Monday, May 31, 2010

Adapting your community’s restrictions to today’s new reality


Last week a client asked me if they could or should overlook an amendment to their Declaration that was passed several years ago. That amendment placed a cap on the number of rentals that the Board could approve in the community; it was a restriction that was wholeheartedly supported by the membership at that time. Here’s the rub: that cap has now been achieved and there are several owners who are currently in danger of losing their units to foreclosure if they cannot rent out their units.

What should the board do in this instance? Amending the rental cap restriction at this time is not really an option for this community. If the board ignores the rental cap restriction in their governing documents do they risk a breach of fiduciary duty claim and/or do they risk being able to once again enforce this restriction when market conditions stabilize in the future?

My advice to this board was to weigh the pros and cons of rigidly enforcing a declaration restriction which does not really fit in with today’s new reality. The unique fact pattern surrounding owners who might lose their home to foreclosure might insulate the board from a selective enforcement argument in the future when foreclosure isn’t the issue and owners wanting what they want is. Moreover, the board can also republish the rental cap restriction in the future when market conditions no longer merit overlooking that cap.

If this situation teaches a community anything it is that every documentary restriction should contain a hardship exception to give the board the flexibility it needs to deal with changing membership needs and market factors beyond the board’s control.

Thursday, May 27, 2010

Why do the rules apply to some owners and not all of them?

That is a question that is often asked whenever the rules in a community change and the issue of “grandfathering” certain existing conditions arises.

What does the term grandfathering mean when applied to rule enforcement? A grandfather clause is an exception to a rule that allows existing situations to remain in place for a time certain. Used as a verb, grandfathering means to grant such an exemption. Grandfathering often makes a new rule more palatable to existing owners with conditions that would otherwise be prohibited by the new rule. A classic example would be a new restriction against pets. Requiring existing owners with pets to remove those animals from the premises would be harsh and would certainly be met with reprisals. Allowing existing owners to keep those pets throughout the duration of the animals’ lives while prohibiting owners without pets from acquiring them will eventually result in a pet-free community with less angst in the process.

The problem arises when existing owners mistakenly believe that their units are grandfathered in and not their current condition. These folks often think they can continue to buy new pets, lease out the unit, purchase new restricted vehicles indefinitely. In fact, once the pet dies, the vehicle needs replacing or the lease expires, the new rule kicks in and applies to these owners in the same manner it applies to those owners who did not have these pre-existing conditions.

Did you know that the term “grandfathering” originated in late-19th-century legislation and constitutional amendments passed by a number of southern States which created new and discriminatory restrictions on voting, but exempted those whose ancestors (grandfathers) had the right to vote before the Civil War?

Tuesday, May 25, 2010

Let your vendors know who can bind the association.

Often associations run into problems when certain board members or directors incur expenses on behalf of the association without the support and approval of the entire board. This can also apply to managers and other agents who step outside the boundaries of their actual authority when entering contracts or requesting services of vendors.
Apparent authority is a legal term used to describe a situation where a third party is led to believe that a person has certain authority to bind the principal entity.
In my law firm, we set up an “Authorized Contact” system whereby the board passes a resolution determining who can contact us to request our services, give direction on cases and communicate on their files. Most boards choose one or two directors and their manager; rarely will the entire board be chosen as the association’s authorized contacts with the Firm. We implemented this system to (a) prevent duplicate requests by various people (b) cut down on unnecessary legal expenses and (c) ensure clear direction is given.
Of course the Authorized Contacts change with time at the Board’s direction. It is a good idea for new boards to discuss at their very first organizational meeting what role each member will play and who should be communicating with association vendors. Existing boards should also have ongoing discussions in this regard. If there is any concern that a director or officer might be overstepping these boundaries, it would be wise to alert all association vendors who can speak for and bind the association and who cannot. Any vendors who continue to rely upon the word and direction of individuals not so listed would then do so at their own risk.

Monday, May 24, 2010

What will your insurance deductible really cost you?


With hurricane season right around the corner (June 1st) and the threat of the BP Oil Spill impacting some of our coastline becoming more likely, the question of whether or not your insurance policy will cover you to the extent you think it will, is timely.

