Monday, January 31, 2011

Can your unit be liened individually for work performed on the common elements?

The Victoria Group was a company hired by the Parc Central Aventura East Condominium Association to provide cleaning, maintenance, concierge and security services for the condominium building through a series of three separate contracts over thirteen months from January 31, 2008, through the end of February, 2009. Specifically, the Victoria Group was to provide “standard residential cleaning, maintenance & concierge services to all common areas of the building entrance and lobby, pool area, club house, gym, activity rooms and lavatories”. They were also hired to provide “concierge, engineering, administrative assistant services to the building” seven days a week.

At some point, the Victoria Group claimed that they were not paid amounts owed under the contract(s) and attempted to encumber more than 100 condominium units at Parc Central Aventura East by filing liens against same for payment of $280,737.27 owed by the association. The lower Court granted Summary Judgment and a Final Judgment of Foreclosure of the claim of lien filed by the Victoria Group. The association appealed that decision in the Third DCA. The case is Parc Central Aventura East Condominium v. Victoria Group Services, LLC et al, 36 FLW D149.

The Victoria Group asserted that it had the right to file its Claim of Lien for the monies owed pursuant to Chapter 713 (aka the Mechanics’ Lien Statute) as well as Section 718.121 of the Condominium Act. The well-established function of the Mechanics’ Lien Statute is to “protect those who have provided labor and materials for the improvement of real property.” Section 713.01(15) of the Mechanics’ Lien Statute defines an “improvement” to mean “any building, structure, construction, demolition, excavation, solid-waste removal, landscaping or any part thereof existing, built, erected, placed, made, or done on land or other real property for its permanent benefit.”

In this case, the 3rd DCA admitted that the case law was sparse while stating that the 4th DCA relied on the 3rd’s analysis years prior by concluding that lawn mowing and shrubbery cutting services were not lienable under the Mechanics’ Lien Statute. The 3rd DCA further pointed to an Illinois appellate decision from 1996 which held that mere maintenance of property is not lienable. The court in the Parc Central case also rejected the argument that the lien being sought was justified under Section 718.121 of the Condominium Act. The lower court’s Final Judgment of Foreclosure was reversed by the Third DCA but the money judgment sought was upheld against the association.

Ultimately, the Victoria Group can seek enforcement of its money judgment against this association in ways other than foreclosing a claim of lien against the common elements and individual units. Vendors seeking to file claims of lien under the Mechanics’ Lien Statute in Florida are well advised to determine first whether such lien is permitted by Chapter 713 lest they wind up facing a Slander of Title claim from either the association or the individual unit owners. There is no doubt that any Parc Central owners attempting to sell their units while the lien remained on their units were forced to escrow funds to eventually pay off their pro-rata share of the lien or they risked losing the sale.

The moral of this story: problems arising from contracts pertaining to the common elements can have wide-ranging ripple effects that impact individual unit owners.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Sunday, January 23, 2011

How much association trivia do you know?

Most of us know the game, Trivial Pursuit, but here is my version association-style!

The first person(s) to respond correctly to these questions is the winner. What do you win? Just the knowledge that you know more about community associations than most of us. The answers to the following questions will be posted tomorrow. Try to refrain from googling the answers and see how you do. Good luck.
• Who is Robert from Robert’s Rules?
• When was Robert’s Rules of Order first published?
• Who was the first Condominium Ombudsman in Florida?
• Who is the current Director of the Division of Florida Condominiums?
• Who is the current Condominium Ombudsman?
• How many unit owners are needed to petition the Ombudsman to appoint an Election Monitor?
• What is the Florida Ombudsman’s annual salary?
• When was the Condominium Act first passed in Florida?
• How many pages was that first Condominium Act?
• How many pages is the Condominium Act today?
• When was Chapter 720 first passed in Florida?
• How many pages is the HOA Act today?
• What Florida association attorney is related to a famous baseball player?

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Thursday, January 20, 2011

Can your HOA publish your phone number?

So your Board just announced that it will be publishing a neighborhood directory with the addresses, phone numbers, and email addresses for all owners, is that ok with you? My HOA in West Broward did this for years and I have to admit that the guide came in handy when I wanted to contact a neighbor regarding a recipe, babysitting or mail pickup during vacations. I haven’t seen the directory in the last two years and I suspect it is because the student who published it for us has graduated and moved out of state. However, it got me thinking whether the board could continue publishing this information about each owner?

