Articles Posted in New Legislation

The Florida Marketable Record Title Act (MRTA) requires HOAs to reaffirm and renew their covenants and restrictions 30 years after they were originally recorded in the local county records.  MRTA was created to extinguish claims to property which are at least 30 years old in an effort to stabilize property law by clearing old defects from the chains of title to real property, limiting the period of record searches, and clearly defining marketability by extinguishing old interests of record.

One of the unintended consequences of the Act is that the declarations of covenants, conditions and restrictions recorded by HOAs may be set to expire after 30 years of the date in which they were recorded.  Keep in mind that for most HOAs, if the residents are no longer compelled to act in accordance with the community’s declaration, the results could be catastrophic for the associations’ administration and finances.

Flalegislature-300x169The Florida legislature passed a law earlier this year to update the process for HOAs to renew and preserve their covenants and restrictions under MRTA in order to keep them in place after the 30-year term.  Under the new law, which is now in effect, at any time during the 30-year period following the effective date of the title for the covenants and restrictions of a community association, the association may preserve and protect those covenants or restrictions from extinguishment by following more simplified filing procedures which include the following:

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Earlier this year the Florida legislature passed an important update to the new condominium association website requirements that the state’s lawmakers codified during the 2017 legislative session.  The most important change was to extend the deadline for associations to launch their websites from July 1, 2018 to Jan. 1, 2019, providing condominiums and their property managers with an additional six months to develop and launch their sites.

In addition, the new website requirement no longer applies to multi-condominium associations with combined totals in excess of 150 units if none of individual condominium properties operated by the association contains 150 or more units.

Flalegislature-300x169The 2018 statutory amendments also changed some of the posting requirements to allow for the posting of summaries of certain documents rather than the documents themselves.  The official records that must be posted in the new websites also now include monthly income or expense statements as well as all bids in excess of $500 received from vendors during the past year for materials, equipment or services.

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With their eco-friendly promise to Mother Nature, electric vehicles have gained popularity among U.S. consumers and policymakers alike, and auto industry giants are predicting even further growth for this high-tech and environmentally-friendly segment of the market in the future.  Notwithstanding the growth thus far, one of the challenges that has been potentially inhibiting the greater dispersion of electric vehicles throughout Florida has been the lack of clarity in the law with respect to the installation and use of electric-vehicle charging stations within condominium communities.  However, Florida’s Legislature recently passed a new law facilitating an owner’s capacity to install and use an electric-vehicle charging station within their condominium building that will surely ameliorate some of these challenges.

carchrg2-300x155Before adoption of the new law, and as a result of the potential legal, engineering and financial liabilities resulting from the installation of electric-vehicle charging stations on a large scale, many boards of directors raised questions regarding the proper method to facilitate owners’ requests to install electric-vehicle charging stations within condominium building parking garages.   The new addition to Florida’s condominium association laws provides clarity to some of these questions.

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This year’s legislative session has come to an end, establishing new laws and amendments to a number of statutes regulating community associations in Florida. On March 23, 2018, Governor Rick Scott signed the following laws into effect:Florida-legislature-photo-thumb-300x198-300x198

Official Records of Condominiums and Cooperatives – § 718.111, § 719.104

  • The deadline for condominium and cooperative associations to fulfill official record requests has been extended from 5 working days to 10 working days. §718.111(12)(b), § 719.104(2)(b), Fla. Stat.
  • Electronic records relating to voting have been included in the list of official records that must be kept by condominium and cooperative associations. §718.111(12)(a)12., § 719.104(2)(a)10., Fla. Stat.
  • Condominium associations must now permanently maintain specific documents from the inception of the association, unlike the previous 7-year limitation. The following is a list of those documents: §718.111(12), Fla. Stat., §719.104(2), Fla. Stat.
  • A copy of the articles of incorporation, declaration, bylaws and rules of the association;
  • The minutes of all meetings;
  • A copy of the plans, permits, warranties, and other items provided by the developer;
  • Accounting records for the association.

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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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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

Firm partner Gary M. Mars authored an article that appeared as a “My View” guest column in today’s “Business Monday” section of the Miami Herald.  The article, which is titled “Condo Fraud Legislation Adds Teeth to Florida’s Laws,” focuses on the ramifications of the newly minted Florida law that established criminal penalties for some of the most common maneuvers of association fraudsters.  Gary’s article reads:

The new legislation, which will add teeth to the Florida laws governing the administration of condominiums by establishing criminal penalties for fraudsters, has been signed into law by Gov. Rick Scott and took effect July 1.

The El Nuevo and Channel 23 reports revealed many cases of electoral fraud and forgery, conflicts of interest, mismanagement, and rigged bidding systems at a number of condo associations in South Florida. The Miami-Dade circuit court grand jury investigation focused on some of the cases from the news reports and several others, and its findings illustrated in detail that the state’s laws and enforcement measures are inadequate. Continue reading