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Articles Posted in Community Association Law

A new rule by the Federal Housing Administration that went into effect Oct. 15th is making it easier for first-time condo buyers, even those with less than perfect credit scores, to get approved for FHA-backed mortgages.

The new rule allows individual condominium units to be eligible for FHA mortgage insurance even if the condominium development has not been FHA approved.  It introduces a single-unit approval process, which will make it much easier for many condominium residences throughout the country to become eligible for FHA-insured financing.

The rule changes also extend the recertification requirement for approved condominium communities from two to three years, and it allows more mixed-use projects to be eligible for FHA-insured mortgages. fha Condo developments will be eligible for FHA financing if their commercial/non-residential space does not exceed 35 percent of the total floor area (previously the maximum was 25 percent).

The FHA provides mortgage insurance on loans made by FHA-approved lenders, which benefit from the added protection against the risk of default.  According to the U.S. Department of Housing and Urban Development, the rule change is expected to make 20,000 to 60,000 condo units per year eligible for the FHA-insured financing.

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A recent article by the Marco Eagle newspaper reported that the Marco Island Code Enforcement Magistrate recently issued $1,000 fines to three condominium associations for violating sea turtle lighting restrictions.  For one of the properties, it was the second such violation in consecutive months.

The violations involved lighting in the pool areas that reflect on the oceanfront buildings.  These lights could potentially disorient turtle hatchlings, causing them to move away from the shore.

sturtle-300x200The newspaper report also noted that the city’s code enforcement office had recently issued $1,300 in fines against six condominium associations for violating sea turtle lighting restrictions.  To date, the municipality has issued 45 notices of violation during the 2019 sea turtle season, 25 more than in 2018.

The article also states that a local condominium resident recently posted in a Facebook group that she found a dead sea turtle hatchling inside of a Ziploc-type plastic bag in her building’s lobby accompanied by a note reading:  “This is what you get when you don’t close the blinds.  They crawl towards the light.”

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The Florida law mandating condominium association websites went into effect at the start of 2019.  By now, all condominium associations with 150 units or more (excluding timeshares) should have launched a website that complies with the new law.  Those that have not already created their website should do so immediately in order to avoid any potential repercussions.

Under the new law, password-protected condominium websites for the exclusive access by association members must include the recorded declaration of condominium and bylaws along with any amendments to each, the articles of incorporation filed with the state, and the association’s rules and regulations.  The website must also include a list of all executory contracts and transactions to which the association is a party or under which the association or unit owners have an obligation.

After bidding for related materials, equipment or services, the website must include a list of bids received by the association within the past year.  Summaries of bids in excess of $500 received from vendors during the past year for materials, equipment or services must be maintained on the website for one year.  In lieu of summaries, however, the association may post complete copies of those bids.

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Requests by unit owners to review official records of their community association should not present any difficulties for Florida condo associations and HOAs, yet records requests often become needlessly contentious.

Associations in the state are required to allow access to their official records within 10 working days after receiving a written request from a unit owner or their authorized representative.  They may establish reasonable rules specifying the frequency, time, location and manner of record inspection and copying, but they cannot deny access.  Those that fail to comply may be subject to compensate the requesting owner with a minimum of $50 per calendar day beginning on the 11th day after receiving the written request.

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Firm shareholders Helio De La Torre and Lindsey Thurswell Lehr, together with associate Berenice M. Mottin-Berger, have worked for more than four years in representing the BrickellHouse Condominium Association in litigation over the property’s failed robotic parking garage.  Their work yielded a truly exceptional result last week when a Miami-Dade Circuit Court jury awarded the association $40,590,990 in damages against BrickellHouse Holding LLC, the developer of the 46-story tower in Miami’s Brickell area, and many of South Florida’s most respected media organizations took notice.  The verdict yielded major articles this week in the Miami Herald, Daily Business Review, South Florida Business Journal, The Real Deal and Law 360 about the trial team’s success in demonstrating to the jury that the developer, a subsidiary of Newgard Development Group, breached statutory warranties owed to the association and its unit owners.

Helio-De-La-Torre-2013“The association has been left without parking for its residents in the promised 480 vehicle garage since November 2015,” explained De La Torre to reporters after the verdict.  “Since that date, residents have been parking offsite and incurring increased costs due to the failed robotic parking system sold by the developer. The board of directors and a team of consultants have worked very hard to find a solution for the garage and bring the owners the justice they deserve.”

 

LTLehr-2018-Siegfried-Rivera-200x300Thurswell Lehr concluded:
“As a result of the verdict, the condominium association will now be able to move forward with the replacement of the garage in order to restore the parking for the building that the owners and residents deserve.”

BrickellHouse is located at 1300 Brickell Bay Drive and features 374 residences.  The 46-story tower was one of the first post-recession condo buildings constructed in the Brickell area.  After its completion in October 2014, the problems with the 480-space robotic parking system were immediately apparent.  The developer retained control of the condominium association through September 2015, and the robotic parking system was completely shut down in November 2015.

Below is a video depicting how the garage was designed to use a fleet of autonomous robots that move beneath the vehicles to lift and move them throughout the building and elevators.  Click here to read the Miami Herald article in the newspaper’s website, click here for the Daily Business Review article (registration required) and click here for The Real Deal.

