Can my condo board face a fine for not letting me review official records?

by: Daniel Vasquez

Florida law clearly provides condominium unit owners the right to review associations records, and condo boards that withhold such records could face a fine of up to $500.

And yet I often hear from readers who complain about not being able to access such records. Sometimes the complaints are unfounded because the owner making the complaint never officially requested to see the records, or made a records request to vague to comply with, such as "I want to see all bank records."

On the other hand, well-run boards are open to records requests and do what they can to accommodate owners in order to breed trust and faith in community operations. I know it sounds corny, but it's true.

In general, boards should make association records available within five working days after receipt of a written request from an owner, an attorney representing that owner. Official association records include accounting documents, insurance policies, bank statements and work contracts, and by law, should be maintained and available for review to owners for seven years.

Any condo owner who believes they are being illegally kept from reviewing records can file a complaint with the Department of Business and Professional Regulation (DBPR). 

What the law says: 

The failure of an association to provide the records within 10 working days after receipt of a written request shall create a rebuttable presumption that the association willfully failed to comply with this paragraph. A unit owner who is denied access to official records is entitled to the actual damages or minimum damages for the association's willful failure to comply with this paragraph. The minimum damages shall be $50 per calendar day up to 10 days, the calculation to begin on the 11th working day after receipt of the written request. The failure to permit inspection of the association records as provided herein entitles any person prevailing in an enforcement action to recover reasonable attorney's fees from the person in control of the records who, directly or indirectly, knowingly denied access to the records for inspection.

Read More: http://blogs.sun-sentinel.com/

Related article: http://www.floridacondohoalawblog.com/

Florida Statute 718.111

A Picture is Worth a Thousand Words - Balcony Repairs

Balcony Repairs Nov 23 2013

Nobody Wants To Be On Board of a Condominium Association

By Joseph Adams

Question: We own a unit in a small condominium association. There are 20 units and we have a board with three directors. However, there is a concern that at the next annual meeting the three directors who are currently serving will not seek re-election and no one else wants to serve on the board. What happens when no one wants to serve on the board of directors of a condominium association? D.K. (via e-mail)

Answer: Yours is not a unique problem. We see many associations have member apathy in voting in elections as well as a lack of interest in running for the board. As such, it is not uncommon to see individuals serve on the board of their condominium association for a number of years because no one else wishes to run. Your proposed scenario is rather extreme, in that you are asserting that there may come a point when no one wishes to serve on the board.

That being said, the Florida Condominium Act does address what happens under the circumstance when a condominium association cannot constitute a board of directors. Specifically, Section 718.1124, Florida Statutes discusses what happens when an association fails to fill vacant seats on the board of directors with sufficient individuals to constitute a quorum of the board. If an association fails to seat enough board members to constitute a quorum, any unit owner is entitled to petition the circuit court in the county where the condominium exists for the appointment of a receiver to manage the affairs of the association. Once the petition for the appointment of a receiver is filed, if the association does not fill the vacancies on the board within thirty days of filing the petition, the unit owner may proceed with a hearing on the petition in order for the court to appoint a receiver. Once a receiver is appointed, he or she has the authority to manage the affairs of the association. Further, once appointed, the association is responsible for paying the salary of the receiver and all related court costs and attorney’s fees. As such, having a receiver appointed can become very expensive for the association.

Given the seriousness of having the court appoint a receiver to oversee the affairs of the association, it is rather unusual for the situation to get that bad. However, your concerns are well founded, in that many associations have persistent trouble in obtaining volunteers who are willing to serve on their boards. The best solution is to seek to involve other unit owners in the operation of the association and educate them as to how important it is for all owners in the association to participate in the governance of the association to the benefit of everyone.

No Hispanics on new Miami Beach commission

Hispanics are out. So are incumbents. First-timers are now the majority.

When Miami Beach voters went to the polls this month, they elected a brand-new City Commission.

Multimillionaire Philip Levine won the mayorship in just one round of voting. His closest competitor was sitting Commissioner Michael Góngora.

In runoffs on Tuesday, retired community banker Joy Malakoff beat Matti Herrera Bower for the Group III seat in resounding fashion, with 60 percent of the vote. Bower, mayor for the last six years, ran for commission because she was term-limited from her current post.

Criminal defense attorney Michael Grieco bested incumbent Jorge Exposito for the Group II seat.

In a race that was wide open, Realtor Micky Steinberg defeated Elsa Urquiza for the Group I post.

All of the losers are Hispanic. None of the winners are. The outcome: no Hispanics are left on the dais.

This, in a city where 53 percent of the population identifies as Hispanic, according to the 2010 Census. City meetings are often bilingual, and the Beach’s press office makes sure to make information available in both Spanish and English.

