The firm’s Oscar R. Rivera was the subject of a profile article in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper. The article, which is titled “Real Estate Attorney Oscar Rivera Traces Career Roots to Shredding Carbon Paper,” chronicles Oscar’s career in the law, which began when […]
The firm’s Nicole R. Kurtz authored an article that appeared as a “Board of Contributors” guest column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper. The article, which was titled “Disputed Condo Election Offers Important Lessons for Association Boards,” focused on a recent appellate ruling that illustrated the importance for boards of directors to act with a clear understanding of their capabilities to alter association election procedures. Her article reads:
Allegations of questionable or even downright fraudulent tactics by candidates in annual association elections are not entirely uncommon. When suspicious activities begin to call into question the integrity of the election, some boards of directors hit the panic button and take actions that will not stand the test of their governing documents or the Florida Administrative Code.
Such appears to be what took place in a disputed election at the Palm Aire Country Club Condominium in Pompano Beach that culminated in a recent ruling by Florida’s Fourth District Court of Appeal. While the appellate panel’s opinion does not address the reasons for the association board’s actions, noting only that “there is some ambiguity as to what exactly occurred” at the board’s Feb. 29, 2016, meeting, the opinion essentially invalidates the board’s 6-3 vote at the meeting to postpone the annual election that was set for two days later on March 2.
Even though a majority of the board voted to postpone the election, it took place as originally scheduled on March 2, and new directors were elected. The management company for the property, M&M Property Management LLC, subsequently refused to recognize the authority of the prior board of directors and instead began working with the newly elected directors.
In response, the prior board of directors filed suit against M&M seeking a temporary injunction to compel the management company to stop operating in service of the new board of directors. The prior board was granted the temporary injunction, and in turn M&M was ordered to recognize the board as it existed prior to the March 2 election.
This year our firm is celebrating the 40th anniversary of its founding. In 1977, Steven M. Siegfried had the vision to bring great lawyers and supporting staff together to focus on every aspect of Florida’s burgeoning construction, community association and real estate industries.
As Florida has grown, so too has SRHL. Maintaining our focus, we are now 46 attorneys in our three South Florida offices. As required by the evolution of the industries in which our clients excel, we have incorporated expertise in insurance, creditors’ rights, and the commercial transactions and disputes that relate to these core competencies. We also have developed an expertise in aircraft transactional work.
As we reflect on our 40 years of service in these vital industries, we take pride in having played significant roles in some of the most important and challenging projects throughout South Florida and the nation. We look forward to furthering our role as one of the most trusted sources for legal counsel and representation in these fields in the years to come.
For community association attorneys, it often seems that no matter how much we caution homeowners and condominium associations to take all of the necessary safeguards in order to prevent theft and embezzlement, new cases of blatant fraud always seem to crop up.
The latest example was chronicled in a recent article by the Palm Beach Post. The article focuses on the arrest of the bookkeeper for the master homeowners association of Cypress Lakes, a 1,000-home, 55-plus community off Haverhill Road in West Palm Beach.
Kristine K. Moore, the bookkeeper, was charged with embezzling nearly $95,000 over the course of years from the association. Moore was paid $44,000 per year and had been employed by the association for more than six years.
According to a police affidavit, management reviewed the association’s credit card bills and called police in April 2014 after discovering about $10,700 in charges for personal purchases during the preceding several months. Additional review then uncovered much larger losses, including missing cash deposits that had been paid by homeowners.
Firm partner B. Michael Clark, Jr. authored a guest column that appeared as a “Board of Contributors” feature in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper. The article, which was titled “Court Upholds Concurrent Cause Doctrine in Win for Property Policyholders,” focused on the positive ramifications for Florida commercial and residential insurance policyholders of the state Supreme Court’s recent decision in the case of Sebo v. American Home Assurance. Michael’s article reads:
The recent Supreme Court of Florida decision in Sebo v. American Home Assurance rejecting the “efficient proximate cause doctrine” in favor of the “concurrent cause doctrine” for property insurance claims represents a significant win for residential and commercial policyholders.
The state’s highest court has determined that the appropriate theory of recovery for claims in which two or more perils contribute to a loss but at least one of the perils is excluded from coverage is the concurrent cause doctrine. Under the rejected efficient proximate cause theory, when multiple perils cause a loss, it is the efficient cause — the one that sets the other in motion — to which the loss is attributed.
For the insurance industry, the efficient proximate cause doctrine has always been preferred. If the carriers are able to demonstrate that the efficient cause behind a loss is excluded from coverage under the policy, then the entire claim may be denied.
Sebo makes the concurrent cause doctrine the legal standard to be applied for property insurance claims in Florida. Now insurers must cover a loss even if the covered peril is the secondary cause of the loss, which was concurrent with but not the primary or efficient cause.
Firm partner Michael E. Chapnick has written extensively in this blog and several publications on the nuisance and security issues that have been caused by Pokemon Go, the augmented reality game in which players search the real world for characters that appear on their smartphones. In the latest issue of the Community Associations Institute’s Common Ground magazine, he is quoted in an article on the topic titled “Pokemon Woe.” The article reads:
If Pokémon Go players are being noisy or creating other disturbances, associations should check their nuisance provisions.
