Names of Unit Week Owners not Available in Timeshare Condominiums

Q:  You recently published an article stating that the names of fellow unit owners are a public record.  Is the rule the same for timeshare condominium associations?

A:  No.  When it comes to providing the names (and other information) of owners of a timeshare, the “rules” are different.  Unlike the Condominium Act (Chapter 718, Florida Statutes) or the Cooperative Act (Chapter 719, Florida Statutes), the Florida Vacation Plan and Timesharing Act (Chapter 721, Florida Statutes) provides that notwithstanding any provision of the Condominium Act or the Cooperative Act, an association may not furnish the name, address, or e-mail address of any owner to any other owner unless the owner whose name, address, or e-mail address is requested first approves such disclosure in writing. It is important to note, however, that even though owners are not entitled to the names and addresses of other owners, they can ask the association to mail materials to the other owners if the purpose of the mailing is to advance legitimate association business, such as soliciting a proxy for any purpose (including the recall of one or more board members or the discharge of the manager or management firm).

Q: Each of our condominium units has one assigned carport to park their car. There are only 20 additional parking spaces for 40 units. We have so many people that have two cars, that at certain times of year, there is nowhere for visitors to park. I only have one car and it seems unfair that I can’t have guests. Is there anything I can ask the management company to do about this? J.T. via email

A: Your board would be the proper party to address this issue, though the management company may be involved in the process. Parking limitations are one of the most common problems at condominiums (especially during the “season” and in older condominiums) and also the most difficult to solve.

For many years, zoning codes required 1.5 parking spaces per dwelling unit, so in many communities it would be mathematically impossible for every owner to have two vehicles parked on the property. Current codes generally require 2 spaces per dwelling unit, plus additional guest and handicap parking.

In a 1981 appeals court case called Juno By the Sea North vs. Manfredonia, the court was confronted with a dispute where the board had to deal with how to allocate 97 parking spaces in a 70 unit condominium. Although the central focus of the litigation was a challenge to the board’s right to assign parking spaces to owners who had not “bought” them from the developer as “limited common elements” (which was upheld) the subject rule appeared to limit each unit to one car with remaining spaces reserved for guest use.

There is no “one size fits all” solution to parking limitations. For example, while a “one car per unit” rule may seem fair to some, would a married couple who both work and have to drive separately think so? Your management company may be able to offer some solutions based on their experience, such as making certain spots “guest only” and implementing some kind of “second car” policy such as a prohibition against second cars with the board having the ability to grant hardship waivers, such as in the example I gave about the working couple. Good luck.

Q: My condominium association has a unit owner who engages in abusive conduct towards the members of the board of directors and other unit owners. Can the association take legal action to force this owner out of the condominium? (N.O., via e-mail)

A: No. There is a 1995 Appeals Court case called Kittel-Glass v. Oceans Four Condominium Association, which held that the Association cannot force a unit owner out of their unit due to document violations. Rather, the remedy would be to obtain an order directing that the owner not engage in conduct which violates the condominium documents.

Originally posted on floridacondohoalawblog.com. Written by Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. 

What is “Cumulative Voting” and Is It Permissible?

Q: If the ballot sent to every homeowner states you may vote up to five candidates and no more, can you cast all five votes for just one person and have that ballot counted as five votes versus one vote? (S.D., via e-mail)

A: It depends on the provisions of your homeowners’ association’s governing documents. Your question is whether “cumulative voting” in elections of directors is permissible. Under cumulative voting, each member is provided with one vote for each seat open on the board and may split those votes as he or she sees fit, including casting all votes for only one candidate. Cumulative voting gives a member’s vote more weight than if the homeowners’ association does not allow for cumulative voting.

Section 720.306(9)(a) of the Florida Homeowners’ Association Act generally provides that elections of directors must be in accordance with the governing documents of the association. Section 617.0721(5) of the Florida Not For Profit Corporation Act, which also governs Florida homeowners’ associations, provides that the articles of incorporation or the bylaws may provide for cumulative voting; however, cumulative voting is not permitted unless it is expressly authorized in the articles of incorporation. Therefore, cumulative voting in only permissible in your homeowners’ association if its articles of incorporation specifically authorize same.

As a practical matter, few homeowners’ associations adopt cumulative voting. When considering whether to permit cumulative voting, it is recommended that associations first consult with a qualified and experienced community association attorney to discuss its benefits and challenges.

Q: My condominium unit is in an association that is part of a larger master association. The master association is made up of a number of other condominium associations. A question has arisen as to what law applies to the master association. (J.J., via e-mail)

A: Whether the master association is a condominium association governed by Chapter 718, Florida Statutes, the Florida Condominium Act, depends on whether master association’s membership is composed exclusively of condominium unit owners or their elected representatives. If there are single-family homes or non-condominium property within the master association, then it would not be a condominium association governed by Chapter 718.

