Friday, October 30, 2009

Town Hall Meeting on Condo and HOA issues.

The Sun Sentinel's Town Hall meeting last night drew a big crowd of people looking for answers to fairly common association problems. I was very pleased to sit on a panel that was asked to listen to those questions and try to help.

Two issues were raised that directly pertain to my profession-lawyers! The first issue pertained to the association attorney's perceived support and loyalty for the board alone. Several audience members complained that attorneys representing their communities were (a) helping boards do bad things (b) wouldn't speak with them as unit owners and (c) were part of the problem and not the solution.

As an owner who is not part of the board's decision-making process, it can feel like the attorney represents the board and not YOU. In fact, association attorneys (the good ones at least) realize that they represent the association which, of course, is comprised of all the members. However, when representing any large organization, you can't take direction from several hundred masters and that is why the board is the liaison with the attorney.

I have seen association attorneys overstep their boundaries, become too attached to one or two board members to the exclusion of others, and not be forceful enough when they are cognizant that the board is operating outside the confines of their documents and the statutes. It's equally important to remember, however, that the boards who are most intent on operating outside those boundaries often do not get their attorney's advance buy-in for their agenda. Just because the association is represented by counsel, don't assume that the board has gotten the attorney's approval for a clearly unadvisable decision; chances are the attorney was never consulted.

The other issue raised regarding association attorneys is why 5 of them can give you 4 different opinions!! My first answer would be "it's the nature of the beast"! In all seriousness, however, most of what we do hinges on interpreting language that would make my English professors at Northwestern cringe. Sadly, many developers create awful governing documents and many of our laws are also very poorly drafted. Don't assume that all of the laws being written in Tallahassee are drafted by lawyers. Many times they are the result of lobbyists writing out suggestions on cocktail napkins!

When our laws and association documents are written in concise, plain English it makes it much easier to render useful and uniform opinions. Garbage in, garbage out or conversely, quality in, quality out!

Thursday, October 29, 2009

The advantages and disadvantages of living in a common interest ownership community.

Have you ever made a list of pros and cons to decide how you really feel about a person or an issue? It sometimes helps to see in black and white which column outweighs the other.

Realistic expectations can often help avoid disappointment and failure in any endeavor. If you didn't make a list before you moved in to your current condominium, cooperative, homeowners' association or mobile home community, it's not too late to take a moment to figure out whether the advantages outweigh any perceived disadvantages.

Some of the advantages to that common interest ownership community are:

-Shared vision for aesthetics;

-Shared expenses for common facilities and amenities that you would not otherwise be able to afford;

-Security;

-Location (can't afford a house on the beach but a condo on the beach might be in your budget!);

-Rule enforcement (you hopefully won't have a neighbor paint her house purple or leave a car on cinderblocks for months);

-Bulk buying power.

Some of the disadvantages to that common interest ownership community may be:

-Your priorities in terms of maintenance and repair items might not be shared by the board;

-You are subject to the board's judgments in terms of vendor selection, contract sums, etc.

-You are subject to the documents being amended and rules you agreed to at the time of purchase being changed (you must be prepared to be on the losing end of votes at times);

-Your home is your castle except in a community association. You will have to tone down the all-night noisy parties, drive fewer cars and adapt to certain aesthetic standards you might not share;

-You could be the subject of arbitrary and capricious enforcement at some point or nasty board politics;

-You could be forced to pay for owners who aren't paying.

Of course, everyone's list will be different so it might be time to brush off or update yours to see if your community is still a good fit.

Wednesday, October 28, 2009

Director conflicts of interest.

The term "conflict of interest" gets thrown around a lot but I often wonder how much is understood about the hurdles a conflict may present and how they can be surmounted.

There is a difference between a true conflict of interest and a public relations problem. A director who owns the landscape company that the board is considering hiring, clearly has a conflict of interest; that does not mean, however, that the board cannot hire that company. It does mean that the conflicted director must disclose the relationship or interest to the board prior to the vote and the approval must be obtained without counting the votes of the interested director.

A separate issue for that director is whether or not it makes sense to do business with one's own community. Even if the director does everything right in terms of disclosing the conflict and abstaining from voting, the resulting contract will still be viewed with a certain amount of suspicion by some members.

At what point is a conflict not really a conflict at all? If that same landscape company is owned by the director's third cousin whom he's never met, is that still a conflict? Typically, a conflict is present when someone is receiving something of value either directly or indirectly as a result of a relationship or an interest and his or her position on the board affords an opportunity to advance that interest.

