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Dear Central Florida Friends:
I know many of you are trying to navigate the delicate balance of protecting your occupants in the time of COVID-19 and also deal with the normal issues which community associations in our area confront during the summer months. There is no getting around it, this is a tough time for everyone and community association leaders have additional considerations facing them constantly. One of those considerations is what to do about holding membership meetings. So what do you do about in-person membership meetings in light of COVID-19? Unfortunately, the community associations statutes are not presently drafted in a manner which allows forced participation through video conference or teleconference means. At Becker, we are teaming up with The Florida Bar in order to propose legislation to deal with this issue, but it very likely will not be in effect until mid-2021 due to the Florida Legislature’s session schedule. During this year’s annual meeting season, you will have to use the existing tools the law provides with regard to remote participation at membership meetings. For most community associations, voting for directors may be done by sending in a ballot. For establishment of quorum and voting on all other non-election issues, limited proxies can be used. Remember, you do not need the original copy of the limited proxy. An executed scanned copy of the limited proxy is fine. While the foregoing are good, there is something that is better. Several years ago, the Florida Legislature approved the use of online voting for membership meetings. Participation through online voting (1) counts towards establishing quorum; (2) may be used in the election of directors; and (3) may be used for other substantive votes (e.g. governing documents amendment, surplus funds rollover, material alterations, etc.). The bottom line is that online participation may be the way of the future for community associations membership participation, and it is especially useful in dealing with pandemic environment. Becker has teamed up with an integrated online software design team to create BeckerBALLOT. If you are not a first time user of BeckerBALLOT, you know how helpful it is to attack the problem of apathy in membership initiatives. If you would like to implement BeckerBALLOT, we need to discuss the prerequisite resolution and forms required (these are required no matter what online participation platform you use). To learn more about BeckerBALLOT, please visit www.BeckerBALLOT.com. If you decide to sign up, be sure to tell them that your association is a Becker retainer client, as there is a steep discount offered to our Becker clients. If you have any specific questions related to what can and cannot be done with respect to your association’s membership meetings, please feel free to contact me directly. Until then, please stay safe and be kind to each other my friends. |
Category: Uncategorized
The Florida Department of Professional Regulation is actively 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.”
Community Update – June 2020
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| 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.” |
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
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| 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 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. |
2020 Hurricane Preparedness Checklist
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
- The corporate name is incorrect or incomplete.
- The lease is signed by a person in the corporation that has no authority.
- The lease fails to include a signature line creating individual liability.
- 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
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| 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. |
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