Monday, February 6, 2017

Attention Boards: your two favorite menaces have combined: Airbnb and Pets!

Whether I am giving a presentation to hundreds of people, teaching a class to dozens of managers or meeting privately with a board of directors, the two issues that have come up without fail over the last few months are: Airbnb and Emotional Support Animals (ESAs) and other pet issues.

The questions I field on these topics usually sound like this:

"Our community is turning into a hotel. We have people coming and going at all hours and we have no idea who they are and, in addition to our security concerns, our recreational amenities are taking a beating."

"We are a no pet community but we have people bringing in more dogs each year and claiming they are emotional support animals. What about the people who bought here specifically because they do not want to or cannot live in close contact with dogs?

As a result of having recently rescued a dog from our local Humane Society, I have been searching for ideas to keep her from tearing down the house during working hours when she is alone. Lo and behold I cam across a site which advertised itself as "Airbnb for Dogs"! Oy. For a fee you can drop off your pet at a sitter's home but just imagine if that home happens to be inside a pet-restricted condominium or HOA? You get the best (or worst depending on one's perspective) of both violations!

With regard to Airbnb, VRBO, HomeAway and other similar sites, the ability to control your owners' engagement in this type of short-term rental activity depends largely on the provisions in your association's governing documents. If you were hoping your local government would help regulate this activity you should know that Airbnb is making that much more difficult by pursuing legislation which would restrict or prohibit a local government's ability to impact their business model which means your association is likely to be on its own when trying to regulate this behavior.  Attempting to pursue each violation as a violation of your minimum leasing requirements can be both costly and laborious given that each renal lasts only mere days. In my opinion, it is more effective to amend your documents to make the listing of properties in your community on these sites the violation rather than focusing on the rental term.

"But how can we tell if we have properties in our community listed on these sites before the guests show up?" you might ask.  Wherever there is a problem, a cottage industry designed to solve it cannot be far behind and the same is true here. There are now companies that exist which search these short-term rental sites each month to confirm whether or not there are units or homes in your community listed there. When those listings are found, your board can spring into action.

With regard to emotional support animal requests, I realize that you may question the truthfulness of many of these requests. You may even feel that the cards are very much stacked against a volunteer board of directors attempting to enforce reasonable pet restrictions.  This does not mean that associations need to rubber stamp all requests the receive. The best policy is to turn over these requests to a community association attorney who is highly experienced with requests for accommodations under the fair housing laws. This way, you can ensure, to the fullest extent the law allows, that any request for an exception to your pet rules is properly investigated and documented. Some people making false claims for fair housing accommodations will back off when asked to produce proper documentation while others are more intransigent and will proceed to acquire documentation off the internet without ever seeing a medical professional. It is also important to remember that there are individuals who are truly in need of an emotional support animal and are legally entitled to a reasonable accommodation.  Your job as a volunteer Board member or community association manager should be to work with your counsel to comply with the law and avoid the often significant penalties and costs associated with violating the fair housing laws while protecting the integrity of your pet restrictions.

The appeal of monetizing one's assets should really come as no surprise as that appeal is strong and there is no asset more easily monetized than a Florida getaway. For volunteer boards attempting to deal with a member's desire to do whatever he or she pleases with regard to occupancy of his or her unit, getting a handle on short-term rental activity and fraudulent ESA requests will certainly require the assistance of experienced counsel, a little ingenuity and a whole lot of patience.

For board members and managers in Florida who have more questions about this blog topic, you may reach me at dberger@bplegal.com or by phone at 954-364-6031.




Wednesday, December 28, 2016

Will Your Community Association be Sponsored by Advertisers Someday?

I read recently that some of our national parks in the U.S. are going to permit advertising in certain locations within the parks.  The reason for this move is ostensibly due to the appeal of millions of annual park visitors who spend many hours or days enjoying the natural beauty of these venues. Corporate America knows that a large captive audience provides the best opportunity to have a branding message resonate.  Despite the logic, to me some things should be off-limits, sacrosanct if you will.

The continuing trend to brand everything and carve out messaging on every available blank space has me thinking about the potential for advertisers to look inside private residential communities next. Many condominium and cooperative high-rises as well as large HOA communities already allow certain advertising activity such as cell phone towers and ads in their social directories and on in-house cable channels.  Most of that activity, however, is relatively unobtrusive and does not raise any eyebrows.  This could change if companies look next to large, private residential communities which contain hundreds or even thousands of residents along with the guests of those residents entering and exiting the community each day.  Can you imagine the potential for advertising, particularly in creative ways?