If you think you have a conflict of interest, you probably do. Disclosing a potential conflict that turns out not to be a conflict after all is not nearly as bad as failing to reveal a relationship or interest that is later discovered to be a true conflict.

Thanks to all of you who logged on today to the Sun Sentinel's live chat on condominium and HOA issues. We were amazed at the number of participants and there were so many fantastic questions that we simply did not have enough time to answer. If any of your unanswered questions can be addressed as a future blog topic, please email me at dberger@kgrlawfirm.com.

Tuesday, October 27, 2009

Look before you leap when amending your documents.

The associations who get into the most trouble when it comes to amending their documents are usually those who did not think through the process ahead of time.

The starting point for any association wishing to amend its documents is to review the amendatory threshold in the document being amended. The declaration, articles and bylaws might all have different amendatory requirements. If you are amending a document that requires lender consent to do so, please save yourself a costly headache and contact your association attorney to discuss what must be done and whether or not you can rely on the relatively new statutory procedures concerning lender consent requirements.

If amending your declaration requires 90% approval from your total membership, you might want to consider first amending the declaration to lower that threshold and then going on to amend other provisions at a later time.

You must also consider whether or not the document you are amending is the proper place for the provision you are adding. For example a leasing restriction should not be placed in your Articles of Incorporation simply because the Articles contain an easier method of amendment than the Declaration does.

Here is a checklist of sorts next time you want to amend your documents:

1. Can we achieve the necessary amendatory threshold?

2. Is lender consent required and if so can we obtain it?

3. Are we amending the correct document?

4. Is the amendment reasonable and enforceable?

5. Does the amendment in one document require an amendment to another in order to avoid a conflict?

6. Are the members aware that we will be asking them to vote on this amendment and will they support it?

Some amendments are relatively easy to pass (i.e. making the date of the annual meeting more flexible) and others meet a high level of resistance (i.e. guest/occupancy restrictions). Make sure you know ahead of time what your chances of amendment success are and whether or not you have followed all the proper steps.

Monday, October 26, 2009

Are you dealing with a master association?

How many of you are dealing with the issue of a master association? "What does this mean?" some of you might ask.

This means that in addition to your own condominium or homeowners' association, you are also obligated to be an assessment-paying member of another association which has certain overall control regarding the entire community in which you live.

If you live in a condominium association, you should have knowledge of the existence of a master association because you are entitled to receive a Question and Answer Sheet and one of the questions pertains to whether or not there is a master association. If you live in an HOA, you will not receive such information so be sure to ask your seller when purchasing if there is a master association to which you must also belong in addition to the HOA.

The absolute bare minimum you need to know about a master association follows:

1. Who are members of the master association, all of the individual owners or the sub-associations?

2. Is the master association board elected and, if so, by whom or is the master board automatically comprised of certain directors from the sub-associations?

3. What are the rights and responsibilities of the master board? What common areas does it maintain, repair and replace?

4. Can the master board enforce your own community's governing documents in the event your board fails to do so?

5. Are the master association's documents more restrictive than your sub-association documents and which set prevails as it pertains to your individual unit/home use?

6. How does the master association collect its dues? Are fees collected directly from all owners or do the sub-association boards collect and remit the portion of assessments owed to the master?

7. Does the master board have the right to lien you for nonpayment of assessments or to fine you for certain use violations?

Not surprisingly, sub-associations and their master associations do become combative with each other at times. Much of that stems from either a misinterpretation of their respective governing documents or the failure of the community's developer to create a development scheme that laid the groundwork for a properly functioning master/sub relationship.

Friday, October 23, 2009

The one-year countdown begins!

Probably the last thing on your mind right now is a storm that blew through here four years ago to the day this Saturday. However, if your association was like many and suffered damages when Hurricane Wilma paid us her unfriendly visit, you need to know that the one-year countdown on the 5-year statute of limitations to pursue a casualty claim has begun.

My law firm, Katzman Garfinkel Rosenbaum (KGR) and the Community Advocacy Network (CAN) are committed to educating board members, association members and community association managers about their rights before this window of opportunity closes forever.

Community association boards are particularly vulnerable to the common myths that are associated with the complicated insurance claims process. Have you ever thought your policy would be canceled or your rates raised if you made a claim for property damage? If you have, you are a member of a very large and misinformed group of people. In fact, Florida law prohibits an insurer from cancelling or failing to renew a policy as a result of a claim made for damage caused by an act of God.

