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Community Update – June 2020

June means the start of Hurricane season in Florida and while we always hope for a quiet year, it’s important that your community take steps now to ensure preparedness should disaster strike. This issue includes Becker’s newly interactive 2020 Hurricane Guide which provides important tips and information to help prepare and protect your community. Make sure to check out the guide along with all of the other informative content this month.

This month’s featured article, “Slowly Getting Over the Hump: Addressing Speeding with Traffic Calming Devices,” discusses can and if your association should install speed bumps or humps to deter speeding in your community.

Must association members be notified of all board meetings prior to? Find out the answer in, “To Notice, or Not to Notice, That Is the Question: Closed Board Meetings.”

In “Tiffany Plaza Condominium Association v. Spencer” unit owners challenged the payment of assessments for an alteration the members did not approve. So, why does this case matter? Find out how this case and its progeny have shaped the application of current law.

Lastly, don’t miss June’s Spanish article, “El avance de la tecnología en las leyes de las asociaciones.”

If you have new members on your board or a new manager of your association and want them to be part of our Community Update, have them subscribe here:

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4th of July Might Get Louder for Florida HOAs

If you live in a homeowners’ association, Fourth of July celebrations may sound a lot louder this year. As of this spring, Florida now has a law that will allow the use of fireworks on three days each year:  Independence Day, New Year’s Eve, and New Year’s Day. While condominium and cooperative associations may still prohibit the use of fireworks no matter the holiday, a Florida homeowners’ association may not adopt a board rule prohibiting fireworks on any of the three designated days. That means that for this upcoming 4th of July, if you are on the board of an HOA, you are no longer permitted to adopt rules that prohibit an owner’s right to use fireworks.

To be clear, you may have restrictions addressing fireworks in your recorded Declaration (or properly recorded amendment to the Declaration) and those may still be enforced. However, under the new law, an HOA board may no longer adopt any rules “that attempt to abrogate a homeowner’s right to use fireworks during a designated holiday.”  Click here to read SB 140 which was signed by Governor DeSantis and became effective on April 8, 2020.

Florida law (Chapter 791) previously banned the retail sale and use of fireworks for the general public. This new law is an exemption to that blanket prohibition to allow the use of fireworks during designated holidays. The term “fireworks” is generally defined as combustible or explosive substances, in contrast to sparklers and smaller noisemakers. Many associations relied on the existing laws to prohibit the use of explosive or projectile fireworks in their communities, regardless of whether they had specific restrictions in their governing documents or not. However, because there is now an exemption that allows fireworks to be used and sold on July 4, December 31, and January 1, the owners in your community can no longer be told they cannot shoot off firecrackers this 4th of July. In other words, unless you have a restriction banning fireworks in your Declaration, you can no longer rely on Florida law to prevent their use on these three specific holidays.

From a practical standpoint, narrowly tailored board rules, for example restrictions that limit the time of night fireworks may be used or the location from which they can be detonated, are still permissible; but any blanket prohibition against their use on one of the three designated holidays in the new law is no longer permitted to be adopted as a board rule. Additionally, while the board, by itself, cannot make a board rule prohibiting fireworks use on the three listed holidays, the Association members are still allowed to amend the Declaration (pursuant to the amendment procedure contained in the Declaration), to prohibit fireworks use even if that amendment prohibits fireworks use on a designated holiday. If you have concerns about the potential liability involved with detonating fireworks in your community, the possible lack of insurance coverage should the use of same create a problem or the nuisance associated with such use, you should consider amending your governing documents to address the use of fireworks.

On a separate note, please click here to read a letter which I sent to Governor DeSantis regarding the upcoming expiration of the State of Emergency on July 7. Given that Florida’s numbers of COVID-19 cases continue to head in the wrong direction, we are seeking an extension of emergency powers for our volunteer boards who need to take steps to continue to safeguard their vulnerable resident populations.  For those of you who wish to urge the Governor to assist you in this regard you may contact him by clicking here.

Governor DeSantis signed SB 1084 emotional support animal (ESA) legislation

Dear Public Policy Stakeholders,

I have some great news regarding the emotional support animal (ESA) legislation we heavily supported this past session. Governor DeSantis signed SB 1084 into law yesterday, which seeks to curb growing abuses of emotional support animal (ESA) certificates.

The continued abuse of online ESA certificates was presenting significant problems for many of our members who are also property managers. The cumulative changes in the new law are intended to further legitimize what should be considered reliable information for an ESA and its intended purpose.

The new law does a number of different things such as requiring patients to establish the need for an ESA through a licensed medical practitioner with whom they have an established professional relationship, and creating a civil penalty for the falsification of documentation used to support the need for an ESA. It also gives housing providers the ability to ask for supporting documentation if the disability is not readily apparent as well as letting owners deny an ESA if they believe the animal will cause harm to people or the property of others.

