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Articles Posted in Renovation Projects

Laura-Manning-Hudson-Gort-photo-200x300Our firm’s South Florida community association attorneys are often called upon by journalists for their insights into the issues impacting condo communities and HOAs.  When The New York Times “Wealth Matters” columnist Paul Sullivan decided he needed to turn to a highly experienced community association attorney for input for a major article on association living, he called on shareholder Laura Manning-Hudson in our West Palm Beach office.

Paul’s article, which is titled “When Condo Boards and Residents Clash, Legal Bills Mount” and appeared in the Your Money section on Saturday, March 30, 2019, focuses on some of the most common issues that can cause disruptions and financial strains for community associations.  It reads:

My mother-in-law recently regaled me with a tale of intrigue, money and power in her South Florida homeowners association.

Seeking to raise about $6 million to refurbish the 20-year-old community, the association’s board had voted to assess each homeowner $7,000. But a group of vocal residents fought back, setting up a power struggle.

This conflict is nothing new to anyone who has dealt with a condominium board or homeowners association, which has well-defined obligations to the residents. As the overseer, it hires workers to cut the lawn, take out the trash, clean lobbies and common areas and maintain pools, tennis courts, golf courses and other amenities. If the elevator breaks or the roof leaks, the board gets it fixed.

But if it wants to do something cosmetic — renovate the lobby, add pickle ball courts or install a fitness center — the board needs to put its idea to a vote of the residents.

timslgo-300x46The article continues:

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A recent report by the Jacksonville, Fla., ABC network affiliate exemplifies the calamitous results that can ensue when condominium associations and HOAs are inadequately prepared to meet the long-term maintenance needs of their communities.  The station chronicled the battle that is taking place at the Fountain Gate Condominium, which is composed of a number of buildings that were originally built in the 1980s and now need their wood siding replaced.

According to the report, the association’s board of directors has approved the procurement of a bank loan for $1.5 million for the project.  It would be repaid by imposing a special assessment of approximately $20,000 per unit, to be paid monthly over seven years.

One of the directors on the association’s board, Jody Kilgore is against the special assessment proposal, which met with an immediate backlash by the unit owners.  She is quoted in the report saying that the owners, who are mainly retirees in their 70s and 80s on fixed incomes, “feel like we’re being railroaded.”

fgate-300x199She goes on to say that the unit owners are being left out of the decision-making process, explaining that Florida law requires the approval of 75 percent of the owners for material changes such as this repair project.  Instead, she notes that the board of directors alone voted to approve the changes.

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One of the key takeaways from Hurricane Irma was a reminder about the importance of keeping trees properly trimmed in order to avoid damage to power lines from downed foliage.  However, a recent report by Channel 7 News (Fox) in South Florida about a Hallandale Beach HOA’s troubles with the city over its allegedly exorbitant tree trimming serves as a cautionary tale for all Florida community associations.

According to the report, the insurance company for the Hallandale Village Homeowners Association asked association president Richard Masone to trim the trees around the property at the start of this year’s hurricane season.  Masone complied and asked the association’s regular landscape maintenance company to trim the trees.

hrack-tree-300x225The job pleased the community’s insurer, but Hallandale Beach Code Enforcement officers were not happy with the tree trimming.  City Manager Roger Carlton called the trimming unacceptable, noting that it “enormously exceeded any reasonable amount.”

The association was told by the city that the trees were “hatracked,” or over-trimmed, and they ordered the community to dig up and replace the trees, which entails hiring an arborist and pulling permits for each of the 10-15 trees that would need to be replaced.

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Nicole-Kurtz-2014-200x300The firm’s Nicole R. Kurtz authored an article that is featured as a Board of Contributor’s 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 “Court: Association Declaration’s Reference to Alterations Encompasses Material Alterations,” focuses on a recent ruling that illustrates how Florida courts will turn to the plain and unambiguous meanings of terms in interpreting a community association’s governing documents.  For associations with declarations of condominium stating that the board of directors has the authority to approve alterations to the common elements, the decision emphasizes that such authority extends to all additions or improvements to the association’s common elements, including material alterations.  Nicole’s article reads:

. . . In 2016, the [Regency Tower condominium] association’s board of directors voted, without obtaining membership approval, to replace the existing Carrara marble flooring in the lobby with ceramic tile flooring. In response, one of the association’s unit owners challenged the board of directors’ authority to replace the lobby flooring without first obtaining approval from the association’s members.

