Rembaum's Association Roundup Archives - Page 5 of 5

February 7, 2021February 7, 2021

Hosting Virtual Meetings via Zoom

The most asked question of 2020 is this: Can our association host our board and annual meetings using Zoom or another similar virtual/electronic platform? There is no doubt that technology will always advance faster than legislation. In fact, advances in technology seem to take place in light speed whereM as advances in legislation seem to travel at the speed of your average turtle.

As to board meetings, §718.112(2)(b)5 of the Condominium Act provides, “A board or committee member’s participation in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication counts toward a quorum, and such member may vote as if physically present. A speaker must be used so that the conversation of such members may be heard by the board or committee members attending in person as well as by any unit owners present at a meeting.” Note that similar provisions are provided for cooperative associations in… Read the rest in Rembaum’s Association Roundup

January 10, 2021January 11, 2021

Financial Screening of Purchasers: How Far Is Too Far?

A few months back a case came before the county court in the 20th Judicial Circuit for Collier County, wherein a prospective buyer challenged the validity of a board-adopted rule which required that all prospective buyers provide two years of tax returns with their application for ownership approval. This requirement was in addition to the background check and credit check that were also required. While this is only a county court case and, therefore, has no precedential value other than to the parties themselves, there are principles addressed of which associations and managers should be aware; even though many learned attorneys would opine that the conclusions of the court are legally flawed under the facts of the case and, if appealed, would likely be overturned. Nevertheless, there are still nuggets of knowledge that can be gleaned from this case.

In this case, Mech v. Crescent Beach Condominium Association, Inc., Case No. 19-SC-3498, decided June 2020, the purchaser, who was the plaintiff, was seeking to buy a unit at Crescent Beach Condominium for $400,000, which was to be paid in cash. The purchaser purportedly had a clean background and a credit score of 800. Nonetheless, the board required that, like all other prospective purchasers at the condominium, this purchaser needed to produce his tax returns in order for the association to approve the transfer. The purchaser refused to provide his tax returns and cited his good credit score and clean background as evidence enough for approval. Eventually, an impasse was reached, and the purchaser canceled the contract. Then he brought the county court lawsuit challenging the requirement. (Generally speaking, typically under current Florida law, the purchaser would not have legal standing to even bring the claim against the association; but it does not appear that this legal infirmity was raised by the association, which allowed the case to proceed.)

The purchaser challenged the rule, arguing that the rule was not within the scope of the association’s authority to adopt, nor did it reflect reasoned decision-making. (It is noteworthy to point out that, after…

August 11, 2020August 11, 2020

Governing Documents Amendments in Light of Covid-19

Rembaum’s Association Roundup | Governing Documents Amendments in Light of Covid-19: Making Lemonade Out Of Lemons

As a result of the unexpected COVID-19 crisis and its ramifications on Florida’s community associations, there are lessons that can be learned. Early on, an unexpected issue many community associations faced was whether the board could rely on the emergency powers set out in the Florida Statutes to help protect both residents and property alike during this time of uncertainty (the “emergency power legislation”). The Condominium, Cooperative, and Homeowners’ Association Acts each provide that the board of directors is granted certain emergency powers in response to damage caused by an event for which a state of emergency is declared by the Governor. While local governments at the city and county level may similarly declare a state of emergency, the emergency powers only spring into existence upon the Governor’s issuance of an executive order declaring a state of emergency in response damage caused by event.

These emergency powers include, just to name a few, the ability to cancel and reschedule meetings, conduct such meetings with…

July 7, 2020July 20, 2020

State of Emergency Extended for 60 Days

To see the Order in its entirety click HERE

If the link does not work for your browser, then copy and paste the following into your browser: https://www.flgov.com/wp-content/uploads/orders/2020/EO_20-166.pdf

A copy of the relevant text from the Order follows:

STATE OF FLORIDA OFFICE OF THE GOVERNOR

EXECUTIVE ORDER NUMBER 20-166 (EmergencyManagement-Extension of Executive Order 20-52-COVID-19)

WHEREAS, on March 9, 2020, I issued Executive Order 20-52, declaring a state of emergency for the entire state due to COVID-19; and

WHEREAS, on March 25, 2020, President Donald J. Trump approved my request and declared a Major Disaster due to COVID-19 in Florida; and

WHEREAS, on June 3, 2020, I issued Executive Order 20-139, implementing Phase 2 of my Safe. Smart. Step-by-Step. Plan for Florida’s Recovery; and… Click for the Complete Article

April 13, 2020April 13, 2020

The 2020 Census: The Importance of Being Counted, Especially Now

The U.S. Constitution provides that every ten years, the United States must conduct a census to count the entire population of the nation. Moreover, federal law requires each person to complete the census. Each year, the federal government distributes more than $675 billion to states and communities based on Census Bureau data. Additionally, information gathered in the census is used to determine how many Representatives each state has in Congress and is used to redraw the congressional district boundaries. Local communities rely on census data to plan for new roads, schools, and emergency services. In the private sector, businesses use the census data to decide where to build factories, offices, and stores which create jobs in the community. In order for your community to receive the maximum benefit from the 2020 Census, every member must be counted.