 

 

Laura-Manning-Hudson-Gort-photo-200x300Firm shareholder Laura Manning-Hudson authored an article that was featured as the guest commentary column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “HOA Dispute Over Backyard Playset, Other Amenities Snowballs Into Federal Lawsuit,” discusses an HOA’s dispute over the installation of a backyard playset, spa pool, barbecue and other amenities in a Georgia community that has escalated into a federal lawsuit alleging violations of the Fair Housing Act due to discriminatory housing practices.  Laura’s article reads:

. . . As was chronicled in a recent article in the Gainesville Times newspaper, Martin Moreira and his wife Zulema filed suit against the Pointe West Homeowner’s Association after their plans for a backyard makeover were nixed by the association. They filed the discrimination complaint in federal court in April after the HOA had issued fines and placed a lien against their home in the community located in Oakwood, in northern Georgia.

The dispute arose in the spring 2017 when the Moreiras submitted plans to the HOA to install a play area for their grandchildren as well as a barbecue, spa pool, fireplace, gazebo and other amenities in their backyard. The architectural control committee for the association rejected the project and requested additional information on several items for continued consideration.

dbr-logo-300x57The committee continued to reject the project after the supplemental information was submitted, but the complaint alleges that its members then went further than ever before. It states: “In deviation from established practice, ACC members went to the Hall County Building Department and demanded all information regarding Moreira’s application. Hall County Building Department staff later confided with Moreira’s architect, Jack Bailey, that ACC members were looking for something to kill the project.”

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susanodess-srhl-thumb-200x267-94402The firm’s Susan C. Odess authored an article that appeared as the featured guest commentary column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “Court Opens Citizens Property Insurance to Claims for Consequential Damages,” focuses on a recent precedent-setting ruling with a certified question to the Florida Supreme Court by the state’s Fifth District Court of Appeal.  Her article reads:

. . . The appellate panel overturned the trial court’s decision and remanded the case back to the lower court for hearings on whether the claimant is entitled to consequential damages for lost rental income caused by the insurer’s delays and denials.

The case began with an insurance claim by Manor House with Citizens Property Insurance Corp., which accepted responsibility for the loss and paid $1.93 million. The property owner later reopened the claim seeking $10 million, and the insurer subsequently made additional payments for approximately $345,000. However, Citizens’ adjuster estimated the actual cash value and replacement cost value of the policyholder’s loss to be in the $5.5 to $6.5 million range.

dbr-logo-300x57The property owner eventually sued in 2007 seeking prompt payment of the allegedly undisputed amount of $6.4 million and asking the court to compel Citizens to engage in the appraisal procedures called for under the policy.

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Changes and shakeups on community association boards of directors are common in Florida, and since the legislature has imposed term limits for association directors, communities are likely to see an even greater level of transitions to new board members in the years to come.

While it is still common to see the same directors serve year after year on association boards – mainly due to lack of participation – this practice does not present an ideal scenario for change. In a perfect world, board transitions should take place incrementally over time, enabling new board members to get up to speed on all the matters that are currently pending before the association with the help and guidance of experienced incumbent directors.

meet-300x166Wholesale changes to replace entire boards with new directors are never the best approach, yet unfortunately such total transitions do occur from time to time. Whether it is a board recall after a questionable election or a total overhaul election following some tempestuous controversy implicating the prior board, the new norm is entirely new boards comprised of completely novice board members taking over control from one day to the next.

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Nicole-Kurtz-2014-200x300The firm’s Nicole R. Kurtz authored an article that was featured as the guest commentary column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “New Laws Spurring Florida Community Associations to Implement E-Voting, Websites,” focuses on the recent changes in state law allowing community associations to implement electronic voting and requiring condominium associations with 150 units or more to have a website containing digital copies of certain official records.  Her article reads:

. . . The condominium association website laws mandate that compliant websites should have been operational as of Jan. 1 of this year. The laws call for association websites that are accessible only to unit owners and employees where certain notices, records and documents are posted. These must include the declaration of condominium, bylaws, articles of incorporation, rules and regulations of the association, as well as all executory contracts or documents to which the association is a party, or under which the association or unit owners have an obligation or responsibility.

dbr-logo-300x57Condominium association websites must also feature the association’s annual budget and proposed annual budget; financial reports; monthly income or expense statements; copies of bids, or summaries of bids, exceeding $500; association meeting notices, and board member certification forms.

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Condominium associations and HOAs throughout South Florida as well as across the country are seeking effective responses to the problem of short-term rentals that are in violation of their rules and restrictions. These unauthorized rentals, which have become prevalent with the growth of Airbnb and other online home-sharing platforms, can create a revolving door for guests with none of the prior screening and background checks that are typically performed for new residents and tenants.

As many associations have already realized, enforcing rules and restrictions against short-term rentals can be very challenging. Savvy unit owners have been known to sneak their transient guests into properties by advising security that their visit is authorized.

As such, enhanced vigilance and guest-screening measures have become necessary, and many associations have developed and implemented new registration forms for use with guests and tenants along with written assurances and noncompensation statements indicating they are not paying for their stays.

sout-300x200That may not go far enough for some associations with owners who are highly determined to rent their units. For some, it has become necessary to retain a private investigator to gather and document incontrovertible proof that restricted rentals are taking place. Licensed private detectives can effectively investigate homeowners and tenants in violation of association bylaws and CC&Rs that prohibit turning units into short-term vacation rentals. Also, court actions may become necessary against some unit owners who flout the rules, and the evidence obtained by these investigators as well as their testimony can be very helpful in these proceedings.

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