There is much we can talk about in this regard but let’s focus on one area: the hurricane deductible. Association policy deductibles are typically determined by the Board of Directors. The Condominium Act and most association governing documents require that deductibles be consistent with industry standards and prevailing practice for communities of similar size and age and having similar construction and facilities. SB 1196 will remove the current requirement for condominium boards which requires that the notice for the board meeting at which deductibles will be considered state the proposed deductible, the available funds and the board’s assessment authority as well as an estimate of any potential assessment against each unit as a result of the deductible being considered. Obviously, the type and amount of any deductible bear significant consequences for the association’s membership.

Do you truly know what your hurricane deductible is and how it will be applied?

Many associations throughout Florida have exceptionally high deductible amounts that apply to wind-related events. These deductibles may look relatively minor on paper but when applied to a claim for damages, they may completely and utterly wipe out your claim.

In an insurance policy, the deductible is the amount of expenses that must be paid out of pocket before the insurer will cover any expenses. Most policies have two types of deductibles: general and windstorm. The general deductible is usually easy to understand and is a flat amount (i.e. $10,000, $20,000 or $100,000 per loss). In the event of a covered loss like a fire or burst pipe, these deductibles are easy to apply. However most association policies often have huge windstorm deductibles that are disguised in the policy.

Most carriers will require the insured to provide an appraisal of the property at various intervals during the insurance process. This means hiring a firm to come out and give a “value” to the property at the expense of the association. Other carriers choose to inspect the property themselves to come to an “agreed” value for the property.

If the deductible language in your association policy is vague or ambiguous, you will eventually run into problems. For example, there is a big difference between a 3% deductible based on the total insured value of the property (TIV) and a 3% deductible based on the “total values at risk”. Some policies are for the TIV per building so in those instances, the value of any given building in the community could drastically affect the value of the claim, especially in associations where buildings of different types and structures are involved. A deductible based on this type of scenario can result in large out-of-pocket expenses for replacing roofs and other major repairs simply because the value of the larger building dramatically affects the amount of the deductible.

What can you do to ensure that you understand what you are getting when you negotiate the deductible for your association policy?

Your first option is to insist on a flat deductible amount so there is no ambiguity. Your second option is to ensure that the deductible is calculated the same way as the risk. In other words, if policy limits are global for the entire association, then the deductible should be applied the same way. Third, if you have a deductible based on a per building calculation make sure you understand that the total possible deductible for the entire association may greatly exceed the percentage that appears on the face of the policy. This is especially true if you have multiple tiers of coverage. Finally, have your policy reviewed by your association attorney BEFORE you sign on the dotted line and suffer a major loss. Ultimately, careful planning benefits the association and the individual members who will have to pay a special assessment if a huge hidden deductible shields the insurance company from paying your association claim.

Wednesday, May 19, 2010

2010 Hurricane Preparedness Guide for Community Associations is Now Available!!


I am pleased to announce that the CAN 2010 Community Association Hurricane Guide is available for immediate download online at the website of the Community Advocacy Network (www.canfl.com). Click on the guide in the rotating news on the home page of the CAN website at www.canfl.com.

Representatives of community associations and other organizations interested in obtaining free printed copies of the 2010 Hurricane Guide for distribution can also contact CAN by email at dschick@canfl.com or by phone at 954-315-0372.

Florida City and County governments interested in obtaining bulk copies of the 2010 Hurricane Preparedness Guide for free distribution as a public service to condominium, co-ops, mobile home communities and homeowner associations in their areas are encouraged to contact CAN directly for more information.

When it comes to hurricane preparedness and disaster recovery, Florida community associations stand apart from other single-family and multi-family properties and must operate in keeping with specific parameters laid out in Florida statutes and their own governing documents. That is why a guide designed for their specific needs is so critical for their effective preparation for a storm and swift recovery afterwards.

In advance of the June 1st start of the 2010 storm season, the Community Advocacy Network is making this useful guide with tips and recommendations available as a public service to all condominium, cooperative, HOA and other community association Boards, community association managers and City and County officials who want to better prepare themselves and their communities for storm-related disaster contingencies this year.

