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October 24, 2022

Firm Secures Jury Verdicts Against Insurance Carriers

by Siegfried Rivera

Siegfried Rivera

A significant part of our firm’s work focuses on representing property owners in claims against their insurance carriers. We regularly counsel and represent property owners, including condominium associations, in claims involving weather/wind and nonweather water damage, fire/smoke damage, and damage to common elements such as pools, parking garages, elevators, roofs, etc.

Only rarely do such cases go to trial, but in recent months our firm’s insurance attorneys secured jury verdicts in favor of claimants involving very typical nonweather water losses. Shareholders Susan C. Odess, Stuart Sobel and Nicholas Siegfried, together with associate Zachary T. Smith, recently pursued cases against State Farm and Universal over their refusal to adequately cover damages stemming from broken water pipes and leaks.

The three Miami-Dade Circuit Court jury verdicts we secured in these suits are excellent examples of the types of cases that our firm’s insurance attorneys successfully handle on behalf of our clients. We will now pursue the recovery of our attorneys’ fees and costs against these carriers. Of equal import, we will be filing separate actions on behalf of the policyholders for all of the prevailing cases to assert a claim for bad faith. While these claims involved homeowners, we often secure similar results for condominium associations and HOAs for comparable water-loss claims.

October 23, 2022

Miami Herald Real Estate Column by Michael Hyman: “3 Reports of Association Fraud on Same Day Show Importance of Prevention, Vigilance”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column is authored by shareholder Michael L. Hyman and appears in today’s edition of the newspaper. The article, which is titled “3 Reports of Association Fraud on Same Day Show Importance of Prevention, Vigilance,” focuses on news reports from across the country that made headlines on Sept. 26 of three cases of apparent community association fraud, theft and embezzlement. It reads:

. . . The reports began in Minneapolis when several local outlets as well as the Associated Press chronicled how a California woman had been indicted in federal court for embezzling more than $1 million from several local HOAs. Mai Houa Xiong, 47, of Fresno, California, was charged with wire fraud, aggravated identity theft, making and subscribing a false return, and other charges.

Xiong, who worked for an unnamed Minneapolis property management company from May 2013 – Oct. 2021, “had nearly unfettered access to the victim homeowner’s associations’ financials, bank accounts, vendor and contractor payments, and bookkeeping systems,” according to a U.S. Attorney’s Office news release. She is accused of devising and executing a scheme in which she used her access to the HOAs’ bank accounts to transfer money directly into her personal bank accounts by mislabeling and disguising the electronic transfers as legitimate expenses. She is even charged with using her signatory authority to make cash withdrawals from the HOAs’ accounts, including some withdrawals after she had been fired from the property management company in July 2021.

October 10, 2022

Oscar Rivera Quoted in Sun Sentinel Article on Hurricane Ian Headlined: “Survivors’ Decision: Rebuild or Relocate?”

by Siegfried Rivera

Siegfried Rivera

Oscar R. Rivera, our firm’s managing shareholder, was the first and the penultimate local business leader quoted in the Sun Sentinel‘s article on the repercussions of Hurricane Ian featured on the front page of today’s edition of the newspaper. The article, which is titled “Survivors’ Decision: Rebuild or Relocate?”, focuses on the consequences of the devastating storm for residents and business owners throughout the impacted areas. It reads:

Hurricane Ian gave southwest Floridians plenty of reasons to leave: It killed at least 115 people, crushed countless homes and businesses, turned area waterways into toxic soups and caused at least $50 to $65 billion in damages.

But as residents and business owners assess the devastation and reach for insurance policies that may or may not cover all of their losses, there appears to be an emerging consensus for rebuilding, and not relocating to areas perceived to be less vulnerable to catastrophic storms.

It is a mindset, analysts say, driven by a long-standing affinity for Gulf Coast living, a strong resolve among public and private sector interests, and a growing tolerance of devastating hurricanes as life disruptors.

“We have already been contacted by numerous clients and potential clients,” said Oscar Rivera, managing shareholder of the Siegfried Rivera law firm in Miami, which represents condominium owners, associations and commercial real estate investors. “Everyone we have spoken to is committed to rebuilding.”. . .

October 9, 2022

Miami Herald Real Estate Column by Nicole Kurtz: “Community Association Disputes? Here’s How to Minimize and Avoid Them”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest “Real Estate Counselor” column in the Miami Herald is authored by shareholder Nicole R. Kurtz and appears in today’s edition of the newspaper. The article, which is titled “Community Association Disputes? Here’s How to Minimize and Avoid Them,” focuses on the most common types of association clashes, the damage they can do, and some of the best approaches for associations to steer clear of them. It reads:

. . . [F]or most communities to realize the benefits that stem from effective association oversight, some disputes are inevitably bound to arise from time to time. Some of the most typical association clashes involve:

Matters arising from compliance with state laws and municipal regulations;

Financial issues, including collections, special assessments and reserves;

Rule enforcement, including violations, suspensions and fines;

Architectural review applications and decisions;

Amendments to governing documents;

Maintenance of community amenities, and rules governing their use;

A perceived lack of transparency, including ineffective communications of association rules, changes and operational procedures to owners and residents;

Seemingly inadequate responses to residents’ concerns and complaints;

Meetings and their discussions, agendas and notices;

Devising, implementing and enforcing new rules and restrictions;

Renovations and alterations to the common elements or common areas;

Maintenance of the common elements and areas;

Board of director election irregularities and concerns;

Vendor contracts.