A copy of the final bill analysis can be found here and a copy of the final bill text can be found here.

This new law is a big win for our members and I am so happy to finally be able to share the good news with you. As always, please let us know if you have any questions.

Sincerely,

Danielle Scoggins
Vice President of Public Policy
Florida Realtors

Emotional Support Animal Bill Goes to the Governor

Emotional Support Animal Bill Goes to the Governor

We are thinking of all of our CALL Members during these uncertain times and want to remind you that CALL remains a trusted resource for your community.

Yesterday, Governor Ron DeSantis received the following bills from the Florida Legislature. The Governor has until June 30, 2020 to act on these bills.

  • SB 1084 – Emotional Support Animals
  • CS/SB 82 – Individuals with Disabilities
  • CS/CS/SB 156 – The Early Childhood Music Education Incentive Pilot Program
  • CS/SB 344 – Courts
  • CS/SB 434 – Designation of School Grades
  • CS/CS/CS/SB 662 – Education and the Military
  • CS/SB 1466 – Government Accountability
  • CS/SB 1742 – Home Medical Equipment Providers

SB 1084 would criminalize fraudulent emotional support animal requests which could be a game changer in terms of reducing the monetary stress and labor strain on communities who are forced to evaluate countless fraudulent requests each year. We are hopeful that the Governor will sign this bill into law but it always helps to have his office hear from a large number of citizens who want to see this happen. You can contact the Governor’s Office at (850) 717-9337 or via email at GovernorRon.Desantis@eog.myflorida.com.

Now that bills are heading to the Governor, you will be receiving CALL alerts as the bills that impact our CALL communities are received and acted upon by the Governor. And, we will be sending out our annual Legislative Guidebook in the near future.

Wishing you continued health and safety.

Updates On Legislation That Affects Florida Community Associations

Only a few bills passed this year that affect community associations. These bills pertain to:

1. fire sprinkler and engineered life safety systems in condominiums,
2. removal of dangerous trees,
3. vegetable gardens, and
4. Assignments of Benefits

House Bill 7103 – Effective June 28, 2019
Under the Florida Fire Prevention Code, all high-rise condominiums must be protected by either (1) a complete automatic fire sprinkler system or (2) an engineered life safety system (“ELSS”). High-rise condominiums are those with buildings greater than 75 feet in height, measured from the lowest level of fire department access to the floor of the highest occupiable level.

Prior to House Bill 7103 being adopted, Section 718.112(2)(l), Florida Statutes, required all high-rise condominiums to retrofit the condominium with a fire sprinkler system or an engineered life safety system by December 31, 2019 or vote to opt out of the sprinkler retrofit option. The option to opt out of the sprinkler retrofit expired on December 31, 2016 and there was no opt-out provision for ELSS. Even those high-rise condominiums that had timely opted out of the sprinkler retrofit were still required to have an ELSS completed by December 31, 2019.

House Bill 7103 amended Section 718.112(2)(l), Florida Statutes, to extend the deadline until January 1, 2024 for high-rise condominiums to retrofit the condominium with a fire sprinkler system or an engineered life safety system. It also reinstated the option to opt-out of the requirement to install a fire sprinkler system, with the option also expiring on January 1, 2024.

House Bill 7103 also deletes the requirement in Section 718.112(2)(l), Florida Statutes, that the bylaws must include a provision that a certificate of compliance from a licensed electrical contractor or electrician may be accepted by the association’s board as evidence of compliance with the applicable fire and life safety code. Instead, language is added that an association must ensure compliance with the Florida Fire Prevention Code and the requirement for high-rise condominiums.

House Bill 7103 also amends Section 718.1085, Florida Statutes, to clarify that, for the requirement to retrofit common areas with handrails and guardrails, the term common areas means “stairwells, exposed, outdoor walkways and corridors, but does not include individual balconies.” Therefore, there is no requirement to install handrails and guardrails on individual balconies as they are not common areas.

House Bill 1159 – Effective July 1, 2019
House Bill 1159 created Section 163.045, Florida Statues, to prohibit local governments from requiring notice, application, approval, permit, fee or mitigation for the pruning, trimming, or removal of a tree on residential property if the owner obtains documentation from a certified arborist or a Florida licensed landscape architect stating that the tree is a danger to persons or property. Further, local governments cannot require that the owner replant the tree that was pruned, trimmed or removed. The exception to the requirements of this section are mangrove trees.

This new law does not affect a community association’s architectural or design guidelines or enforcement of its architectural or design criteria. For example, a community association can still require a removed tree be replaced if its governing documents have such a requirement.