The 2010 changes to the HOA Act include new language clarifying which “records” may be made available to owners and which may not. It should be noted that the statute requires the HOA to maintain electronic addresses for owners who agree to accept notices via electronic transmission but goes on to state that email addresses and owners’ phone numbers are off limits.

Below are excerpts from Chapter 720:

OFFICIAL RECORDS
The association shall maintain each of the following items, when applicable, which constitute the official records of the association:

A current roster of all members and their mailing addresses and parcel identifications. The association shall also maintain the electronic mailing addresses and the numbers designated by members for receiving notice sent by electronic transmission of those members consenting to receive notice by electronic transmission. The electronic mailing addresses and numbers provided by unit owners to receive notice by electronic transmission shall be removed from association records when consent to receive notice by electronic transmission is revoked. However, the association is not liable for an erroneous disclosure of the electronic mail address or the number for receiving electronic transmission of notices.

INSPECTION AND COPYING OF RECORDS
The official records shall be maintained within the state and must be open to inspection and available for photocopying by members or their authorized agents at reasonable times and places within 10 business days after receipt of a written request for access.

Notwithstanding this paragraph, the following records are not accessible to members or parcel owners: Social security numbers, driver’s license numbers, credit card numbers, electronic mailing addresses, telephone numbers, emergency contact information, any addresses for a parcel owner other than as provided for association notice requirements, and other personal identifying information of any person, excluding the person’s name, parcel designation, mailing address, and property address.

So the association must maintain a list of email addresses but not disclose it to owners requesting to inspect same; confusing to be sure. The real question is do owners support this move towards protecting their contact information from neighbors or do they long for the days when your neighbor knowing how to reach you was not the worst thing in the world?

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Monday, January 10, 2011

Owners in newly built Florida residential communities might have additional warranty protection!

A matter pertaining to just how far a developer’s warranty extends in a community association development has been certified to the Florida Supreme Court.

The landmark 1972 case of Gable v. Silver held that developers in Florida are deemed to give an implied warranty that any home they build is “habitable” or reasonably fit for ordinary use as living quarters.

A developer breaches this duty if a home it builds does not meet ordinary standards found in homes of comparable quality in the marketplace. For example, a home built in South Florida with a non-functioning air conditioning system would likely not meet this standard since the home would not be “habitable” whereas one built with a functioning but very noisy AC might not constitute a breach.

Up until now, Florida courts have consistently held that a developer’s implied warranty of habitability extends only to the construction of the home itself and improvements that immediately support the home’s structure such as the roof, septic tank, etc. Items such as roads, drainage systems, seawalls, bodies of water and other common areas and recreational facilities were not viewed as being included in the developer’s implied warranty of habitability.

This was the case until the 5th DCA’s holding on October 29, 2010 in the case of Lakeview Reserve Homeowners v. Maronda Homes. In that case, the court held that the “immediately supporting” standard is not limited only to items that are directly attached to the home and instead, reinterpreted this standard to include anything that provides a “service essential to the habitability of the home.” Of course, the true test will be what services are essential to a home’s habitability. Do you need a functioning guard gate, safe roads, a mold-free Clubhouse, etc., to live in the home?

This decision and reinterpretation of the traditional warranty standard and kicks the door open to defects in the roads and other common areas falling within the developer’s warranty.

Of course, this 5th DCA decision conflicts with an opinion previously rendered by the 4th DCA, hence, the certification to the Florida Supreme Court to resolve the matter. Depending on the outcome of that review, the Lakeview case could be a boon to Florida’s homeowners dissatisfied with the final building product that was delivered to them.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Thursday, January 6, 2011

CAN’s Community Association Legislative Wish List for 2011!