Moreover, even if you've never filed a claim, you are just as likely to have your rates raised as your neighboring property owner who has made dozens of claims and been paid on them. Insurance companies raise rates in broad swaths and not just in reaction to your particular claim.

Many boards submitted claims for Wilma storm damage four years ago and were told that their claims did not reach their deductible level. Others received some money from their carriers but not nearly enough to pay for repairs and, as a result, they were forced to specially assess their members. Incredibly, a few associations never even made claims because they relied on their resident community "expert" who told them not to bother.

For far too many communities, the storms that ravaged Florida in 2005 (Katrina and Wilma) created a hole from which they never dug out. The special assessments that their members were forced to pay for damage that should have been covered by their insurance carriers made them less able to bear the current real estate market conditions.

Time is running out to help associations that may have been impacted by the inequities in the insurance claims process. Please visit a special website I helped create at www.wilmaclaims.com for more information about what you can do.

Thursday, October 22, 2009

Does the Florida Clean Indoor Air Act apply to your community?

The Florida Clean Indoor Air Act (FCIAA) was enacted in 1985 by the Florida Legislature. The purpose of the Act was to protect people from the health hazards of secondhand smoke at work. In November 2002, seventy-one percent of Florida's citizens voted for a constitutional amendment to prohibit smoking in all enclosed indoor workplaces. The smoke free law became effective July 1, 2003.

Originally condominiums were exempt from this Act. That exemption was removed. Common areas and recreational facilities may be deemed to be the "workplace" for your lawn people, pool maintenance workers and others. Thus, the association can prohibit smoking there even if some of those areas are not enclosed. The more interesting question is whether or not a condominium or cooperative can prohibit smoking inside the units.

The units are not a "workplace" if no one other than the owners and their guests and invitees enter them. However, what if the association sends in a pest control man regularly or has to perform other maintenance inside the unit? Is it now an "indoor workplace" for those workers?

In the event no one ever enters a unit to perform any sort of work, a heavy smoker whose smoke is penetrating another unit or units via the ventilation system could still be pursued as a general nuisance even if the FCIAA is not an option.

The Department of Health (DOH) and the Department of Business and Professional Regulation (DBPR) are responsible for enforcement of the FCIAA. DOH shall enforce the FCIAA in all facilities not regulated by DBPR. To obtain a list of facilities that are regulated by the DBPR, click on the FCIAA Brochure .

To report a violation of the FCIAA, you can contact either the DBPR or the Bureau of Tobacco Prevention at the emails listed below. The following information is required to process a complaint:
  • Name of workplace (where violation is occurring);
  • The mailing address, city, county and zip code;
  • Nature of the violation (ex. smoking in an enclosed indoor workplace); and
  • If available, provide a telephone number and name of the person in charge of the workplace.

Email: Bureau of Tobacco Prevention Program Call.Center@dbpr.state.fl.us

Tuesday, October 20, 2009

One statute for all types of communities?

In Florida, we have five different statutes for five different types of community associations: 718 (condominiums), 719 (cooperatives), 720 (homeowners' associations), 721 (time shares) and 723 (mobile home parks).

While there is no doubt each of these kinds of communities have very different components, they all share certain procedural necessities as corporate entities (holding meetings, preparing budgets, etc.) that might benefit from one streamlined statutory process.

Vermont, Nevada and Minnesota are some of the states that have Common Interest Ownership Acts. Is it time that Florida join the list? Mark R. Benson, Past Chairman of the Florida Community Association Living Study Council, Past Member of the Regulatory Council of Community Association Managers, Past Vice-Chairman of the Advisory Council on Condominiums and a County Court Mediator, believes the answer is a resounding "Yes".

Mark has spearheaded a project known as the 7xx Project for Community Association Legislative Change whose highlights are as follows:

1. A single, streamlined uniform statute which addresses residential condominiums, HOA's and Co-ops;

2. Use of common language;

3. Replaces the DBPR with the Department of Agriculture Consumer Services;

4. Greater accountability for board members;

5. Better access to education and assistance;

6. More education for and discipline of community association managers; and

7. Places time shares and condo-hotels in a separate statute to which they are better suited.

If you want a copy of the 7xx Draft, please send an email request to mark@markRbenson.com and indicate if you want it in Word or PDF format.