Senate Bill 82 – Effective July 1, 2019
Senate Bill 82 created Section 604.71, Florida Statutes to prohibit local governments from regulating vegetable gardens on residential properties. The statute defines a vegetable garden as “a plot of ground where herbs, fruits, flowers, or vegetables are cultivated for human ingestion.” Like House Bill 1159 referenced above, this new law does not affect a community association’s architectural or design guidelines or enforcement of its architectural or design criteria.

House Bill 7065 – Effective July 1, 2019
House Bill 7065 amends Section 627.7152, Florida Statutes, in an attempt to cut back on abusive practices using Assignment of Benefits. An Assignment of Benefits (“AOB”) is an agreement that transfers the insurance claims rights or benefits of the policy to a third party, typically a contractor. The AOB gives the third-party authority to file a claim, make repair decisions, and collect insurance payments without the involvement of the homeowner or the association. These AOBs have been abused by contractors by charging homeowners or associations inflated amounts and then pursuing unnecessary litigation against insurance companies to collect the inflated amounts. To prevent these actions, House Bill 7065 amends Section 627.7152 to add the following safeguards:

  1. AOB must be in writing.
  2. AOB must include a provision that allows the assignor to rescind the agreement within 14 days after executing the agreement, at least 30 days after the date work is scheduled to commence if assignee has not substantially performed, or at least 30 days after execution if the agreement does not contain a commencement date and if assignee has not begun substantial work on the property.
  3. AOB must contain a provision that requires assignee to deliver a copy of the executed AOB to the insurance company within 3 days after execution or the date when work begins, whichever earlier.
  4. AOB must contain a written, itemized per-unit cost estimate of the services to be performed.

Additional requirements regarding litigating under AOBs have been added to the statute, as well as an allowance that insurance companies can prohibit AOBs in their insurance policies.

Florida Statute 718.111(11)a – Update Information

FLORIDA STATUTE – IT’S THE LAW!!

We’d like to remind our client associations that even with the current
COV-19, they are still required to comply with Florida law.

The Florida Department of Professional Regulation is still enforcing Florida Statutes and imposing penalties.

In Florida ALL residential condominium associations are required by law to have a replacement valuation conducted at least every 36 months. This is the fiduciary responsibility of the Association’s Board in order to protect the financial interests of the unit owners.

Florida Statute 718.111(11)a:
“Adequate property insurance, regardless of any requirement in the declaration of condominium for coverage by the association for full
insurable value, replacement cost, or similar coverage, must be based on the replacement cost of the property to be insured as determined by an independent insurance appraisal or update of a prior appraisal. The replacement cost must be determined at least once every 36 months.”

What happens if an Association does not comply?
“Failure to comply with the Florida Statutes and the Florida Administrative Code (FAC) can lead to action by the Department of Business and Professional Regulation (DBPR) including fines of up to $5,000 per violation.”

Dangers of Corporation Leases

CORPORATIONS AS RESIDENTS

 

While we strongly recommend against having corporations as residents in residential leases, sometimes it is necessary and often actually works out fine. How the lease is executed with the corporation becomes a big problem, and rarely do we see leases with corporations executed correctly. The name of the corporation, who signs, the personal guarantee and how it is signed will determine if you will potentially have a successful lease or major problems later. This article will not address the dangers of the corporate resident, but will rather show you how to enter into a lease with the corporate resident in the proper legal fashion.

 

The “Corporation Only” as a Resident

 

There will be times when the resident will be the corporation. Granted, a human being will be the occupant in the residential property, but the lease named resident will be a corporation and nothing more. This means that the corporation as resident is responsible for paying the rent, is bound to the lease and incurs all the obligations and benefits as a leaseholder. If the leaseholder corporation is in default of the lease, the manager’s only recourse will be to sue the corporation as the resident, and the manager will be bound by all the legal requirements and procedures necessary to sue a corporation. No individual person is responsible for payment of the rent or liable for failure to pay the rent.

 

Why Would a Lease Only Be in the Corporate Resident’s Name?

 

In the case of a medium to large corporation, no one is going to personally sign or guarantee a corporate lease in most situations. Usually the corporation is placing employees, officers or directors in the rental unit. The manager deals directly with the employee, officer or director of the corporation. Neither the occupant nor the corporation, officers, employees of directors will have any individual being liable under the lease. The corporation is the only liable party.

 

Who Is the Corporation?

 

Before you can even think of entering into a lease with a corporation, it is crucial to know the exact legal entity’s name as it is registered with the Florida Secretary of State or the state in which it is incorporated. “Joe’s Painting Company” is not the proper corporate name, if in fact the corporate name filed with the Secretary of State indicates, “Joe’s Painting and Contracting, Incorporated”. We see a massive amount of sloppiness in how the name appears on the lease. We recommend you always get a printout from the internet, and even possibly get a copy of the Articles of Incorporation. While you may not think this is important, when it comes time for the corporation to break a lease, skip out on you or get evicted, this sloppiness can really cause serious complications. Never assume that the name of the corporation that is being provided to you is in fact the exact legal name of the corporation. Always investigate and confirm.

