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Articles Posted in Condominium Association Law

Gary-Mars-2021-2-200x300An article featuring insights from firm shareholder Gary M. Mars appears on the front page of today’s Sun Sentinel.  The article, which is headlined “Failed Condo Safety Bill Leaves Residents, Buyers in Limbo,” focuses on what is in store for condominium safety reforms from lenders and insurers after the measures before the Florida Legislature failed to pass during the 2022 session that ended last week.  The article reads:

. . . Some condo lawyers argue that it was too ambitious to expect that a sweeping safety bill could be passed in a short three-month legislative session.

“I know it was very, very ambitious legislation,” said Gary Mars, a condo lawyer at Siegfried Rivera in Coral Gables.  “It would have taken a lot of effort to get it through all of the machinations developing legislation of this type.”

He noted that not every building is in dire structural straits, or even old enough to be required to follow inspection rules such as the ones in Broward and Miami-Dade counties, which mandate deep-dive studies after 40 years.

Sun-Sentinel-3-21-22-print-page-1-1-100x300“I represent a lot of associations in buildings in their teenaged years,” he said.

“They’re getting sophisticated reports” from their engineers about deferred maintenance issues such as waterproofing, balcony restorations and painting, Mars said.  But the reports don’t cover structural issues.

“They may have wonderful reports, but those reports don’t give the association the ability to check the box” about the building’s overall condition, he said. “There’s not a perfect solution to this problem.”. . .

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The demands for increased access to condominium financial records and structural reports in Florida after the horrific Champlain Towers tragedy are leading to possible changes at the state and local levels, and they just led to a new local ordinance in Miami-Dade County.

On March 1st, the Miami-Dade Board of County Commissioners unanimously approved an ordinance establishing a searchable database for financial statements and structural reports, among other information and documentation, for residential community associations located in Miami-Dade County. The new ordinance requires community associations in Miami-Dade County, including all condominium, cooperative, and homeowners’ associations, to upload certain documents and information to the county’s database, along with a written registration with the Miami-Dade County Department of Regulatory and Economic Resources, by Feb. 1st of each year, beginning on February 1, 2023.

MCboard-300x169The ordinance provides that the documents uploaded to the database will be publicly accessible on the county’s website, and will also be searchable. Some of the documents to be attached to the annual registration submitted to the county include the following: the name of the community association; the name and contact information for the association’s property manager or other designated agent; a list of all officers and directors of the association, including their contact information; a link to the association’s website, if any; a legible copy of the association’s governing documents; a list containing the association’s planned capital projects from the date of registration through February 1st of the following year; a copy of the association’s current budget and financial statements, including any applicable current or approved special assessments; and all reports issued within the last 10 years on the structural status of the property governed by the association, including recertification reports, if applicable.

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Gary-Mars-2021-2-200x300The firm’s latest “Real Estate Counselor” column in the Miami Herald authored by Gary M. Mars is featured in today’s Neighbors section and titled “Electric Vehicle Chargers At or Near Top of Many Condo Community Wish Lists.”  The article focuses on a state law that was ratified last year to facilitate the addition of shared electric vehicle charging stations as an amenity for the use of owners and guests in Florida condominium communities.  It reads:

. . . For condominium dwellers, the lack of access to electrical charging in congested parking garages with assigned spaces initially proved to be a significant challenge for those with EVs. Wisely, the Florida Legislature passed several new laws in recent years to address the installation of charging stations in condominiums, and the law that went into effect last July to facilitate the deployment of shared community EV charging stations may be the most important yet.

Herald-GMars-2-27-22-print-clip-for-blog-101x300The law clarified that the installation of shared EV charging stations for a community’s owners and guests can be ratified via a simple vote of a condominium association’s board of directors, and it would not require a vote and approval of all the unit owners as is needed for projects involving what are called “material alterations.” The prior new charging-station laws addressed installations to be paid for and used by individual unit owners at their assigned parking spaces.

The problem with that model is that very often there is inadequate electrical infrastructure to install such charging stations without it becoming exorbitantly expensive. EV charging requires heavy-duty electrical cables and equipment that are capable of handling the high-capacity loads necessary to fully charge vehicles in just a few hours, as opposed to 12 hours or more using standard 110-volt outlets. Plus, the electrical consumption needs to be metered and billed to the owner, also requiring additional equipment and expenses.

