COMMUNITY ASSOCIATION MANAGER – A LICENSED PROFESSION?

By Jan Bergemann

Published September 26, 2014

   

Florida's community association managers are supposed to be licensed – and so are the management firms they are working for.

  

But: Are they really all licensed?

  

Definitely not! We hear all the time stories of folks who worked – and got paid – as community association managers without ever having a license. One of the problems we see all the time: The DBPR – supposedly in charge of licensing professionals in Florida – is very lax in enforcing license requirements.

  

Owners discover more and more often that the person they are paying as community association manager isn’t licensed. But complaints to the DBPR are often answered by offering the person, who worked and got paid as community association manager, to get a license – and all is forgiven and forgotten.

  

That surely doesn’t encourage folks to make the required licenseBEFORE starting to work in that profession.

  

It’s tempting to work without a license and avoid paying annual licensing fees if the only penalty you have to be afraid of is a letter asking you to get a license.

  

And – with the help of former State Representative Julio Robaina – CCFJ added a provision into FS 468.431 - 438 -- Part VIII (FS468.432) that requires Community Association Management firms to be licensed as well.

But how can you be sure that the person – and the firm – getting paid as community association managers are actually licensed?
Easy going: Go to the Website of the DBPR and click on the tab:Verify A License! (https://www.myfloridalicense.com/wl11.asp?mode=0&SID=)

  

Type in the name of the person who claims to be a licensed manager and/or the name of the firm he/she is working for. In all cases you should find a more detailed license description with aa license number and expiration date.

  

If you can’t find this info confirming that the person/firm has a license you better start researching more thoroughly. You might be on the right track of discovering that the person/firm working as your community manager/firm doesn’t have the required license!

Read More: http://www.hoa-condoblog.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……..

Read More: http://www.hoa-condoblog.com/

Is a C.A.M. Mandatory?

By Eric Glazer, Esq.

            The other day on the show, we spoke about a President of an association who is in trouble because he used community association funds to pay himself for doing services that would normally be performed by a licensed community association manager.  So, you might ask, does that mean all community associations must hire a community association manager? The answer to this question is NO. A community association does not need to hire a manager.  The Board can do all the book keeping its wants.  However, if the Board members are going to get compensated for doing the work of a C.A.M. they have to be licensed.  It boils down to money.  It’s OK for the Board to manage the place without professional help, as long as they aren’t getting paid to do it.

            Even if a member did bother to get a CAM license, the statutes require them to refrain from participating in any board vote to hire him or herself as the manager.

            The other question that comes to mind is….. can the association hire an unlicensed bookkeeper?  I hate when I hear that.  I have never seen a situation where the unlicensed  “bookkeeper” is not performing services that only a licensed manager can perform for pay.  To me, the simple answer is therefore NO.

            Florida law not only requires the community association manager to be licensed, but if that manager is working for a company, that company must be licensed as well.  One community I know recently found out that the company they contracted with was licensed, but the community association manager assigned to the property wasn’t.  To me, clearly a violation of the law and a breach of the contract by the management company.

            As many of you know, this year The Florida Legislature gave community association managers lots of new powers that used to be considered the practice of law.  It is therefore more important than ever to ensure that before deciding upon which manager or management company you decide to hire, get references and ensure that you verify the management firm is licensed and insured and that the manager assigned to your community is licensed as well.  The right manager can brighten the smiles of the Board and all of the owners, and on the flip side, the wrong one can get the community into lots of trouble.

Read More: http://www.hoa-condoblog.com/

Construction Meeting

CONSTRUCTION MEETING

NOTICE IS HEREBY GIVEN that a construction meeting  will be held at the following date, time and place:

Date:            Tuesday, September 23, 2014

Time:            3:00 p.m.

Location:     The Pavilion Condominium Conference

                      Room at the Mezzanine level.