Some untapped areas might include:


  • Ads on the community bulletin board, association website, newsletter and other communication portals;
  • Ads on bus benches and other stops in communities with transportation systems;
  • Targeted sponsorship for certain recreational amenities or events. For example, the exercise room sponsored by LA Fitness, the Spring Picnic sponsored by Publix;
  • Signage at the community entrances and guard house;
  • Ads in the elevators, mail room, laundry facilities and other common areas.
Some larger communities in Florida and likely throughout the country are already experimenting with allowing more advertising involvement in their community's lifestyle. I have been to social events in client communities where portions of the event costs were defrayed by contributions from vendors who provide services to the community. I think more communities might consider these advertising arrangements if they were approached by companies to do so but up until now corporate America does not appear to have given much thought to the potential for community association advertising.

That might change and volunteer boards must decide in advance how to navigate these potentially risky waters.

Advertising inside your community might very well fall within the category of 'be careful what you wish for'.  It is important for community association boards to remember that they are typically operating not-for-profit corporations. As such, while certain sources of income other than the collection of assessments can be used to defray costs, they can also trigger tax consequences.  In Florida, boards can grant long-term easements so these kinds of advertising arrangements could be structured as easements which could prove difficult to vacate early if the association experiences buyer's remorse.  Boards considering such arrangements in the future would be well advised to consult with experienced counsel to discuss how long the initial term should be (a trial period would be best) and to craft sufficient disclaimer language advising residents and guests that the association is neither advocating for nor vouching for the advertisers in the community.

It is equally important to understand that once you start deriving revenue from a certain source, it is easy to become dependent on that revenue and therefore loathe to turn off its source.  While advertising is the fuel which drives the capitalistic engine, when it is used in a private residential community setting, the big question becomes whether such advertising will improve the quality of life in our communities or will it merely make it more difficult to seek refuge inside our previously tranquil communities.

Monday, October 17, 2016

If Hillary and Donald were running for your Condo or HOA Board which one would get your vote?

I realize that the title of this blog post will prompt some readers to dash off a response in support of their favored candidate or at least launch an attack against the candidate they despise.

The question in the title of this blog post is designed to make you think about the criteria community association members currently use when deciding who to vote for in an election of directors. While the stakes are undoubtedly higher on the national stage, the more local the government, the more direct impact your elected representatives can have on your daily life.  Accordingly, many of the same factors affecting our presidential election can and do affect association board elections; voter apathy in the form of an uninformed and uninvolved electorate combined with fiery rhetoric and rigid mindsets often result in the best condo, cooperative or HOA candidates not being elected and, in many cases, not even running in the first place.

Let's imagine Hillary and Donald both running for a seat on your condominium board.  For purposes of this blog post, we'll treat Gary Johnson and Julie Stein as the condo candidates who didn't send in their notice of intent to run on time. Perhaps in your community the personality types represented by each of these presidential candidates is not far off the mark? Thank goodness the Florida statutes limit the space permitted for a Candidate Information Sheet while also providing that the association is not responsible for any of the contents.


Now, let's begin the critical analysis that voters should undertake to make an informed choice. How do you see the following aspects of association operations being impacted, positively or negatively, by the current presidential candidates (and the real ones in your community) if they were running for a seat on your board?
  • Which candidate is more likely to encourage and facilitate open board and membership meetings with order maintained while also allowing members to speak and fully participate?
  • Which candidate do you want involved in preparing and passing your association's operating budget?   
  • Which candidate is likely to engage in cronyism both in terms of hiring professional advisors and vendors as well as the uniform and fair enforcement of covenants and restrictions against members and residents?
  • Which candidate has the ability to expose the association to lawsuits based on poor judgment, refusing to honor contracts, impulse control, or a quick trigger finger? For example, fair housing claims based on discrimination often result in high penalties and punitive damages against the housing provider/association.
  • Which candidate is likely to abuse his or her power on the board by rewarding friends and punishing "enemies"?
The foregoing questions are designed to tease out the negatives in a particular choice, but you can just as easily ask the following questions from a more positive perspective:
  • Which candidate has served on a community association board before, for how long and how efficiently did the community operate?   
  • Which candidate has previously volunteered for committees and other roles for the benefit of the community?  
  • Which candidate has attended any sort of educational classes for board members or expressed an interest in learning what the position entails?
  • Which candidate respects and understands parliamentary procedure? 
  •  Which candidate has a sense of fair play and has previously helped diffuse conflict in the community?
Lastly, and because the scenario in this blog post demands it, which candidate might be a little too focused on your community's walls and fences and which might benefit from a strict email policy?
After looking through both sets of questions, you may conclude that in far too many communities there is a lack of qualified candidates and the members have very few good choices. Many people feel that way about the 2016 presidential election as well. Still, refusing or failing to vote  is guaranteed to result in you not getting the board (or president) you want. The moral of this blog post: vote or run for your board and make your community great again. After all, we're all stronger together.
I realize that the title of this blog post will prompt some readers to dash off a response in support of their favored candidate or at least launch an attack against the candidate they despise.

