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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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There are many objections to board service that are often cited by unit owners who are reluctant to serve on their community association’s board of directors. While the time commitment is a prevalent concern, some believe that the post also brings with it an unreasonable level of liability and exposure to lawsuits by disgruntled unit owners.

To quell those concerns, such individuals should recognize that condo associations and HOAs typically carry Directors and Officers Liability Insurance (aka D&O insurance), which serves to defend and protect directors from lawsuits to which they may be exposed. Additionally, directors are also protected by indemnification provisions of the Florida laws governing not-for-profit corporations as well as the articles of incorporation of their association.

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MTobacksrhl-law2-200x300The firm’s Michael Toback authored an article that appeared as the featured “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 “Court Strikes Down HOA’s Rule Banning Personal Trainer From Fitness Center,” focuses on the takeaways from a recent appellate ruling involving association bans of guests from amenities and common areas.  The article reads:

Is a personal trainer in a fitness center like a call girl sitting at a clubhouse bar? This comparison was drawn by the trial court in its decision to grant summary judgment in favor of a homeowner’s association as to whether a personal trainer is an invitee or a licensee. However, the Fourth District Court of Appeal reversed the decision, concluding that neither the analogy nor the analysis was properly applied to the facts of the case.

The Fourth DCA’s recent ruling in Charterhouse Associates v. Valencia Reserve Homeowners Association brings an added measure of clarity to the proper test for courts to apply when determining who may be classified as a licensee by associations.

dbr-logo-300x57The residents of a property owned by Charterhouse within the Boynton Beach, Florida community paid and authorized a personal trainer to lead their workouts in the community fitness center. The gym is one of the amenities available for use by owners, family members, guests, invitees and tenants according to Valencia Reserve’s declaration. When the association later entered into a contract with a different vendor to be the exclusive provider of personal training services in the fitness center, it banned the residents’ trainer from the facility.

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Nick-Siegfried-2013-thumb-120x180-61267jmilesThe firm’s Joseph A. Miles and Nicholas D. Siegfried were featured in an article in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, about a major verdict that they recently secured for one of the firm’s clients.  The article, which is titled “South Florida Lawyers Win $4.1M for Cable Company Fired Over Service Delays,” focuses on their work in securing the verdict for an affiliate of Miami-based OpticalTel in a case involving the company’s wrongful termination by a Central Florida HOA.  The article reads:

Coral Gables lawyers Joseph A. Miles and Nicholas D. Siegfried landed a $4.1 million verdict for Miami-based company PC Services LLC, which claimed the Cascades of Groveland Homeowners’ Association Inc. in Lake County should never have terminated an agreement with the company because it wasn’t responsible for a flurry of delays and problems with services.

The 2012 lawsuit arose from years of bad blood between the parties over a deal that turned sour. On July 2007, the homeowner association terminated its contract with PC Services, claiming it had failed to properly do its job. But PC Services argued it had and lost the opportunity to make a profit on its $1.6 million investment.

The defense argued it was right to terminate the agreement because it didn’t get what PC Services promised.

dbrlogo-300x57Defense lawyers Aristides J. Diaz and Thomas R. Slaten Jr. of Larsen & Associates in Orlando did not respond to requests for comment before deadline.

Making the case was no small feat for the Siegfried Rivera lawyers, as it was laced with technical jargon that would likely stump the average juror.

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A recent news report about excessive levels of radon gas in a Florida condominium raises some interesting questions about the proper response from a condominium association and its insurance carriers on this issue.

The report, which appeared in late November in the pages of the Venice Gondolier Sun, chronicled how the owners of a unit at the South Preserve II of Waterside Village Condominium were surprised to learn that tests conducted at the behest of their tenants found excessive levels of radon in their unit. The odorless and colorless gas, which comes from the radioactive breakdown of naturally occurring radium found in most Florida soils, rocks and groundwater, is the second leading cause of lung cancer overall and is the leading cause among non-smokers. In Florida, one in five homes tested has elevated radon levels above the limits set by the Environmental Protection Agency, and the gas can be found in homes, schools, offices and high-rise condominiums.