April 3, 2020April 3, 2020

COVID-19 Update: Your Questions Answered

OUR KBR TEAM OF ATTORNEYS OFFER GUIDANCE TO YOUR MOST PRESSING COVID-19 QUESTIONS

1. If we have a resident who tested positive for Covid-19 should we inform the entire community?

If the positive test has been confirmed, while it is ok to alert the entire community that a member has tested positive for Covid-19, it is definitely NOT ok to identify the infected person by name and/or property address. It is recommended that you contact Association counsel for assistance in preparing or reviewing the notice to the membership.

2. What do we do if a confirmed, infected person in our community refuses to self-quarantine? Read the rest…

March 16, 2020March 27, 2020

Special Coronavirus Emergency Powers Edition: Board Emergency Powers

For Condominium, Cooperative & Homeowners’ Associations

All board members and managers should take a few moments and brush up on emergency powers approved by the legislature and codified into Florida Statutes in Chapters 718, 719 and 720 for use during a “state of emergency.” Hopefully, your association will not need to use them. But just in case, now is the time to familiarize yourself with this important legislation.

No doubt the emergency powers granted by the Florida legislature to a condominium, cooperative and homeowners’ association board of directors for use during a “state of emergency” were intended for hurricanes and the like. Nevertheless, should circumstances warrant, they can be utilized during this state of emergency caused by the Coronavirus. However, use of these powers should be reasonably related to the threat at hand. In other words, there should be good reason for their exercise such that there is a nexus between the emergency action taken and the situation at your association as related to the Coronavirus.

Due to the Coronavirus, a myriad of other issues present themselves for consideration, too. Should board meetings be held and if so, how? Should the board learn of an infected member living in the association, what next? Should the infected person be identified to other members? What type of notice should be provided? Should an entire condominium be quarantined due to one case of coronavirus or should only those members who were in contact with the infected member be in quarantine? These are issues of first impression and the list goes on… Read the Rest (including the actual legislation)

September 11, 2019October 31, 2019

REMBAUM’S ASSOCIATION ROUNDUP: NEW RULES FOR FHA FINANCING – WHAT BOARD MEMBERS NEED TO KNOW

For some home buyers, financing the purchase of their new home can be a barrier to entry. Many home buyers need the benefit of an FHA backed loan for their lower interest rates. The Federal Housing Authority (FHA), a part of the Department of Housing and Urban Development (HUD), has provided mortgage insurance on loans made by FHA-approved lenders since its inception in 1934. Until a recent FHA rule change, any buyer interested in purchasing a condominium unit backed by an FHA loan faced the additional hurdle requiring that the condominium project itself must be FHA approved.

The FHA approval process for condominium projects can be complex and time-consuming. Prior to the recent FHA rule change, if the condominium project was not approved by the FHA, then prospective condominium purchasers could only obtain conventional loans, making it more difficult to secure financing. In fact, according to the FHA, only 6.5 percent of the country’s more than 150,000 condominium projects are approved to participate in the FHA’s mortgage insurance program. However, a new FHA rule that goes into effect on October 15, 2019 will change the approval process for condominium units and allow more buyers to receive approval for an FHA loan.

The new rule introduces several changes to the FHA approval process. The most notable is that the FHA will now allow an individual condominium unit owner to be eligible for an FHA backed mortgage even if the condominium project as a whole is not approved. However, the FHA will only approve a limited number of units in any condominium project. For projects with 10 or more units, no more than 10 percent of the individual units can be FHA-insured, and for projects with fewer than 10 units, no more than two individual units can be FHA-insured. Board members, owners, managers, and anyone else can access HUD’s database to find the number of FHA backed loans in a condominium project at https://entp.hud.gov/idapp/html/condo1.cfm.

The following are some of the essential requirements for a condominium project to be FHA approved, which have not been changed by the new rule:

The condominium project must consist of two or more units
No more than ten percent of the units can be owned by one investor or entity in a project with more than 10 units. In a project with 10 or fewer units, an investor may not own more than one unit. Unsold units are not considered investor-owned
No more than fifteen percent of the total unit owners can be in arrears of association fees.

While the FHA allows limited restrictions on leasing, a condominium project will not be approved if the declaration or by-laws require that a prospective tenant be approved by the association. However, the association may require leases to be in writing and subject to the declaration and by-laws of the condominium, request a copy of any sublease and the name of all tenants who will occupy the unit, and establish a maximum allowable lease term and maximum number of rental units within the project. The FHA leasing requirements are the same for condominium and homeowners associations, but the new rule changes apply only to condominium associations.

