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New Legislation to Enhance Owner Participation in Community Association Elections

08/17/2017 Martin Cabalar
BY: J. DAVID RAMSEY

On Thursday, July 13, Governor Christie signed legislation to enhance owner participation in community association elections. The CAI Legislative Action Committee, with Community Association Practice Chair, Dave Ramsey, leading the effort, worked side-by-side with Senator Gordon, the primary sponsor of the bill, to ensure that the final version of the law would be balanced and not impose undue burdens on community associations while making the election process democratic where it currently isn’t. Only through an eleventh-month effort and the willingness of Senator Gordon to listen to, and accommodate, CAI’s concerns was this able to occur.
A few important features of the new law:
• Although the law is effectively immediately, the implementation of portions of the bill that may require associations to modify some procedural aspects of their election process are delayed until October 1, 2017 to give associations an adequate opportunity to prepare.
• Subject to certain exceptions, in those few associations where the owners are not members of the association, effectively immediately, they are.
• Starting with elections occurring after October 1, Unit owners in good standing will have the right to nominate themselves or other owners in good standing. Bylaws requiring nomination by a Nominating Committee or requiring the signing of a petition by other owners will no longer be required, though Nominating Committees may continue to nominate owners for election to the board – but not exclusively.
• Certain time periods are statutorily imposed, including notices seeking nominees for the board must be sent to all owners not less than 30 days before the notice of the election meeting is sent.
• Notice of the election meeting must go out 14 or more days before the meeting but not more than 60 days before (this impacts many associations that previously had a minimum time notice period of 10 days).
• Board members’ names must be listed alphabetically on all ballots.
• Electronic voting in board elections is statutorily authorized and electronic notice of meetings is also authorized if permitted under the bylaws.
• In a provision unrelated to elections, governing boards may amend bylaws without a vote of the owners in two methods: First, it may amend the bylaws to be consistent with federal, state or local law. Second, it may propose an amendment to the bylaws together with a ballot to reject the amendment and if not more than 10% of the owners’ vote, within 30 days, to reject the bylaws amendment, it becomes enacted.
A number of other parties also voiced concerns about the new law, including the Department of Community Affairs and the New Jersey Builders Association. While a number of language clarifications from each of those parties were accepted, through the efforts of the Legislative Action Committee provisions that were overly burdensome or had negative impacts on community associations were successfully fended off. While there were numerous association election bills posted in the Senate and Assembly this year, most of which would have imposed significant burdens on associations were therefore unacceptable to CAI, only this bill reached the Senate and Assembly floors for a vote, and passed each house unanimously.
Look forward to a future article by Dave Ramsey in Community Trends providing additional details about this bill and a CAI program in late August in which he will provide information concerning important exceptions to the law and tips on how to take advantage of certain beneficial provisions in it.

Benefits of the Municipal Services Act

08/04/2017 Martin Cabalar


Many communities are either not receiving the benefits of the Municipal Services Act or are being substantially shortchanged by the municipality in reimbursements due


New Jersey’s Municipal Services Act (the “Act”), N.J.S.A. 40:67-23.2 – 23.8, requires that every municipality provide “qualified private communities” with certain municipal services on its roads or streets or reimburse those communities for such services.  The purpose of the Act is to eliminate double payment for services (such as snow and ice removal, lighting of the roads and streets and collection or disposal of garbage, recyclables and leaves) by residents who pay for them through both their property taxes and association common expenses.  The vast majority of condominiums, as well as other community associations in the State of New Jersey, meet the requirements of a “qualified private community,” as defined in the Act.

If the municipality chooses to perform the designated services, it must do so in the same fashion as it does throughout the municipality.  However, if the municipality selects the reimbursement option under the Act, the municipality enters into a written agreement with the Association to reimburse it annually for the municipality’s actual cost (not that of the Association’s) to obtain the covered services.  While these costs may be significantly less than the Association’s cost to hire private contractors, as is often the case, many municipalities reimburse communities amounts which do not reflect the true full costs to the municipality.  For example, costs associated with the services should include and take into consideration direct and indirect costs such as: labor (straight and overtime), supervisory and administrative personnel, employee benefits, materials, fuel and oil, vehicles and equipment, and the housing of vehicles and equipment and maintenance of same.   Moreover, in some circumstances, a community may be entitled to greater reimbursements when taking into consideration certain “difficulty” factors, such as the steepness of the roads. 