According to the newspaper’s article, the unit owners sent the test results to their association, which hired a different company to conduct its own tests that yielded similar results. The radon levels in the residence were more than five times the level considered safe by the EPA.

rn-300x196The owners obtained an estimate for $3,100 to mitigate their unit, but per EPA rules the company would be required to inform the neighbors of the mitigation process. It also requested that the owners sign an “inadvertent collateral mitigation form” stating the company would not be held responsible for any environmental impacts on adjoining units.

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This is the time of year when many Florida condominium associations conduct their annual meeting and election of directors.  Here are some helpful reminders about the process to ensure that your community’s meeting and election avoid potential glitches and remain in compliance with Florida law.

Board membership should be viewed as being akin to a civic duty for condominium owners.  So long as individuals meet the basic legal requirements, to wit: they are current on all of their financial obligations to the association and are not a convicted felon, they are otherwise eligible to run for a board seat in most associations.

The election notices that are distributed by the association to all of the owners begin with the initial notice that must be sent out at least 60 days prior to the election. This notice should include information on the deadlines for submission of notices to the association for those who intend to run for a board seat. All candidates must provide their association with a written notice of their intent to run for the board of directors at least 40 days prior to the date of the election. meeting-vote-300x300Registered candidates are then able to lobby their fellow owners, and they may submit a resume to the association at least 35 days prior to the election. The resume, which may not exceed one side of a standard piece of office paper, should contain details about a candidate’s professional and educational background as well as any other attributes and qualifications that they would like to include.

A second notice of the election, which must be distributed between 34 and 14 days prior to the election, must include copies of all the resumes submitted by the candidates together with the ballot and the inner and outer envelopes.

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ElizabethBowen-srhl-law-2-200x300Firm shareholder Elizabeth A. Bowen authored an article that appeared 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 “Suit Against Association for Emotional Support Animal Denial Sends Message to Fla. Condos, HOAs,” discusses the implications of a recent lawsuit by Broward County against a Lauderhill condominium association for alleged violations of fair housing laws over its denial of an emotional support animal for a unit owner.  Her article reads:

Emotional support animals have been in the news quite a bit during the last couple of years. There have been reports of airline passengers boarding with a peacock, hamster, pig, a duck wearing a diaper and a squirrel. As a result, companies have started to change their policies, and the public’s attitudes and perceptions toward ESAs also appear to be changing.

Frontier Airlines recently announced its new policy to allow only cats and dogs as emotional support animals. It joined Spirit Airlines, Delta Air Lines, United Airlines and American Airlines, which have all tightened their policies on ESAs this year. Publix also banned them from its stores and posted signs reading: “For food safety reasons, only service animals that are specifically trained to aid a person with disabilities are permitted within the store.”

esupdog-300x234These new policies and signs have raised awareness of the perceived abuse of ESAs by people trying to take advantage of federal disability laws in order to take their pets into businesses. As a result of the growing skepticism, community association boards of directors can easily fall into the trap of disregarding requests for accommodations for ESAs and summarily rejecting them.

A recent lawsuit by Broward County against a Lauderhill condominium association illustrates the potential pitfalls of such uninformed actions by associations. The county filed suit in federal court against the Environ Towers I Condominium Association seeking damages and injunctive relief for its alleged violation of federal fair housing laws as well as the Broward County Human Rights Act. Continue reading

In the aftermath of one of the worst school shootings in U.S. history, the residents of Parkland in Broward County have taken pride in the resilience and unity that they have demonstrated as a community. Memorials and messages of support were placed throughout the neighborhoods and enclaves surrounding Marjory Stoneman Douglas High School, and signs reading “Parkland Strong” and “#MSDStrong” became ubiquitous.

However, at the home of Donna Ali, whose daughter is a student at the high school, the Parkland Golf & Country Club HOA had requested that her “Parkland Strong” yard sign as well as those of some of her neighbors should be removed.

According to a report by WPLG-ABC Channel 10, the HOA sent an email to residents reading: “In keeping with the memorial plans, the community relations committee is asking residents that have shown solidarity with the MSD family by placing memorials in their yard to take them down by Nov. 15.” plandstrong-300x225The community is apparently working on installing a permanent memorial, which is expected to be completed by February.

After hearing about the station’s report, the board of directors of the HOA distributed a news release stating that the signs will now be allowed to stay up until the permanent memorial has been completed. It reads: “The board immediately decided to suspend the removal request until the permanent memorial is complete as our community does not want to bring any additional pain to anyone, especially an MSD student.”

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