Condominium Association Law

July 30, 2023

Miami Herald Column: “After Surfside Condo Collapse, Group Recommends Key Condo-Safety Measures, Financial Reforms”

The firm’s latest Miami Herald “Real Estate Counselor” column was authored by shareholder Laura Manning-Hudson and appears in today’s edition of the newspaper. The article, which is titled “After Surfside Condo Collapse, Group Recommends Key Condo-Safety Measures, Financial Reforms,” focuses on some recent major changes to the Community Associations Institute’s recommended condo-safety policies and reforms. Her article reads:

. . . CAI, which is the leading organization representing the interests of community associations, revealed that it now recommends statutorily mandating reserve studies and funding for all community associations.

For nearly 40 years, the organization’s recommended public policy called for leaving reserves funding and studies up to the individual associations, rather than mandates in state law. That began to change after Surfside when it convened three specialized task forces to explore changes to laws and best practices that could help to prevent a similar disaster.

The task forces recommended that CAI review and update its reserve studies and funding public policies, which were initially established in 1983 and last updated in 2012. The organization has now acted on that suggestion, and the changes go well beyond the call for new state mandates.

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June 18, 2023

Miami Herald Article on Investors Taking Over Condo Boards Features Insights from Roberto Blanch

by Siegfried Rivera

Siegfried Rivera

Firm shareholder Roberto C. Blanch provides vital input and insight into the issue of bulk buyer investors taking control of the condominium boards for aging local enclaves in a Miami Herald article on the topic in today’s edition of the newspaper. The article reads:

. . .The situation at the two-story building at 2033 Calais Drive is, in some ways, a reflection of forces resulting in steep costs for many South Florida condo owners. Those costs include inflation, ballooning insurance prices and a condo safety law that was enacted after the deadly Champlain Towers South collapse in Surfside and will require associations to maintain reserves for structural repairs by 2025.

Properties such as Fiorda’s 1959 building have become red meat for investors in North Beach, a gentrifying neighborhood full of aging coastal structures and one of the last Miami Beach slivers that some middle-class and working-class families can afford.

But the substantial, sudden cost increases at 2033 Calais Drive also reflect the tactic of investors taking over condo boards and making spending decisions with limited input from other owners who must also foot the bills. Condo associations in Florida have broad latitude to make financial decisions under a “business judgment rule” that protects directors from liability as long as they can show a reasonable basis for their spending, said Roberto Blanch, a South Florida condo lawyer.

“There is this gray area, I think — let’s call it this wiggle room — that might be enough to let them get away with some unsubstantiated or some uncorroborated increases,” Blanch said. “The board can always get away with saying, ‘We’re just spitballing here.’”

June 18, 2023

Miami Herald Real Estate Counselor Column: “Condo Owners Concerned by Rising Association Budgets Make for Ideal Committee Members”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald real estate column was authored by Michael L. Hyman and appears in today’s edition of the newspaper. The article, which is titled “Real Estate Counselor: Condo Owners Concerned by Rising Association Budgets Make for Ideal Committee Members,” focuses on the issues that are arising at Florida condominium associations due to the new milestone inspections and reserves requirements that lie in store as a result of last year’s condo-safety reforms. Budgetary and assessments increases are becoming necessary for most communities, and naturally this is triggering questions from impacted and concerned unit owners. Michael’s article reads:

For condominium association boards of directors, the manner in which they react and respond to any growing scrutiny from worried owners will be of pivotal importance.

In many communities, the best approach will be to embrace the heightened level of interest and participation in board meetings and matters, and to respond by inviting and recruiting the most ardent and capable owners to do their part by joining new or existing committees.

By enabling the most concerned and involved owners to participate in the planning process for associations’ coming new reserves and inspections requirements, boards of directors can demonstrate their commitment to full transparency and cooperation with their fellow unit owners. It sends the message that the community is committed to an all hands on deck approach to addressing and overcoming the challenges that lie ahead.

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May 1, 2023

Florida Senate Passes Bill Addressing Concerns Over Last Year’s Condo-Safety Reforms

by Laura Manning-Hudson

Laura Manning-Hudson

Florida condominium associations and those who provide them with expert guidance have experienced some confusion and questions over aspects of last year’s condo-safety reforms, and the state Senate has responded with the passage of key amendments to address some of these concerns. While a companion bill remains before the House, Senate Bill 154, which was passed unanimously, deals with the new requirements for inspections and financial reserves.