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Oscar-Rivera-2015-hi-res-200x300The latest edition of the firm’s exclusive Real Estate Counselor column in the Miami Herald appeared in today’s Neighbors section and was authored by managing shareholder Oscar R. Rivera.  Titled “Condo Terminations Take Hold as an Exit Strategy for Owners at Aging Towers,” the article focuses on the legal termination of older condominium communities and buyout of all the unit owners to make way for new construction.  Oscar writes that the owners of units in aging condo communities near the water are receiving more offers from industry-leading developers than ever before, and some of these offers are coming just as the 40- and 50-year recertifications for their towers come due.  His article reads:

. . . The costs for repairs, even at the 40-year mark, can be too much for many unit owners to afford. Some associations’ financial reserves are woefully inadequate, or even nonexistent, so they would need to impose significant special assessments to pay for major repairs.

Herald-ORivera-print-clip-2-13-22-300x300In such cases, offers that are sometimes two to three times over market value for each unit can become a very appealing exit strategy for owners, and Florida has a legal mechanism for such condominium terminations that has proven to be effective. Terminations led to the development of the Armani/Casa tower in Sunny Isles Beach and the Una Residences now under construction in the Brickell area.

For developers, the math is even simpler than that of the unit owners. Once the value of the land for redevelopment becomes greater than that of the combined property values of all the existing units in a community, a condominium termination presents a fruitful opportunity.

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When disagreements and disputes arise amongst those who serve on community association boards of directors, emotions can run high in light of the impactful nature of the decisions made by such directors.  However, as association directors are duty bound to act in the best interests of their community and its owners, they should seek to avoid engaging in personal spats and attacks with one another and the owners that could lead to potential legal liabilities for the association.

One of the best examples of the dangers of public rows between association directors and unit owners is now playing out at the Porta Bella Yacht and Tennis Club in Boca Raton (pictured below).  As chronicled in a recent report from www.BocaNewsNow.com, homeowner Samuel Loff filed a lawsuit against the association premised upon an allegation that its board members made inappropriate and inaccurate accusations against him as part of a retaliation campaign.

pbella-300x255The lawsuit alleges that the community’s board of directors retaliated against Loff for an email that he sent to them complaining about security shortfalls and announcing his candidacy for a board seat.  Shortly after his email, the suit alleges that the board began accusing him of making unwanted advances to a female security guard, and it later put those accusations in writing via an email distributed to all the unit owners.

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A report that aired in late November on 7News (WSVN-Fox) in South Florida focused on a local renter in a dispute with her condominium association over her motorcycle. While the property’s rules ban motorcycles, the tenant had apparently been explicitly told she would be allowed to keep and park her motorcycle at the property prior to signing her lease. Three years later after she’d been using and parking her motorcycle at the property without complaint, she received a notice from the association indicating that it had to go or it would be towed.

It appears that the tenant’s response was to call or email the TV station’s tip-line, and the end result was another thoroughly investigated and highly informative “Help Me Howard” segment by its senior reporter Patrick Fraser and long-time legal expert Howard Finkelstein.

The report chronicles how Alexa Polcyn had been allowed to use and keep her motorcycle at the property for over three years until the association suddenly began “hassling our landlord about it.” She tells Fraser that she had noticed the restriction on her lease but was expressly told by the association that her motorcycle was not going to be an issue.

wsvn-logoThe association was apparently true to its word until three years later in late 2021 when it decided it would begin enforcing its motorcycle ban. It issued her a written notice that the motorcycle had to go, so the question for the station’s legal expert was whether the association could now change its mind on an exception to its rule that it had previously granted?

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Gary-Mars-2021-2-200x300When the editors of the Miami Herald decided they would like to feature a new column to provide timely legal knowledge on real estate topics for the readers of its Neighbors community news section that appears on Sundays, they turned to the attorneys of Siegfried Rivera as the exclusive contributors for the newspaper’s new Real Estate Counselor.  The inaugural edition of the new monthly column authored by the firm’s Gary M. Mars appears in today’s edition and as is titled “All Eyes on Florida Legislature for High-Rise Condo Safety Reforms.”  It focuses on the status of reforms after the horrific tragedy of the Champlain Towers South collapse.  Gary’s article reads:

. . . So far, the most significant changes have come at the federal level from Fannie Mae and Freddie Mac, two government-sponsored companies that acquire residential loans to offer mortgage-backed securities for investors in the secondary market. They both have a massive influence over the terms for mortgages offered by lenders, and they recently released new requirements for loans for residences in high-rise buildings with five or more attached units to meet their standards for acquisition. The changes, which are now being adopted and implemented by major residential lenders, place a heavy focus on structural and financial stability, and they reinforce the importance of meticulous documentation of all appraisals, meeting minutes, financial statements, engineering reports, inspection reports and reserve studies.