Having one uniform common interest ownership statute will certainly make association attorneys' lives a little easier as it cuts down on the potential to misquote the wrong statute. The real question is will it make your life as a board member or a unit owner any easier?

No matter what you feel about "one statute to rule them all" most of us can agree that some sort of change is needed. Our Florida Condominium Act is one of the most bloated and incomprehensible laws on our books. At some point we might want to stop putting new parts in an old car and just buy a nice, shiny new one instead!

Monday, October 19, 2009

Do you know which of your actions are really material alterations?

Most board members understand that they must obtain membership approval for material alterations or substantial additions. What they are not so clear on is what constitutes a material alteration.

The most basic litmus test is if the change materially or palpably changes a common element's appearance or use, it's a material alteration. In a condominium association, a material alteration must be approved by at least 75% of the total voting interests unless the governing documents provide otherwise. In a homeowners' association, the governing documents will control what needs to be done in the event the board makes any changes to the common areas.

The reasoning behind the requirement for membership approval is quite simple. An owner might have purchased in a particular community solely because it has a tennis court or is painted a lovely shade of blue. While that same owner might be on the losing end of the vote to change these items, they must at least have a say.

Some examples are obvious and others might be a little less clear. The following examples are material alterations which must be approved in advance by your members:

1. Changing the paint color of the building's exterior, corridors or any other common area;

2. Adding a cell phone tower to the roof;

3. Changing from carpeting to tile or vice versa;

4. Changing from a flat tile roof to barrel tile;

5. Cutting down a large tree on the common areas;

6. Changing light fixtures in the clubhouse;

7. Adding a fountain to the lake; and

8. Changing the card room to an exercise room.

These are just a few examples of changes that constitute material alterations which require membership approval. There are exceptions to the need for membership approval. For example, changes required in order to comply with local or state ordinances can be made without membership approval. If you are performing maintenance or repairs and simply want to take advantage of new materials or technology that was not available when your community was originally built you can do so without treating it as a material alteration.

This is one of those areas that definitely requires a discussion with your association attorney in advance. Some boards are hesitant to ask the members for approval for these kinds of projects for fear they will be voted down. Even the best ideas can fail to garner enthusiasm and support; they should be scrapped until the board and members can jointly decide on a vision.

Friday, October 16, 2009

Voting certificates and other common recall pitfalls.

If you just learned that your members are trying to recall you as a director, your head is probably spinning. Keep it in place and remember that this is one of those times where it makes sense for the board to call your association attorney immediately and not try to muddle through the process yourselves.

Some of the common pitfalls boards encounter when dealing with a recall are:

-Failing to timely and properly notice and hold a board meeting to vote on the recall;

-Failing to establish a quorum at that board meeting;

-Failing to list specific reasons in support of their decision not to certify (any reason for not certifying which is not contained in the minutes of the board meeting cannot later be raised in the Petition for Arbitration so you've got to get this right!);

-Failing to timely file a Petition for Recall Arbitration; and

-Voting Certificates

Voting Certificates may be the most contested items in any recall arbitration. Here the old adage proves true: If You Don't Use It, You Lose It!!

Voting certificates are forms submitted to the association's secretary for units owned by more than one person, or owned by a corporation, partnership or other entity to designate the person authorized to vote on behalf of the unit if the association's governing documents require the use of a voting certificate.

If the governing documents require the use of voting certificates, the association must provide evidence that it has routinely enforced this requirement in order to deny any recall ballot because it was not signed by the authorized voter. In other words, the association cannot reject a recall ballot from a person from whom it has accepted votes on other issues in the past.

While a Petition for Recall Arbitration is pending, the board carries on business as usual. If the recall is later certified, the actions taken by the board during the pendency of the arbitration are presumed valid. If less than a majority of the board is recalled, the remaining board members appoint members to fill the vacant seats. However, the board may not appoint any of the recalled members to fill those vacant seats. If an election occurs during the pendency of a Recall Arbitration, the arbitration will be deemed moot.

In tough times, people question the role their leadership played in their current suffering. Are you hearing more grumbling about potential recalls? The best way to avoid being in the position of having to defend yourself from a recall is to insist on transparency and pro-activity in all your association operations.

Thursday, October 15, 2009

You've just been served with a recall petition....now what?