The question in the title of this blog post is designed to make you think about the criteria community association members currently use when deciding who to vote for in an election of directors. While the stakes are undoubtedly higher on the national stage, the more local the government, the more direct impact your elected representatives can have on your daily life.  Accordingly, many of the same factors affecting our presidential election can and do affect association board elections; voter apathy in the form of an uninformed and uninvolved electorate combined with fiery rhetoric and rigid mindsets often result in the best condo, cooperative or HOA candidates not being elected and, in many cases, not even running in the first place.

Let's imagine Hillary and Donald both running for a seat on your condominium board.  For purposes of this blog post, we'll treat Gary Johnson and Julie Stein as the condo candidates who didn't send in their notice of intent to run on time. Perhaps in your community the personality types represented by each of these presidential candidates is not far off the mark? Thank goodness the Florida statutes limit the space permitted for a Candidate Information Sheet while also providing that the association is not responsible for any of the contents.


Now, let's begin the critical analysis that voters should undertake to make an informed choice. How do you see the following aspects of association operations being impacted, positively or negatively, by the current presidential candidates (and the real ones in your community) if they were running for a seat on your board?
  • Which candidate is more likely to encourage and facilitate open board and membership meetings with order maintained while also allowing members to speak and fully participate?
  • Which candidate do you want involved in preparing and passing your association's operating budget?   
  • Which candidate is likely to engage in cronyism both in terms of hiring professional advisors and vendors as well as the uniform and fair enforcement of covenants and restrictions against members and residents?
  • Which candidate has the ability to expose the association to lawsuits based on poor judgment, refusing to honor contracts, impulse control, or a quick trigger finger? For example, fair housing claims based on discrimination often result in high penalties and punitive damages against the housing provider/association.
  • Which candidate is likely to abuse his or her power on the board by rewarding friends and punishing "enemies"?
The foregoing questions are designed to tease out the negatives in a particular choice, but you can just as easily ask the following questions from a more positive perspective:
  • Which candidate has served on a community association board before, for how long and how efficiently did the community operate?   
  • Which candidate has previously volunteered for committees and other roles for the benefit of the community?  
  • Which candidate has attended any sort of educational classes for board members or expressed an interest in learning what the position entails?
  • Which candidate respects and understands parliamentary procedure? 
  •  Which candidate has a sense of fair play and has previously helped diffuse conflict in the community?
Lastly, and because the scenario in this blog post demands it, which candidate might be a little too focused on your community's walls and fences and which might benefit from a strict email policy?
After looking through both sets of questions, you may conclude that in far too many communities there is a lack of qualified candidates and the members have very few good choices. Many people feel that way about the 2016 presidential election as well. Still, refusing or failing to vote  is guaranteed to result in you not getting the board (or president) you want. The moral of this blog post: vote or run for your board and make your community great again. After all, we're all stronger together.

Tuesday, October 4, 2016

Indemnity Provisions can leave Associations holding the bag for someone else's wrongdoing!


A recent Broward County negligent security lawsuit filed on August 31st raises issues about who should  pay the consequences when a security breach results in a resident's death. In this case, a community with an entrance feature protected by a 24-hour guard and security cameras became vulnerable to entry when a perimeter fence was not properly maintained. An intruder with a decade-long rap sheet entered the upscale Davie community and fatally stabbed a resident. The multimillion dollar lawsuit was filed against the community's management company and security company but not the association. The initial reaction from the volunteer board of directors may have been relief to not have been named in the lawsuit until someone reminded them that they likely agreed to broadly indemnify both the management company and the security company in their contracts.

 

This blog post addresses provisions in existing service contracts which require the association to be financially responsible if its vendor’s negligent actions cause damage to a third party. As it is typical for boards to agree to provide broad indemnification in management, security and elevator contracts, in the negligent security case discussed above, it is likely that the management company and/or security company will file third party claims against the association to enforce the terms of those indemnification provisions.

