Monday, August 30, 2010

Florida’s Third District Court of Appeal issues ruling on truck parking restrictions

In a decision that could have a positive impact on an association’s ability to enforce its parking restrictions, last week Florida’s Third District Court of Appeal finally issued its ruling in the case of Kuvin v. City of Coral Gables. Although the case involved a municipality’s right to enforce parking restrictions, much of the reasoning in the decision could be applicable to community associations as well.
Because community associations are not political subdivisions, an association would not be held to the stricter analysis the court applied to the City of Coral Gables. In the opinion, the court upheld the City of Coral Gables’ restrictive ordinance concerning trucks and stated that:

“The City may constitutionally pass ordinances to enhance or maintain the aesthetic appeal of the community and to protect the City’s residential neighborhoods against the lingering presence of commercial-looking vehicles.”

While an association’s ability to regulate the community on aesthetic grounds is generally acceptable if provided for in the association’s governing documents, and subject to other statutory provisions (such as Section 720.3035, Florida Statutes, in regard to homeowner associations), this ruling appears to extend the ability to regulate due to aesthetics to parking as well. The exact wording of your association’s documents in regard to parking would have to be reviewed to determine if the Kuvin case would be beneficial. Furthermore, whether such parking restrictions appear in the association’s declaration or by-laws, as opposed to a rule passed by the association board, may also be a factor in determining the enforceability.

No matter what your feelings are about the appeal of trucks, this case will certainly be used by associations looking to uphold parking restrictions based on aesthetic considerations in the future.

Thursday, August 26, 2010

Be careful before you post that “anonymous” comment!



Depending on the topic, some internet blogs and websites are almost certain to stir up controversy and elicit strong opinions. A sewing blog might not rile people up but a blog about life in Condo and HOA land absolutely will bring out both sides on any particular issue.

Of course, that is the whole point, isn’t it? Allowing healthy public debate over issues of importance? Absolutely, but it can be all too tempting for some people to cross a line in such debate. Expressing an opinion is fine even if that opinion is that a certain hotel or restaurant has lousy service or food. Disparaging a business operator personally or accusing a public official of criminal conduct are danger zones.

Often, the cloak of anonymity gives a false sense of security. Many people have no idea of the potential liability they face when they publish something online. Last month, the San Francisco-based 9th U.S. Circuit Court of Appeals upheld a District of Nevada Order requiring the disclosure of the identity of three people accused of conducting an “internet smear campaign” via anonymous postings against Amway Global. In Canada, courts are also ordering ISP’s to identify individuals who have posted defamatory material online.

It is important to remember that there is never any real expectation of privacy on the Internet; even postings made at public locations such as libraries and internet cafes can be tracked if necessary. Most bloggers and people responding to blogs have no understanding of the distinctions between expressions of opinion and libel. Don’t assume that the cloak of anonymity can’t be stripped by court order. Even if the owners of a website don’t know a poster’s actual identity, ISP addresses, as well as email addresses, are frequently stored and that information is subject to discovery under the proper circumstances. The law governing the prerequisites for compelling the disclosure of a poster’s identity remains unsettled.

So do these recent court cases spell the demise of our constitutional rights to freedom of speech or are they the proper response to “keyboard bullies” who spread misinformation and vitriol on the internet without regard to the consequences?

Be careful before you post that “anonymous” comment!


Depending on the topic, some internet blogs and websites are almost certain to stir up controversy and elicit strong opinions. A sewing blog might not rile people up but a blog about life in Condo and HOA land absolutely will bring out both sides on any particular issue.

Of course, that is the whole point, isn’t it? Allowing healthy public debate over issues of importance? Absolutely, but it can be all too tempting for some people to cross a line in such debate. Expressing an opinion is fine even if that opinion is that a certain hotel or restaurant has lousy service or food. Disparaging a business operator personally or accusing a public official of criminal conduct are danger zones.

Often, the cloak of anonymity gives a false sense of security. Many people have no idea of the potential liability they face when they publish something online. Last month, the San Francisco-based 9th U.S. Circuit Court of Appeals upheld a District of Nevada Order requiring the disclosure of the identity of three people accused of conducting an “internet smear campaign” via anonymous postings against Amway Global. In Canada, courts are also ordering ISP’s to identify individuals who have posted defamatory material online.

It is important to remember that there is never any real expectation of privacy on the Internet; even postings made at public locations such as libraries and internet cafes can be tracked if necessary. Most bloggers and people responding to blogs have no understanding of the distinctions between expressions of opinion and libel. Don’t assume that the cloak of anonymity can’t be stripped by court order. Even if the owners of a website don’t know a poster’s actual identity, ISP addresses, as well as email addresses, are frequently stored and that information is subject to discovery under the proper circumstances. The law governing the prerequisites for compelling the disclosure of a poster’s identity remains unsettled.