Before you know it, the 2011 Legislative Session will be in full swing. Community Association bills are already underway and the Community Advocacy Network’s 12-member Advisory Council has met and rolled out its Legislative Agenda for this year which includes the following:

• Transport the Election and Board Member Eligibility Requirements found in Chapter 718 (the Condominium Act) to Chapter 720 (the HOA Act). Reason: Create more parity between the two common interest ownership statutes and to ensure that convicted felons do not serve on HOA boards;

• Set the quorum requirement for condominiums at the same 30% level found in the HOA Act and allow HOA owners to speak for 3 minutes on all agenda items at Board meetings. Reason: currently condominium quorums are established by the governing documents and are usually no lower than a majority making it difficult at times to achieve a quorum. HOA’s have had their quorum set at 30% (or lower if the governing documents provide for a lower quorum requirement) by statute for some time. In addition, condominium owners have the right to speak on every designated item at Board meetings whereas HOA owners currently only have the right to speak on items which they have petitioned to have placed on the Board agenda;

• Clarify that full rent can be collected from tenants in delinquent properties until the total delinquency owed is paid in full. Reason: vague statutory language leaves the issue of whether full rent or merely the monthly assessment can be demanded up to costly debate. The intent was to help make struggling associations whole; collecting the full rent until the delinquency is paid off does that; collecting only the monthly assessments while large sums remain unpaid does not;

• Clarify that cable television can be suspended for delinquent owners. Reason: Current statutory language does not make it clear whether or not cable is one of the common services that can be suspended when an owner is 90 or more days delinquent;

• Exempt associations from joint and several liability under 718.116(1)(a) and 720.3085(2)(a) for past due assessments when the association takes title to a property via foreclosure. Reason: Many banks are trying to argue that associations are jointly and severally liable for past due assessments when they take title to property via foreclosure to avoid the bank’s responsibility to pay the statutory cap for past due assessments when the bank finally forecloses. This also resolves the issue between master and sub associations when one or the other takes title to property via foreclosure;

• Amend Section 718.113(5)(a) of the Condominium Act to provide that a majority of the members may vote to allow the board to install impact glass in the same manner in which a majority of the members may currently vote to allow the board to install hurricane shutters. Reason: Many older high-rises are in desperate need of window replacement and find themselves unable to currently implement a replacement program under their governing documents; and

• Require that members in condominium associations with fewer than 50 units must be notified of a voluntary cancellation or non-renewal of the association’s liability coverage. Reason: a Board president in a 30-unit Broward County condominium association cancelled the liability coverage for the building as a “cost cutting measure”. A fire subsequently occurred and thirty families were rendered homeless as a result of this one director’s unilateral decision to forego coverage. Condominium owners reasonably expect that their assessments will be applied towards insurance coverage on the building among other things. If the owners have notice that such coverage is at risk, they can take steps to correct the situation and protect their homes.

No one bill will ever be a panacea for all of the issues confronting our communities. However, the provisions above address some of the problem areas and will hopefully survive the often tortured legislative process to become law. What would be on your legislative wish list?

On a separate note, if you haven’t taken a few moments to fill out CAN’s Second Annual Florida Association Management Survey, please do so. Every association in this State is managed one way or another: either with the assistance of a licensed professional or by the board managing itself. Finding out what factors go into this very important decision and what works for other associations allows you to benefit from our members’ shared wisdom. The survey will be available at http://surveys.canfl.com/2011 and will remain open until January 31st. Results will be released in late February.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Tuesday, January 4, 2011

Is that "doctor-ordered dog" really doing the job?

There are very few topics more emotional in the community association setting than the issue of whether “man’s best friend” should be part of the community.

As the owner of a very loveable Boxer, I understand the joy of seeing a friendly face and a wildly wagging tale at the end of a long day. I also always assumed that the stories I’ve read about the health benefits that come with living with a pet. However, a recent OpEd piece in the New York Times entitled: “Fido’s No Doctor. Neither is Whiskers” provides some food for thought. The piece was written by Professor Hal Herzog, a professor of psychology at Western Carolina University.

Professor Herzog asks readers to question survey results showing health benefits accruing to pet owners by pointing out that other surveys show just the opposite. In his column he writes:

A 2006 survey of Americans by the Pew Research Center, for instance, reported that living with a pet did not make people any happier. Similarly, a 2000 Australian study of mortality rates found no evidence that pet owners lived any longer than anyone else. And last year Dutch researchers concluded that companion animals had no effect on their owners’ physical or mental well-being. Worse, in 2006, epidemiologists in Finland reported that pet owners were more likely than non-pet owners to suffer from sciatica, kidney disease, arthritis, migraines, panic attacks, high blood pressure and depression.

