in the “Board of Contributors” page of the print edition.  The article, which is titled “Ruling Illustrates Perils in Foreclosures of Noncompliance With Documents, Miscalculating Claim of Lien,” discusses a recent ruling by the state’s Fourth District Court of Appeal that highlights not only the significance of associations complying with the provisions of their governing documents in foreclosures, but also the implications of a mistake in the calculation of the “assessment amount due” in determining the ultimate validity of an association’s claim of lien.

Michael’s article begins by noting that most community association governing documents require the association to provide an annual budget to each homeowner with the assessments for the coming year and their due dates, as well as a certificate setting forth the amount of current assessments upon request.  If an owner becomes delinquent in their assessment payments, Florida law calls for associations to issue a demand letter to the owner outlining the amounts that are outstanding. If such demands prove unsuccessful after 45 days (30 days for condominiums), associations may then file a claim of lien against the owner’s residence for the assessment amount due.

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His article continues:

. . . In Pash v. Mahogany Way Homeowners Association, the HOA filed a foreclosure against unit-owner Gary Pash claiming he had failed to pay outstanding quarterly assessments and costs.  Both parties filed dueling summary judgment motions, and the circuit court ultimately entered summary judgment for the HOA and denied summary judgment for the owner.

The Fourth DCA panel’s majority opinion overturned the HOA’s summary judgment, concluding that the evidence presented by the HOA failed to include each of the relevant budgets and notices, together with the proof they were provided to the unit owner, in order to combat Pash’s affidavit in opposition.

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Security cameras in community associations, especially in sprawling HOA communities with gated entries and considerable common areas, help to provide residents and guests with an added measure of peace of mind. However, there are important privacy considerations for associations seeking to install surveillance systems, and there are also questions about whether these systems may constitute material alterations that must be approved by a vote of an association’s membership.

In general, community associations are allowed to install and utilize security cameras to monitor their common areas. The most important limitation in their use is that the cameras should not be positioned to view areas in which residents may reasonably expect a level privacy, such as restrooms, locker rooms, and private dwellings or backyards.

Another important consideration is whether the deployment of security camera systems constitute a material alteration which may require a vote of the association’s voting interest. Decisions over this issue in arbitrations before the State of Florida’s Division of Condominiums, Timeshares and Mobile Homes have held that security camera installations may be considered material alterations. Therefore, unless an association’s specific governing documents provide otherwise, they may first have to be approved by a vote of the owners, which in some cases may be at least 75 percent of the membership. Some association governing documents require less than the statutory 75 percent threshold to approve a material alteration, and some only require membership approval when the cost of the alteration exceeds a specific amount.

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Senate Bill 630, a bill that has wide support from community association industry interests across the state, passed the Florida Senate with a unanimous vote of 40 to zero. It will now move to the Florida House of Representatives for consideration.

The bill represents sweeping changes for Florida communities. It allows condominium associations to use the same non-binding arbitration process used by HOAs; increases the amount that can be charged for a transfer fee from $100 to $150; addresses insurance subrogation; and clarifies that associations’ emergency powers extend to health emergencies.

The legislation also prohibits associations from requiring certain actions relating to the inspection of records; revises requirements relating to the posting of digital copies of certain documents by certain condominium associations; authorizes condominium associations and cooperatives to extinguish discriminatory restrictions; revises the calculation used in determining a board member’s term limit; and deletes a prohibition against employing or contracting with certain service providers.

Flalegislature-300x169The bill also features several changes pertaining to electric vehicle and natural gas charging/filling stations, including: revising the requirements for electric vehicle charging stations; providing requirements for natural gas fuel stations; authorizing boards to take certain actions relating to electric vehicle charging stations and natural gas fuel stations; providing that the installation, repair, or maintenance of electric vehicle charging stations or natural gas fuel stations do not constitute material alterations or substantial additions to the common elements or association property; and providing that labor and materials associated with the installation of a natural gas fuel station may not serve as the basis for filing a lien against an association but may serve as the basis for filing a lien against a unit owner.

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Community associations often struggle with securing a quorum, which is the minimum number of voting interests required to be present in order to conduct a meeting of the members, and this challenge has been exacerbated by the pandemic. One of the most effective ways for associations to secure enough votes from unit owners to achieve a quorum and conduct their business is through the use of proxies.

A proxy is a document that allows a designated individual to attend and participate in a meeting in place of a unit owner. Florida condominium laws provide that unit owners may not vote by “general proxy” but may vote by a “limited proxy” that substantially conforms with the form provided by the state’s Division of Condominiums, Timeshares and Mobile Homes.

meeting-vote-300x300Limited proxies for association votes must contain a specific statement of what the unit owner is voting on and how the unit owner is voting. A unit owner cannot vote on specific substantive questions by a general proxy, which can be used only for the purposes of establishing a quorum and non-substantive votes, e.g., the approval of minutes, adjournment or continuance of meetings, and other matters that do not specifically require a limited proxy.

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