So do these recent court cases spell the demise of our constitutional rights to freedom of speech or are they the proper response to “keyboard bullies” who spread misinformation and vitriol on the internet without regard to the consequences?

Tuesday, August 24, 2010

Updated Association Statutes now available online!


Many of you have been asking when the many changes brought about by Florida SB 1196 will be reflected in the statutes for ease of reference. I am happy to report that the updated statutes are now available online.

Please click the links below to read the updated statutes:
Chapter 718-The Condominium Act

Chapter 719-The Cooperative Act

Chapter 720-The Homeowners’ Associations Act

Wednesday, August 18, 2010

Older communities considering renovations need to know about EPA requirements concerning lead-based paint.

Lead-based paint was banned in the United States by the Consumer Product Safety Commission in 1977 (16 Code of Federal Regulations CFR 1303). However, there are still millions of older residential housing units in the US that contain lead-based paint which present a health risk during renovations and repairs.

Humans can be poisoned during unsafe renovations or repainting jobs on housing that has lead paint. Children younger than 6 are especially vulnerable to neurological damage if any deteriorated paint (peeling, chipping, cracking, etc.) is not carefully stabilized in a lead-safe manner and precautions taken during preparation for repainting.

Effective April 22, 2010, the US Environmental Protection Agency (EPA) now requires that all renovators who work in residential housing and child-occupied facilities built prior to 1978 and who disturb more than six square-feet of lead paint be Renovation, Repair and Painting (RRP) certified. The new regulation will affect over 100,000 renovators across the country.

As of October 1, 2010, those companies must have a Certified Renovator on their staff and must have at least submitted the application to become a Certified Firm under the EPA’s new Renovation, Repair and Painting regulation. The EPA can levy significant fines against companies for non-compliance with this regulation.

If your pre-1978 community is contemplating repairs or renovations which will disturb more than 6-square feet of lead-based paint, you must verify that the contractor you select to perform this work has the requisite ”Certified Renovator” certification required by EPA’s new regulation. In addition to drafting your contract to ensure that your contractor is properly licensed and insured, it is a good idea to add language that your contractor is properly certified for the type of work being performed!

Friday, August 13, 2010

Think twice before picking that legal fight!

How often have you heard of owners being whipped up into a frenzy about community issues without having the benefit of either all the facts or good legal advice before proceeding to court?

A recent case has been added to the list where a group of owners sued their Association and its Board members for breach of fiduciary duty. The owners complained about several things, including the handling of money received after Hurricane Wilma and the holding of secret meetings by past Boards. In this 4th District appellate case, the court stated that “the genesis of this litigation” was the response by the Association post Hurricane Wilma. The complaint claimed “a variety of Board activity following hurricane Wilma” was improper. Several owners sued for breach of fiduciary duty for eight different violations. The trial court ruled against the owners on all counts.

The appellate court reversed this ruling because the sole basis for the trial court’s decision on six of the eight counts was that the owners had failed to first take the Association to Arbitration. However, breach of fiduciary duty claims are not subject to arbitration before the Division so the trial court erred in this regard. As to the only two counts that the trial court ruled on the facts, it ruled against the owners and the appellate court agreed.

The first concerned the allegation that the Board held “secret meetings” without notice and involvement from unit owners. The owners could offer no evidence that the current Board engaged in this practice, only prior Boards. The court noted that the Association’s Board members were almost entirely new, and that without evidence that this practice was continuing, the owners could not prevail on their claim seeking an injunction to stop secret meetings. Therefore, Judgment against the owners on this point was upheld, even though prior boards may have had secret meetings. The other count that the trial court ruled on dealt with alleged misallocation of funds, and as the court stated was part of the crux of the complaint. The owners claimed certain insurance money should have been spent elsewhere. The Board responded that the insurance company went bankrupt, and the money received was not spent where the owners wanted because in the Board’s determination, those areas suffered minimal damage. The Court ruled that the owners’ claims were all based on speculation, disagreement as to how the money should have been spent, and without sufficient proof that funds had been misallocated. Therefore once again, judgment was entered in favor of the Association and the Board Members.