 

How Is the Pure Corporate Resident Lease Drafted?

 

The corporate resident should be on the lease exactly as it appears in the Secretary of State records. The lease should clearly state who the occupants will be, and if you routinely do criminal background checks on your residents, failing to do criminal background checks on the occupants could be a Fair Housing violation. Years ago, a client found out that one of the occupants in a unit rented under a corporate name was in fact a registered sexual offender. Since the occupant never filled out an application and the manager never did a criminal background check, the occupant could not be evicted.

 

How Does the Pure Corporate Resident Sign?

 

In the signature section of the lease, the corporate name needs to be listed as the resident along with the name of the person signing the lease on behalf of the corporation.

 

Example: XYZ Engineering and Surveying, Inc., by John Smith, President.

 

Is John Smith now liable at all if the corporation fails to pay the rent or gets evicted? No. John Smith is simply signing as his authorized capacity as president of the corporation.

 

Who is Authorized to Sign on Behalf of the Corporation?

 

This is not an easy question to answer. Someone may have apparent authority, but due to the bylaws of the corporation, only certain people or persons can actually bind the corporation. Your attorney can help you investigate this. Never assume that the person signing the lease is in fact authorized. You will sadly find out that he was not authorized to sign when the corporation is trying to get out of the lease, and the corporation’s attorneys can prove that this person had no actual authority.

 

The Corporate Resident and the Person With Individual Liability

 

Unless you are dealing with a solid corporation with a proven track record and know for sure that the person signing the lease has the absolute authority to bind the corporation, you will want to have someone sign “individually” in addition to signing in a corporate capacity. This person signing “individually” is actually bound to the terms, conditions and all obligations of the lease as if there were no corporation in the picture at all. This is the best possible way you can execute a corporate lease.

 

Example: In the beginning of the lease, it will state that something like “Bill Jones and Mary Jones, Manager and XYZ Engineering and Surveying Corporation, through its agent John Smith, President AND John Smith Individually”

 

At the signatory section of the lease, you will have a place for Bill and Mary Jones to sign (unless you are signing on their behalf with a Power of attorney) and 2 more places for signatures:

 

XYZ Engineering and Surveying Corporation, by John Smith President _______________________ (sign here)
and

 

John Smith, Individually ______________________ (sign here)

 

Common mistakes we see

 

  1. The corporate name is incorrect or incomplete.

 

  1. The lease is signed by a person in the corporation that has no authority.

 

  1. The lease fails to include a signature line creating individual liability.

 

  1. There is a signature line, but it fails to state whether the person signing is doing so individually or on behalf of the corporation, causing legal confusion.

 

Our Recommendation

Besides all the dangers of entering into corporate leases in residential units which we promised not to address in this article, we strongly recommend that unless you are sure you know how to enter into a corporate lease, give your attorney a call so that you will know how to draft the lease correctly.

 

 

 

Enforcement Related to COVID-19 Protocols and Quarantine

Dear Clients and Friends,

I hope you are all doing well and are staying safe.  By now all of you should have closed most or all common area facilities in response to state and county emergency orders and in the interest of the safety of your residents and staff.  Many of you have taken further measures to protect the health, safety, and welfare of your residents and staff, such as limiting or prohibiting contractors and guests as well as other similar actions to keep people other than residents from entering your communities.

Many of your residents applaud the board for its decisive actions in these uncharted waters.  Unfortunately, I have also heard stories of owners violating these emergency procedures by continuing to use the gym, pool, and other common areas, by bringing prohibited guests into the community, and, in extreme cases, violating applicable quarantine requirements.  These are selfish and dangerous actions, which threaten the violators themselves as well as others on the property.  As a board, what can you do to enforce these restrictions when the usual enforcement means, such as a violation letter, fine, or suspension of common area use rights, make no sense under the current emergency?

We are prepared to ask the courts to issue immediate injunctions for such violations.  While the courts are slowly opening for routine matters, they have remained open for emergency matters.  Violating quarantine guidelines or the temporary rules and regulations your association has enacted for the health, safety, and welfare of your residents and staff is an emergency that we believe the courts will address on an emergency basis.

Please contact me if you are encountering any of the above situations.  If necessary, we are prepared to take the proper legal steps to ask the courts for immediate relief under the current pandemic circumstances.

We are here for you.  I am available for conference and Zoom calls and I also have the ability to set up such calls for you and your residents.

Please do not hesitate to reach out if there is anything I can do to assist you during this difficult time.

Thank you, and stay safe.

Very truly yours,

Scott Kiernan, Esq.