Articles Posted in Condominium Association Law

hands-and-breaking-handcuffs_shutterstock_58240561-300x184In the pursuit of association fraud and embezzlement, one of the most important aspects of the major legislation that was adopted earlier this year is the law’s effort to curb conflicts of interest by association board members and officers.

The new law provides that presumptions of conflicts of interest exist in the following circumstances:

  • A director, officer or one of their relatives enters into a contract for goods or services with the association.
  • A director or officer . . . holds an interest in a corporation, LLC, LLP or other business entity that conducts business with the association or proposes to enter into a contract or other transaction with the association.

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Florida condominium assWebsite-300x157ociations with 150 or more units, which do not manage timeshare units, must have an independent website or web portal by July 1, 2018, according to Section 718.111, Florida Statutes. These websites or web portals can either be wholly owned and operated by the association, or operated by a third-party provider.  It is important that associations that meet the 150+ unit prerequisite begin to take the necessary steps to ensure that they are in compliance with the new law by the July 1st deadline.

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Changes in condominium association laws that were recently enacted with an aim to curb fraud in associations seem to have had a strong impact in increasing the general awareness of the problems facing Florida condo communities.  A few major media outlets have followed up on the news of the law with reports about arrests involving South Florida associations.

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Several months ago the Miami Herald reported that the administrator of an Aventura condominium named Admirals Port had been arrested on charges of accepting thousands of dollars in bribes and stealing cash from the building’s laundry machines.  Donovan Staley was charged with organized fraud, grand theft and the use of a phone to plan a crime, and he could face up to five years in prison.

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Does your neighbor’s loud music, barking dog or late-night visitors keep you up at night? If you live in a condominium building, your answer is probably ‘yes.’ A recurring complaint that we receive from condominium unit owners is that they are able to hear their neighbors through shared walls, followed by the frustration of feeling as if there is no recourse. Here are some tips on how to deal with noisy neighbors:

Take a minute to thinNoisy-Neighbors-300x157k: Is this excessive noise?

Depending on the materials that were used to build your condominium building, it is possible that the walls are to blame for hearing everything your neighbor says or does. From routine noises, such as walking or watching television, to noisier activities, such as blasting music or operating loud appliances, the building’s lack of insulation may be the reason that noises become magnified in your place of retreat. Take a second to think about whether or not the noise you are stewing about is intentional. Recognizing that your neighbor may be hearing the same type of commotion coming from your unit may provide a different perspective. With that said, if your neighbor is creating excessive noise, and frequently at odd hours of the day, feel free to take the next step.

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Term-LimitsAmong the major changes to Florida’s condominium laws in 2017 is a new provision mandating term limits for board members.  The new legislation marks a significant departure from the past policies for most associations pertaining to the tenures of their board members, and it only applies to condo associations and not HOAs.

The newly codified law allows for board members to serve two-year terms, if that is what is called for in their association’s bylaws.  However, a board member may not serve more than four consecutive two-year terms.  The only exemptions to this cap would be granted to candidates who achieve a 2/3 super majority of the total voting interests and to associations that do not have enough eligible candidates to fill the board vacancies.

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Hurricane Irma is now a category five storm that is predicted to impact the state of Florida by late this week.  As all community associations prepare their properties for the storm, they should also take specific measures to prepare for any insurance claims that may arise.  Below is an excerpt from an article by firm partner Laura M. Manning-Hudson on these pre-storm insurance recommendations that was posted in this blog earlier this year:

At the start of every hurricane season, association board members or property management should photograph and/or video all of the main public areas of the condominium property.  These images could become vitally important in the event that a storm strikes and claims are filed.   Associations should also take the time to store copies of their wind, flood and property insurance policies in waterproof cases in a secure location.  If possible, digital copies should also be stored in several computers and devices.

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Florida community associations, just as with all other property owners in the state, can be held liable for crimes committed on their properties.  Associations and other property owners owe a duty to their residents and guests to undergo reasonable steps to protect against foreseeable crimes.

There have been cases over the years of Florida associations being sued by the victims of crimes that took place in their community for allegedly failing to implement adequate security measures.  Some of these suits, especially those involving severe injuries, have been resolved in considerable rulings or settlements in favor of the victims.  These awards, combined with the litigation costs and the possibility of increased insurance premiums, can be financially disastrous for many associations.

ggate-300x225Exactly what is considered reasonable security is the key question before the courts in these negligence claims. Other considerations include whether the crime that took place was foreseeable.  For instance, in a gated high-end community, residents and guests may expect a greater level of security, so some might argue that such community is to take measures at a higher standard.

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The outcome of this year’s legislative session evoked a lot of confusion from property managers and boards of directors serving the community association industry.  As a result, we have received a lot of requests from our readership asking for clarification on some of the laws that were enacted. In this post, we will be tackcc-article-photo-fb-3-300x158ling the debit card provision in an effort to clear up some misconceptions about the new legislation.

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The new Florida law that establishes criminal penalties for association fraudsters should help many associations to contend with suspicious and irregular activities by unscrupulous board members.

Association boards of directors control the purse strings for their condo communities, and as such they have always made for extremely appealing targets for fraudsters who conspire to assume control via their annual elections.  In a Las Vegas case, a U.S. Justice Department investigation revealed that 11 associations were defrauded of tens of millions of dollars in a board of directors takeover scheme from 2003 to 2009.  Forty-one defendants were convicted of rigging board elections through such tactics as traveling to Mexico to print phony ballots, using the master key at a condominium complex in order to remove ballots from mailboxes, and retrieving discarded ballots from condo dumpsters.

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After several years of failed attempts, the estoppel bill has become law in Florida and mandates major changes to the way community associations in the state prepare estoppel letters (also called estoppel certificates), which are legal documents detailing the amounts owed by a unit owner prior to the sale of their residence.

Below are the changes required by the new law:

  • Reduces the time associations have to respond to written or electronic requests for estoppel certificates from 15 days to 10 business days.
  • Requires each association to provide on its website the identity of a person or entity (and their street or e-mail address) to which requests for estoppel certificates may be sent.
  • Provides that estoppel certificates must be submitted by hand delivery, regular mail, or e-mail to the requestor on the date of issuance of the certificate.
  • Changes authorized association signatories for estoppel certificates from officer or agent of association to any board member, authorized agent, or authorized representative of the association, including authorized employees of the association’s management company. Continue reading