There are several “take aways” from this case. First, breach of fiduciary duty claims are not claims subject to arbitration and lawyering is important. This error may have cost the Association a complete win. Second, lawsuits are serious, and if you are going to sue your Board for wrongdoing, be sure you have proof of what you are alleging in your lawsuit. Finally, courts appear to be tiring of “technical” lawsuits. As a result, while holding secret meetings was certainly illegal, since the lawsuit was not brought until the practice stopped, the Court ruled in favor of the Association and its current Board Members.

It is important that owners not be discouraged from bringing lawsuits if true misappropriation or self-dealing has taken place, or other wrongdoing is ongoing. However, bringing a case based on pure speculation, disagreement with the Board, or technical violations of past boards is not something the courts are willing to entertain, and owners need to think twice before suing their Boards without the benefit of valuable forethought and sound legal strategy.

Wednesday, August 11, 2010

How does your board communicate with your members?

We all know that frequent and effective communication is the key to healthy communities. Directors need to know what issues are of paramount importance to their members and members need to know what decisions their elected board is making and why. Many of the same management techniques that work in building successful businesses also work in building successful communities.

Before your board decides to spend money revamping that set of governing documents that looks like it was printed on parchment paper, has the reason for that project been effectively communicated to the members in order to ensure a greater likelihood that the ultimate product will be approved? What about that expensive landscaping project or re-doing the lobby? People are more likely to support a project (especially a costly one) if they are informed from the beginning and their input solicited. Naturally, not everyone is going to agree with every worthy or necessary project undertaken by your board, but involving your membership early is the key to a successful outcome. Of course, if you had a project (other than necessary maintenance and repair) in mind and are met with overwhelming disapproval from your members, it is wise to re-examine the worthiness of that idea.

How then do you communicate your ideas and actions to your members? Board, committee and membership meetings are one way but we only have to look around at the very few faces at these meetings to realize that most people don’t feel a compelling need to attend. If you were selling a product, you would devise a way to communicate with your target audience that is the most convenient for them, not the least.

Some communities use printed newsletters delivered to the owners; others have electronic versions. My community has tried both and I routinely read them but there was usually such a span of time between issues that I didn’t feel very up to date on what the board was doing. Other communities use association websites with email blast functions to keep their members current on community issues. My community also started doing this some time ago and it has proven to be a great success. When a rather large alligator was spotted some months back, a blast went out advising owners to be sure they did not leave their pets out back. Similar blasts inform us about upcoming meetings, neighborhood social events, bulk garbage pick-up and the ACC walk-through among other things. Many high-rise communities use in-house cable channels which can even broadcast meetings for those who want to see what is going on from the comfort of their home.

The bottom line is that you can never have too many open channels of communication with your association’s membership. It does take an investment of time from someone to create the newsletter or the website content but the rewards in terms of an informed and involved membership can be immeasurable.

Monday, August 9, 2010

What do you need to know about the process to apply for an Economic Injury Disaster Loan from the SBA?


Recently, the United States Small Business Administration (SBA) released a fact sheet as a result of Governor Crist’s certification that many Florida counties were currently at risk of economic injury as a result of the BP Oil Spill. Of course, that list of counties can and will expand depending on where the oil heads; officials estimate that 6,800,000 gallons leaked every day from April 20-July 15, 2010.

SBA Disaster Loans were a source of much needed very low-interest loans for Florida communities who were slammed by a series of hurricanes nearly 5 years ago. This will hold true again should expert predictions regarding our 2010 hurricane season prove true. Whether or not your community is impacted by the oil spill or a hurricane this year, it is important for you to know the mechanics involved in obtaining these kinds of funds. It is important to note that communities that do not maintain required flood insurance will not be eligible to obtain these low cost (3% for associations) loans which is yet another reason to purchase and maintain relatively inexpensive flood coverage.

The following is information reprinted directly from the SBA.

FLORIDA #12172 (Disaster # FL-00056) COUNTIES: Bay, Citrus, Collier, Dixie, Escambia, Franklin, Gulf, Hernando, Hillsborough, Jefferson, Lee, Levy, Manatee, Monroe, Okaloosa, Pasco, Pinellas, Santa Rosa, Sarasota, Taylor and Walton Counties and contiguous counties of Alachua, Broward, Calhoun, Charlotte, DeSoto, Gilchrist, Glades, Hardee, Hendry, Holmes, Jackson, Lafayette, Leon, Liberty, Madison, Marion, Miami-Dade, Polk, Sumter, Wakulla and Washington in the State of Florida; contiguous counties of Baldwin, Covington, Escambia and Geneva in the State of Alabama; and contiguous counties of Brooks and Thomas in the State of Georgia.