 

While agreeing to an indemnification clause is often a cost of doing business these days, these provisions should not be treated as harmless boilerplate. Indemnification clauses must be carefully considered and discussed with legal counsel prior to agreeing to same. Moreover, the association must contact its insurance agent to confirm whether or not its current insurance policy will cover such clauses or if additional coverage is required. Most indemnification clauses will require that the vendor be added as an additional insured to the association's policy and the association's policy will be treated as the primary coverage for any claims even if the vendor has sufficient coverage to address its own negligence.

 

In the case of an onsite manager, that individual really is an extension of the board so it is reasonable for the association to indemnify him or her for actions taken at the board's request and with their direction. However, consider the case of a woman trapped in an elevator who sues the elevator company for negligent maintenance which resulted in her entrapment and injuries. The elevator company was hired to perform regular maintenance and repairs on the association's elevators. Neither the volunteer board members nor the association manager have the skill or expertise to determine when repairs and maintenance must be performed nor how to perform those functions, hence the need to hire an elevator expert. With a broad indemnification clause in place, however, the elevator company can avoid liability for all but the most egregious actions which typically must rise to the level of gross negligence or willful misconduct.

 

In a contractual setting, a fair indemnification provision should be reciprocal (meaning the contractor or vendor agrees to protect the association in addition to the association protecting them) and should be based on the party causing the harm being the party responsible for fixing it.

 

 

 

 

Friday, September 9, 2016

The 5 Most Frequently Asked Questions About Florida Fire Sprinkler Retrofits


As the 12/31/16 deadline for Florida high-rises to opt out of a full sprinkler retrofit looms large, the confusion regarding which multifamily buildings should opt out, why and what the consequences of that opt out vote will be escalates.

Here are the top five questions I've been asked over the last several months from condominium and cooperative associations throughout Florida.

1. Should low and mid-rise buildings vote to opt out?

The decision to opt out for low and mid-rise buildings requires a conversation with knowledgeable association counsel. I have some of my low and mid-rise clients who are taking the opt out vote and others who are not.

I have discussed the preventative value of an opt out vote for non-high-rises, however, there are also some perceived disadvantages to taking the vote as well including the fact that post vote notice requirements must be followed including the possibly chilling impact on sales and rentals when owners must notify all future potential purchasers and potential renters about the opt out vote.

When I have this discussion with my low and mid-rise clients the factors we discuss include:
  • Physical configuration of the building; specifically whether there are exterior catwalks with two remote entrances at each end.
  • Age of the building. If the building is three stories or higher (but fewer than 7) and was built after 1994 the permitting process required sprinkler installation so the potential need to opt out should no longer exist.
  • The existence of a local ordinance or code pertaining to sprinklers and low and mid-rise buildings. If such an ordinance or code exists then I am inclined to recommend the opt out vote for those low and mid-rises.
  • The percentage of short-term rentals permitted in the building. If a building has enough short-term rentals it may be treated as a public lodging establishment and its life safety requirements are much higher which might make the opt out vote more compelling.
  • The existence of commercial units in the building.
2. Will filing a Petition with the DBPR for a Declaratory Statement to clarify whether low and mid-rise buildings should opt out solve the problem?

No.  The DBPR does not make or enforce the Life Safety Code.  The Division will likely deny any such petition based on the fact that it does not have jurisdiction to interpret fire codes. A member of the Division initially took the position in a press article that the ability of all buildings to opt out under Chapters 718 and 719 of the Florida Statutes must mean that those low and mid-rise buildings must do so or be forced to retrofit. The Division has since backed off that position thanks to the efforts of the Florida Bar's Condo Committee, outreach by Senator Jeremy Ring, one of the sponsors of the opt out bill, and members of my law firm, Becker & Poliakoff. As such, there is absolutely no need to ask the Division to weigh in on a matter for which it has no jurisdiction and has already backed off an initially incorrect stance. It might be easier for some attorneys to have the Division undertake the legal analysis needed to answer clients' questions on the highly complicated sprinkler question but please see my comment in #1 about having a conversation with knowledgeable legal counsel on this topic.

