|For years there have been significant legal constraints on a condominium association’s ability to use reserve funds. In addition to the statutory requirement to obtain membership approval for non-designated reserve usage, the prevailing school of thought was that association funds could not be invested since investments can and do fail.
A newly filed bill by Senator Jason Pizzo, SB 1490, could create a significant change in terms of an association’s ability to invest the community’s operating and reserve funds in depositories other than a traditional bank or savings and loan.
The bill provides as follows:
“Unless otherwise prohibited in the declaration, and in accordance with s. 718.112(2)(f), an association, including a multicondominium association, may invest any funds in one or any combination of investment products described in this subsection.”
If this bill passes and an association invests funds in any type of investment product other than a depository account, the association must meet all of the following requirements:
Lastly, the bill would exempt registered investment advisors from having their bids subjected to the competitive bidding requirements found in Section 718.3026, F.S. The companion bill to SB 1490 is HB 1005 (Killebrew/Fine).
As more associations change their old habits and begin to fund reserves, the allure of more aggressive investment vehicles for these funds, which can be substantial amounts, is undeniable. However, the risk is also undeniable. As such, if this bill becomes law and the investment of reserves becomes available, boards are strongly encouraged to take an extremely cautious, measured approach with reserves.
While investment of your association’s operating and reserve funds might result in a substantially better return than a savings account, you might also see significant losses. The investment of association funds must be done with careful consideration of the demographic in your community, the age of your buildings and facilities, the required liquidity of your funds and, most importantly, the sensitivities and risk tolerance of your membership all taken into account. If your members fuss about your board’s landscaping decisions imagine the potential fallout if you make the wrong investment decisions!
|Calling all Board Members and Community Association Managers!Becker’s “Can They Do That” video series tackles some of the unique problems that homeowners and renters face today. We answer your questions, no matter how far-fetched they may seem. From service animals to nudists in your community, we get to the bottom of it and let you know – “Can They Do That?”
Do you have a question about your community that you would like answered? Email topic suggestions to email@example.com
Catch up on past episodes from this series below.
Dear Clients and Friends,
The unprecedented challenges of this year have been difficult for us all. These challenges are magnified for volunteer board members having to make hard decisions which impact not only themselves, but their family, friends, and neighbors. As we turn to a new year, exciting news of advancements and wider distribution of COVID-19 vaccines appear on the horizon. While this is of course a welcomed development, the vaccines in and of themselves will bring new decision points for boards and their management professionals with respect to whether their associations are going to modify COVID-19 protocols which have been in place for much of 2020. From an executive level perspective, these protocols break down into two broad categories: (1) restrictions related to facilities; and (2) restrictions related to people.
Many of our clients made tough choices to close down common facilities completely when COVID-19 infections accelerated. Other clients took a more incremental approach with limited use of such facilities, monitoring the use of those facilities and enhanced disinfecting procedures. The bottom line is that no one approach was prescribed for all types of communities. In formulating the COVID-19 procedures, boards were encouraged by us to thoroughly evaluate what types of facilities their community contained, the risk factors potentially associated with the use of those facilities, the community’s budgetary and staffing constraints and how guidance (and legal mandates) from local, state, and federal governments applied to their community. The same will now be true with respect to evaluating the impact of widespread vaccine availability. Thankfully board members are not expected to have all of the answers immediately, however, now is the time for you to start preparing for the questions that will inevitably arise from residents. You may find that residents start advising that they have been vaccinated and thus are entitled to ignore your safety protocols such as masks, social distancing and use of amenities immediately upon arrival from elsewhere. Boards should follow developments in recommendations from applicable authorities and work closely with legal counsel to help formulate appropriate restrictions as developments in the vaccine distribution process occur.
In addition to restrictions on facility usage, the COVID-19 crisis resulted in difficult decisions to restrict guest access. Those decisions often impacted not only the number and type of guests that the residents could invite into the community, but also limited the ability of new tenants and owners to move in, as well as limiting which vendors could continue serving the association and individual owners. With the release of the COVID-19 vaccine, many of our boards are inquiring if their current guest restrictions should be loosened or eliminated for those guests willing to provide proof of vaccination. Similarly, associations with direct employees are asking if they should require those employees to provide proof of vaccination and others who have leased employees are wondering if their contracts with those companies should be revised to require proof of employee vaccination. While we do have some precedent with the flu vaccine and requirements for certain types of employers like hospitals and nursing homes, we have no such guidance when it comes to the new COVID-19 vaccine.