Since January 1, 1992, the definition of “association” in Section 718.103(2) has been as follows: “means, in addition to any entity responsible for the operation of common elements owned in undivided shares by unit owners, any entity which operates or maintains other real property in which unit owners have use rights, where membership in the entity is composed exclusively of unit owners or their elected or appointed representatives and is a required condition of unit ownership.” The statute was amended to define an association in this manner following an appellate court decision that addressed when a master association is governed by the Florida Condominium Act.

Following the amendment to the statute, the test as to whether an association is a condominium association is based on this constituency test. Therefore, if all of the members of the master association are condominium unit owners, or their representatives, then the master association is a condominium association governed by Chapter 718.

However, there is a recent court case that held that the amendment to the Florida Condominium Act that changed the definition of “association” in 1992 does not apply to master associations which existed before the revision of the statute. As such, if your master association pre-dates 1992, you would need to consult with your legal services provider to determine if the master association is governed by Chapter 718. However, for master associations created after 1992, the statute would apply.

Originally posted on floridacondohoalawblog.com. Written by Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. 

Can a Director Resign for Any Reason?

I have met with many boards over the years and often find that they are tireless volunteers who due to malcontents in the community being unappreciative and rude chose to resign from the Board rather than continue dealing with the drama.  The Florida Not For Profit Corporation Act (Chapter 617, Florida Statutes), which applies to most community associations in Florida, requires resignations to be in writing and delivered to the corporation.  There is no requirement however that the resignation include a reason or justification for the resignation.  Service on a community association board (in addition to often being thankless) is a completely voluntary undertaking. A Director cannot be required to remain in his position for the duration of his term.

 

Originally posted on floridacondohoalawblog.com. Written by David G. Muller

Raffles and Games of Chance: A Gamble for Community Associations

Historically, gambling was only illegal when it became a public nuisance. See Lee v. City of Miami, 121 Fla. 93, 163 So. 486 (1935). Today, although gambling is not generally prohibited, almost all forms of gambling are either prohibited by Florida law or heavily restricted. Given the potential for condominiums, co-ops, and homeowners associations or its members to ask to conduct raffles, games of chance, or other forms of gambling (e.g., 50/50 raffle drawings, “horse racing,” and bucket raffles/Chinese auction) on common areas, it is important for community associations to understand state gambling laws and how they operate in the context of their communities.

Chapter 849 of the Florida Statutes regulates gambling in Florida. Section 849.09 provides in pertinent part that it is unlawful for any person in the state to: set up, promote, or conduct any lottery for money or for anything of value; conduct any lottery drawing for the distribution of a prize or prizes by lot or chance, or advertise any such lottery; aid or assist in the setting up, promoting, or conducting of any lottery or lottery drawing in any other manner whatsoever, or be interested in or connected in any way with any lottery or lottery drawing; or attempt to operate, conduct, or advertise any lottery scheme or device. Any person convicted of violating one of these prohibitions is guilty of a third degree felony or first degree misdemeanor.

Section 849.11 also provides that “[w]hoever sets up, promotes or plays at any game of chance by lot or with dice, cards, numbers, hazards or any other gambling device whatever for, or for the disposal of money or other thing of value or under the pretext of a sale, gift or delivery thereof, or for any right, share or interest therein, shall be guilty of a misdemeanor of the second degree…”

While there are exceptions for drawings by chance or raffles conducted by certain charitable organizations under Section 849.0935, these exceptions generally do not apply to community associations because they are not exempt from federal income taxation under the provisions of Section 501(c)(3), (4), (7), (8), (10), or (19) of the Internal Revenue Code (“IRC”) as a religious or charitably club, civic organization, recreational club, fraternal society, or organization of past or present members of the Armed Forced of the United States, respectively. See §849.0935(1)(b), (defining the term “Charitable, Nonprofit Organization”). While a community association may be a not-for-profit corporation, this does not make it a nonprofit tax-exempt organization under the IRC. Federal regulations provide that to be tax-exempt, a corporation must operate for the benefit of the general public, not solely for the benefit of its members. In the case of most community associations, games of chance, raffles or lotteries for money or for anything of value being conducted on the premises would be for the private benefit of their members and not the public at-large and, accordingly, community associations are generally subject to the state prohibitions on same.

Most governing documents that regulate community associations also provide that association property must be used in accordance with all federal, state, and local laws and ordinances. They often further require that members not permit obnoxious, offensive, or nuisance activities, including illegal acts, in their units or on their lots.