3. Do high-rises who have opted out still have to install sprinklers?

Yes, partial sprinklers are typically part of an Engineered Life Safety System (ELSS) and, while buildings which would otherwise have to fully retrofit have the right to opt out of that full sprinkler retrofit, an ELSS cannot be waived. The main difference is that an ELSS typically only requires the installation of a sprinkler head just inside the entrance to a unit or in the kitchen while a full sprinkler retrofit is much more intrusive with sprinklers located throughout each residence. There is some growing talk about seeking new opt out rights from an ELSS and we will have to wait and see if that legislation has any real chance at passing.  Buildings which are required to retrofit with full sprinkler retrofits and opt out before the deadline must then install an ELSS as an alternative to that full sprinkler installation. If your building was not required to fully retrofit you would not be required to install an ELSS.  HOWEVER, there are elements of an ELSS which are otherwise required under the Life Safety Code so the Fire Marshal usually gets you one way or the other.

4. Can we use online voting to take the sprinkler opt out vote?  Unfortunately, it is not advisable to use online voting for the sprinkler opt out vote even though doing so would be the most convenient method for high-rise buildings with a significant percentage of out-of-state owners.

Section 718.112 (2)(l)1, F.S. provides that "a vote to forego retrofitting may be obtained by limited proxy or by a ballot personally cast at a dully called membership meeting or by execution of a written consent by the member." Moreover, the notice of the meeting at which the opt out vote will be taken CANNOT be transmitted electronically but must be mailed or hand delivered to each unit owner at least 14 days' in advance. Given the significance of the sprinkler opt out vote it is best not to attempt taking same via online voting regardless of the convenience factor involved.

5. What if we took the opt out vote but forgot to take some of the post vote steps required by law?

The statutes require that associations who successfully vote to opt out of the full sprinkler retrofit must take the following steps:

  • File a Certificate with the Division reflecting the opt out vote.
  • Mail or hand deliver to  notice of the results of the opt-out vote within thirty (30) days after the vote takes place to every owner. Compliance with this requirement must be evidenced by an affidavit from the person providing the notice and such affidavit must be maintained as part of the official records of the association.
  • After the association sends out notice to each owner, each owner must then provide a copy of that notice to a new owner before closing or to a renter before signing a lease.
If you failed to record your Certificate on the Opt Out Vote or failed to hand deliver your Notice of the Opt Out vote within thirty (30) days after your vote occurred, you should consider retaking the vote in an abundance of caution prior to the deadline. There is no way to tell right now if failure to take these post vote steps is a fatal flaw in the process but you certainly don't want your association to be the test case.

As you can see from the foregoing, this puzzle is only going to be solved by relying on the advice of your own experienced counsel and not by relying on free blogs and newsletters. Even folks with good intentions can harm others by providing inaccurate or incomplete information.

The moral of this post: please try to resist relying on information from entities and groups who use important topics like the sprinkler retrofit vote in Florida as a marketing tool.

Wednesday, August 10, 2016

Zika Virus and Your Community Association

Ask the average community association resident whether or not the association board has a duty to protect him or her from foreseeable risk inside the community and the answer is likely to be a resounding "OF COURSE".

Whether or not that duty is spelled out in the governing documents there is the expectation that the association will ensure that residents do not get sucked into a non-compliant pool drain and drowned, trapped inside an unsafe elevator or mugged in the parking lot.


With the growing threat of Zika virus in the U.S. and particularly in South Florida what, if anything, should your community be doing to lessen this threat to your residents?

A physical inspection of your community is warranted. The Centers for Disease Control and Prevention (CDC) has issued important recommendations on how to address any property conditions which might be attracting mosquitoes and providing convenient breeding grounds for them. Standing water in your community should be drained if possible or treated with insecticides. Non-functioning fountains should be drained and turned off and birdbaths drained.

The CDC is also recommending that air conditioning be used to combat mosquito breeding grounds so if you have vacant units or you keep the air off in your clubhouse or other indoor common areas to save money now is the time to address those situations.


Aerial spraying in your community may be useful in combating mosquitoes but may also draw the ire of your chemically sensitive residents.  Speak to your city or county officials to see what if anything is being done to address a potential Zika problem in your geographic area.

Lastly, if you host outdoors community events in the summer for your residents you might want to consider hosting those events inside this year rather than outdoors. You might also wish to adjust the hours your pool and other common areas are open at night.

There is no reason for your community to panic nor is there a reason for your Board to undertake responsibilities that are not yours to bear.  However, taking reasonable steps to prevent a potentially devastating problem for some of your residents should be explored.


For more information about how to combat the Zika virus in your community please click here:  http://www.cdc.gov/zika/prevention/prevent-mosquito-bites.html