Read More: http://miamiherald.com

Read more here: http://miamiherald.typepad.com/nakedpolitics/2013/11/no-hispanics-on-new-miami-beach-commission.html#storylink=cpy

Matt Damon Drops Price for Miami Beach Home

Oscar-wining actor Matt Damon and wife Luciana Barroso have cut the price of their Miami Beach mansion by more than $1 million, after putting the house on the market seven months ago.  

The couple first listed the 12,705-square-foot home in April for $20 million, looking to make a $5 million profit. The property is located on upper North Bay Road with past and present neighbors including Jennifer Lopez, Alex Rodriguez, Calvin Klein, Dwayne Wade and Chris Bosh.  

Built in 1935, the mansion, known as Maravilla, has seven bedrooms, nine baths, and includes 170 feet of water frontage, according to the property's listing by celebrity real estate specialists "The Jills." 

The property sits on two lots, the first of which Mr. Damon purchased in April 2005 for $10.3 million. He bought the second lot eight months later for $4.2 million, the Real Estalker reports.  



The main house includes a wine cellar, theater and oversized living room with views of Biscayne Bay. The property also features a two-bedroom, two-bath guesthouse.  

The couple purchased a mansion in the Pacific Palisades earlier this year for $15 million, on the same street as best friend and "Good Will Hunting" co-writer Ben Affleck, according to the Real Estalker.  

Source: http://www.worldpropertychannel.com/

Condominium Renters Able To Leave Early

By Joseph Adams on November 18th, 2013

Question: Our condominium documents state that we can rent our units for a one month minimum. Some owners believe if they rent for one or two weeks in a month, and they do not rent for the rest of the month, they are complying with the documents. What is your opinion on this matter? J.G. (via e-mail)

Answer: Minimum lease term restrictions are common because many condominiums want to avoid having the “hotel-like” atmosphere that comes with short and frequent rentals. In fact, if a condominium permits rentals of less than thirty days more than three times per year, the condominium is considered a “place of public lodging”, and can be subject to various laws pertaining to “public accommodations”, including Chapter 509 of the Florida Statutes, which is often referred to as Florida’s “hotel/motel” law.

In your example, if the tenant only stays for two weeks, and no other tenants occupy the unit for the next two weeks, that scenario might be seen as even better than tenants being present for the full 30 day rental. However, some people believe that there is a significant difference between the types of use that a two week tenant makes of a unit as opposed to a monthly tenant.

I assume the belief is that a two week tenant is likely on vacation and will “live it up” all 14 days, and nights, while a monthly tenant may be more likely to act more like a resident, who keeps traditional hours and treats the property with care and respect.

Further, if the unit owner is allowed to resume occupancy for the remaining half of the lease, then the community is burdened with both a short-term rental and full occupancy for the entire 30 day period, albeit by the owner for the remaining lease term. But clearly in that case, the rental restriction is effectively rendered useless.

In my opinion, if an owner submits a proposed “monthly” lease, and the rent to be paid is clearly below market value, or there are other terms or information indicating the intent to actually lease for less than a month, the association (assuming it has lease approval rights) can disapprove that lease as a sham transaction. There may be valid reasons for a reduced rate, so some investigation may need to take place before an official disapproval is given. Proving the lease is a sham beforehand might be difficult. But we have had cases where it is discovered that the owner is advertising less than monthly rentals on vacation websites. In some cases, “weekly” and even “daily” rental rates are posted. That makes it easier for the association to disapprove an apparent sham lease term.

Finally, I believe it is reasonable and consistent with your rental restriction to adopt a restriction that nobody, not even owners, can occupy a unit if the tenants leave before the lease ends. Legal counsel should be consulted as to whether this can be accomplished through a board-made rule, or whether a document amendment is required. You certainly cannot stop any tenant from leaving early, but you can restrict the use of the unit consistent with the restrictions in the declaration of condominium.

Read Source Document: http://www.floridacondohoalawblog.com/

TIME TO PREPARE THE ANNUAL BUDGET

By Eric Glazer, Esq.

Published November 18, 2013

It's that time of year again --- number crunching time.  Time to figure out if everyone is going to be paying a little more next year in their monthly or quarterly assessments.  Here are some things to keep in mind:

1.         In a condo -- when the budget is mailed to the owners, the budget must show the reserves as fully funded.  If the Board is going to give the owners the right to waive the funding of full reserves, the Board can also show what the budget would look like with partial funding of reserves or a complete waiver of reserves.  But in any event, everyone must be shown a budget with fully funded reserves.  Notice that I said "IF" the Board is going to give the owners the right to waive full funding of reserves.  There is nothing in the statute that requires the Board to give the owners this choice.  So, for all intents and purposes, if a Board wants fully funded reserves, they get them.  Sure, the owners would have a right to call a meeting and vote them down later, but I have never seen that happen.

