Tuesday, January 28, 2014

What I learned at the Annual CAI Law Seminar

I recently returned from the annual CAI Law Seminar held over four days in Las Vegas-a tough job to be sure but someone has to do it!

This year's law seminar was the largest in the event's 35-year history with over 600 people registered to attend. Despite the polar vortex delaying some attendees, the buzz of excitement was evident from the very first day of registration through the last event held on Saturday. For many of us who attended, the excitement started even before we landed in Nevada as we played around with our incredibly cool Law Seminar App, setting up our profiles, creating our schedules and more.

The sheer magnitude of this event was impressive. There are many who say that organizing lawyers and other professionals is akin to herding cats but you would have to disagree looking at how the seminar was handled from start to finish. There were many people involved with the planning and execution of an event this large and they are all to be commended for an incredibly well done job.

Each day brought a packed schedule of course offerings exploring the trends and practices in community association law for attorneys, managers, insurance professionals and others in the industry. It wasn't always easy to decide which of the concurrent sessions to attend. Did I want to learn more about parking, pets and pools and the nuances associated with each of those  under the Fair Housing Act or did I want to sit in on the practical tips for effective and efficient association litigation management?

Ethics for Associations and the Attorney's Role was a course that had many "aha" moments and, given my social media activities, Maximizing Technology for Associations was not a session I was likely to miss. One of the highlights of the event for me and many others with whom I spoke was the keynote address given by Dan Abrams, the chief legal affairs anchor for ABC News. It's always a good thing to hear a respected journalist speak your language!

The event was presented by the College of Community Association Lawyers (CCAL) of which I am a proud member.  CCAL was established in 1993 to acknowledge CAI member attorneys who have distinguished themselves through contributions to the evolution or practice of community association law and who have committed themselves to the highest standards of professional and ethical conduct in the practice of community association law.

I can't speak for how other industries handle their annual conferences as I have been immersed in this one for over two decades now. However, this annual law seminar always makes me proud of my career choice and honored to be surrounded by the caliber of people who also dedicate their lives to making the community association concept and lifestyle successful.

Sunday, January 19, 2014

Common Elements Require Common Sense

Over the weekend, a Bay Harbor Islands condominium had one of its docks collapse, sending twenty people into the water with two being taken to the hospital afterwards.

Twenty to twenty-five feet of the 100-foot-long structure collapsed. Reports still have not surfaced as to the reason for the collapse or when the last time the dock was inspected, maintained or repaired.

What is certain is that the condominium association (and hence, its members) will be on the receiving end of a lawsuit related to this incident.

Far too often, both directors and members in community associations take a rather lax approach when it comes to maintaining, repairing and replacing common elements and limited common elements. Sometimes this attitude is tied to an effort to "cut costs" and other times it stems from a feeling that the amenity in question does not serve the majority of residents.

In the case at hand, some association members may not have thought about the docks in years since they may never have used them. However, that lack of use will not insulate any of the members from the resulting special assessment to pay for legal fees and/or a judgment should one be secured.

It is reasonable for association members to assume that the common elements and limited common elements are being properly maintained and insured but experience has taught that is not always the case. When was the last time you thought to inquire about the state of your community's pool, tennis courts, clubhouse or other recreational amenity? This question applies to both members of the board and owners alike. If you don't ask, you may be making some dangerous assumptions.

It behooves every association member and certainly every director to ensure that the common areas are properly maintained and insured in the unfortunate event an incident causing injury or loss of life occurs.

Monday, January 13, 2014

Squatters rent out foreclosed properties-today's realities

Sun Sentinel reporter, Brett Clarkson, reported yesterday that a couple had been arrested for identifying foreclosed properties in Broward, Palm Beach, Miami-Dade and Martin counties, changing the locks on those properties and then passing themselves off as the property owners to unsuspecting tenants.

Apparently, the real estate hoax was fairly elaborate and included falsifying title documents. The fraudsters managed to lease out 27 foreclosed properties with a gain of approximately $240,000 in nine months in the form of rent, lease deposits, etc.

You might ask how these victims could not have known that the people posing as owners were not record title owners of these properties. Think back to whenever you rented a property and ask yourself how much due diligence you performed to ascertain the identity of the other party involved. Prior to the foreclosure crisis, the answer is probably not a whole lot. However, these days with a glut of foreclosed properties still out there, it is important to be sure you are dealing with the owner of a property. Unlike a sales transaction where title examination is involved, leasing transactions are particularly vulnerable to this kind of fraudulent activity.  We have even seen some associations attempt to rent out properties without having taken title to the properties themselves. Absent title or a court order allowing an association to lease out such property, that transaction is not legally sanctioned.

So how should a potential renter proceed? Well, he or she can search the public records to see if the property for rent was, in fact, foreclosed and who owns title at the time of the proposed lease. If the names do not match up. there is a problem. The potential purchaser can also search the landlord's name on the Tax Assessor's Rolls or at the Property Appraiser's website to again see if it matches up with the property in question.

The real estate market the last few years has also created another area where potential renters should be wary.  Renters of condominium or cooperative units or single family homes in a homeowners' association, should inquire as to whether or not the owners of those units are delinquent in the payment of assessments to the association. Many of those potential renters are still unaware that renting from a delinquent owner can create hassles for them.

The realities of the real estate market have not always created an environment that is friendly to people who fail to undertake some basic level of due diligence in the pursuit of a real estate transaction. It is always good to remember that slogan from the Cold War: "trust, but verify".

Sunday, January 5, 2014

Does your board define the problem before passing rules?

Einstein is quoted as having said that if he had one hour to save the world he would spend fifty-five minutes defining the problem and only five minutes finding the solution.

As association counsel, we often do not hear of the existence of a new rule until we are being asked how to enforce it. That being said, good counsel will ask for a history on the rule and how it came into existence. My first question is usually, "what was the problem which required you to pass this rule?"

Sometimes, the problem is clear and the rule is well drafted to cure that particular problem.  A recent example includes a client in SW Florida with numerous bear sightings in the neighborhood. The board enlisted the help of the Florida Fish and Wildlife Conservation Commission and even reached out to a local legislator when the the FWC was unable to remove the bear. Some neighbors unwisely spoke of taking matters into their own hands including possibly hunting the bear which requires licenses, permits and is best off done in a wilder setting than a homeowners' association.

Ultimately, what was recommended was to have neighbors stop putting their garbage out the night before trash pickup since the odor was an attractant to the bear. Once the bear realized that its nocturnal foraging was not turning up food, it was assumed he or she would find more fertile hunting grounds.

In this community's case, the problem was clearly defined-a big bear inside a neighborhood could mean death or injury to residents or pets. The rule was not overly broad or ineffective-take away the attractant and you reduce the neighborhood's appeal to the bear. The rule was passed, the association members understood the need for the rule and they are complying.
However, in other communities, boards engage in the reverse of the Einstein formula set forth above. They may spend five or fewer minutes defining a problem in their rush to spend fifty-five minutes drafting rules and regulations.

If you have a legitimate problem which your board has defined, you have considered it from different perspectives and weighed various consequences of passing and not passing a rule addressing it and you have rule-making authority in your governing documents, then by all means adopt a rule. Your members will understand and for those who do not, your chances for withstanding an enforcement challenge are good.  However, if there is no current problem and no real potential for a problem you must ask yourself why you are passing this rule in the first place.