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Articles Posted in Homeowners association law

All too often, the other community association attorneys at our firm and I are asked for help on how to prevent unruly behavior from disrupting board and owner meetings. Since items addressed at these meetings generally have a significant impact on the welfare of an association and the financial responsibilities of its owners, conversations dealing with topics such as special assessments and annual elections can quickly become contentious. The following are helpful tips on how to try to keep your meetings on track and in order:

  1. Use Robert’s Rule of Order – This common form of parliamentary procedure for meeting protocol allows meeting facilitators to manage time effectively, all while ensuring that everyone stays on topic. Many people are already familiar with this method, making it easy for participants to follow and respect the meeting procedures that are in place.

meet-300x1662. Be specific about who can attend – The association should establish rules determining who can participate in advance of the meeting. Generally, owners, or owners and residents are the only people allowed to participate in such meetings. Counsel for an owner is likewise permitted to attend.

3. Make the purpose of the meeting clear – Prepare an agenda that outlines the specific items that will be discussed. Be sure to be transparent about the topics, providing participants with any supplemental documents they may need to make educated decisions.

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HB 153 – Landlords and Tenants – § 83.51, Fla. Stat.:

  • Requiring landlords to provide their tenants with a physical copy of any restrictive covenants governing the premises and occupancy of the premises at the time the landlord and tenants execute a rental agreement.
  • Requiring landlords to provide their tenants with written notice by certified mail of any changes to the covenants or the enforcement of the covenants within 10 business days.
  • If passed, this law would become effective July 1, 2019.

HB 155 – Homeowners’ Association Recalls – § 720.303, Fla. Stat.:

  • Adding a qualification for recalls, whereby directors may be recalled and removed from office by a majority of the total voting interests who physically reside in the community. Previously, the requirement to physically reside in the community was not in place.
  • If an association’s declaration, articles of incorporation or bylaws specifically provide that members may also recall and remove directors by a vote taken at a meeting, such special meeting of the members may be called by 10 percent (10%) of the voting interests who physically reside in the community. Previously, the requirement to physically reside in the community was not in place.
  • If passed, this law would become effective July 1, 2019.

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A recent report by Channel 7 News (WSVN-Fox) in South Florida shined a spotlight on a new trend that is beginning to cause noise disruptions at some of the area’s condominium communities. It is called pickleball, and the sport is becoming especially popular for 55-and-older retirement communities. While the decision of the association’s board to accommodate the sport seems innocent, it appears to have triggered some unintended consequences that other community associations should bear in mind.

First created in 1965, pickleball is a paddle sport for all ages and skill levels that combines many elements of tennis, badminton and ping-pong. It is played both as singles and doubles on a badminton-size court using a slightly modified tennis net, paddles and a plastic ball with holes.

pballThe station’s report, which states that the sport is becoming very popular, chronicles the issues that are arising from the noise that pickleball is creating at the Wynmoor in Coconut Creek retirement community in Broward County. Two of the community’s tennis courts were converted into eight pickleball courts, which allow for up to 32 people to play at the same time.

Linda Waldman, the owner of a unit near the courts, states: “It’s a very noisy game, unfortunately . . . there is a ‘pong’ not also from the racket, but also when it hits the ground. Ponging and screaming. It’s a very enthusiastic game. The people love it.”

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A couple of years ago we saw the Florida state legislature add teeth to Florida’s condo and HOA laws governing theft, fraud, abuse and conflicts of interest. Recently, the Department of Business and Professional Regulation, the state agency that governs community associations, followed suit by implementing harsher civil disciplinary guidelines for condominium association infractions.

The new guidelines detail the civil penalties and disciplinary procedures for violations of the Condominium Act and the Florida Rules of Administrative Procedure involving accounting records, assessments, boards, budgets, common expenses, conflicts of interest, debit cards, elections, estoppel certificates, final orders, fiduciary duty, investigations, records requests, financial reporting, reserves, special assessments and websites.

dbprlogo-300x170For minor violations, the disciplinary guidelines call for the agency’s Division of Condominiums, Timeshares and Mobile Homes to issue the association with a written Notice of Noncompliance “due to the violation’s lower potential for public harm.” If the association fails to comply with the stipulations called for in the Notice, it could result in sanctions and enforcement with monetary penalties being imposed in amounts between $5 and $10 per unit for each violation. The maximum penalty for minor violations is $2,500, for a single minor violation.
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Nicole-Kurtz-2014-200x300An article authored by the firm’s Nicole R. Kurtz 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.  Her article, which is titled “Association Election ‘Shenanigans’ Lead to Contentious, Costly Litigation,” focuses on the takeaways for Florida community associations from the case involving the strange and suspicious circumstances surrounding an Orlando-area HOA’s last annual election.  It reads:

A case in which a trial court concluded may have involved some association election “shenanigans” is going back to the trial court for further proceedings after the Fifth District Court of Appeal reversed the lower court’s order mandating binding arbitration.

“What should have been a rather routine meeting of the Association was cloaked with mystery, intrigue, and confusion,” begins the Fifth DCA’s unanimous opinion in the case of Winter Green at Winter Park HOA v. Richard Ware et al. Indeed, mystery, intrigue and confusion seem to be very apropos for describing the set of circumstances that unfolded during the Orlando suburb’s annual meeting and election.

It all began when somehow two nearly identical notices were sent out to announce the upcoming annual meeting and election to the homeowners. Both notices included the necessary agenda and accompanying documents, however the notice prepared by the association’s property manager set the annual meeting date for November 15, 2017, while the other notice announced the annual meeting was to be held on November 12, 2017.

dbr-logo-300x57Fifty-five members of the association attended the Nov. 12 meeting, which was sufficient to establish a quorum, but the owners were surprised to find that neither the property manager nor any of the current board members were present. An owner was even dispatched to the property manager’s office to seek clarification on the manager and directors’ absence, but he found no one there.

