All too often, we are asked by boards of directors and property managers what steps can be taken to prevent residents from continuing to break rules in their communities. Seldom, however, do we hear community associations that are active and persistent in disciplining their rule breakers. Typically, violations range from disobeying noise ordinances to more problematic ones such as ignoring an association’s prohibition of short-term rentals. Regardless of how big or small—or even how chronic—an infraction may be, it is important that board members do their part in enforcing the rules and regulations of their associations.
While recovery from property damage and power outages may take precedence in the hours and days following a hurricane, it is also important to consider—and to take swift action to recover from— not-so-apparent implications of a storm.
As we enter into the “season” of Annual Meetings and Elections, deadlines are soon approaching for community associations to distribute their Notice(s) of Annual Meeting and Election to Owners. The Florida Statutes, Florida Administrative Code and association governing documents provide us with a strict protocol of when such Notice(s) must be distributed, depending upon an association’s scheduled or required date to hold the Annual Meeting and Election. Following a storm such as Hurricane Irma, a few hours or days without power may affect a printing company or management office’s work hours, and, in turn, make it difficult or impossible to timely distribute Notice(s) of Annual Meeting and Election in accordance with statutory and governing-document-based protocols.
The outcome of this year’s legislative session evoked a lot of confusion from property managers and boards of directors serving the community association industry. As a result, we have received a lot of requests from our readership asking for clarification on some of the laws that were enacted. In this post, we will be tackling the debit card provision in an effort to clear up some misconceptions about the new legislation.
The firm’s Michael L. Hyman authored an article that appeared as a “My View” guest column in today’s Business Monday section of the Miami Herald. Michael’s article shed light on the new estoppel bill that is being considered by the Florida Legislature and how it would lead to increased fees for most associations. His article reads:
“. . . with the backing of the powerful real estate industry and title companies, a new version of the bill now seeks to take the burden of paying for the preparation of estoppels away from some of their clients and place it on the existing homeowners in the communities where their clients wish to buy.
House Bill 203, this year’s version of the measure, has already passed the House’s Civil Justice Committee, and it is on track for a vote during the 2016 legislative session that began on Jan. 12. It calls for changes to allow estoppel certificates to be delivered electronically and require them to include specific content as well as effective periods. The amount that associations can charge home buyers for the certificates would be capped at $500, and the certificates would be required to be prepared and delivered within 10 business days of a request.
None of these changes are the one that presents the most concerns for associations, although the requirement for a 10 business-day turnaround will prove difficult in complex cases that may include fines in addition to delinquent maintenance dues and/or litigation. Bear in mind that the size and sophistication of community associations varies greatly, and small associations with antiquated bookkeeping will find these difficult cases to be particularly daunting. In addition, any differences between the capped amounts that home buyers can be charged for the preparation of an estoppel and the actual cost of creating it would be passed on to all of the unit owners of an association.”
Michael’s article concludes:
“. . . the most troubling aspect of the bill for associations is that they and their unit owners would be on hook for these fees in many cases when sales fail to close. The bill calls for associations to wait for a sale of a unit to close until they get paid for the work and fees that they incurred in preparing an estoppel to facilitate the sale. If the home or condominium sale did not close, the association would ultimately be responsible for these fees and costs if it were unable to collect them from the seller of the unit, as would often be the case with so many distressed properties being sold by owners already delinquent on their association dues.
This aspect of the bill is sure to have a deleterious financial impact on many condominium associations and HOAs throughout the state. Real estate sales fail to close all of the time due to failed inspections, and the associated costs for conducting these home inspections are always rightfully borne by the prospective buyers. Estoppel certificate fees, which are typically less than $400, are actually among the smallest expenses of all of the closing costs and fees incurred in connection with real estate transactions.
Community associations in Florida have had to overcome dire financial strains in order to recover from the collapse of the housing market and the foreclosure crisis. HB 203 seeks to shift estoppel fees to the associations and their unit owners, and take them away from those who enter into contracts for the purchase of a property and then fail to close. Association directors and members as well as property managers should contact the Florida lawmakers for their district to voice their opposition.”
Our firm congratulates Michael for sharing his insights with the readers of the Miami Herald on the potential negative impact of this legislation on community associations in Florida. Click here to read the complete article in the newspaper’s website.