Thursday, July 28, 2016

The Fuss about Florida's Fire Sprinkler Opt Out Deadline

The Division of Florida Condominiums, Timeshares and Mobile Homes ("Division") has recently been quoted in several media articles advising that all multifamily buildings in Florida, regardless of height, must install sprinklers unless they opt out prior to the December 31, 2016 deadline. In the aftermath of that revelation, some Florida attorneys are advising communities that they all must take an opt out vote prior to the December 31, 2016 deadline or they will be required to begin installing a full sprinkler system shortly thereafter.

So what's the problem?

For starters, neither the condominium law nor the cooperative law impose retrofitting requirements nor do Chapters 718 or 719 of the Florida Statutes confer jurisdiction on the Division to interpret or enforce life safety laws. That  function rests with the Fire Marshal. The requirement for sprinkler retrofitting arises from Chapter 633 of the Florida Statutes not from either Chapter 718 or 719 where the opt out rights are provided. Chapter 633 of the Florida Statutes incorporates the National Fire Protection Association (NFPA) standards. The NFPA requires "high rise" buildings (which are defined as buildings in excess of 75 feet) to retrofit with sprinklers. While there may be other circumstances where buildings less than 75 feet must be equipped with fire sprinklers, there is no blanket requirement that all condominiums and cooperatives in the State of Florida, regardless of height or occupancy or date of construction be equipped with fire sprinklers.

Why does the Division and those following their lead believe otherwise?

In 2010 Chapters 718 and 719 were amended to remove the word "high rise" from the original "opt out law" which was enacted in 2003. That change occurred through SB 1222/SB 1196 which was sponsored by Rep. Ellyn Bogdanoff and Senator Jeremy Ring. It is likely that the Division believes that the removal of the reference to the "high rise buildings" signified a legislative intent to create a retrofitting requirement for all condominium and cooperative buildings through the condominium statute. As discussed above, that logic is not supported by the statutes or the NFPA standards. Moreover, Senator Ring has confirmed that the legislative intent behind the 2010 change was not to impose a blanket retrofitting requirement on all multifamily buildings in Florida but rather was to remove the reference to building height since the shared ownership statutes were not the proper place to impose physical requirements relative to life safety standards.

What does this mean for your multifamily building? 

After Jan 1, 1994, all new buildings 3 stories and above had to have fire sprinklers. In addition, buildings that are treated as public lodging establishments, regardless of height, have life safety obligations which include sprinkler installation. Other than those exceptions, if your building is not a high-rise of 75 feet or higher and you are confused about whether or not you should take a sprinkler opt out vote prior to the 12/31/16 deadline you need to discuss with your association attorney (who is hopefully experienced in these matters) whether or not your local government is requiring low and mid-rise buildings to retrofit with sprinklers due to a local code or ordinance and what the costs and repercussions of taking and not taking that opt out vote are.

Are there any repercussions to taking or not taking this vote?

For high-rises, the failure to take the opt out vote prior to the December 31, 2016 deadline is clearly spelled out in the statutes. Those high-rises who fail to opt out by the deadline must initiate an application for a building permit for the required installation with the local government having jurisdiction demonstrating that the association will install a full sprinkler system by December 31, 2019.

For buildings other than high-rises, the failure to take the vote may have no repercussions at all if they are not otherwise required by local ordinance or code to install sprinklers or it might have some preventative value should a local authority try to impose a sprinkler requirement on them. Your low and mid-rise building must weigh the costs and labor to take the vote against the preventative value or no value in doing so. It is also important to remember that once an opt out vote is taken that the association doing so must take the following steps:

  • Within 30 days after the association’s opt-out vote, notice of the results of the opt-out vote must be mailed or hand delivered to all unit owners. Evidence of compliance with this notice requirement must be made by affidavit executed by the person providing the notice and filed among the official records of the association.
  • After notice of an opt out vote is provided to each owner, a copy must be provided by the current owner to a new owner before closing and by a unit owner to a renter before signing a lease.
  • As part of the information collected annually from condominiums, the division shall require condominium associations to report the membership vote and recording of a certificate under this subsection and, if retrofitting has been undertaken, the per-unit cost of such work. The division shall annually report to the Division of State Fire Marshal of the Department of Financial Services the number of condominiums that have elected to forego retrofitting.
If you manage or serve on the board of a multifamily condominium or cooperative building in Florida which does not currently have a full sprinkler system and you have not yet taken an opt out vote, relying on media articles, newsletters and communications from attorneys who do not serve your community is not your best course of action. Blog posts, including this one, are a good way to start a conversation about an important topic but an informed board must make that decision by relying upon its own advice of counsel.


Tuesday, July 19, 2016

How to Prevent an "Act of God" from Derailing Your Community.

Ask a contractor or vendor about what will happen to their services and your community in the event of a disaster or emergency and they will likely point you towards a clause in their contract entitled, Force Majeure.

A typical force majeure clause reads as follows:

"X shall not be liable for any failure or delay in performance of this Agreement, in whole or in part, where such failure or delay is caused by circumstances beyond X's reasonable control, including but not limited to acts of God, severe weather, fire, terrorism, vandalism or civil riots, war, civil disturbance, labor activity or strike, court order or any other cause outside X's exclusive and direct control."

While your contractor certainly cannot control the weather or any of the other items listed above, he or she can control what they are willing to do to help your community recover and how much it will cost you.  Unless you have properly negotiated your contract, most vendors' proposals contain language which is designed to protect them from liability, from having to perform services and/or from incurring penalties in the aftermath of a disaster. However, if you have properly negotiated your contracts, language can be added which provides that your association is not responsible to continue making payments for a project or services which have temporarily ceased due to an emergency situation. In the absence of such protective language you may find yourself having to pay for services which are not being delivered.

For services like security, landscaping, pool and grounds maintenance, your association needs vendor contracts which clearly specify the services to be performed prior to a disaster and in the aftermath of same and at what rates. Moreover, for an essential service like security and/or an important repair project, your association should address how quickly your community can expect to be protected post disaster. Naturally, you also want to pay a fair price for such services and not a price which has been inflated as a result of the emergency so pricing needs to spelled out in the contract.

The following are some questions you need to start asking when negotiating your contracts:
  • How many guards will return to the community post disaster, when and at what rates?
  • Will our manager be working onsite post disaster or remotely?
  • When will the landscaping company arrive to remove dangerous storm debris?
  • Who will help document the community properly in anticipation of a possible insurance claim?

Florida's six-month hurricane season started on June 1st. In addition to powerful windstorms, residential communities are also vulnerable to fires, floods, tornadoes and hailstorms all of which can fall under the category of an "act of God". Moreover, we now have the very real threats of civil disturbances/riots and terrorism for which volunteer boards should start preparing.