AGENDA

1.    Building Repair Progress

2.    Contractor Repair Project Schedule for Lines 1 through 12  located        at the East Elevation

3.   New Aluminum Glass Railings (penthouses,  building  entrance and Mezzanine units)

4.   Stucco Damage on Walls at PH-01

5.   Yellow Paint to Columns in Parking Garage

6.   Paint at Walkways, Driveways and Sidewalks at Building Entance

7.   Metal Structure Underneath of Unit M-12

8.   Association related items

BOD MEETING

AMENDED NOTICE

IN  OBSERVANCE OF THE JEWISH HOLIDAY, THE BOARD  OF DIRECTORS  HAS MODIFIED THE DATE THE MEETING OF THE BOARD WILL BE HELD, AS FOLLOWS:

NOTICE IS HEREBY GIVEN that a meeting of the Board of Directors of The Pavilion Condominium Association of Miami Beach, Inc. will be held at the following date, time and place:

Date:            Tuesday, September 23, 2014

Time:            7:00 p.m.

Location:     Social Room

**Important:  This meeting is for unit owners only**

AGENDA

1.    Call meeting to order

2.    Establish Quorum – Roll Call

3.    Reading and/or waiving Minutes

4.    Old Business

·        President's Report on the expiration of the cable contract, re-negotiation with Atlantic Broadband  and approval of the new contract.

·        President's report on the legal cases.   We are formally inviting the members of the 2012-2013 Board of Directors, especially its former president,  Mr. Alex Hernandez, to attend the meeting.

·        BOD’s Report on progress of work performed and improvements of the condominium property.

·        General Manager’s Report.

5.    Adjournment

Dr. Osvaldo Valiño

President

MODIFICACION DE AVISO

TENIENDO EN CUENTA  LAS CELEBRACIONES JUDIAS, LA JUNTA DIRECTIVA HA MODIFICADO EL DIA EN QUE SE CELEBRARA LA REUNION DE PROPIETARIOS.

LA PRESENTE NOTIFICA  una reunión del Consejo de Administración de  Pavilion Condominium Association of  Miami Beach, Inc. La cual se celebrará en la siguiente fecha, hora y lugar:

Fecha:              Martes, 23 de Septiembre,  2014

Hora:                7:00 PM

Lugar:               Salón Social

Importante: Esta reunión es sólo para los propietarios de unidades

AGENDA

1.  Orden del Día

2.  Establecer Quórum 

3.  Lectura Minutas Reunión Anterior

4.  Asuntos a tratar:

·        Informe del Presidente sobre el vencimiento del contrato de cable, re-negociación con Atlantic Broadand y aprobación del nuevo contrato.

·        Informe del Presidente sobre los casos legales. Se invita a los señores de la Junta del 2012-2013,  especialmente al ex-presidente, Sr. Alex Hernandez, a asistir esta Reunión.

·        Informe de la Junta Directiva sobre progreso  de las obras del condominio

·        Informe del Gerente General sobre los asuntos del condominio.  

5. Clausura

Dr. Osvaldo Valiño

President

Message from the Mayor: City Update

Dear Friends and Neighbors:

It's been an honor to serve as your Mayor for almost one year now. As part of an ongoing effort to keep Miami Beach residents abreast of the City Commission's latest developments, here are some of our recent initiatives:
 

• O Cinema at the Byron Carlyle Theater: The City Commission unanimously voted to enter into an agreement with the cutting-edge, independent nonprofit, which currently operates O Cinemas in Wynwood and in Miami Shores. The third O Cinema, located in the Byron Carlyle Theater and part of our efforts to stimulate the economy of North Beach, is set to open sometime this fall. 

• Body Cameras for Police Department and Other City Departments: Police officers' body-worn cameras are proven to reduce the number of misconduct complaints and the use of force. This fall, 50 cameras will be deployed for use by Miami Beach Police Department to improve the organization's transparency and accountability. There are also five cameras being deployed for evaluation and testing by the Fire Department, Code Compliance Division, Parking Department, and Building Department. 

• Millage Rate: At the most recent City Commission meeting, your elected officials voted to decrease the millage rate by 0.0926 mills. This will account for a reduction in property taxes to median or average property owners that qualify for the homestead exemption and the Save Our Homes cap. 

• Voluntarily Forgoing Salary and Benefits: As I did last year, I will be forgoing my City salary, compensation, and benefits for the upcoming fiscal year. The total amount, which comes to about $44,000, will be allocated to the elderly and to senior-related activities throughout Miami Beach.