Miami-Herald-1-23-22-1006x1024Fannie’s new requirements are already in effect, while Freddie’s will take effect for all mortgages with settlement dates on or after Feb. 28. Its new standards will exclude from eligibility any condo loans for units in communities with what it considers to be critical repair needs, which are defined as those that significantly impact a community’s safety, soundness, structural integrity or habitability, and/or that impact unit values, financial viability or marketability. These include all life-safety hazards, violations of any laws or ordinances, building code violations, fire-safety deficiencies and others.

Subsequently, properties that have already identified elements requiring attention and begun their remediation efforts may become ineligible until such work is completed.

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RobertoBlanch_8016-200x300The lead article at the top of today’s front page of the Sun Sentinel titled “Collapse Drives Tougher Loan Standards” begins with quotes from firm shareholder Roberto C. Blanch and goes on to include quotes from his recent blog post on the topic.  The article, which also appears in the Miami Herald’s website, focuses on the new condominium loan requirements from Fannie Mae and Freddie Mac, the government-sponsored enterprises that make mortgages available to low- to moderate-income borrowers.  It reads:

. . . Reacting to last year’s tragic collapse of the Champlain Tower South in Surfside, Fannie Mae and Freddie Mac, the two companies that back a majority of residential mortgages in the U.S., are scrutinizing deferred condo maintenance issues before approving loans generated by banks and other lenders.

Generally, they will not back loans for condo and co-op units if their buildings have put off major repairs, industry experts say.

Both companies have issued temporary requirements for condo and co-op projects to ensure that buildings are structurally sound, and that associations that govern them have the money to pay for repairs.

Sun-Sentinel-RBlanch-1-21-22-print-clip-1-1024x519The upshot, legal and real estate analysts say, is that some condo buyers around the nation may need to find other sources if they want to finance their purchases. The rules could make it harder for some owners to sell, and place more pressure on condo inventories already tightened by heavy demand.

“It is without a doubt a more heightened scrutiny than what was previously being requested,” said attorney Roberto C. Blanch, who specializes in community association law at the Siegfried Rivera firm in Coral Gables. “The focus is on ensuring the safety and structural soundness and viability of buildings.”

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As my fellow firm partner Laura Manning-Hudson wrote recently in this blog, Fannie Mae’s new condo-safety financing requirements for condo buyers are now in place. Following suit, federal mortgage buyer Freddie Mac has also announced similar requirements for condominium loans to meet its standards for acquisition for its mortgage-backed securities for investors. Both of these changes are heralds of the stricter mandates that condominium associations are likely to see as a result of the horrific tragedy of the collapse of the Champlain Towers South in Surfside, Florida.

Freddie Mac’s new requirements, which take effect for all mortgages with settlement dates on or after Feb. 28, exclude from eligibility for acquisition any loans for units in condominium communities with what it considers to be critical repair needs. Subsequently, properties that have already identified elements requiring attention and begun their construction and remediation efforts may become ineligible until such repairs and renovations are completed.

fmac-300x300The federal agency defines critical repairs as those that significantly impact a community’s safety, soundness, structural integrity or habitability, and/or that impact unit values, financial viability or marketability. These include all life-safety hazards, violations of any laws or ordinances, building code violations, fire-safety deficiencies, and others.

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CSantisteban-200x300The firm’s Christyne D. Santisteban authored an article that was featured as the guest commentary column in the online edition of today’s 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 its print edition.  The article, which is titled “Condo Garage Exit Alarm Creates Quite a Stir, But Only Requires Simple Solution,” focuses on an unusual condo dispute controversy that recently made local headlines in the Tampa Bay area.  It involved a parking garage exit pedestrian-warning alarm at a St. Petersburg, Florida, condominium tower that can be heard for several blocks and has drawn a nuisance lawsuit from a unit owner of a neighboring building.  Christyne’s article reads:

. . . The report in the Tampa Bay Times, which was followed by an editorial from the daily newspaper suggesting a simple solution, is sadly yet another example of an association ignoring an issue until it becomes a five-alarm fire, and then fanning the flames rather than easily and effectively putting them out.

dbr-logo-300x57The Times article focuses on Fred Sherman, who has apparently become extremely knowledgeable about the garage exit pedestrian-warning systems used by the buildings in his downtown St. Petersburg neighborhood. He demonstrates to the newspaper’s reporter that one has a voice that says “attention, vehicle exiting,” another has a light with a speaker that says “car coming,” and a third has a flashing device with some audio.

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