There will likely be employees who refuse to be vaccinated on religious grounds or who will claim a physical disability under the ADA. It is important that your board take no steps regarding this issue without obtaining a legal opinion first. Incentives related to covering any out-of-pocket costs and time off needed to be vaccinated may be better methods to ensure a vaccinated workforce as opposed to a mandate.
As for outside vendors who may be hired by the association and/or by your residents, there also needs to be a thoughtful deliberation as to what other protections along with proof of licensure and adequate insurance coverage may be appropriate.
We understand that the COVID-19 pandemic continues to be a fluid and difficult situation. However, with the welcomed news of vaccine distribution, boards need to initiate discussions and potential adjustments to their association’s COVID-19 protocols as you will likely receive questions or demands from your residents related to the vaccine. Naturally, any changes to your community’s COVID-19 protocols will need to be properly adopted at a duly noticed board meeting and those changes properly communicated to your residents. If you are interested in discussing this topic in greater detail, I am available.
Happy holidays to you and your loved ones and best wishes for a joyous, healthy, and prosperous new year!
Solutions Property Management is very proud to help advocate for Corona Virus Mutual Aid of Brevard County. This organization has pulled together 100’s of volunteers spear headed by a wonderful woman Stacey Patel, for such an amazing cause. We are taking donations and sponsored our office to assist in receiving donated items for a family that has lost everything due to a house fire.. If anyone would like to donate any items on this list or more please let us know or drop it off at 2235 N Courtenay Pkwy, Merritt Island FL 32953. 3216847793 for more information. Take the time to read about this amazing woman and how far she has reached by a small gesture of kindness.
BREVARD COUNTY, Fla. — A Brevard County woman is stepping up and taking to social media to help meet her community’s needs during the COVID-19 pandemic.
Even though Stacey Patel is tired, she keeps on going. Patel started the Coronavirus Mutual Aid Network of Brevard County Facebook group because she couldn’t just sit back while the pandemic was forcing businesses to shut down and people to lose their jobs.
“Sometimes when you experience hardship it give you the ability to see other people suffering,” Patel explained. “We’ve helped folks with long-term residences, shelters, short-term shelters, groceries. Anything you can think of is needed in wake of this crisis.”
The Facebook page already has more than 10,000 members, and it’s a one-stop shop for people who need help or for those who are in a position to help out.
“If someone says they don’t have food or transportation — some people can get to a pantry but some can’t — so we deliver groceries to people who don’t have transportation or are sick and can’t get out of their home,” Patel said. “We work with homeless families with small children.”
If someone needs help no matter what it is, members of the group will do their best to step in and help because, as Patel said, they are all facing this pandemic together. She said she will keep the page up as long as the pandemic lasts.
“We’ve just reached out to the community, and they’ve been every generous,” Patel said.
It’s that generosity that keeps her going — and makes her today’s Everyday Hero.
Question: The wife of an owner (only the husband is on the deed) is running for the Board of our condominium association. Is she eligible to run for the Board? I thought you had to be an owner under Florida Law to serve on a condominium association Board? D.A. via e-mail
Answer: Florida law does contain certain minimum requirements for a person to be eligible to serve on the board of directors for a community association. As an example, The Florida Not For Profit Corporation Act (Chapter 617, Florida Statutes) requires a board member to be eighteen years of age or older. Further, The Condominium Act (Chapter 718, Florida Statutes) contains certain eligibility requirements to serve on the board, including a prohibition on felons serving on the board, unless their civil rights have been restored for a period of no less than 5 years. That being said, there is no requirement within Florida law for a person to be a “member” (i.e. name on the deed) of a condominium association before they are eligible to serve on the board. Many condominium association governing documents, however, do require a person to be a “member” of the condominium association to be eligible to serve on the board. The answer to your question will depend on the specific language contained within your condominium association’s governing documents.