INCIDENT AND DATE: Deepwater BP Oil Spill
Occurred April 20, 2010 and continuing
APPLICATION DEADLINE: February 14, 2011


Type of Disaster Loan:
• EIDL assistance is available only to entities and their owners who cannot provide for their own recovery from non-government sources, as determined by the U.S. Small Business Administration (SBA).

• Economic Injury Disaster Loans (EIDLs) – are working capital loans to help small businesses, small agricultural cooperatives and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.

Credit Requirements:
• Repayment – Applicants must show the ability to repay the loan.

• Collateral – Collateral is required for all EIDLs over $5,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available.

• Credit History – Applicants must have a credit history acceptable to SBA.

Interest Rates:
• Businesses and Small Agricultural Cooperatives without Credit Available Elsewhere: 4.000%

• Non-Profit Organizations without Credit Available Elsewhere: 3.000%

Loan Term:
• The law authorizes loan terms up to a maximum of 30 years.

• SBA determines the term of each loan in accordance with the borrower’s ability to repay. Based on the financial circumstances of each borrower, SBA determines an appropriate installment payment amount, which in turn determines the actual term.

Loan Amount Limit:
• Economic Injury Disaster Loans (EIDL) – The law limits EIDL(s) to $2,000,000 for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by SBA, less business interruption insurance and other recoveries up to the administrative lending limit. SBA also considers potential contributions that are available from the business and/or its owner(s) or affiliates. If a business is a major source of employment, SBA has the authority to waive the $2,000,000 statutory limit.

Loan Eligibility Restrictions:
• Noncompliance: Applicants who have not complied with the terms of previous loans are not eligible. This includes prior borrowers who did not maintain required flood insurance.

Insurance Requirements:
• To protect each borrower and the Agency, SBA requires borrowers to obtain and maintain appropriate insurance. Borrowers of all secured loans (over $5,000) must purchase and maintain hazard insurance for the life of the loan on the collateral property. By law, borrowers whose collateral property is located in a special flood hazard area must also purchase and maintain flood insurance for the full insurable value of the property for the life of the loan.

For more information about obtaining a loan from the SBA, contact SBA Disaster Assistance Customer Service Center at: (800) 659-2955 or www.sba.gov/services/disasterassistance.

For more information about the BP Oil Spill and what communities should be doing right now to protect themselves, please visit www.FloridaSpill.com.

Monday, August 2, 2010

How are Florida’s community associations being managed?


Every common interest ownership community must follow one of two paths: professional management for their community or self-management by their volunteer board of directors.

My law firm’s statewide advocacy group, the Community Advocacy Network (CAN) wanted to know what factors influence Florida’s communities to choose one path over the other and how often they choose to switch paths mid-stream.

At a time when associations are confronted by so many economic challenges and have recently been presented with new legal tools to deal with those challenges, including the ability to collect rent from tenants in delinquent properties, it is important to know who is helping our Florida boards cope.

CAN’s First Annual Florida Association Management Survey received responses from 762 community association decision-makers and members which provide real insight into what residents, owners and/or Board members in all types of common interest ownership communities in Florida really think about management practices in their communities today. The survey data also gives a good indication of what association leadership takes into consideration in planning the future management in their communities.

For example, did you know?
• Fully 25% of Florida community associations are self-managed by Board members with the help of non-management employees and third-party service providers.

• Of the 75% that are professionally managed, more than half of the respondents are satisfied with their current manager or management company and nearly 2/3 said they were so satisfied they would recommend them to another association.

• Billing & collections, bookkeeping, records maintenance and budget preparation are areas where professional management is seen as “most helpful”.

• Many associations say real improvement is needed in management’s handling of rules & regulations violations, property maintenance, contracts and vendors, as well as member communications.

• Cost savings looms large as an incentive to self-management with nearly 2/3 of self-managed respondents saying they had chosen that path because of cost savings; however, many of these same respondents indicate the potential to switch to professional management for a variety of reasons.

• Among self-managed communities considering a switch to professional management, the single most popular option would be to have an “Off-site Community Association Manager affiliated with a Management Company”; this option was selected by more than 1/3 of the self-managed survey respondents.

CAN’s Florida Association Management Survey contains more than 50 probing questions which were answered online between December 10, 2009 and January 15, 2010, by a nearly-even split between Board (53%) and non-Board (47%) members around the State
.
We set out to poll the knowledge and experience of community association residents with regard to management practices and the costs associated with same, within their own communities.

To view the full CAN Florida Association Management Survey Report, please click the link below:
http://www.canfl.com/Documents/CAN%20Assoc%20Mgmt%20Surv.pdf