The most effective community association boards of directors understand their business decisions will inevitably lead to disputes from time to time, but they should seek to avoid perceived minor or frivolous disputes whenever possible. They should also try to minimize or avoid significant disputes that may negatively impact the association’s operations and sow discord within the community.

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September 25, 2022

Miami Herald Real Estate Law Column Authored by Roberto Blanch: “HOA Policies on Signs, Flags Require Diligent Discussion and Deliberation”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column was authored by partner Roberto C. Blanch and appears in today’s edition of the newspaper. The article, which is titled “HOA Policies on Signs, Flags Require Diligent Discussion and Deliberation,” focuses on the issues surrounding yard signs and flags in HOA communities that often arise prior to presidential and midterm elections. Roberto’s article reads:

. . . Many community associations have already established rules covering yard signs, flags and displays, as they have been a long-time cause of questions and concerns in gated enclaves. Even the Florida legislature weighed in on the matter years ago by enacting a state law prohibiting HOAs from banning respectful displays of the U.S. flag as well as the state flag and those of the branches of the armed services.

For community associations that have not yet addressed policies regarding yard signs and displays, taking a proactive approach may well be the most effective option for such a significant and recurring issue. Enacting policies could help to minimize the potential for discord that may arise if neighbors with opposing viewpoints try to outdo each other with walls of signs at their property lines. Not only would such displays be unsightly; they could also significantly compromise harmony within the community and the adherence to mutual respect among fellow owners/residents.

The place to start, as with most matters involving the enacting of new rules and restrictions, is with a careful review of an association’s governing documents by qualified legal counsel. The terms of an association’s declaration, by-laws and articles of incorporation — together with an analysis of the applicable statutes — will guide the decision establishing the approach which should be taken to make the changes. While at times it may be necessary to conduct and obtain votes of a community’s owners to amend the restrictive covenants, some restrictions may be more easily achieved by having the board of directors modify existing rules or enacting new rules.

September 11, 2022

Miami Herald Real Estate Column by Shari Wald Garrett: “Drones Can Get Tempers Flying High in HOA Communities”

by Siegfried Rivera

Siegfried Rivera

The latest edition of the firm’s “Real Estate Counselor” column is authored by partner Shari Wald Garrett and appears in today’s edition of the Miami Herald. The article, which is titled “Drones Can Get Tempers Flying High in HOA Communities,” focuses on the issues stemming from the use of drones in communities with associations and the types of restrictions that many communities are putting in place. Her article reads:

. . . Owners and residents in HOA communities across the country have expressed concerns over drones equipped with cameras being capable of surveilling their properties and backyards. There have also been outcries that have made local media headlines over associations’ use of drones.

To address these issues, the Florida legislature enacted in 2015 the “Freedom from Unwanted Surveillance Act,” which bans the use of drones “equipped with an imaging device to record an image of privately owned real property or of the owner, tenant, occupant, invitee, or licensee of such property with the intent to conduct surveillance on the individual or property captured in the image in violation of such person’s reasonable expectation of privacy without his or her written consent.”

The law further clarifies that a person is presumed to have a “reasonable expectation of privacy on his or her privately owned real property if he or she is not observable by persons located at ground level in a place where they have a legal right to be, regardless of whether he or she is observable from the air with the use of a drone.”

Interestingly for municipalities and possibly also for licensed community association managers acting as agents of associations, the law does not prohibit the use of a drone “by a person or an entity engaged in a business or profession licensed by the state, or by an agent, employee, or contractor thereof, if the drone is used only to perform reasonable tasks within the scope of practice or activities permitted under such person’s license.”

September 4, 2022

Miami Herald Column by Michael Clark and Susan Odess: “Don’t Let Down Your Guard: Here Are Some Hurricane Prep, Recovery Reminders for Storm Season’s Second Half”

by Siegfried Rivera

Siegfried Rivera

Shareholders B. Michael Clark, Jr. and Susan C. Odess authored the latest edition of the firm’s “Real Estate Counselor” column appearing in today’s Miami Herald. The article, which is titled “Don’t Let Your Guard Down: Here Are Some Hurricane Prep, Recovery Reminders for Storm Season’s Second Half,” focuses on the types of activities and initiatives that condominium associations along the coast and other Florida community associations should be taking in advance of as well as in the aftermath of a severe hurricane. Their article reads:

. . . Given the precarious condition of the Florida insurance marketplace today, it behooves property owners and community associations throughout the state to take the upmost precautions to prepare for any storms and recoveries as the season draws to a close in November.