  

2.         In case you haven't heard, there is a foreclosure crisis here in Florida .  That means you should include a line item in your budget for "bad debt."  This is a figure that equals the amount of money you are not likely to receive from the unit owners in assessments, because their homes are in some form of collection.  It gets added back into your budget, so that at the end of the year, you actually collect all of the money necessary to pay the association's bills.  If you don't include a line item for bad debt, there is a likelihood that at the end of the year, you will run short and have to pass a dreaded special assessment.

3.         In an HOA - reserves must be included in your budget if the developer placed them in the budget while the developer maintained control of the community, if the owners previously voted for reserves, or if the Board simply wants reserve funding in the budget.  If done solely by a board vote, the board cannot exceed any limitations on the amount of the budget as reflected in the governing documents, if any.

  

4.         If your association has a huge surplus at the end of the year, it is not automatically allowable to transfer that surplus into a reserve account. Suppose the owners have voted against the funding of reserves?  Those monies should either be returned to the owners or credited against next year's future assessments.

5.         Despite the fact that your association is a not for profit Florida corporation, you are still required to file a federal tax return.   I am amazed at how many associations have not filed returns for years on end.

6.         Remember to give proper notice of the budget meeting to the owners.  14 day advance notice for a condominium.  In a HOA - notice is determined by your governing documents.

   

7.         As I said, reserves can be waived by the owners.  However, if not waived properly at a meeting of the owners, the budget with fully funded reserves goes into effect - LIKE IT OR NOT.

Often times, the budget meeting unfortunately turns into a shouting match.  It really shouldn't.  The Board's job is to simply pass a budget that ensures he bills get paid as they come due.  Nothing more, nothing less.

So, I wish for all you this year significant decreases in your assessments, smaller bills for your windstorm insurance, 100% collection of assessments from your owners and to be litigation free.  Well maybe not litigation free……..

Original Article: http://www.hoa-condoblog.com/

REMEMBER: Board Meetings must be held in the Sunshine

Meetings of the board at which a quorum of the directors is present and discussing association business constitutes a board meeting and must be open to all owners. There is no getting around this; if there are enough directors sitting by the pool discussing association business to constitute a quorum, it is a de facto board meeting that should have been properly noticed in advance so owners could join in or listen to the discussion.

There is no exception for "executive sessions", brief chats or emails that substitute for a discussion that should more properly take place during a board meeting that is open to the members. Asking your association counsel to sit in on a board meeting does not, in and of itself, make it a closed meeting. Your counsel must be present to discuss proposed or pending litigation to warrant closing the meeting to the owners and even then the closed meeting must still be properly noticed to the members as a closed discussion with counsel regarding litigation issues.

Florida law requires associations to post notice of all regular board meetings at least 48 continuous hours preceding the meeting except in an emergency.

Check out Florida Statutes 718.112.5 (c)

Association Board Should Not Risk Funds

By Joseph Adams on November 7th, 2013Posted in Fiduciary Duty of Board of Directors, Reader Q&A

Question: Last year, our board purchased stocks and bonds with association funds. The securities were sold earlier this year at a loss. The homeowners have been asking the board who is responsible, but have not received an answer. Finally, the board informed the homeowners that the stock broker was making up the loss, and since a confidentiality agreement was entered into with him, no additional information would be forthcoming. Is it legal to withhold this information? D.P. (via e-mail)

Answer: It is possible that governing documents could give the board the express, legal authority to invest association funds in stocks and bonds. But such authority is unusual. Most community association bylaws provide that association funds shall be held in a bank, with FDIC or similar insurance to cover all funds. But you should look to the provisions of your governing documents to confirm the limits of the board’s investment authority.

To meet its fiduciary duty, the board must handle association funds in the same way that a reasonably prudent person would handle the funds of another. While there may be an argument that inflation alone might justify taking some risk with principal, my advice is that an association board should not invest association funds in any manner that puts the principal funds at risk. Of course, any bylaw provision should also be followed.

As for the ability of the members to review documents that might explain what happened here, I am not aware of any provisions of the Florida Homeowners’ Association or Florida Condominium Act that would apply to preclude members from inspecting those documents. With the exception of any documents that may be subject to an attorney-client privilege, I doubt the relevant documents fit into any of the statutorily created exceptions to the general rule that members can inspect all official records of the association.

As for the alleged confidentiality agreement with the broker, absent a court order establishing that the terms of the settlement are confidential, it is my view that legal settlement agreements are not confidential as to the members of the association. When I prepare agreements involving  associations that include a confidentiality provision, I will typically include a reference to the association’s statutory obligation to allow members to inspect records, so that the other party understands that the association does not have the legal authority to guarantee complete confidentiality. Your association’s counsel would need to review this issue in terms of how compliance with the HOA law must impact the validity of the settlement agreement, or create a potential breach thereof.

Read More: http://www.floridacondohoalawblog.com/