The statutes governing community associations require notice of meetings to encourage owner participation. HOAleader recently published an article on this subject: HOA Meetings: Does Your State Have Rules for Your Meeting Agendas? Here are some handy reminders – there are additional options in the statutes. This list is not intended to be all inclusive.
|Board meeting(s)||48 hours posted (or pursuant to documents) with agenda||48 hours posted (or pursuant to documents)|
|Budget meeting(s)||14 days mailed (along with a copy of the proposed budget) and posted, unless documents require a longer time period||Pursuant to documents|
|Annual meeting(s)||60 days for first notice; 14 days for second notice, mailed, delivered or electronically transmitted||14 days mailed, delivered or electronically transmitted (unless documents require more notice)|
|Special assessment(s)||14 days mailed and posted– condos must also include the purpose & estimated amount of special assessment in the meeting notice (14 days applies to meetings to establish the insurance deductible as well)||14 days mailed and posted|
|Board meeting(s) to adopt rules regarding unit or parcel use||14 days mailed (along with a copy of the proposed rule) and posted||14 days mailed (along with a copy of the proposed rule) and posted|
|Member meeting(s)||Pursuant to By-Laws (usually at least 14 days mailed, delivered or electronically transmitted)||14 days mailed, delivered or electronically transmitted (unless documents require more notice)|
|Committee meeting(s)||Committees that take final action on behalf of the board or make recommendations to the board regarding the association budget must notice their meetings 48 hours in advance, and the meetings must be open to the unit owners.
Committees that DO NOT take final action on behalf of the board or make recommendations to the board regarding the association budget must notice their meetings 48 hours in advance, and the meetings must be open to the unit owners, UNLESS the By-Laws provide otherwise.
|Must be posted 48 hours in advance when a final decision will be made regarding the expenditure of association funds and to meetings of any committee vested with the power to approve or disapprove architectural decisions with respect to a specific parcel of residential property owned by a member of the community|
|Association attorney meeting(s)||Must be noticed 48 hours in advance, but are not open to unit owners when the meeting is held for the purpose of seeking or rendering legal advic||Must be noticed 48 hours in advance (or pursuant to documents), but are not open to owners when the meeting relates to proposed or pending litigation or personnel matters.|
The best time to prepare for a hurricane is before hurricane season begins on June 1. It is vital to understand your home’s vulnerability to storm surge, flooding, and wind. Here is your checklist of things to do BEFORE hurricane seasons begins.
- Know your zone: Do you live near the Gulf or Atlantic Coasts? Find out if you live in a hurricane evacuation area by contacting your local government/emergency management office or by checking the evacuation site website.
- Put Together an Emergency Kit: Put together a basic emergency. Check emergency equipment, such as flashlights, generators and storm shutters.
- Write or review your Family Emergency Plan: Before an emergency happens, sit down with your family or close friends and decide how you will get in contact with each other, where you will go, and what you will do in an emergency. Keep a copy of this plan in your emergency supplies kit or another safe place where you can access it in the event of a disaster. Start at the Ready.Gov emergency plan webpage.
- Review Your Insurance Policies: Review your insurance policies to ensure that you have adequate coverage for your home and personal property.
- Understand NWS forecast products, especially the meaning of NWS watches and warnings.
- Preparation tips for your home from the Federal Alliance for Safe Homes
- Preparation Tips for those with Chronic Illnesses
Q: Is it necessary for the board of my condominium association to get a vote from the owners to change parking rules? They want to restrict me from parking my third vehicle on the property. I have been living here for over a year with three vehicles and no problem. (R.T., via e-mail)
A: The vast majority of governing documents grant the board the authority to make and amend and promulgate rules regarding the common elements. Board made rules cannot conflict with the declaration of condominium, nor rights which are inferable from the declaration. Further, board made rules must be “reasonable.”
Whether a particular rule is reasonable depends on the facts of each case. Some deference is given to the board’s business judgment and the board does not need to choose the least restrictive alternative when there are choices of approach. The development regulations for many condominiums only required 1.5 parking spaces per unit at the time the condominium was built. Obviously, in such case, every owner could not have 3 vehicles.
Q: Our development has 10 fountains in 7 ponds. The board reduced the operating time of the fountains from 12 to 6 hours a day. Owners of homes with a fountain view feel like the enjoyment and value of their homes has diminished. Is this a material change under Florida law that would require membership vote? (R.D., via e-mail)
A: The seminal case in Florida defines “material alterations” in the condominium context as those changes which “palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design or plan, or existing condition, in such a manner as to appreciably affect or influence its function, use, or appearance.”