The unit owner asserted his challenge by filing a petition for arbitration with the state’s Division of Condominiums, Timeshares and Mobile Homes. After the petition was dismissed by the arbitrator, he filed a lawsuit against the association in circuit court.

dbr-logo-300x57The owner’s position, in both the arbitration and the lawsuit, was that the association’s declaration of condominium did not include a provision detailing the procedure for approving “material alterations,” as it only referenced the board of directors’ authority to approve “alterations.” As such, the owner argued that Section 718.113(2)(a), Florida Statutes, which is triggered should there not be a procedure in an association’s declaration of condominium for the approval of material alterations, applied and precluded the board of directors from being able to unilaterally approve of the lobby flooring modification.

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A recent newspaper report about squatters in condominium units illustrates the level of vigilance that associations and their property management must employ to prevent any unauthorized uses of their residences.

The article in January by the Citrus County Chronicle documented the case that took place at The Islands condominiums in Crystal River, Fla. (pictured below).  Work on the residences in the community became necessary due to extensive damage caused by Hurricane Hermine in September 2016, and it had been progressing well until several unit owners discovered workers were staying in the units without permission.

ilndscndo-1024x668It began when one of the owners noticed wet floors near the shower and other indicators that the construction workers were not just replacing cabinets or working on the carpets.  He and a neighbor later found workers sleeping overnight in the condo unit of another owner who did not know they were there, so they called the police. Continue reading

While maintaining an adequate level of reserve funds for deferred maintenance, capital improvements and other major expenses is always recommended, community associations that find their reserves do not cover all of their needs have a worthwhile option other than special assessments that they should explore and consider.

Bank loans and lines of credit for associations were very difficult to obtain during the height of the foreclosure crisis, but happily for many Florida communities those days are long gone.  Now, there are a number of lenders that focus on loans for associations and offer highly competitive rates and terms.

Special assessments are typically the first option that associations consider to cover shortfalls in their reserves and take on important renovations or other unforeseen expenses.  However, it may not be the preferred choice for many communities.  Millions of U.S. homeowners are still recovering from the crash of the housing market and do not have the ability to secure a home equity line of credit in order to pay a special assessment.  In addition, the implementation of a special assessment is viewed as a sign of financial distress in an association by lenders considering FHA-backed home loans for buyers ipool-deck-renovation-300x224n a community, and this can ultimately take a significant toll on sales and property values.

Most associations will begin their research into their financing options by first turning to the bank that maintains their operating and/or reserve accounts.  While this is the obvious place to start, in the majority of cases they are also going to need to shop around.

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RobertoBlanch2013.jpgFirm partner Roberto C. Blanch wrote an article that appeared in today’s edition of the Daily Business Review, South Florida’s only business daily and official court newspaper, about the recent decision by the Second District Court of Appeal in the case of Andrews v. Shipps’s Landing Condominium Association. His article reads:

LisaLerner.jpgThe firm’s Lisa A. Lerner contributed a guest column in the Friday, March 13, 2015 edition of the Daily Business Review that focused on the changes that have taken place with some of the practices of South Florida community associations as a result of the foreclosure crisis and the investor-fueled recovery.

Constant new development of residential and mixed-use towers can be seen all over South Florida, with new projects being announced constantly. The construction of these new towers evokes buyers to ask themselves: What is better, new or old? The answer to that question is triggering existing community associations to spruce up their communities by giving them a facelift in an effort to stay competitive.

An arbitration decision rendered earlier this year by the State of Florida Division of Condominiums involving a dispute over alterations approved by a condominium board without a prior meeting and vote of the unit owners did not surprise our firm’s community association attorneys. We often find ourselves reminding association directors and property managers that the changes they are considering – albeit seemingly minor in nature – could be among those changes that are considered “material alterations” requiring approval by the membership.