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Drones have become extremely popular for those who yearn for the latest gadgets and gizmos.  Many associations have already adopted rules to address the use of drones in their communities, and those that have not done so should give it serious thought and consideration.

When equipped with cameras, drones can be used to violate the privacy of association residents, not to mention their ability to cause major property damage, so associations should take a proactive approach toward developing and implementing rules and restrictions to protect the interests of those residing within their community.  Specifically, some examples of the rules and policies that associations are implementing include:

d2-300x176Restricting the space within which drones may be flown, such as over their operator’s personal lot, or those lots of adjoining neighbors (with their prior permission).

Limiting drone use to association common areas that are away from roads, buildings, playgrounds and other amenities.

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As the 2019 Florida legislative session gets underway, all indications are that this will be a very busy year for new legislation affecting the more than 48,000 community associations in the state. Here are some of the bills that my fellow community association attorneys at our firm and I will be monitoring very closely:

HB 153 – Requires landlord to provide physical copy of any restrictive covenants that govern premises to tenant at specified time; requires written notice be provided to tenant of any changes to covenants within specified time.

HB 155, known as the Community Recall Act – Amend Section 720.303, F.S. to require owners living in an HOA to physically reside in the community in order to vote to recall a member of the board of directors.

HB 565 – Removes housing discrimination as cause of action for relief & damages stemming from violations of Florida Civil Rights Act of 1992; revises timeframe & conditions under which aggrieved person may commence civil action to enforce specified rights; authorizes, rather than requires, civil action after alleged discriminatory housing practice; authorizes civil action regardless of whether aggrieved person filed complaint with commission; prohibits aggrieved person from filing specified action in certain circumstances; provides exception.

Florida-legislature2HB 647 – Requires certain associations to post certain signs or symbols on buildings; requires State Fire Marshal to adopt rules governing such signs & symbols; provides for enforcement; revises provisions relating to evidence of association compliance with fire & life safety code; revises provisions related to retrofitting.

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Reports of association theft, fraud and embezzlement are no surprise to the South Florida community association attorneys at our firm, but two similar reports on the same day from communities on both the east and west coasts of the country drew our attention.

The media reports of the incidents, which both ran on Thursday, Jan. 17th, are very similar. The one in the Nisqually Valley News newspaper in the state of Washington chronicles how the Clearwood Community Association filed a complaint alleging its former bookkeeper embezzled nearly $300,000. The suit against Dolanna K. Burnett, the former bookkeeper, and her husband claims that she wrote multiple checks to herself and covered it up in the accounting system dating back to 2014.

The newspaper article states Burnett had a previous conviction in 2014 for theft, identity theft and forgery. She used counterfeit refund checks totaling $17,000 while she was working for the Tacoma Health Department and deposited them into her personal account. This information was discovered last summer and taken to the Clearwood Board of Directors, which stood by its decision to retain her and continued to use her as its bookkeeper.

This led to an outcry by the unit owners, eventually prompting a majority of the board members and Burnett to resign from their posts.

By the end of the year, the board hired a forensic accountant and discovered evidence that the former employee had been stealing significant sums from the association’s general account for years. It turned the case over to the county sheriff’s office and filed a civil suit against Burnett.

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Laura-Manning-Hudson-Gort-photo-thumb-120x180-18921An article authored by partner Laura Manning-Hudson is featured as the “Board of Contributors” 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 “Permitted Breach of Rules by Association Does Not Create Liability for Resulting Accident,” discusses the takeaways from a recent case involving a community association’s liability for an automobile accident involving parked vehicles on its streets.  Her article reads:

Lack of parking can be an extremely troublesome issue for many South Florida community associations. For HOAs with rules that prohibit on-street parking, the dearth of available spaces for residents and their guests can leave many homeowners feeling stymied and annoyed.

To remedy the angst of its residents, the HOA for the Seminole Lakes community in Palm Beach County decided to forgo its rule against on-street overnight parking. However, that decision nearly ended up causing the association major legal and financial liabilities, which it was only able to avoid after it appealed a jury’s verdict to Florida’s Fourth District Court of Appeal.

dbr-logo-300x57The case of Seminole Lakes Homeowner’s Association v. Esnard arose from a 2013 car accident in the community between the Esnards and another motorist, who rear-ended their vehicle while they were stopped waiting for two trucks to pass between two parked cars on the street. The Esnards, who were injured in the accident and had their car completely totaled, filed suit against the other driver as well as Seminole Lakes on the basis that the community was negligent and had proximately caused their damages by permitting homeowners and their guests to park on both sides of its streets — contrary to its governing documents.

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Not enough community association boards make effective use of committees.  Committees can be very useful when it comes to providing recommendations to the board and assisting the board with carrying out its duties and responsibilities.  However, many associations do not take the time to establish committees or set parameters for their work so that committees may assist in the operation of the association.

Setting up committees is the responsibility of an association’s board of directors. The board must appoint the members of each committee at a properly noticed board meeting, during which the directors should provide instructions and set parameters for the scope of the committees’ responsibilities.

One of the best approaches is for boards of directors to use their annual meetings to establish various committees, appoint committee members and establish areas of purview for each. Each committee should have at least three members.

meetWith the exception of the rules enforcement committee, board members may also serve as members on committees. Many associations choose to have a board member on each committee along with two non-director volunteers, as this enables the board member to keep their fellow directors abreast of the committee’s work and progress.

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