Leading hurricane forecasters are currently predicting above-average activity for the 2010 Atlantic hurricane season, with above-average probability of United States and Caribbean major hurricane landfall this year. Forecasters at Colorado State University’s Tropical Meteorology Project anticipate a total of 15 named tropical storms, including eight hurricanes – four of which will be classified as “major,” with winds in excess of 110 miles per hour.

The most active tropical storm season in recorded history occurred in 2005, with a total 28 named storms, including 15 hurricanes – seven classified as “major” hurricanes. A record five of those 2005 hurricanes made landfall on the U.S. mainland, including the disastrous hurricanes Katrina and Wilma, which caused major property destruction and devastation to livelihoods of millions of Floridians.

The CAN 2010 Hurricane Preparedness Guide contains useful information to prepare communities in advance of the storm season and alerts them to what they should expect in the wake of a storm. Areas covered in detail in our Hurricane Preparedness Guide include:
Contract Review: explaining why it is important to review the association’s contracts with all service providers before the storm season and what to expect in terms of service delivery in a storm’s aftermath;

Document & Record Security: detailing why and how association documents should be preserved and stored for availability in the immediate aftermath of a hurricane disaster;

Facilities Preparation: including the need to determine if the property is ready to confront the impact of a tropical storm and why documentation of the pre-storm state of the property is crucial to post-storm disaster recovery;

Member Communications: setting out why and how Boards should avail themselves of all possible means of communication with residents, owners and employees — before, during and after a storm;

Emergency Board Powers: with details on the “special powers” conferred by the State Legislature on condominium Boards to enable them to maneuver their association through the difficult post-disaster period;

Immediate Post-Storm Action: including locating residents and employees, attending to the injured, securing the community and documenting storm damage; and,

Reconstruction & Restoration: dealings with association attorneys, insurance companies and contractors regarding disaster recovery and putting a community back together again.

I look forward to your feedback after you have had a chance to review the guide and please feel free to share it with neighboring associations and your local public policy makers near and far. Again, you can view and print the guide at www.canfl.com. You can also receive a pre-printed guide by contacting dschick@kgblawfirm.com or by calling 954-315-0372. You can never be too prepared when a disaster strikes!

Monday, May 17, 2010

What were they thinking? Going without insurance is not an option.

Many of you may have read about the 30-unit Lauderhill condominium that was recently destroyed by fire. Fortunately, there was no loss of life. Unfortunately, there was very significant property loss and all of the accompanying grief and inconvenience that brings to the people who were living there. Even sadder is the fact that the condominium board decided not to renew the property insurance as a “cost saving” measure last year.

Section 718.111(11)3(d) of the Condominium Act specifically provides that:

An association controlled by unit owners operating as a residential condominium shall use its best efforts to obtain and maintain adequate insurance to protect the association, the association property, the common elements, and the condominium property that is required to be insured by the association pursuant to this subsection.

We can debate all day long where struggling associations are going to find the money to pay for insurance premiums, but going without coverage is simply not an option. Cutting out every other service if need be, passing a special assessment and/or terminating the condominium entirely would be better options.

Debating about whether or not the directors’ actions constituted a breach of fiduciary duty or wanton recklessness might be psychologically fulfilling but won’t do much to make these owners financially whole after this tragedy.

I have previously been told by clients struggling with incredibly high delinquencies that they are considering going without insurance coverage as a result. In the past, that discussion was confined solely to windstorm coverage. I advised those associations not to do that even IF they received 100% approval of each and every owner living in the community. Board members have to make tough and intelligent decisions even when their members don’t support them. In the sad case of this Lauderhill condominium, the owners weren’t even kept in the loop as to the decision being made that put them in peril.

This condominium is a cautionary tale for any other boards or directors out there that think cost savings should start by cutting out your safety net.

Thursday, May 13, 2010

How far can Census Takers go in community associations?

A client emailed me yesterday about a problem her community is having with overzealous Census Takers. The client reported that the association office has been harassed during the past couple days by Census bureau workers and supervisors asking for information on the residents of the buildings. Apparently the Census Taker wanted this board to match names and telephone numbers, as well as state the occupancy status of the units in the building.

When the manager declined to provide this information, she received a threatening phone call from a supervisor citing Federal law and telling them that they would show up with a letter stating they will have the right to review the association files in the association office in order to collect the necessary information.