Those communities that do not currently have an agreement in place with the municipality may be entitled to significant monetary sums for the prior years the municipality failed to either provide services or reimburse the community for same.  For newer developments, it is important to keep in mind that it is not necessary that the roads meet municipal standards/specification or that they be accepted by the municipality for dedication for the Act to apply.  In such circumstances, the municipality still has a duty to reimburse the community. 


Despite the enactment of the Act in 1993, many communities are either not receiving the benefits of the Act or are being substantially shortchanged in the municipality’s calculation of the costs for such services.  For this reason, it is important that communities have counsel who specialize in common interest communities, such as those at Becker & Poliakoff, LLP, to carefully negotiate with a municipality in order to assure they receive the maximum amount to which they are entitled.  

CondoMundoUSA

Votación Por Linea - Video

10/18/2016 Martica Miguez Platts



Si usted vive en una comunidad residencial que está dirigida u operada por una asociación, o si usted sirve en la junta directiva de la comunidad, quizás desee obtener la comodidad de votación por línea.   Nuestra firma de abogados acaba de lanzar un breve video de instrucción sobre nuestro producto por línea llamado BPBALLOT.   Dedíquele unos minutos a este video.
La votación por línea le permitirá a su comunidad aumentar la participación de su membrecía a la vez que reducirá la posibilidad de fraude electoral.  Estamos seguros que usted disfrutará y obtendrá beneficios del video.  Si tiene cualquier pregunta, por favor envíenos un correo electrónico a condomundousa@bplegal.como llámenos al 561-820-2870. 

Martica y Marilyn
Sus amigas de CondoMundoUSA






Estudio de Votación y Fraude en las Asociaciones / Community Association Voting and Fraud Survey

06/17/2016 Martica Miguez Platts
CondoMundoUSA les trae el Estudio de Votación y Fraude.  Este estudio tiene el propósito de identificar las preocupaciones relacionadas con el proceso de votación de los miembros de las asociaciones de comunidades.  Los resultados ayudarán a crear materiales educativos y ayudarán a encabezar cambios en las disposiciones legales que gobiernan el método de votación en las comunidades.

Solamente le tomará 5 minutos haga "click" en el idioma que prefiera. 

Español                       Inglés

Gracias, 

Martica y Marilyn


***************


CondoMundoUSA has created a survey intended to help identify concerns of community association members related to voting. The results will help create educational materials and help spearhead changes in statutory provisions governing voting in communities.

It should only take 5 minutes, please click on your preferred language.

Spanish                       English



Thank you, 


Martica & Marilyn

The Community Association Law Blog

When Differences turn into Dysfunction: Why Your Board of Directors Needs a Code of Conduct

08/09/2017 Donna DiMaggio Berger
The role of board members in a community association is fairly straightforward:  keep informed on the association's business operations; be familiar with and come prepared to discuss the agenda items for upcoming board meetings; encourage and participate in constructive, businesslike discussions of those agenda items; and use your judgement to represent the community and its members in the way you conduct yourself as a board member and in the way you decide the issues that come before the Board. Unfortunately, some community association board members do not follow these guidelines and some create a level of dysfunction that is highly unproductive.  The result is usually a community which devotes a disproportionate amount of time and resources to argument and personal attack rather than to constructive action for the good of the community. A certain amount of discourse and debate amongst board members is not only healthy, it can be productive when crafting policies and protocols resulting from differing viewpoints.

What happens, however, when differences turn into dysfunction?

Naturally, it is counterproductive when board members find themselves at odds with each other. In some communities these power struggles can manifest in any of the following ways:

  • A Board  Member demanding frequent and heightened access to the association's books and records including privileged information for his or her own nefarious purposes;
  • A Board Member disclosing privileged information including, at times, even disclosing litigation strategy to adverse parties;
  • A Board Member refusing to attend meetings if doing so prevents a quorum from being achieved;
  • A Board Member refusing to cast his or her vote;
  • A Board Member refusing to turn over association books and records in his or her possession either while serving on the Board or after his or her term expires;
  • A Board Member slandering fellow board members or the manager or unit owners who express contrary opinions;
  • A Board Member filing a complaint with the DBPR; and
  • A Board Member inciting and encouraging a recall of fellow directors.
Some of the foregoing director actions (such as a DBPR complaint and a recall action) may be justified if the board as a whole is dysfunctional and the dissenting voice on the board is attempting to steer the board in a better direction. However, some directors fail to understand that being part of the board means accepting that decisions are often made by consensus and not by unanimity; gracefully accepting that your fellow directors may not always (or ever) agree with you should be a job requirement for service on the board. Some directors who are at odds with their fellow board members use tactics which are not designed to resolve the issues but rather to inflame them. More importantly, a fractured board more often than not leads to a fractured community.

For directors who believe they are entitled to greater access to the association documents, the answer is "No", a director is not entitled to any greater access to the association records than an ordinary association member unless that director has been tasked by the Board with certain duties which require such access. For example, a director serving on the Screening Committee should have access to the rental and sales applications.

I am often asked by boards dealing with one or more directors who have a personal agenda which conflicts with the board's goals if that director can be removed from the Board. Again, the answer is "No", a director cannot be removed from the board by his or her fellow directors; only the members in a Florida community association can remove a duly elected or appointed director unless one of the limited statutory disqualifiers applies.  However, a board can, by majority vote, remove a director from holding a particular office such a President, Vice President, Treasurer or Secretary. Doing so may not solve the problem but it can prevent a rogue director from convincing vendors and other third parties that he or she has authority that simply does not exist by virtue of no longer having a title.

Many association governing documents define the scope of board authority as a whole but do not address the mechanics of how a board comprised of different individuals can work together successfully for the betterment of the community.  This is where a thoughtful Code of Conduct can fill in the gaps.

A Code of Conduct should address the following areas for your Board Members:

  • Confirming how conflicts of interest can be identified and avoided and which conflicts must be disclosed;
  • Confirming which directors have authority to sign contracts and negotiate and otherwise deal with vendors and professional service providers;
  • Outlining respective officer and director roles;
  • Creating a communication policy and email protocol both internal and external; and
  • Creating basic expectations for board member service and professional decorum.
In the aftermath of Florida's 2017 Legislative Session which created heightened potential liability for directors in connection with certain basic association operations, according to insurance expert Lou Meskin, some insurance companies are already discussing whether or not a Board Member Code of Conduct should become mandatory or, at a minimum, preferred for the issuance of Directors and Officers coverage.  While a Code of Conduct won't be the panacea some boards are seeking, it can lay the groundwork for more successful association operations.

If you'd like more information about creating a Code of Conduct for your Florida Board of Directors, please email me at dberger@bplegal.com.



Going Too Far Down the Rabbit Hole: How Our National Political Discourse Parallels Our Community Association Discourse

06/25/2017 Donna DiMaggio Berger
It's hard right now to turn away from the 24/7 news cycle and its discord, rancor and heated rhetoric. When we spend the majority of our time discussing just 20% of the topics which concern us, we cannot commit time or energy to the other 80% which also demands our attention.  It's not surprising that the same prioritization pressure occurs in private residential communities.  How often has a board or membership meeting been monopolized by the concerns of one very vocal owner?  That owner may very well have legitimate concerns but that still does not justify how some communities seem to be the equivalent of the tail wagging the dog.

We live in a world of increasing oppositions; it's becoming harder to find a middle ground on most topics.  For those of us who work with and live in community associations, the current state of political discourse in America sadly comes as no surprise.  In fact, there are some eerie similarities that reveal a few uncomfortable truths about our society.

Name calling, speaking (and yelling) over others, character assassination, accusations, conspiracy theories, and filibustering are never productive and usually reflect a certain intellectual laziness. Fake news and alternative facts have been employed for decades in some communities where facts matter less than agendas and can be employed equally by both members looking to oust a board as well as boards looking to shut down opposition. the best way to do battle with this problem is to have a membership comprised of people willing to undertake an independent analysis of the situation rather than relying on someone else's version of the truth.  When id doubt, just remember this quote by Daniel Patrick Moynihan: "everyone is entitled to his own opinion, but not his own facts."

Calls to remove leaders are nothing new.  Unfortunately, the recent changes to Florida law will make it less likely that recalled board members will challenge even a questionable recall petition if they must do so by paying for such a challenge out of their own pockets.