This pattern of mixed results also holds true for the widely heralded notion that animals can cure various physical afflictions. For example, a study of people with chronic fatigue syndrome found that while pet owners believed that interacting with their pets relieved their symptoms, objective analysis revealed that they were just as tired, stressed, worried and unhappy as sufferers in a control group who had no pets. Similarly, a clinical trial of cancer patients undergoing radiation therapy found that interacting with therapy dogs did no more to enhance the participants’ morale than reading a book did.

For the full article, please click the link below. When confronted with conflicting data, what is the average reasonable person to do? For me, the choice is easy. I live in an association that has no pet restrictions and I own my Boxer for pure enjoyment so health benefits or no health benefits, my decision to be a pet owner would not change. For those who live in pet-restricted communities and believe they may need an animal for health reasons, I suspect there will be more push-back in the future as to whether or not those health benefits actually exist.
http://www.nytimes.com/2011/01/04/opinion/04herzog.html?src=twrhp

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Why Do Some Folks Think Negative Marketing Works?

Between the recent bouts of cold in South Florida that had me flipping back and forth between AC and Heat, the telltale odd noises emanating from the unit told me it was time for a service call or, even worse, a possible replacement. I called a well-known "name" in the industry to find out if they could do the work for me. What I received was a dissertation from the salesman about how lousy and disreputable his competition was with nary a word on his company's services or how they would help me.

I hung up knowing that regardless of whether or not the competitor was truly lousy, I would not use this man's company for my work. It left me to wonder, why do some folks think negative marketing works?

We have all seen it in political campaigns and most of us are left with the same sick feeling in our stomachs. Why focus on someone else's negatives when it is so much more powerful to focus on your positives?

Every time I see this kind of marketing in the community association industry whether it's a referral for an accountant, attorney, manager or other vendor, I am struck by how ignorant the sender of the message must think the recipient is. If nothing else, the potential for a very real negative boomerang effect is quite real.

How many of you have seen competitors use these kinds of tactics to gain association business in our industry? Did it provide them with any sort of advantage or did they suffer any ill effects by employing negative marketing in the first place?

In the end, I called several different companies including the first company's main competitor for quotes. I wound up hiring that competitor and, not surprisingly, they were really quite good!

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Sunday, January 2, 2011

Association pays $2 million to injured owner!


On Halloween night in 2005 following Hurricane Wilma’s wrath, Dr. Helen Salsbury was in her pitch-black yard (due to the power outages) and was seriously injured when two teens ran her over in their ATV. Dr. Salsbury’s legs were both fractured and she was flown by helicopter for emergency surgery. She subsequently recovered $300,000 from each of the homeowners’ policies held by the teens’ families. She also collected $100,000 from her own underinsured motorist coverage.

Dr. Salsbury also sued her Southwest Ranches homeowners’ association, Griffin Road 345 Property Owners’ Association, for negligence as she claimed the association knew that ATV riders and dirt bikers sped through her community yet did nothing to stop them. A jury trial against the HOA was commenced in 2009 with Circuit Judge Charles Greene presiding. The jury found the association liable and a second jury trial was scheduled to determine the damages to be awarded to Dr. Salsbury. Instead, the HOA settled for the $2 million requested by the plaintiff. Why so high an award? One can only surmise that at age 51, Dr. Salsbury was in her prime earning years when she was mowed down in her yard. While she did return to Palmetto General Hospital where she is on staff, her chronic pain does not allow her to maintain the same schedule she did prior to the accident.

This case is certainly a cautionary tale for other associations who know about potentially dangerous situations in their communities but either feel it is not their business to become involved or too costly to do so.

What are some of these potentially dangerous situations you should discuss with legal counsel to determine what, if anything you can and should do?

Speeders in the community, unleashed dogs and dogs that bite, recent security breaches/criminal activity, crumbling seawalls/docks and poorly maintained roads/poorly maintained bodies of water are just a few examples of issues that should not be ignored by a board of directors. Associations can’t afford NOT to address items that could spell signficant damages should harm to an owner, guest or resident occur as a result of that condition or situation. With each new year, a board has the opportunity to take stock of these conditions and draw up new operational plans for the coming year.

In order to avoid a successful claim of negligence, a board does not have to be perfect but it does have to be responsive to the situation. In the case at hand, if the HOA had been able to prove that each ATV driver of which it was aware had received a violation letter regarding their activity and the association was pursuing those violations (even if they hadn’t been successful yet) I imagine the outcome of the jury trial would have been much different.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.