Under last year’s reforms, milestone inspections are required for buildings that have been occupied for 30 years (25 years if within three miles of a coastline), and additional inspections are required every 10 years thereafter. The new bill allows buildings within three miles of the coastline to be inspected after they have been occupied for 30 years, but it enables local officials to require inspections after 25 years of occupancy depending on “local circumstances, including environmental conditions such as proximity to salt water.” It also clarifies that the required milestone inspections apply only to residential condominiums and mixed-use buildings.

Florida-legislature2-300x169 If enacted, the bill would also allow local officials to extend inspection deadlines if building owners have entered into contracts with architects or engineers but have been unable to complete inspections in time. In response to complaints from associations over the lack of available qualified inspectors, it also permits for inspections conducted by design professionals working under engineers or architects as the registered professionals in charge.

April 9, 2023

Miami Herald Real Estate Column by Eduardo Valdes: “Takeaways From Ruling Over Dispute at Hollywood Condo”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column was authored by Eduardo J. Valdes and appears in today’s edition of the newspaper. The article, which is titled “Takeaways From Ruling Over Dispute at Hollywood Condo,” focuses on a recent decision over a dispute at the Hollywood Station Condominium by Florida’s Fourth District Court of Appeal that illustrates one potential outcome for community association lawsuits brought by concerned unit owners. His article reads:

. . . The case pitted Tara Ezer, a unit owner at the condominium and member of its association, against the association and six members of its board of directors. Her suit alleged that the directors violated the community’s bylaws by obtaining a loan without unit owner approval to fund material alterations to the common elements, and they misrepresented how the association would pay for the project.

Ezer’s lawsuit was a derivative action where one or more shareholders file suit in the name of a corporation against its officers and/or directors over its management/finances. The lawsuit sought an injunction to stop the alterations and requested the appointment of a receiver to manage the affairs of the condominium. It also sought damages from the defendant directors for breaches of fiduciary duties, civil conspiracy, and aiding and abetting fraud.

The case first arose in September 2020 when Ezer provided the board of directors with a letter summarizing her claims, which was followed by the filing of the lawsuit the very next month. In accordance with Florida law, the association responded to Ezer’s letter by commencing an investigation on the allegations to be led by an independent committee.

March 26, 2023

Miami Herald Real Estate Column by Michael Hyman: “Boca Condo Offers Case Study in Pitfalls of Prolonged Litigation for Associations, Owners”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column was authored by Michael L. Hyman and appears in today’s edition of the newspaper. The article, which is titled “Boca Condo Offers Case Study in Pitfalls of Prolonged Litigation for Associations, Owners,” focuses on the takeaways from the ongoing epic litigation involving the Boca View Condominium that has been covered by the Sun Sentinel. His article reads:

. . . This latest of several articles by the newspaper on Boca View’s litigation chronicles how unit owner Eleanor Lepselter is now asking the court to find the association in contempt and impose fines of $500 a day until it complies. It states that deadlines set by two court rulings for the association to produce the records have already passed, and the motion for contempt that was filed on Feb. 21 accuses the association of having no plan to release the records.

The case dates back to February 2019 when Lepselter submitted written requests to the association’s property manager seeking to inspect financial records for the four-story, 72-unit property that lies between the Intracoastal Waterway and Atlantic Ocean in Boca Raton. Her request stated she had appointed her attorney to conduct the inspection, and the attorney’s request cited a provision of Florida’s condominium laws requiring associations to make such records available to unit owners or their personal representatives.

The association responded by designating a time for Lepselter to inspect its financial records, but it refused to allow her attorney to accompany her. She challenged that decision by filing for arbitration with the state’s Department of Business and Professional Regulation, and the agency’s arbitrator found in her favor.

March 20, 2023

Florida Legislature Considering Bills Proposing Changes to Condo Safety Reforms, Construction Defect Lawsuits

by Roberto C. Blanch

Roberto C. Blanch

As the 2023 Florida legislative session gets underway, there are several bills impacting associations and real estate that our firm’s South Florida community association attorneys will be keeping a close eye on and discussing in our blog.

Senate Bill 154 and House Bill 1395

Perhaps the most important of these are Senate Bill 154 and House Bill 1395, which deal with issues such as inspections and condominium association financial reserves that were addressed in the condo safety reform law that was passed last May with the adoption of Senate Bill 4D during a special legislative session. Under the new law, inspections are required for buildings that have been occupied for 30 years — or 25 years if they are within three miles of a coastline. After these initial inspections, the buildings will have to go through the process again every 10 years.

