Q: I understand there is a new law related to term limits in a Condominium. Can you explain it?
A: Yes. Section 718.112(2)(d)2 of the Condominium Act was changed effective July 1, 2017. It provides that a board member may not serve more than four consecutive 2-year terms unless approved by 2/3 of the total voting interests or unless there are not enough eligible candidates to fill the vacancies. The law only applies to condominiums. One aspect that is unclear is whether or not the law is retroactive to include the consecutive terms served before July 1, or does the 8-year limit begin as of July 1. Most attorneys believe the law is prospective and therefore the 8-year clock begins as of July 1. Interestingly, the law does not limit the number of consecutive 1-year terms a Director may serve.
Q: We live in a gated community and are having trouble resolving a problem that we have reported to our Property Management and HOA. We have neighbors that have large “loaded” coconut trees that are hanging over on to our property and on to our roof. Also, coconuts are being dropped onto our property which could become hazardous if propelled. The Management Team has sent out letters to Homeowners but nothing seems to be done. The trees have grown to a point that they are impeding our view and hanging so far on to our property that we cannot enjoy or relax on our deck. It is the season to cut the trees as it is the beginning of Hurricane season and strong winds or hurricanes could cause major damages or injuries. My question is: If we incur roof, personal and/or property damage, does this become a legal matter and who comes responsible for the damages if we sue for damages and/or personal injuries. Will it be the property owner, or the HOA, or both to pay for our damages?
A: Unless your HOA is responsible for trimming trees on the individual Lots this issue is primarily between you and your neighbor. The common law in Florida is that if a tree planted on a neighboring lot encroaches onto your lot you can trim the portion of the tree that in encroaches over your property line. If you have put your neighbor on notice of the potential danger and he fails to trim the tree and it causes damage to your home it is possible that you could make a claim for negligence. If failing to keep the trees properly trimmed is a violation of the covenants, then your HOA could also seek to impose a fine on the property owner. Finally, if you are on speaking terms with your neighbor you might also consider speaking to him and see if you can resolve the issue.
Q: We have a group of owners that call themselves “the Watchdogs”. They have submitted a second records request in a month, this time for 3 years of records. Our attorney is present when they go over these documents and our bill to the board to date is close to $2,000. They have found nothing previously and we don’t anticipate anything being found in this go-round. I have always been told that the plaintiff bears the burden of proof. So why should all homeowners be charged for their curiosity?
A: Owners have the right to inspect and copy almost all of the official records of the Association. The Association can impose a per page charge for copies. The Board can also adopt an official records request policy which can impose reasonable limitations on the number of requests per month and the length of time each inspection can last. However, beyond that there is nothing that can stop owners who simply enjoy going on fishing exhibitions. Further, if the Board believes the Association attorney needs to be present then it would have to be at the Association’s expense.
Q: I was told our condominium association can no longer use debit cards. Is this true?
A: Yes, as of July 1, 2017, Section 718.111(15) of the Condominium Act provides that an association and its officers, directors, employees and agents may not use a “debit card” issued in the name of the association or billed directly to the association. Use of such a card for purposes other than legitimate association expenses is deemed credit card fraud. This law does not apply to cooperatives or HOA’s. Credit cards are also still allowed to be used.
Q: I am the chairman of the architectural review committee in my HOA. Can I be held personally responsible if the committee approves a project and I sign it and something goes wrong with the project?
A: Generally, no you would have no liability for approving an ARC application. If an owner sued you or the ARC, you would also very likely be covered by the Association’s Directors and Officers insurance. However, you may want to add a statement to the ARC application notifying the applicant that approval of the project does constitute any type of assurance from the Association as to the safety or soundness of the project. Your Association legal counsel could help you draft an appropriate disclaimer.
Q: We are in the process of getting our condominium association turned over from the developer and we notice that the fiscal year-end financial status shows a financial loss each year since it was created. What is the developer’s responsibility financially at the point of turnover? Can they hand us an association that is in the red?
A: Under certain circumstances the answer to your question is yes. The Board including a developer controlled Board is required to adopt a budget each year that properly funds the Association operations. However, while a community is under developer control the developer can agree to deficit fund or impose an assessment guarantee. This can have the effect of allowing the developer to keep the monthly or quarterly assessments lower than necessary to fund the budget, as long as the developer makes up the shortfall. This is done for sales purposes as lower assessments is a marketing tool. When the Association turns over, the developer will stop deficit funding and this often leaves the Association in the red as the regular assessment are insufficient to fund the entire budget. Developer funding is a complex issue and when you get the turnover audit it should be reviewed closely with a CPA and an attorney to determine if the developer guarantee or deficit funding was done properly, and according to the law. This also involves a review of the reserve funding, too. It is not uncommon to find that the developer funding was not done properly and the developer actually owes the Association money.