First a little background on the 2010 Census is in order. Every 10 years, the U.S. Census determines how many people live in the United States. More importantly, it determines how the federal government will allocate money to improve schools, roads, hospitals and other institutions.

A Census Taker is a person from your community who is hired by the Census Bureau to make sure that your neighborhood gets represented as accurately as possible. The Census Taker’s primary responsibility is to collect census information from residences. So far, 72% of households have mailed back their census forms which is the same rate that was achieved during the 2000 Census.

• The Census Bureau provides the Census Taker with a binder containing all of the addresses that didn’t send back a filled out census form.
• The Census Taker then visits all of those addresses and records the answers to the questions on the form.
• If no one answers at a particular residence, a census taker will visit a home up to three times and attempt to reach the household by phone three times. The census worker will leave a double-sided (English and Spanish) NOTICE of VISIT in the doorway that includes a phone number for the resident to schedule an appointment.

The census taker will ONLY ask the questions that appear on the census form.

Individual participation in the 2010 Census is required by Section 221, of Title 13 of the U.S. Code. However, rather than rely on criminal charges, the Census Bureau usually elicits participation by explaining the importance of the questions we ask and how the information benefits our communities. The question for community associations is how far must the board and/or manager go in assisting a Census Taker in obtaining information not being provided by individual owners and/or in allowing entry in guard-gated communities. Some communities are not permitting Census Workers to go door to door inside the building and others are not assisting in compiling the information on behalf of recalcitrant owners. Further exacerbating the problem is the fact that many condominium units are vacant right now.

In terms of access, I would treat a Census Taker no differently than a process server and allow entry. The stickier question becomes whether or not the Census Taker can inspect association books and records to obtain the information they need. Certainly with a subpoena they can but prior to that time some communities are assisting and others are not. Most Census Workers are leaving a box of forms in either the association office or in the lobby of condominiums and cooperatives.

Certainly there is benefit to be gained in having your community’s and city’s needs accurately reflected in terms of federal funding. If privacy is a concern, you should know that the Census Taker who collects your information is sworn for life to protect your data under Federal Law Title 13. Those who violate the oath face criminal penalties: Under federal law, the penalty for unlawful disclosure is a fine of up to $250,000 or imprisonment for up to 5 years, or both.

So how many of your communities have run into problems or questions as a result of the 2010 Census?

Monday, May 10, 2010

What changes will SB 1196 bring for HOA’s?

I have spent a lot of time discussing SB 1196 and the sweeping changes it will bring to condominium and cooperative associations throughout Florida. I have been asked by many of you what changes, if any, this bill brings for homeowners’ associations. There are far fewer changes for HOA’s in this bill but here is a summary of what HOA’s can expect to see if the Governor signs SB 1196 once it finally reaches his desk.