Conflicts of interest can erode the trust between an elected official and the people who elected him or her. Just as some members of Congress have filed litigation based on the Emoluments Clause in the U.S. Constitution, a perception that a board member has an undisclosed conflict of interest can lead to dissatisfaction at best and recall and litigation at worst. It's impossible to serve two masters so if you have agreed to serve on your community's board of directors, your decisions must be based on what is best for the community and no longer what is in your best interests.

Just as we have spent an inordinate amount to time on a national discussion concerning the improper use of emails and sloppy email protocol, some directors completely underestimate the trouble a lack of email protocol can cause.  The failure to understand, let alone embrace, best practices when it comes to email protocol which includes safeguarding privileged information and employing language which is designed to achieve a goal not blow it up, can make a small flare-up quickly turn into a full-blown conflagration.

Recently, a new client asked me about what can be done to stop leaks and leakers on their board.  Just how did one roofing vendor reduce his bid to make it lower than the bid that was going to contract?  Leaks on community association boards are often designed to do nothing more than embarrass a board member or officer (or help a vendor friend) but occasionally they cause a lot more damage including an anticipatory breach of contract claim.  When it comes to litigation matters or pursuing insurance claims, closed-loop communications are crucial to the ability to minimize the association's exposure in the former instance and maximize its recovery in the latter circumstance.

Building a proverbial wall can become the turning point in a community. Some directors have very firm ideas about the material improvements they would like to make in their community and how to pay for those improvements, either by special assessment or loan.  Often these ideas are not as wildly popular with the association members as Mr. or Ms. Director would like to believe. It is always best to gauge community sentiment before embarking on costly and potentially divisive projects.

Inevitably, the issue of personality conflicts arises in many communities.  Dealing with personality issues (as exhibited by board members, owners or both) can be one of the toughest problems to solve in a shared ownership community.  It is important to remember that your conflicts involve a "living together" relationship so patience, empathy and updated emergency contacts are some of your best tools when dealing with sensitive behavioral problems.

Finally, the potential for violence is the most disturbing comparison of all between the national stage and our local communities. There have been sporadic reports of violence in community associations over the years.  Two that come to mind include a manger who was shot in the head (but mercifully survived) by a disgruntled former association employee and a board member shot and killed by a fellow director as they argued over association matters.  Violence is never the answer but it does underscore how a 'pressure cooker' situation can blow the lid off any society, micro or macro.

The ability to find some middle ground is sadly disappearing from the national stage and it is, unfortunately, no different in some of our communities but our disgust with our national discourse might just lead us to insist that our association affairs be handled more productively.

Biz Law Today

What Is “Product Hopping” and Why Should You Care?

08/04/2015 Becker & Poliakoff

ThinkstockPhotos-97429646This post was authored by Ann Marie Effingham, an intern for Becker & Poliakoff who is based out of the firm’s Red Bank, New Jersey office.

New Jersey is home to 14 of the world’s 20 largest pharmaceutical companies so when our sister circuit—the Second Circuit Court of Appeals—issued a decision of first impression regarding pharmaceutical patents, we should take notice. To summarize, the state of New York brought an antitrust action against Actavis PLC claiming the manufacturer’s introduction of the once-daily capsule that treats Alzheimer’s disease at the end of the manufacturer’s patent exclusivity period for the twice-daily tablets impeded competition in violation of the Sherman Act. The Southern District of New York granted a preliminary injunction barring Actavis PLC from restricting access to the twice-daily version until after generic competition entered the market, and the Second Circuit Court of Appeals affirmed the injunction.

The Second Circuit Court of Appeals explained that neither product withdrawal nor product improvement alone is anticompetitive. However, when product withdrawal is combined with some other conduct—the overall effect of which coerces consumers and impedes competition—a manufacturer’s actions are anticompetitive under the Sherman Act.

The Actavis PLC case is an example of “product hopping”—whereby a manufacturer introduces a “second-generation” formulation of a drug and removes the previous formula that is nearing the end of its patent lifecycle which then restarts the regulatory approval process for the generic manufacturer. In theory, a manufacturer could keep reformulating its patented product if it can show that continuous improvement in the drug is being made. However, under some circumstances this type of behavior is anti-competitive. Generic manufacturers enter the market at the end of the brand name’s patent lifecycle so when a brand name manufacturer engages in “product hopping” it keeps generic manufacturers from entering the market—which could ultimately lead to a monopolization.