If adopted, the new bills could result in changes to the time by which buildings, including those within three miles of a coastline, will have to be inspected. The two bills include different timeframes by which the initial milestone inspection may have to be performed (e.g., SB 154 triggering all such inspections at 30 years with discretion for local officials and authorities having jurisdiction to compel some at 25 years depending on “local circumstances, including environmental conditions such proximity to salt water”; or HB 1395 requiring the initial inspections at 25 years for all buildings regardless of proximity to salt water).

February 26, 2023

Miami Herald Real Estate Column by Christyne Santisteban: “Growing Condo Association Budgets Require Deft Touch by Directors, Property Managers”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column was authored by Christyne D. Santisteban and appears in today’s edition of the newspaper. The article, which is titled “Growing Condo Association Budgets Require Deft Touch by Directors, Property Managers,” focuses on how condominium associations should respond to the increased costs and financial pressures they are now facing. Her article reads:

. . . [M]any condominium associations are being forced to increase their annual budgets and augment their monthly dues, and/or to implement special assessments to pay for specific unexpected shortfalls.

Needless to say, anytime costs and collections go up dramatically, questions will arise from concerned owners over how their associations’ funds are being spent. That is why transparency and communications will play a key role for associations that are increasing their budgets and assessments.

The best approach for associations and their directors to adopt will be that of full disclosure and complete transparency, which actually begins by determining where cost-cutting adjustments could possibly be made. This may entail meetings and negotiations with key vendors.

Association directors should also schedule and hold discussions over such budgetary and collections increases at all the necessary board meetings that it takes to address owners’ questions and concerns.

February 20, 2023

Community Associations Institute’s Condo Safety Initiatives Recognized with Prestigious Public Affairs Council Award

by Roberto C. Blanch

Roberto C. Blanch

The Public Affairs Council, which is the leading nonpartisan association for public affairs professionals worldwide, recently awarded its 2022 Lobbying Strategy Innovation Award to the Community Associations Institute for the organization’s condominium safety policy response and initiatives.

In the aftermath of the horrific collapse of Champlain Towers South that claimed 98 lives, CAI released its Condominium Safety Public Policy Report based on the work of its special task forces to recommend changes to laws and best practices that may help both communities and legislators to better address building safety.

The participants in these task forces included engineers, insurance experts, building officials, local government leaders, property managers, attorneys, lenders, and others. Over the course of three months, more than 600 individuals devoted a great deal of time to discussions, surveys, interviews, and research to identify clear recommendations.

The resulting Condominium Safety Public Policy Report provided extensive policy positions and recommendations covering reserve studies and funding, building maintenance, and structural integrity. Since its release, CAI’s government and public affairs team has continued to conduct outreach to state legislators and their staff as well as key individuals in federal housing agencies.

February 12, 2023

Herald Column by Gary Mars: “National Media Focuses on Impact of Florida’s New Condo Safety Law on Association Budgets”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column is authored by shareholder Gary M. Mars and appears in today’s edition of the newspaper. The article, which is titled “National Media Focuses on Impact of Florida’s New Condo Safety Law on Association Budgets,” begins by discussing a recent segment on Fox Business Network’s Mornings with Maria show about the financial repercussions of Florida’s new condominium safety law on the state’s condo associations and their unit owners. It reads:

. . . The host and panelists point out that the mandates for reserves and engineering safety inspections/reports represent new expenses that will need to be borne by condo owners. Their message to recent buyers or those who may be considering a condo in the Sunshine State: Do your homework and come to terms with the fact that the current monthly association dues for many properties are very likely going to see substantial increases in the near future.

Panelist Mitch Roschelle also bemoans that after the Champlain Towers South tragedy, many condominium owners in the state are no longer willing to serve on their board of directors for fear of exposure to potential legal liabilities for their votes and decisions.

While it did paint a particularly gloomy outlook for the state’s condo associations and owners, this recent morning news show segment was not the first and certainly will not be the last of the national news media reports focusing on the coming increases in Florida condominium association budgets created by the state’s new safety reforms. There is no doubt that many properties are going to need to increase their monthly dues and/or enact special assessments to address immediate needs together with the coming inspections and reserves requirements.