• Document inspection requests would have to be sent via certified mail, return receipt requested.
• In addition to being able to charge for copying costs on records inspection requests, HOA’s could also charge “any reasonable costs involving personnel fees and charges at an hourly rate for vendor or employee time to cover administrative costs to the vendor or association.”
• The disciplinary, payroll, health and insurance records of association’s employees would not be subject to inspection by owners.
• Social security numbers, drivers’ license numbers, credit card numbers, email addresses, phone numbers, emergency contact information, any addresses for an owner other than the property address or the address to which they request notice from the association be sent, and any other personal identifying information of any person (other than the person’s name, parcel designation, mailing address and property address) are exempt from inspection.
• Any electronic security measure that is used by the association to safeguard data including passwords are exempt from inspection.
• The software and operating system used by the association which allows manipulation of the data is exempt from inspection. The data, however, can be inspected.
• A majority of the total voting interests in the HOA can terminate a reserve account.
• If the association’s budget includes reserves for deferred expenditures and deferred maintenance but such reserves were not created or established by the membership, each financial report for the preceding fiscal year must include a disclaimer in bold font advising that the reserve funds are not subject to the restrictions on use of or calculation of such funds as set forth in the statute.
• Allows directors, officers or committee members to be compensated for performance of their association duties if the governing documents so provide or a majority of the voting interests approve such compensation in advance.
• The suspension of delinquent owners’ use rights can continue until the monetary obligation is paid (currently the statute provides that the suspension can last “for a reasonable period of time”).
• The HOA could lien for fines in excess of $1,000. If the association imposes a fine or suspension, the association must provide written notice of such fine or suspension by mail or hand delivery to the parcel owner and, if applicable, to any tenant, licensee or invitee of the parcel owner.
• If the governing documents so permit, absentee owners may vote by secret ballot for the election of directors by placing the ballot in an inner envelope with no identifying markings and mailing or delivering same to the association in an outer envelope bearing the name of the owner, the lot or parcel for which the vote is being cast, and the signature of the lot or parcel owner casting the ballot.
• Unless otherwise provided in the Bylaws, any vacancy occurring on the board before the expiration of a term may be filled by an affirmative vote of the majority of the remaining directors even if the remaining directors constitute less than a quorum or by the sole remaining director. Alternatively, a board may hold an election to fill the vacancy according to the election requirements set forth in the governing documents. Unless otherwise provided in the Bylaws, a board member appointed or elected under this section is appointed for the unexpired term of the seat being filled; this language would supersede what is currently found in Chapter 617 regarding vacancies.
• If a parcel is occupied by a tenant and the owner is delinquent in paying any monetary obligation due to the association, the association may demand that the tenant pay to the association “the future monetary obligations related to the parcel. The demand is continuing in nature, and upon demand, the tenant must continue to pay the monetary obligations until the association releases the tenant or the tenant discontinues tenancy in the parcel. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the parcel owner.”
• If the tenant prepaid rent to the owner before receiving the association’s demand and can provide written evidence of having paid such rent within 14 days after receiving the association’s demand, the tenant will receive a credit for the prepaid rent.
• The tenant will not be liable for increases in the amount of monetary obligations due to the association unless the tenant was notified in writing of the increase at least 10 days before the date on which the rent is due. The tenant shall be given a credit against rents due to the parcel owner in the amount of assessments paid to the association.
• If the tenant fails to pay the monetary obligations demanded by the association, the association may stand in the shoes of the landlord and sue for eviction under Chapter 83 of the Florida Statutes.
• The tenant does not have any rights to vote in an association election or to inspect the books and records of the association by virtue of paying the monetary obligations demanded by the association.
• An HOA may enter into agreements to acquire leaseholds, memberships and other possessory or use interests in lands or facilities, including but not limited to country clubs, golf courses, marinas, submerged land, parking areas, conservation areas, and other recreational facilities.
• An HOA may enter into such agreements regardless of whether or not the lands or facilities are contiguous to the lands of the community or whether such lands or facilities are intended to provide enjoyment, recreation or other use or benefit to the owners.
• Any such agreement not entered into within 12 months after recording the declaration may be entered into ONLY if authorized by the declaration as a material alteration or substantial addition to the common areas or association property. If the declaration is silent, any such transaction would require the approval of 75% of the total voting interests of the association.
• The declaration may provide that the rental, membership fees, operations, replacements, or other expenses are common expenses. The declaration may also impose covenants and restrictions on the use of these lands or facilities.
• An HOA board that is still controlled by the developer may not impose a special assessment before turnover unless a majority of the parcel owners other than the developer have approved the special assessment by a majority vote at a duly called special meeting of the members at which a quorum is present.

Some of the changes for HOA’s are beneficial, some might have enforcement challenges and a few are problematic. Liening for fines could become a slippery slope in some communities. The ability to take away someone’s home is quite a big hammer. Each HOA board will have to ask itself whether it is just to use such a big hammer to cure minor violations. Protecting sensitive identifying information as well as the association’s software system is a no-brainer. Other portions of the changes to the inspection exemptions are not as clear. Since the owners’ monthly payments contribute to employees’ salaries, shouldn’t those same owners have the ability to see what those employees earn and whether or not they have been subjected to disciplinary proceedings? Allowing the acquisition of substantial new lands or facilities that will be maintained as a common expense might be a very rude shock to a new owner in a brand-new community that did not contemplate such lands or facilities being a part of their lifestyle or a potential strain on their checkbook.

The HOA provisions in SB 1196 can be found on Pages 87-103. Again, the HOA provisions in this bill represent fewer than a quarter of the bill’s overall content although they have drawn scrutiny from certain quarters. The areas outlined above where the pendulum might have been pushed a little too far can hopefully be managed with good HOA governance and sound counsel.