Florida law provides that any member of the Board of Directors may be recalled and removed from office with or without cause by a majority vote of the total voting interests of the association. This vote may take place at a meeting but it is generally taken by written ballot.

If you've gotten to the point in your community where a recall is being pursued, you already have communication problems and other issues afoot. Your immediate concern is how to respond to the recall petition but after that your board will have to figure out why some of your members no longer want you at the helm of their organization.

Recall can be an ugly process and believe it or not sometimes people will bend the truth to entice a signature on a recall ballot. That does not, however, serve as a defense to the recall. The directors do have the option to rally support and collect rescission ballots up until the time that the recall ballots are served on the board.

Once the board is served by certified mail or personal service of process with the recall ballots, the clock begins to run. Service on only one board member or on the association's registered agent is sufficient to constitute service on the entire board. The board must notice and hold a meeting within 5 full business days following service of the recall ballots. At that meeting, the Board will vote to either certify or not certify the recall. If the recall is certified, the recalled board members are removed immediately and are given 5 full business days to turn over all records and property of the association.

If the recall is not certified, the Board must file a Petition for Recall Arbitration with the DBPR within 5 full business days following the meeting. The association must pay the costs to file the Petition for Arbitration. If the Board votes not to certify the recall, the minutes of the board meeting must list with specificity the reasons for not certifying. Detail is the key in this regard and may have a huge impact on the outcome of a recall arbitration.

Tomorrow we'll talk about some common pitfalls that occur during the recall process and how voting certificates often play a role in those problems.

Wednesday, October 14, 2009

Do you know what your association attorney thinks of you?

We pretty much know what most people think about their attorney (although mercifully there are exceptions to this general rule of overall dissatisfaction with lawyers dating back centuries), but have you ever stopped to think about what your counselor thinks of you and your board?

I recently asked the attorneys at my law firm, Katzman Garfinkel Rosenbaum (KGR) for insight in to our clientele which is primarily made up of community associations. After all, you can't truly serve someone if you don't understand them. Here are some of the observations a dozen of my KGR attorneys made regarding community association boards:

"Representing community associations can be a lot like the movie 50 First Dates. You have to keep reintroducing the firm and what we can do for them as the board composition changes."

"The overwhelming majority of our boards and board members are very willing, if not eager and yearning to be guided, led and mentored. In addition, while they do not always play well with each other, and sometimes lose sight of the fact that they are all on the same team, most board members are willing to play their hearts out under the right coach (us)."

"One size does not fit all when it comes to association clients so you have to know your client or who is in control of your client."

"Association clients need and are open to suggestions, recommendations and directives of a strong but involved and caring coach. They crave new, innovative and proactive game plans that are tailored to the particular needs of their communities, take into consideration and incorporate their own ideas and concerns and anticipate potential pitfalls."

"A community association law firm is not merely a tool for the board's use in achieving its objectives. Rather, it is more like an active partnership with the board where our role is to make suggestions as to what they should be doing, how they should be doing it as well as advising how they can best exercise their business judgment."

"Associations no matter how small or large, pro-active or dormant, professionally managed or self-managed, inescapably have an absolute need for at least one legal service which is contract review/dispute resolution. By contrast, the problems we do see is when the association consummates a deal without seeking legal advice and the last thing they want to hear at that point is 'you should have asked us for help before agreeing to this'."

"Boards and property managers still do not understand the importance in starting the collection process early on. They tend to wait 6 months or more to initiate collections. Their issues are not a nuisance to us, we care and can help."

"Know your audience and the level of knowledge they have regarding legal issues that impact their community. Each board member and property manager is different. Some associations require extra hand holding while others prefer to review their status report in silence."

"Often times the clients who scream the loudest understand the process the least. Reasonable expectations need to be set early on in the relationship so that everyone is satisfied as the matters progress."

"Nothing turns a client off more than overbilling, underexplaining and being unavailable."

“Associations are in desperate need of cash flow in today’s economy and they inevitably look to their attorneys for help. The board members do not want to be left in the dark and therefore constant and open communication between the attorneys and the board members will help guide them through this difficult period.”

Do any of these comments resonate with you? To see some of the folks quoted above, please click on the Our Attorneys tab at www.kgrlawfirm.com.

Tuesday, October 13, 2009

When should you call your association attorney?