• Traffic Management on Causeways During Accidents: In the wake of the numerous  recent traffic fatalities on the Causeways, the Police Department and new Police Chief have recommended that the City invest in 3-D imaging cameras. The state-of-the-art equipment will catalog evidence at the scene of a traffic accident, reducing the duration of road closures by up to 50%. Also under consideration is the installation of HD video cameras at strategic locations along the Causeways, which will help reduce the amount of time it takes to reconstruct an accident scene. 

**We encourage you to forward this email to your email contact list so that others can opt to receive future notifications. Also, please visit our Facebook page,  Mayor Philip Levine, for real time information from our office.**

Sincerely,

Philip

Miami Beach Venture Taps New York Hotel Executives

Faena District, the massive $1 billion hotel, retail and condo project under way in Miami Beach, has hired two top New York hotel executives as the luxury development gets ready to launch into an increasingly competitive hospitality market.

The venture between Argentine real-estate developer Alan Faena and Ukrainian-born businessman Len Blavatnik is one of the most ambitious real-estate projects that Miami has ever seen. It will cover six city blocks and include a 169-room hotel, shopping mall, arts center and high-end condos that have had asking prices of up to $50 million.

Read More: http://online.wsj.com/

IS ASSOCIATION CRIME ON THE RISE?

By Eric Glazer, Esq.

Published September 8, 2014

  

            Many of you heard the Condo Craze show a few weeks ago concerning the Mainlands VII HOA in Tamarac, where a President was arrested for stealing over $180,000.00 from her association. Earlier in the week, I appeared on the local news regarding yet another President allegedly taking tens of thousands of dollars for management fees, despite not being a licensed community association manager. 

Condo president accused of using community funds for personal items

Lately, it seems that week after week we hear about an association’s board member getting arrested for stealing.  It’s alarming.

   

            In all fairness to directors of condos and HOAs, we also hear almost every day about doctors getting arrested for Medicare fraud, attorneys stealing from trust accounts, and government officials taking bribes.  The question is…..are directors of associations more likely to commit financial crimes than members of other professions?  Is it because they don’t get paid and at some point believe they are deserving of these funds?  Is it simply because nobody is watching and the temptation is too great?

            For a long time, the condo statute automatically removed board members who were arrested for stealing association funds.  HOAs on the other hand had no such protection until Jan Bergemann and I worked hard two years ago to have the same rule of law apply to HOA directors and officers who steal.  We both got tired of hearing about directors who stole money and continued to serve as President of the association ---FROM PRISON.

  

            Should directors who steal be subject to harsh discipline because in effect they are stealing from all of the members of the community and there are more victims than a typical theft?  Would a salaried board cure the temptation and the problem?  I don’t pretend to know the answers, but the more we hear about arrests of board members gone awry, the more difficult it becomes for board members with pure hearts to gain the trust and confidence of the members of their own communities.

Read More: http://www.hoa-condoblog.com/

Condo and Co-op Budgeting Basics

By Lisa Magill

It goes without saying that every association must adopt a budget each year reflecting the estimated income and expenditures of the association. The Florida Administrative Code requires the budget adopted by the Board of Directors to contain some basic features.

The budget must contain the beginning and ending dates. Adopting a budget for the “2015” calendar year does not comply with the technical requirement of the code. Saying the budget is applicable for the “year ending 12/31/2015” doesn’t cut it either.

The budget must show the total assessment on a monthly or quarterly basis for each unit type according to the allocation of assessment liability. For condominiums and cooperatives, the statutes require the budget adopted by the board to include fully funded reserves for capital expenditures and deferred maintenance, so that means the monthly or quarterly amount reflected on the budget, as adopted by the board, must contain the total payment. Reserve funding may only be waived or reduced by a membership vote.

Associations operating more than one condominium must prepare a separate budget for each of the condominiums, in addition to a budget reflecting expenses paid by all condominium owners, unless the members have voted to consolidate financial operations. Consolidating financial operations, however, is only available to associations where at least one of the condominiums was created before 1977. Section 718.111(6), Florida Statutes says:

 … an association may operate two or more residential condominiums in which the initial declaration of condominium was recorded prior to January 1, 1977, and may continue to so operate such condominiums for purposes of financial matters, including budgets, assessments, accounting, recordkeeping and similar matters, if provision is made for such consolidated operation in the applicable declarations of such condominiums or in the bylaws.