Friday, May 7, 2010

To tow or not to tow…that is the question.

How often do we hear the threat, “If you park there, we’ll tow you” repeated in certain private communities? The question remains, when can and should a board tow cars?

In terms of ability to tow, there is a significant difference between a towing provision contained in an association rule and one contained in the Declaration. When a court is asked to decide the validity of a towing provision enacted solely by Board rule, much greater scrutiny is applied since “so few” have decided the fate of “so many”. Indeed, the legal standard to be applied in these cases is one of “reasonableness”.

By contrast, when a towing provision is made part of an association’s Declaration, courts treat the reasonableness issue as having been resolved since the membership has weighed in and voted to make towing an option to enforce the parking restrictions. Thus, the safest route for a board to take when implementing a towing policy is to do so via amendment to the Declaration. This is not to say that towing provisions contained within Rules and Regulations are not enforceable; they are simply subject to greater scrutiny.

Once you get past the issue of can you tow, you have to ask whether you should be towing. Keep in mind that towing requires taking a resident’s or guest’s private property which tends to anger them and increases the likelihood of retaliatory lawsuits. The location from which the vehicle is towed also plays a role in this decision. Towing an abandoned or inoperable vehicle that is leaking oil onto the common area parking lot is a lot different than towing an unauthorized vehicle from an owner’s driveway.

Finally, Chapter 715 of the Florida Statutes governs the involuntary towing of vehicles. At a minimum, a board’s towing policy must include the following procedures:

• All current owners and residents must be notified of any recently passed rule and the association’s intent to tow unauthorized or improperly parked vehicles at the vehicle owner’s expense.
• The Board must designate, by resolution, a representative to coordinate and oversee the towing.
• The Board must utilize the services of a reputable towing business which strictly follows and adheres to the requirements set for in Chapter 715, F.S.
• The Board should contact the local municipality to see if there are any specific towing requirements which may supplement Chapter 715, F.S.
• The Board should arrange for the installation of all appropriate signs in conformity with the statute such as size, shape, height and contents.

I previously wrote about when to call your association attorney; implementing a towing program is one of those times given what is at stake and the fact that tempers are always escalated when towing is employed.

Tuesday, May 4, 2010

Deepwater Oil Spill’s Potential Impact on Florida’s Coastal Communities

The April 20th Deepwater Horizon Drilling rig explosion in the Gulf of Mexico has been dominating our news and causing more than a little concern in our Florida coastal communities. Despite British Petroleum’s initial attempts to downplay the full magnitude of this disaster, reports now indicate that the spill covers an estimated 600 mile diameter area (an estimated 2100 square miles approximating the size of Delaware).

Louisiana has been primarily impacted up until now but the forecast is light impact in the Pensacola area later this week or early next week with light sheen approaching within 33 miles. Some experts are also predicting that the Loop Current could push the spill south toward the Keys and then back north to Broward and Palm Beach over the coming weeks.

Current plans call for the deployment of 30,000 feet of inflatable containment booms for the Pensacola area with 23,000 feet deployed and an additional 69,000 staged in Pensacola. However, booms are largely ineffective at this time due to chop which washes the spill over the booms.

The estimated spill is 5,000 barrels (210,000 gallons) per day. Efforts to activate the “fail-safe” hydraulic valves to close the well have not worked but those efforts continue. A dome is under construction to be placed over the leak. This approach has worked before but has never been tried at the current depth (5,000 feet) – estimated time to put in place is 2 weeks. A final alternative is to drill a relief well and cap the leak with grout with an estimated time to accomplish this task at 2 to 3 months.

BP is the entity under federal law which has been tasked with incident response; however, the Coast Guard retains oversight of this cleanup. The big concern by many local officials is that not enough planning is going into protecting Florida’s 770 miles of shoreline and not enough input from Florida officials is being sought.

Even though impact in our State has not yet been fully felt, we must make sure that our communities are prepared for a potentially disastrous impact. According to Alex Sink, the State’s CFO, dealing with a spill of this nature is akin to dealing with a Category 5 hurricane. Think of a hurricane rolling in over a 3 to 6 month period and you get a better idea of what this spill’s long-term impact on our coastal communities might look like.