Even where the board of directors or a manager of a community association does not conduct, authorize, or promote illicit games of chance, raffles or lotteries for money or for anything of value on common property, they may still be held liable for the illicit activities on association property conducted or promoted by its members.

In light of the foregoing, games of chance, raffles, or lotteries for money or for anything of value in the context of a community association violate Chapter 849, Florida Statutes, even to the extent that the community association does not receive a portion of the proceeds or a portion of the proceeds goes to a charitable “cause.” A community association sponsoring, conducting, promoting, advertising, or assisting with such unlawful activities – or even just having “fleeting knowledge” that members and their guests are independently attempting to sponsor, conduct, promote, or advertise them on association property and the community association failed to take steps to stop the illicit activities – may expose the community association, its employees, its managers, and/or its board members to criminal liability.  Criminal conduct by a corporation also presents additional potential problems, including, but not limited to, loss of the presumption of indemnification (hold harmless) entitlement in the event legal proceedings are brought and exclusions from coverage under most insurance policies, including Directors’ and Officers’ (D&O) Liability policies.

Accordingly, it is advised that community associations never seek to conduct or sponsor games of chance, raffles or lotteries for money or for anything of value on association property, and remind its members that these activities are unlawful and are not permitted anywhere on association property. To the extent members or their guests fail to comply with Florida law (and likely also with the community association’s governing documents) with respect to these activities, community associations should consult with their legal services providers.  The community association may have the authority to levy reasonable fines and/or suspend members’ rights to use the common facilities, or institute legal action to compel compliance with the governing documents.

 

Originally posted on floridacondohoalawblog.com. Written by Kathleen O. Berkey, ESQ, AICP

Is This a Conflict?

The board member in a homeowners association just hired the same pool company that is used by the association.  Conflict? Not necessarily.  There are provisions within the Homeowners Association Act which prohibit contracts between an association and a company when one of the board members from the association has a financial interest in the subject company.  There are also restrictions contained within the Homeowners Association Act which prohibit board members from receiving “kickbacks” for awarding contracts on behalf of the association.  That being said, there is no statutory prohibition which would prevent a board member from retaining, for their individual swimming pool, the same pool company which is under contract to clean the community swimming pool, as long as the subject board member is paying the going rate for the service and not receiving a quid pro quo discount as a result of their position on the board.

Originally posted on floridacondohoalawblog.com. Written by David G Muller

Can an Association Be Held Liable for Discriminatory Conduct of Residents?

On a daily basis, we read about acts of hatred and discrimination occurring in our society.  As residential communities are microcosms of the society at large, associations, too, are increasingly faced with determining how to deal with such issues.  Legal precedent has established that associations may be held liable for discriminatory acts committed by its Board members as well as its agents, including the association manager.  Pursuant to a 2016 rule enacted by the U.S. Department of Housing and Urban Development (“HUD”), however, associations can also be held liable for failing to “correct and end” discriminatory acts of residents.

Specifically, 24 CFR, Section 100.7(a)(1)(iii), provides that a person  is directly liable for “[f]ailing to take prompt action to correct and end a discriminatory housing practice by a third-party, where the person knew or should have known of the discriminatory conduct and had the power to correct it.”  (Emphasis added.)  “Person,” as the term is used in this rule, includes community associations.  “Discriminatory conduct” includes unlawful conduct engaged in because of a protected characteristic (race, color, religion, sex, familial status, or national origin).  Thus, under this rule, it is possible for an association to be held directly liable where it (1) knew or should have known about discriminatory conduct by one resident towards another resident; (2) had the authority to correct the conduct; and (3) failed to take steps to end the conduct.

This rule raises more questions than it answers which is especially concerning given the potentially dire consequences an association may face if it fails to address the discriminatory conduct of a third-party.  For instance, can an association really be expected to “correct and end” the discriminatory conduct of a resident when its enforcement options are limited by statute and the governing documents which may ultimately prove ineffective?   HUD’s published response to this issue was that associations regularly rely upon notices of violations, threats of fines, and fines as mechanisms to compel compliance with the community’s restrictions and they should, therefore, use whatever legal means they may take to end the harassing conduct.  In practice, however, is a fine or violation letter, or even the inability to vote or use the common areas really going to correct the discriminatory acts of a person driven by prejudice?  Further, what if the third-party’s actual activity, even if discriminatory in nature, is not specifically prohibited by the association’s governing documents?  Does that mean that the association does not have the “authority to correct the conduct” and would not be held liable under the rule, or does it mean that the association would be required to amend its governing documents to address discriminatory acts by residents?  Additionally, does this mean that associations are now responsible for looking at the motivations behind a resident’s actions to determine if they are discriminatory in nature?