So what does this mean for the biopharmaceutical and medical device industry? The timing and rationale behind product reformulation is key. When product redesign is done simply to coerce consumers and impede competition, it is anticompetitive under the Sherman Act. The Second Circuit Court of Appeals noted that Actavis PLC’s own CEO admitted that the Defendants were “trying to . . . put up barriers or obstacles” to generic competition. Conversely, a large market share that is gleaned from natural growth, development of a superior product while simultaneously giving consumers the option of choice between products, or exceptional business acumen are all justifiable explanations for why a manufacturer may control a significant portion of the market.

A second product hopping case has arisen in the Third Circuit Court of Appeals. There, the Federal Trade Commission (FTC) has filed an amicus brief strongly supporting antitrust causes of action against companies that product hop. Hopefully the Third Circuit can provide more insight as to how to evaluate product hopping cases.

Employers Beware: You May Be Liable to Whistleblowers Without the SEC Ever Getting Involved

07/28/2015 Becker & Poliakoff

ThinkstockPhotos-184747120 (1)This post was authored by Peter Wojcik, an intern for Becker & Poliakoff who is based out of the firm’s New York office.

On June 17, the Second Circuit U.S. Court of Appeals heard oral arguments in Berman v. Neo@Ogilvy, LLC, making it the latest court to venture into the arena of interpreting Dodd-Frank’s whistleblower provision. In Berman, U.S. District Judge Gregory H. Woods of the Southern District of New York held that, before a whistleblower may be protected under Dodd-Frank’s whistleblower anti-retaliation provision, he or she must report securities violations to the SEC. This stands in stark contrast to other district court decisions that have allowed individuals to sue if they only disclosed the violations to their employers.

In Berman, the plaintiff alleged that he was fired after complaining to his employer about seeing transactions that he believed to violate U.S. securities laws, including Sarbanes-Oxley and Dodd-Frank. Never having reported these violations to the SEC, the plaintiff sued his former employer, alleging violations of Dodd-Frank’s whistleblower provision. The provision essentially prohibits an employer from retaliating against a “whistleblower” who:

  • Provides information to the SEC concerning violations of securities laws;
  • Initiates, testifies in, or assists in any investigation or judicial or administrative action of the SEC; or
  • Makes disclosures that are required or protected under the Sarbanes-Oxley Act and any other law, rule, or regulation subject to the SEC’s jurisdiction.

However, the provision also defines a “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the Commission . . . .” The plaintiff in Berman argued that he was entitled to protection because, although subsections (i) and (ii) protect disclosures to the SEC, subsection (iii) includes disclosures to supervisors. Judge Woods remained unpersuaded. In dismissing the plaintiff’s claim, Judge Woods noted that the provision’s language was clear: In order to be a “whistleblower” under the Act, the individual must provide the information “to the Commission,” i.e., the SEC.

District courts that have allowed Dodd-Frank whistleblower protection for individuals who report violations to their employers have essentially followed the plaintiff’s reasoning. Despite the plain language definition of a “whistleblower” under the statue, they have held that subsection (iii) is a narrow exception to the definition and encompasses protection for individuals who report to supervisors.

The Second Circuit is expected to hand down its decision later this year. Although the Fifth Circuit is the only circuit to already decide the issue (holding that whistleblowers must report violations to the SEC in order to sue), district courts across the U.S. are in disagreement. Regardless of how the court in one’s jurisdiction rules, however, the law is still subject to change. If courts continue to disagree, it is likely that the Supreme Court will take up the issue in the future. Until the High Court decides the issue, employers must be aware of the fact that they may be subject to liability under Dodd-Frank’s whistleblower provision once their employees report violations internally.

Construction Law Authority

Review of Legislation continues – Part 5

08/02/2017 Joseph Adams

2017 Legislation Changes Financial Reporting Requirements

Today’s column is the final installment of our annual review of legislation affecting Florida community associations.