The new FHA rule requires that approved condominium projects have a minimum of 50 percent of the units occupied by “owners” for most projects. In 2015, the FHA clarified that a condominium unit is considered to be owner-occupied provided that it is not: (i) tenant occupied, (ii) vacant and listed for rent, (iii) vacant and listed for sale, or (iv) under contract to a purchaser who does not intend to occupy the unit as a principal residence or secondary residence. For approved projects, the FHA will insure up to 50 percent of the units in the project.

The new FHA rule has extended the allowable amount of commercial/non-residential space for an approved condominium from 25 percent to 35 percent of total floor space. It also extended the re-certification deadline for approved condominium projects from two years to three years. An approved condominium project may request renewal of its approval by submitting a request no earlier than six months prior to the expiration or no later than 6 months after expiration of the approval.

Getting your condominium project approved by the FHA allows more buyers the opportunity to purchase units in your community utilizing FHA backed loans. However, the approval process is complex, and may require that your declaration and by-laws be amended to conform with FHA requirements – most especially in regard to leasing. Each association will have to balance the benefit of FHA backed loans versus having lease approval powers. If an owner’s neighboring tenant turns out to be previously convicted of rape, murder, or other heinous crime, then there is a great probability that such owner would have preferred stringent lease approval requirements as compared against providing for FHA backed loans in the community. Your association’s legal counsel can be of great benefit in navigating issues concerning the FHA approval process.

August 13, 2019October 31, 2019

REMBAUM’S ASSOCIATION ROUNDUP: YOU GET WHAT YOU PAY FOR – ASSISTANCE ANIMAL APPLICATION PACKAGES

The complaint heard often from condominium and HOA board members is in regard to the influx of assistance animals in their “no pet” or pet restricted communities. Few other topics within the body of community association law cause more consternation then the application of the Federal, State and local Fair Housing laws. In fact, one relatively minor misstep from a board member or manager can cost an association tens of thousands of dollars in damages, as well as attorney’s fees and costs. Not only that, but this is one of the very few areas where board members could potentially face individual liability for their actions. Under most circumstances, board members will have protection from liability under the “business judgment rule,” but this is not necessarily the case in the Fair Housing arena.

I have read applications for assistance animal requests, believed to be prepared by lawyers with knowledge in this field, which are used as a method to obtain new community association clients by selling the applications for a very low cost, even below several hundred dollars. Unfortunately, these application packages, while seemingly inexpensive, can expose the association to significant monetary penalties.

One such application package is a nightmare waiting to happen to an unsuspecting board because it requires the application to be completed in order for the board to review the matter. While Fair Housing laws encourage a uniform policy be implemented, an association’s assistance animal application package cannot be made a prerequisite. It can be suggested that providing a completed application will assist in expediting the review process, but it cannot be mandated to be considered for approval. Also, without good cause, an association cannot demand regularly updated medical information concerning a claimed disability, regardless of the use of an application created by an association demanding otherwise.

Recent decisions point out the legal exposure to an association when board members or other agents of the association attempt to curtail the rights of assistance animal owners in an apparent effort to placate the rest of the community.

In a recent Fair Housing consent order entered September 28, 2018 by and between an applicant for an assistance animal and Hudson Harbor Condominium Association, Inc., located in New Jersey, the association was ordered to pay $30,000 to the assistance animal applicant for failing to grant a reasonable accommodation to its policy of requiring the animal be carried in a crate or carrier in the common elements and that the owner of the animal only use a service door when accompanied by the animal.

In another case, Pekiun v. Tierra Del Mar Condominium Association, Inc., 2015 WL 8029840, the association’s motion for summary judgment was denied where the plaintiff’s estate sued the association due to its failure to allow an assistance animal and argued that the association caused the intentional infliction of emotional distress and violations of both Florida and Federal Fair Housing Acts. In this case, the association demanded an assistance animal be removed from the premises due to another individual’s allergies and required, not only that a specific application be completed by a particular time. After the assistance animal was approved, the association’s management company changed and the new management company required the owner to “recertify” his assistance animal. Later, the owner committed suicide. Had the Association not given the owner such a hard time, would the owner still have committed suicide? We will never know. The damage award could easily exceed six figures given these occurrences and resulting suicide.

Remember, when considering an assistance animal request, all that is necessary is that the applicant has a disability recognized by the Fair Housing laws and that the animal helps ameliorate the symptoms or effects of the disability. This information can come to the association from a doctor, psychiatrist, social worker, mental health worker or any other qualified individual.

If the association desires a uniform application for assistance animals to assist in trying to streamline request procedures, the board should be looking to work with an attorney/law firm familiar in this area of law, and not simply go for the low cost option.

Unless and until the Federal, State, and local laws are modified to address this ever-growing situation, when considering assistance animal applications, the association would be wise to seek legal counsel before taking any action. This is particularly true if the association is going to request additional information, implement limitations or restrictions on the owner or assistance animal within the community, or perhaps deny the request.