No one is interested in spending unnecessarily or unwisely in this economy but the old axiom "penny wise and dollar foolish" still holds true. Most people resist calling their attorney in all but the most dire circumstances but your board can't afford not to get your association attorney involved early when taking any of the following actions:

1. Disapproving potential buyers, tenants or other guests;

2. Responding to an accommodation request for an alleged disability;

3. Amending the governing documents;

4. Materially altering the common elements (yes, something as simple as changing the hallway paint color is a material alteration requiring membership approval);

5. Levying a special assessment;

6. Creating rules that will impact an owner's use of his or her unit/home and/or the common elements/areas;

7. Levying a fine;

8. Responding to a complaint filed with the Division against the association;

9. Signing any contract (even the seemingly inexpensive ones may contain hidden clauses obligating the association for more expensive services for years to come);

10. Pursuing a delinquent owner;

11. Pursuing an owner for a violation of the governing documents;

12. Purchasing or leasing property on behalf of the association;

13. Granting, altering or terminating easements;

14. Filing an insurance claim;

15. Exercising emergency powers;

16. Borrowing money;

17. Waiving Reserves;

18. Attempting to preserve or reinstate the governing documents; and

19. Creating and sending out the annual meeting and election notice package.

The list above is certainly not exhaustive. Each association's need for legal counsel differs but a general rule of thumb is that if you think it might be a good idea to call your attorney to confirm that what you are contemplating is legal then it is a good idea!

Monday, October 12, 2009

Why do we set our community association boards up for failure?

Show me a successful corporation and I will show you well-trained managers leading those organizations. Being a good manager or leader requires a certain set of skills that most people are not born with, they have to learn over time. Yes, there is a difference between a manager and a leader. A manager makes sure the trains pull into the station on time. A leader decides where to lay the tracks.

Would GE put Joe Anybody in charge of overseeing labor, interfacing with corporate counsel and preparing their annual budget without first knowing if he can perform these tasks? Does Joe Anybody have the skills to negotiate skillfully and tactfully when the workers threaten to walk out? How about the common sense to deal with daily operations?

Corporations for profit understand that managers and leaders are essential to their ongoing existence and they invest in these folks by training them and giving them the tools they need to lead the organization. This got me thinking about the leaders in our not-for-profit corporations, our 55,000+ community associations in the State of Florida.

How much support and training does the State and even the organizations themselves give those leaders? Even when the topic of board member education comes up in Tallahassee as it has the last few years, it comes across a stick rather than a carrot.

There's nothing remotely exciting about being told you have to report for "mandatory training" in order to hold your unpaid position on the board. Being told the State has confidence in your ability to lead your community and evidence of that support can be found in the leadership conference they are paying for you to attend is quite a different message!

Frankly, we need more management and leadership training for board members and less of the statutory drilling we're used to seeing. Yes, it would be wonderful if every board member serving in the State of Florida had a full grasp of the Florida statutes that govern their community as well as a thorough understanding of their own governing documents. Even armed with this knowledge, however, a director without the skills needed to successfully defuse a potentially hostile situation will not be an effective manager or leader. The ability to successfully communicate could be the single greatest asset a director can have and you won't get it by being forced to read the statutes three times!

Thursday, October 8, 2009

Emergency powers for boards

Two years ago the Florida Legislature wisely recognized that volunteer boards could benefit from some guidance and the relaxing of certain procedures in order to better handle a storm situation. Unfortunately, those "emergency powers" were only conferred on condominium boards and not HOA boards but nevertheless they do provide some flexibility for condominium boards to maneuver during a difficult time.

Pursuant to Section 718.1265 of the Condominium Act, a board may undertake the following in response to damage caused by an event for which a state of emergency has been declared by the Governor:

-Conduct board and membership meetings with notice given as practicable and not as statutorily prescribed under ordinary circumstances;

-Cancel and reschedule any association meeting;

-Name assistant officers who are not directors and such assistant officers will have the same authority as the executive officers during the state of emergency in order to replace missing executive officers;

-Relocate the association's principal office or designate alternative principal offices;

-Enter into agreements with local counties and municipalities for debris removal;

-Implement a disaster plan before or immediately following the event which may include shutting down or off elevators, electricity, water, sewer or security systems or air conditioners;

-Declare the property unavailable for entry or occupancy based upon advice of emergency management officials or licensed professionals retained by the board;

-Require the evacuation of the condominium property in the event of a mandatory evacuation order. If a unit owner or occupant fails or refuses to evacuate the condominium property despite the board's evacuation order, he or she does so without possible recourse against the association for any injury or loss to persons or property as a result;

-Enter into contracts to mitigate further damage to the property including removing and disposing of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the condominium property and inside the units;

-Contract on behalf of the owners for items or services for which the owners are otherwise individually responsible but which are necessary to prevent further damage to the condominium property;

-Levy necessary special assessments without a vote of the owners even if the documents ordinarily require membership approval for special assessments; and

-Borrow money and pledge association assets as collateral to fund emergency repairs without unit owner approval.