In prior columns, we reviewed Senate Bill 398 dealing with “estoppel certificates,” and House Bill 1237 which only applies to condominiums and contains changes to the statute including board member term limits, the use of debit cards, recalls, mandatory websites for certain associations, suspension of voting rights, year-end financial reporting, the imposition of criminal penalties pertaining to certain conduct involving condominium elections and finances, and changes to the “conflict of interest” provisions of the statutes. Both SB 398 and HB 1237 became effective July 1, 2017.

The final piece of legislation we will review is House Bill 6027, which applies to condominium, cooperative, and homeowners’ associations. This law also became effective July 1, 2017.

HB 6027 deletes the year-end financial reporting exemption for associations that operate fewer than 50 units or parcels. Under previous law, these associations were not required to prepare a year-end annual financial report based on revenues, but rather, could prepare a report of cash receipts and expenditures.

Now, all associations must prepare a financial report based on annual revenues, regardless of the number of units or parcels. As a reminder, the following thresholds are contained in the law:

  • An association with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements.
  • An association with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements.
  • An association with total annual revenues of $500,000 or more shall prepare audited financial statements.
  • An association with total annual revenues of less than $150,000 is only required to prepare a report of case receipts and expenditures.

Further, for condominium and cooperative associations, HB 6027 also deleted the limitation on the number of times an association can waive its financial reporting requirements. Previously, condominium and cooperative associations could not waive the statutorily required financial reports for more than three consecutive years. This provision has now been deleted, although there is a bit of a glitch in the statutes since HB 6027 removed the provision, while HB 1237, which also amended these sections, left them intact. It remains to be seen how the official version of the Florida Statutes, which is due to be released in the next couple of months, will address this conflict.

This concludes our review of legislation that was enacted this year. It is also worthwhile to note that one Bill affecting condominiums that the Legislature approved was vetoed by Governor Scott.  House Bill 653 contained a number of provisions that affected community associations, many of them similar to the provisions of HB 1237 concerning condominium associations, which we have previously discussed.

HB 653 also addressed the obligation of certain high-rise buildings to retrofit fire sprinklers and/or an “engineered life safety system.” HB 653 allowed high-rise condominium buildings to opt out of the obligation to retrofit an engineered life safety system (usually required when the building has opted out of a full sprinkler retrofit) upon approval of two-thirds of all voting interests. In vetoing HB 653, Governor Scott noted the recent deadly apartment building fire in London, England, and stated his view that life safety concerns outweigh the cost burden placed on some condominium associations.

The post Review of Legislation continues – Part 5 appeared first on Florida Condo & HOA Law Blog.

Community Association Legislative Guide, 2017

07/31/2017 Yeline Goin

CALL’s Florida Community Association Legislative Guide 2017 (“Guide”) is now available online.

The 2017 Legislative Session ended with several bills passing that will have a significant effect on community associations: HB 1237, Relating to Condominiums; SB 398, Relating to Estoppel Certificates, and HB 6027, Relating to Financial Reporting. In addition to these three bills, there were over 25 other bills filed which sought to amend the Condominium Act, the Cooperative Act, and/or the Homeowners’ Association Act. Most of the bills did not pass, but the many bills that were filed show that legislators are interested in community association legislation and how it impacts their constituents. There was, of course, one bill that did pass the House and Senate but was vetoed by Governor Scott – HB 653, which would have allowed older high rises to opt out of an engineered life safety system (ELSS). We address that issue in-depth in the Guide.

The 2017 Guide features the following:

  • An overview letter from me
  • A special report from Ellyn Setnor Bogdanoff, Esq., former State Senator who led our targeting lobbying effort to pass the ELSS legislation, addressing the Governor’s veto and outlining our thoughts about how to approach the 2018 Session
  • A summary of the community association bills that were signed into law
  • A summary of the community association bills that did not pass
  • A list of actions we recommend that you, as a community association board member, should take to comply with all of the new laws
  • A letter from Donna DiMaggio Berger, a shareholder with the firm and CALL’s Founding Executive Director
  • A list of upcoming CALL events and community association classes

The post Community Association Legislative Guide, 2017 appeared first on Florida Condo & HOA Law Blog.

Florida Condo & HOA Law Blog

Review of Legislation continues – Part 5

08/02/2017 Joseph Adams

2017 Legislation Changes Financial Reporting Requirements

Today’s column is the final installment of our annual review of legislation affecting Florida community associations.