For condominium associations on or near the coast, they should consider pre-negotiated service contracts with vendors who typically assist in the aftermath of a storm. This can include water restoration companies to mitigate flooding, debris removal companies, and security providers.

If a storm is approaching, boards of directors should begin by ensuring they have up-to-date paper rosters of the current residents stored at a secure and accessible location. Accompanying it should be a copy of the governing documents, a certified copy of the insurance policy, bank account information, service provider contracts, and contact information for all residents, staff and vendors.

It is also highly advisable to take date-stamped videos and photos of the entire property, including all mechanical and common elements.

August 21, 2022

Miami Herald Column by L. Chere Trigg: “Community Association Officers, Watch Out for Fraud: If You See Something, Say Something”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column appears in today’s edition of the newspaper and is authored by shareholder L. Chere Trigg. The article, which is titled “Community Association Officers, Watch Out for Fraud: If You See Something, Say Something,” focuses on preventing fraud and theft, as well as responding to them whenever they are suspected, in condominium associations and HOAs. Her article reads:

. . . In the community association setting, fraudsters can come in many forms including directors, property managers, bookkeepers, accountants, attorneys, contractors and others. Those who commit fraudulent acts typically pose as experts and work diligently to gain the trust of their victims, then these unscrupulous individuals deploy their schemes and begin to syphon funds from association accounts.

In many ways, modern technology has exposed associations to new sources of potential fraud and financial abuse. The deceit involved in some cases of fraud can be immense, and it often takes much more than cursory reviews of financial and account statements by board members and property managers to determine whether something is amiss.

Some of the telltale signs of potential malfeasance include unusual payments for unbudgeted purchases, payments remitted to unknown vendors, and/or unauthorized signatures appearing on checks or other official documents. However, the variety of potential schemes, which can also include bribes and kickbacks involving unscrupulous vendors, demands the upmost vigilance for effective prevention and detection.

August 14, 2022

Miami Herald Real Estate Law Column by Evonne Andris: “The Costs of Community Association Lawsuits, And How to Avoid Them”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column authored by partner Evonne Andris appears in today’s edition of the newspaper and is titled “The Costs of Community Association Lawsuits, And How to Avoid Them.” Evonne’s article focuses on the potential impacts of community association litigation, and the benefits of alternative options for resolving association disputes. It reads:

. . . In such an environment where emotions can run high, boards of directors and the owners they represent should always strive to let cooler heads prevail. While in certain situations litigation is a necessary tool to assist in the governance of a community, it is a tool that should be used with the understanding that escalating conflicts into litigation is almost always detrimental for both sides in association disputes, including those who eventually prevail in the matter.

Litigation is a disruptor of community harmony, and it could lead to very public squabbles that often make the local news. Such coverage can have long-term negative impacts for communities with their indefinite online lifespan via internet searches under a community’s name, making them potentially detrimental for property values.

Real estate brokers can also become keenly aware of communities that are rife with conflicts, and they will steer their clients elsewhere. Some lenders will also inquire about pending litigation in their loan pre-approval questionnaires, and they may become reluctant to approve mortgages for prospective buyers in communities involved in potentially significant lawsuits, or in those that regularly attempt to enforce their rules, policies and decisions through litigation as opposed to other forms of dispute resolution.

August 2, 2022

Miami Herald Op-Ed Column by Gary Mars: “Federal Condo-Safety Financing Proposal Can Prevent More Tragedies Like the Surfside Collapse”

by Siegfried Rivera

Siegfried Rivera

For the second time in the last several months, firm shareholder Gary M. Mars authored an op-ed editorial column in the Miami Herald on a vital new piece of federal legislation to provide for condo-safety financing options for condominium associations and their unit owners. Gary’s new article, which is featured in today’s op-ed Opinion page of the Herald, discusses what he calls a perfect storm of rising insurance, inspections, repairs and reserves expenses that could jeopardize the finances of many South Florida condominium associations and force some owners to either sell or face the prospect of foreclosure. It reads:

. . . A recent Palm Beach Post article chronicled how the Portofino South Condominium in West Palm Beach received an 82% increase from its insurance carrier, while its directors and residents had expected an increase of about 25%, which the community got in 2021.

Mary McSwain, 67, who bought her one-bedroom unit in January, said her monthly dues are going from $914 to $1,347.

For most communities, increased insurance costs will come first, but increases created by the provisions of the state (and some county) mandates for structural inspections, repairs and reserve funding are sure to follow. Those provisions do not start until 2024 for the affected buildings, but association boards would be well advised to begin securing and vetting offers from qualified professionals for their long-term budgetary planning.

A federal proposal introduced recently by Florida U.S. Reps. Charlie Crist and Debbie Wasserman Schultz, together with another bill from the same lawmakers introduced in April, could provide relief for communities in immediate need of substantial repairs and renovations. The new Rapid Financing for Critical Condo Repairs Act of 2022 would let the U.S. Department of Housing and Urban Development’s Federal Housing Administration insure condominium association building rehabilitation loans issued by private lenders.