The condominium law states that there shall be no material alterations or substantial additions to the common elements except as provided in the declaration of condominium. If the declaration is silent, seventy five percent of all unit owners must approve the change. Although not set forth in your question, it appears that your community may not be governed by the condominium statute, but rather Chapter 720 of the Florida Statutes, the Florida Homeowners’ Association Act. This statute does not have a “material alteration clause” and the case law under the statute suggests that the governing documents control the question.
Based on the situation you describe, the fountains will continue to operate in accordance with their general function, use, and appearance. Rather, the board is making a decision as to how these common elements or common areas will be operated. Most governing documents, as well as applicable case law, generally give the board relatively wide latitude regarding operation of common property.
Q: Our community has a building with 6 connected villas under a common roof. Homeowners are required to carry their own insurance and most have different insurers. If one company says that the building has hurricane roof damage, but the others disagree, would that insurer have to cover the entire roof for the 6 villas? (B.B., via e-mail)
A: That question could only be answered by having an attorney who is competent in insurance coverage issues review the applicable insurance policy. Without prejudging what might come from such a review, the short answer is “I doubt it.”
This is a common issue for this type of community. Over the years, I have seen situations where one villa owner may have inadequate insurance, or no insurance at all, and decides to “walk away” after a major loss, such as a hurricane. There are a number of approaches that could be considered to protect all of the owners, including requiring proof of insurance, requiring rebuilding/repair within a certain time frame, and setting forth effective enforcement remedies. This will usually require an amendment to the declaration of covenants.
Our 2020 Legislative Guide is designed to help your volunteer board and management professionals understand and implement the new laws which impact community associations each year. Given the significant percentage of Florida’s population which resides in shared ownership communities, we are virtually guaranteed to have numerous association bills sponsored each year with some of those proposals becoming new laws.
Florida’s 2020 Legislative Session produced the long-awaited criminalization of fraudulent emotional support animal requests. As of July 1, people who submit fraudulent documentation to support their request for a service animal or an emotional support animal (ESA) in a Florida community or who otherwise hold themselves out as being physically or mentally disabled when they are not, risk being imprisoned, fined and/or ordered to perform community service. Already we are seeing an encouraging trend that when associations use experienced counsel to engage in a meaningful dialogue with the requesting party, insufficient documentation becomes more apparent and dubious requests are often withdrawn.
There are also new legal protections for condominium, cooperative and HOA residents to park a law enforcement vehicle in their communities as well as new rights for HOA residents to use fireworks on the 4th of July, Christmas Eve, New Year’s Eve and New Year’s Day regardless of any HOA restrictions to the contrary.
One of the newly passed laws declares void and unenforceable all “discriminatory restrictions” (e.g. those based on race, color, national origin, religion, gender, or physical disability) contained in any recorded title transaction. Some older association documents may contain pernicious, decades-old discriminatory use restrictions that can now easily be removed by an amendment approved by a majority vote of the board of directors. With our 6-month hurricane season in Florida, the new law which amends Section 631.57 of the Florida Statutes to increase the amount of coverage for property insurance claims by a condominium, cooperative or homeowners’ association under the Florida Insurance Guaranty Association (FIGA) from $100,000 to $200,000 multiplied by the number of units is a positive change.
Lastly, associations operating “55 and Over” communities will welcome the news that a new law deletes the prior registration requirements (a letter to the Florida Commission on Human Relations once every two years, with a fine of up to $500 if they failed to do so) for these communities and eliminates related forms, fees, and fines.
While many of the foregoing new laws are helpful, the community association legislation passed during Florida’s 2020 Legislative Session unfortunately could not address the unprecedented challenges presented by the COVID-19 pandemic as the Session ended right when the health crisis erupted. Volunteer boards who had never grappled with a pandemic before made impactful decisions to close certain amenities, restrict the flow of visitors into the community and marshaled the resources needed to heighten sanitization and implement other safety measures needed to protect their residents. All of this was done at times in the face of vocal resident opposition and a lack of clarity and support from government officials.
It is CALL’s mission, however, to ensure that the crop of 2021 association bills will incorporate some of the lessons we’ve learned from the COVID-19 crisis and provide new tools to assist volunteer boards in the coming years. In the interim, there are steps your community can take by amending your governing documents and implementing necessary policies and protocols to provide you with greater flexibility and a wider range of options when you are inevitably confronted with the next challenge life brings your way.