In prior columns, we reviewed Senate Bill 398 dealing with “estoppel certificates,” and House Bill 1237 which only applies to condominiums and contains changes to the statute including board member term limits, the use of debit cards, recalls, mandatory websites for certain associations, suspension of voting rights, year-end financial reporting, the imposition of criminal penalties pertaining to certain conduct involving condominium elections and finances, and changes to the “conflict of interest” provisions of the statutes. Both SB 398 and HB 1237 became effective July 1, 2017.

The final piece of legislation we will review is House Bill 6027, which applies to condominium, cooperative, and homeowners’ associations. This law also became effective July 1, 2017.

HB 6027 deletes the year-end financial reporting exemption for associations that operate fewer than 50 units or parcels. Under previous law, these associations were not required to prepare a year-end annual financial report based on revenues, but rather, could prepare a report of cash receipts and expenditures.

Now, all associations must prepare a financial report based on annual revenues, regardless of the number of units or parcels. As a reminder, the following thresholds are contained in the law:

  • An association with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements.
  • An association with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements.
  • An association with total annual revenues of $500,000 or more shall prepare audited financial statements.
  • An association with total annual revenues of less than $150,000 is only required to prepare a report of case receipts and expenditures.

Further, for condominium and cooperative associations, HB 6027 also deleted the limitation on the number of times an association can waive its financial reporting requirements. Previously, condominium and cooperative associations could not waive the statutorily required financial reports for more than three consecutive years. This provision has now been deleted, although there is a bit of a glitch in the statutes since HB 6027 removed the provision, while HB 1237, which also amended these sections, left them intact. It remains to be seen how the official version of the Florida Statutes, which is due to be released in the next couple of months, will address this conflict.

This concludes our review of legislation that was enacted this year. It is also worthwhile to note that one Bill affecting condominiums that the Legislature approved was vetoed by Governor Scott.  House Bill 653 contained a number of provisions that affected community associations, many of them similar to the provisions of HB 1237 concerning condominium associations, which we have previously discussed.

HB 653 also addressed the obligation of certain high-rise buildings to retrofit fire sprinklers and/or an “engineered life safety system.” HB 653 allowed high-rise condominium buildings to opt out of the obligation to retrofit an engineered life safety system (usually required when the building has opted out of a full sprinkler retrofit) upon approval of two-thirds of all voting interests. In vetoing HB 653, Governor Scott noted the recent deadly apartment building fire in London, England, and stated his view that life safety concerns outweigh the cost burden placed on some condominium associations.

The post Review of Legislation continues – Part 5 appeared first on Florida Condo & HOA Law Blog.

Community Association Legislative Guide, 2017

07/31/2017 Yeline Goin

CALL’s Florida Community Association Legislative Guide 2017 (“Guide”) is now available online.

The 2017 Legislative Session ended with several bills passing that will have a significant effect on community associations: HB 1237, Relating to Condominiums; SB 398, Relating to Estoppel Certificates, and HB 6027, Relating to Financial Reporting. In addition to these three bills, there were over 25 other bills filed which sought to amend the Condominium Act, the Cooperative Act, and/or the Homeowners’ Association Act. Most of the bills did not pass, but the many bills that were filed show that legislators are interested in community association legislation and how it impacts their constituents. There was, of course, one bill that did pass the House and Senate but was vetoed by Governor Scott – HB 653, which would have allowed older high rises to opt out of an engineered life safety system (ELSS). We address that issue in-depth in the Guide.

The 2017 Guide features the following:

  • An overview letter from me
  • A special report from Ellyn Setnor Bogdanoff, Esq., former State Senator who led our targeting lobbying effort to pass the ELSS legislation, addressing the Governor’s veto and outlining our thoughts about how to approach the 2018 Session
  • A summary of the community association bills that were signed into law
  • A summary of the community association bills that did not pass
  • A list of actions we recommend that you, as a community association board member, should take to comply with all of the new laws
  • A letter from Donna DiMaggio Berger, a shareholder with the firm and CALL’s Founding Executive Director
  • A list of upcoming CALL events and community association classes

The post Community Association Legislative Guide, 2017 appeared first on Florida Condo & HOA Law Blog.