Consolidating the financial operations can make handling your financial affairs much easier. It may be less costly as well, especially when considering accounting fees for the year-end financial statements. Is your community eligible to consolidate its financial operations? Speak to your community association attorney to find out.

Limited common elements may have to be identified in the budget. According to Section 718.113(1), Florida Statutes, the costs associated with maintenance and care of limited common elements may be specifically allocated to the owners having the use of those limited common elements. Sometimes the declaration simply requires the unit owner to attend to the maintenance and repair. In other cases the association is still responsible for effectuating the maintenance and repair and bills the owners separately. In the latter case, the Administrative Code requires the budget to include a separate schedule (or schedules) reflecting the expenses associated with those limited common elements. You may need separate reserve schedules as well.

Calculating reserve contributions depends on the method selected by the Board of Directors. In the past, associations were required to keep separate line-item reserve accounts for roofing, paving, painting and any other item of deferred maintenance or replacement cost expense that would exceed $10,000. 2003 amendments to the Florida Administrative Code allow an association to calculate the funds necessary based on a group of assets. This is referred to as “pooled” or “cash-flow” reserves.

Switching from the straight-line method of reserve funding to the cash-flow or pooled reserves requires membership approval. Many associations have both at the same time since they failed to transfer the straight-line funds into the pooled fund. This will typically result in a calculation that requires a larger contribution so it is worthwhile to work with counsel to ensure all the funds are properly in the pool.

As mentioned above, the budget adopted by the board must contain fully funded reserves. The funding can only be waived or reduced by a vote of the members. Does your association include the required disclaimer in the waiver vote? Section 718.112(2)(f), Florida Statutes requires very specific language on the proxy or the ballot.

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

Interior Shell Or Box Of Air Often Defines A Unit

By Joseph Adams 

Question: In one of your recent blogs, you referred to the condominium “unit”. What is a “unit”?  I understand that it is “paint in, ceiling down, and slab up.”  Is this correct? L.G. (via e-mail)

Answer: The “unit” is the portion of the “condominium property” that the “unit owner” holds legal title to. The unit, when combined with its “appurtenances” (membership in the association, ownership of a share of the common elements, and certain other fundamental rights) are known as the “condominium parcel.”

All portions of the condominium property (the land and improvements subjected to condominium ownership by the declaration of condominium) not included within the “units” are part of the “common elements.”  Common elements are subdivided into two sub-sets, “limited common elements” (common elements reserved for the use of a specific unit or group of units) and other common elements, sometimes referred to (though not in the statute) as “general common elements.”

The distinction between “units” and “common elements” is important in many important respects. For example, unless otherwise stated in the declaration of condominium, the unit owner maintains the unit, and the association maintains the common elements.

Sections 718.104(4)(d) and (e) of the Condominium Act require the declaration of condominium define the “unit” by letter, name, or number, and further through a graphic description of the improvements in which the units are located, that, together with the declaration, are in sufficient detail to identify the common elements in each unit and their relative locations and approximate dimensions.

Most declarations use what is often referred to as the “interior shell”, or “box of air” method of defining unit ownership, which is the same as the “paint in, ceiling down, slab up” configuration you described. I would say about 75 percent of the condominiums I deal with use the “interior shell” definition.

Other condominium buildings have more expansive unit boundaries. Particularly for condominiums developed in Lee County in the 1970’s and 1980’s, we see many condominiums where the unit boundaries include the exterior elements of the buildings, and sometimes the structural slabs as well. Additionally, the condominium statute permits almost any types of real estate interests to be subdivided into condominium units. For example, in RV Park condos, it is usually the lot of land which is the “unit”. There are other types of “land condos” as well. I have seen boat docks and contiguous columns of water created as condominium units, and know of cases where horse boarding stalls have been subdivided into condominium units.

So, the precise answer to your question is that the definition of the boundaries between the unit and the common elements will be described in your declaration of condominium. In most cases, it is the “interior shell” concept you described, but that is not always the case.