Just as your community should properly document your property prior to every hurricane season rolling in on June 1st, “before photos” should now be taken of coastal properties prior to the spill’s arrival in case of a potential claim against BP. In addition, having your financial statements and other documents in order to expedite a disaster loan in the event you need one is advisable. The U.S. Coast Guard’s National Pollution Funds Center (NPFC) was created to implement Title I of the Oil Pollution Act (OPA). OPA addresses issues associated with preventing, responding to and paying for oil pollution. Among other things, Title I of OPA established the Oil Spill Liability Trust Fund (OSLTF) to pay for expeditious oil removal and uncompensated damages.

In addition, here are some important numbers for you to have to get more information as well as to prepare for the potential impact to our State.

Florida State Emergency Information Line: (800) 342-3557

• BP Claims Line: (800) 440-0858
• Environmental hotline and community information: (866) 448-5816
• Wildlife distress hotline: (866) 557-1401
• To report oiled shoreline or request volunteer information: (866) 448-5816
• Vessels of Opportunity (boats) program: (425) 745-8017

You can also visit the Florida Department of Environmental Protection’s response website at http://www.dep.state.fl.us/deepwaterhorizon/default.htm

Unlike a tornado or tsunami, we do have time to prepare ourselves in the event this oil spill impacts our communities. Please take the next few weeks to document your community’s condition prior to any impact.

Monday, May 3, 2010

When should your association call its attorney?

Most people don’t like to call the association attorney when times are good let alone when times are tough and money is tight. However, the old saying “penny wise and dollar foolish” holds true. There are times when you absolutely should call the association attorney prior to taking action as a board.

What situations really require such a call? Here are a few examples:

• You are entering into a contract. Any contract. Why? If a vendor has given you a contract (and 9 times out of 10 it is a one-page proposal) that agreement was drafted with the vendor’s protection in mind not yours. Vital provisions ensuring that the work is under warranty, that the contractor will finish on time, that the association will not have to pay for the contractor’s gross negligence, etc. all need to be in there and usually they’re not!

• You are hiring or firing an employee. There are all sorts of issues that must be considered prior to hiring (to protect you from a negligent hire claim down the road should the employee go on to do harm) as well as prior to firing (to protect you from possible discrimination and other claims). Don’t go this one alone.

• You are contemplating rejecting a proposed lease or purchase application. Again, this is an area fraught with potential liability if it is mishandled. You must ensure that you have the authority you think you do in this regard as well as that you have been applying your standards uniformly and routinely.

• You have been served with a lawsuit, DBPR Complaint or a Code violation. We always recommend that the law firm serve as the association’s registered agent in order to avoid any delay in sending over time sensitive matters for handling. Being named as a defendant in a lawsuit or a Code violation is one area that absolutely mandates a conference with your attorney to map out a strategy.

• You are considering a complete remodeling project for your community. What may seem absolutely necessary and advisable to the board might actually be a material alteration of the common elements or areas which requires a membership vote. Responding to a complaint from an owner after the project is completed puts you in a defensive posture; better to handle it correctly from the beginning.

• You are considering amending your documents with a restriction that might be considered controversial. Prime examples would be “55 and over” age restrictions, leasing and sale restrictions, vehicle and pet restrictions and guest occupancy restrictions among others. Any time you tell your owners what they can and can’t do with their property and the common areas, expect pushback. Consulting your attorney first will help you consider how much pushback to expect and what the board’s stance should be.

• You are considering purchasing or selling property on behalf of the association, changing the parking space designations or the boat slips assignments. All of these matters are sensitive to owners and must be handled with sensitivity.

• You want to pursue an owner for a violation. Before threatening certain action in your demand letter, please make sure you have the authority to do what you threaten. You also might have more tools at your disposal that you might employ to resolve the violation which should also be discussed in that demand. Sending a premature or incorrect demand letter puts the association in an inferior posture later in the game.

• You are served with a Recall Petition. You might not have followed the advice listed above if you find yourself on the receiving end of one of these. There are certain statutory and documentary procedures that must be strictly followed to properly effectuate recall.

• Whenever you think you should call your lawyer, follow your gut instinct and call!