These emergency board powers are limited to a "time reasonably necessary to protect the health, safety and welfare of the association and the unit owners and the unit owners' family members, guests, agents or invitees and shall be reasonably necessary to mitigate further damage and make emergency repairs." These powers should not be used outside these statutory guidelines.

It is interesting to note that there was a push last year to remove these emergency powers when they have yet to even be invoked since we have been fortunate in avoiding hurricanes the last few years. Do some boards overstep their boundaries? Yes. Do some use any excuse that something is an "emergency" to do what they want? Certainly. But those boards do not reflect the majority who simply want the tools they need to protect their communities and to fulfill their fiduciary obligations.

Wednesday, October 7, 2009

Dealing with the "People Factor" when a storm approaches

It is important to remember that your board will be dealing with a lot of fearful people who have been listening to round-the-clock media reporting when a storm is looming. In addition to preparing your community physically it is just as important to prepare your owners and residents mentally.

I recommend that you take advantage of all possible means of communication with your residents both before and after a storm. Even though there is always an abundance of tips in your local newspaper and online, it is still advisable to run your own community list of tips for your owners in your community newsletter, your association website and/or your in-house cable TV channel. Here is some of what you should provide:

-Shelter locations and hours

-Emergency Response information

-Hospital location and information

-Evacuation routes and procedures

-Municipal Vulnerable Persons Registry information for those owners with special needs

This is also your chance to remind your owners what needs to be done to secure their own units or homes such as removing any items from their balconies, emptying their construction dumpsters, closing their shutters, making arrangements for pet removal in the event the building and/or homes need to be evacuated. If your association does not have a rule in place regarding hurricane shutter preparation it needs to adopt one immediately.

Of course, the new wrinkle in this drama is the fact that many homes have now been abandoned due to pending foreclosures so there is no one available or interested in securing the property. It is important to speak with your association counsel to identify what steps the association can and should take to prepare these properties for the storm.

The Hurricane Committee should identify any residents who need special care and contact those owners as well as their family members to determine if any arrangements have been made for them in the event an evacuation is mandated. In the event an evacuation is ordered, owners should be told to keep all of their receipts related to any Additional Living Expenses (ALE) such as hotel accommodations, gasoline, etc. which can be submitted as part of an eventual insurance claim.

A board who cares enough to do the necessary preparatory work pre-storm and who promptly tackles any clean-up post-storm should earn the respect and gratitude of most owners.

Tuesday, October 6, 2009

Preparing your documents and your facilities for a storm

Once the media becomes focused 24/7 on an approaching storm, your adrenaline naturally starts pumping. Use that nervous energy to get your community and owners as physically and mentally prepared as possible.

Community associations rely heavily on various documents to function properly. Association records should be scanned and uploaded for temporary secure internet storage with hard copies placed in water tight Ziploc bags and secured in a fireproof box.

Which documents should you secure?

Insurance Policies

Resident Lists

Financial Records

Employee Records

Contracts

Association Governing Documents

Community Plat

Plans & Specifications and Blueprints

In addition to document preparation, you will need to prepare your property physically. Trees and bushes should be trimmed and any dry wood or debris removed. Any construction material should be secured or removed. Generators should be tested and put in place. The pool and spa should be prepared and the pool furniture stored. The following lists should be prepared:

Vital Equipment List:

Location of shutoff valves and structural components

Location of water lines and cutoffs

Electrical main circuits, gas or fuel oil lines and cutoffs, sewer lines and clean-outs

Location of emergency equipment such as fire extinguishers, defibrillators and generators

Important Contacts List:

Attorney

Accountant

Insurance Agent

Management Company

Architect

Engineer

Contractors

Pool Company

Landscape Company

Elevator Company

Having this information handy in case of a power failure will make it easier to call the people you need and to show those people where certain items are in your community.

Tomorrow we will discuss how to get your owners and residents mentally and physically prepared for a storm and what you should be thinking about in terms of preparing abandoned or foreclosed properties for a storm.