“If you don’t have good nuisance or antinuisance provisions, then those need to be beefed up,” says Michael E. Chapnick, a lawyer with Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel in West Palm Beach, Fla. “It’s a violation like any other violation. You have to enforce your documents and address any issues.”
Chapnick says associations should be applying their existing rules to a changing world. “The rules are made to be fluid and made to be flexible,” he adds.
Our firm congratulates Michael for continuing to be one of the most outspoken community association attorneys on this topic. Click here to read the complete article in the organization’s website (registration required).
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 in 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.
The firm’s Helio De La Torre and Lindsey Thurswell Lehr were interviewed during the last few days by reporters from the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, and The Real Deal, one of South Florida’s leading sources for real estate news and analysis. They were asked by the journalists for their insights into the ramifications of a decision last week by the Third District Court of Appeal that has significant implications for the future of condominium terminations in Florida.
The case pitted the Tropicana Condominium Association against the developer of the neighboring Ritz-Carlton Residences in Sunny Isles Beach. The appellate court ruled in favor of the developer, which had ties with a group of five unit owners at the Tropicana, finding that the property’s bylaws required unanimous approval for a sale, despite the 80 percent threshold in the amended condominium termination legislation from 2007. It agreed that the five holdouts’ refusal to sell was enough to block the termination that was favored by the association because the property’s 1983 governing documents predate the legislative amendment and require all unit owners to approve termination.
The Third DCA ruled that the 2007 changes to the Florida statute don’t apply retroactively to condominium declarations from prior to 2007 unless they contain certain language that incorporates amendments to the state’s Condominium Act.
The appellate court said in its ruling that “when referencing Florida’s Condominium Act, the declaration [for Tropicana] did not contain the words ‘as amended from time to time.’ Absent this language in the declaration, changes by the legislature to the Condominium Act subsequent to the effective date of the declaration do not become part of the declaration automatically.”
“The statute seemingly had language that suggested the intent was to make it retroactive,” said law firm partner Helio De La Torre, who has represented condo associations in similar cases centering on termination of associations through votes by unit owners. He is a partner of Coral Gables-based Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A.
For those who live in community associations, board membership should be viewed in the same vein as a civic duty. An effective board of directors is essential for the financial and administrative wherewithal and stability of every community association, so all unit owners who are able should volunteer to serve at least one term to contribute to their community’s overall success.
Some association members have the mistaken perception that the responsibilities of serving as a director are too complex and demanding for their capabilities and skill sets. While it is a serious commitment in terms of time and attention, board membership should not be viewed as being too daunting of an undertaking for the average unit owner.
The key to success for practically every board member lies in their use of the most effective professional and educational resources that are available. Of course, this should begin with relying on only the most experienced professionals such as attorneys, property managers, accountants, insurers, etc., but that is just the start.
Community association living has many advantages and desirable qualities. Residents share expenses in order to be able to enjoy relatively carefree maintenance of their property and the use of amenities such as pools, fitness centers, meeting rooms, and other appealing features. However, in exchange for enjoying benefits derived from community association living, such as the pooling of the financial burdens of an association via the monthly maintenance payments, members should be mindful of a vital commitment which contributes to the wellbeing of their community: serving on the association’s board of directors.
An effective board of directors is critical for the financial and administrative performance of a community and association. Boards, which are in charge of making very important decisions affecting all unit owners and residents, are comprised of volunteer owners who rise to the call of serving their community in order to make it the best that it can be for all of an association’s members.
Unfortunately, in many cases, we often find that unit owners become complacent when a community’s board of directors is doing its job effectively. Volunteering for board service is often perceived to be a daunting and thankless commitment by individuals who lead busy lives and do not wish to take on new responsibilities.
Effective remedies to tackle apathy towards board member service typically stem from implementing and maintaining long-term strategies to encourage serving. It should begin by encouraging all members of the association to attend and participate in the association meetings, motivating eligible attendees to consider serving on the board of directors in the future. Sharing informational resources on board service from industry groups, such as the Community Associations Institute (www.caionline.org) and other reputable sources, may also stimulate owners to aspire to serve on the board.
In 2010, at the height of the recent foreclosure crisis, community associations in Florida gained an effective tool to aid them in their efforts to collect upon delinquent assessments. It was at that time that the legislature amended Florida law to authorize community associations to suspend the rights of unit owners and their tenants to use portions of the community’s common elements and amenities if the owner became delinquent by more than 90 days in their obligation to pay association monetary obligations, including assessments. Currently, the law also extends the association’s right to suspend such use rights in the event that the owner or their tenants should fail to comply with the association’s governing documents or rules.
Prior to then, associations had few practical remedies at their disposal to address violations of rules. For instance, associations had the options of filing costly and lengthy lawsuits or arbitration actions, or imposing nominal fines. As for collection of delinquent assessments, associations’ options were limited to placing liens on the homes or units owned by delinquent owners – a remedy with limited effectiveness during the foreclosure crisis due to the statutory safe harbor protections benefiting lenders in Florida.
However, since its implementation, some associations have found that suspending owner and tenants’ rights to use common elements or facilities may be an effective measure for contending with delinquencies as well as violations of rules and other restrictions.