Monday, October 5, 2009

What does your board need to do once you hear an official storm warning?

We go through this routine every year in Florida: a tropical storm is strengthening and it is all anyone talks about on the news, radio and at work. At times it feels like some people get a kick out of the tense drama of it all. While also worrying about their own families, homes and businesses, board members are also expected to worry about and prepare the community as a whole. What then should your board do when those first storm rumblings start to be heard?

If you haven't already done so earlier in the hurricane season, immediately review your association contracts to determine what assistance your association vendors can and should give you both pre- and post-storm and at what price.

Management Contract: what extraordinary relief services will be provided by your manager or management company? What is the priority of services to be provided and what additional charges for such services will you have to pay?

Landscaping Contract: what preventative services such as tree trimming and debris removal do they provide? What relief and clean-up services will they provide and in what time-frame post storm? Can you pay ahead of time to secure a better price for debris removal?

Security Contract: when will security personnel leave before the storm hits and when will they be back on the job after the storm passes? If you have electronic gates, what needs to be done to secure them in the event of a storm?

Elevator Contract: if you don't have a generator can your elevator company provide you with one? What relief services can they provide post storm and what preventative steps can you take in advance?

Construction Contract: if the association is in the midst of any construction work on its property, the contract should contain a clause requiring the contractor to secure the premises, empty any waste bins and secure their work material before a storm arrives so construction materials do not become flying missiles and inflict even more damage. Owners with ongoing individual renovation projects should similarly be required to prepare their property for the storm.

Insurance Policies: Make a note of your casualty policy limits and deductibles. Make sure your agent explains in detail any exclusions to your policies. Most importantly, make sure all premiums have been paid and that your coverage is ACTIVE!

Tomorrow we will discuss necessary preparations for your association documents, your people and your facilities. Forewarned is forearmed!

Friday, October 2, 2009

Don't underestimate the likelihood of October hurricanes

It's October 2nd and we've managed to get more than halfway through Florida's hurricane season with nothing stronger than a typical summer rainstorm. However, don't count out the month of October as a potential threat for hurricanes.

Wilma tore through South Florida four years ago on October 24th. Those communities with proactive and knowledgeable boards and trusted advisors fared much better than their less-informed and ill-prepared counterparts. Every year we see information designed to get Floridians prepared for the weather that is a natural part of living in paradise. What we don't see is information designed specifically for community associations and the volunteer boards who run them.

My group, the Community Advocacy Network (CAN), created a Hurricane Preparedness Guide for Community Associations specifically with your needs in mind as you try to safeguard your own property as well as that of your neighbors. You can print out a copy of that guide at www.canfl.com. I will also be discussing various aspects of hurricane preparedness and disaster recovery in a series of blogs.

The very first step to being prepared for a storm event is to form a Hurricane Committee which can implement the strategies and ideas we will discuss. Make sure to pick people who don't mind rolling up their sleeves to get the necessary preparatory work done. Being prepared and staying calm are your two strongest weapons in the face of a serious storm event.

Thursday, October 1, 2009

Quorum tidbits

For many people, the concept of a quorum is their first introduction to the fact that they are serving on a representative body. The word "quorum" is Latin and means "of whom" from the phrase "of whom such a number must be present".

In the most basic terms, a quorum represents the minimum number of members of any representative body who must be present in order to conduct business. Why do we need this? It hardly seems wise to allow a incredibly small number of people to make decisions for a much larger number even if those few managed to drag themselves to a meeting when the vast majority couldn't.

Typically, a quorum at board meetings is a majority of directors unless the governing documents specify otherwise. In condominiums, directors can be present by phone at board meetings for quorum and voting purposes. Also in condominiums, the quorum needed for a membership meeting is dictated by the governing documents but a quorum is not needed to hold a condominium election given the general apathy of most owners.

In a homeowners' association, a quorum for members' meetings is 30% of the owners unless a lower number is specified in the governing documents. Of course, as with most things, a quorum requirement can be used as a weapon in some hands. Without a quorum, business cannot be conducted. Thus, owners or directors who don't want a certain action to take place might use the disappearing quorum as a tool.

Once a quorum has been established, does it continue to exist no matter how many members leave during the course of the meeting? The answer is NO. Once the chair of the meeting or any member notices that the quorum no longer exists as a result of people leaving, all business must cease.