Presently, there are no real answers to these questions.  Given, though, that the rule requires an association to “take prompt action” the immediate take away is that an association simply cannot ignore a discriminatory situation between residents and would be well advised to consult its community association attorney to discuss the particular facts of the situation and work towards a solution that complies with the current HUD rule.

Originally posted on floridacondohoalawblog.com. Written by Sara K. Wilson

Fines and Board Eligibility

Many times, associations are challenged by owners who believe their names were improperly kept off the election ballot because the owner did not agree that they owed a fine.  The Condominium Act states that a person who is delinquent in the payment of any monetary obligation to the association is not eligible to be a candidate for the board.  The date of eligibility is established 40 days before the annual meeting and election.  As such, if an owner turns in their candidate notice 50 days before the election and owes a fine at that time, they can still be on the ballot so long as they paid the fine by the 40-day deadline.  If the fine remains unpaid as of the deadline, the unpaid fine is considered a monetary obligation, which means that pursuant to the statute, the person is not a proper candidate for the board and their name should not be on the ballot.  This is true whether the person has challenged or otherwise disputed the fine.

Originally posted on floridacondohoalawblog.com. Written by David G. Muller

 

Different Laws Govern Associations

Q: My community has both single-family homes and townhouses. A question has arisen as to whether the laws that govern condominium associations or homeowners’ associations apply. Can you clarify this for us? (B.K., via e-mail)

A: The answer would depend on the language of the governing documents for your association. Condominiums are governed by Chapter 718 of the Florida Statutes, known as the Florida Condominium Act. In order for the property to be a condominium, it would have to have been created pursuant to a recorded declaration of condominium.

Homeowners’ associations are governed by Chapter 720 of the Florida Statutes, known as the Florida Homeowners’ Association Act. Property subject to this law does not have to be created in a specific statutory manner, but is usually created by a declaration of covenants. The statutory tests to determine whether a community and its association are governed by Chapter 720 are whether the association is responsible for the operation of a community where the voting membership is made up of the parcel owners or their agents, or a combination thereof, where membership in the association is a mandatory condition of ownership and where the association is authorized to impose assessments and record a claim of lien against the parcel if the assessments go unpaid.

Condominiums and communities governed by homeowners’ associations take many forms, so you cannot tell just by looking at the property. For example, some condominiums are freestanding buildings (typical single family home) where the units are actually plots of land or the footprint of the building. Conversely, some homeowners’ associations govern townhouse or villa-style dwellings where there are multiple dwellings contained in each building that “look like” condominiums.

Q: Recently, our condominium board discussed replacing our pool deck. Our pool deck is currently made up of composite decking material. The board wants to install a cement deck. Doesn’t this require a vote of our unit owners? (K.M., via e-mail)

A: Possibly. The Florida Condominium Act states that there shall be no material alteration or substantial additions to the common elements except in the manner provided in the declaration. If the declaration is silent, then such material alterations or substantial additions must be approved by a 75% vote of the total voting interest of the association.

The seminal case defining “material alterations” comes from a 1971 decision from Florida’s Fourth District Court of Appeal called Sterling Village v. Breitenbach. In Sterling Village , the court stated that if the change “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 functions, use or appearance,” such a change was a material alteration.

Under the test set out in Sterling Village, replacing a composite deck with a concrete deck would appear to be a material alteration and may or may not be subject to owner approval based on the language in your declaration. For example, many declarations allow a board to spend a certain amount of money on material alterations before triggering the requirement for a unit owner vote.

There is also an exception in the law. If an alteration is considered “necessary maintenance” to the condominium property, the owner vote is not required. Convenience and cost savings are not sufficient legal criteria to support changing the common elements without a unit owner vote based on the necessary maintenance exception to the material alteration rule. On the other hand, changes necessary to comply with the law are generally permitted under the necessary maintenance exception. Use of alternative materials always presents a close question. Generally speaking, decisions in this context should be predicated on both a legal opinion, as well as demonstrable evidence from a credible source (for example, an engineer) that the change is “necessary” as that term is used in the law.

Originally posted on floridacondohoalawblog.com. Written by Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. 

Election Voting Assistance

In the Condominium Act, it is very clear that only a unit’s owner can vote in election. That means that an election can’t be decided through the use of proxies (limited or general). There is an exception for associations with fewer than ten units who have voted to follow a different voting procedure.  In such an instance, the procedure set forth in the by-laws would be followed and if proxy voting is permitted in elections then the condominium could do so.

The question which gets asked a lot is whether a person holding a power of attorney can vote in an election.  The answer is no.  The statute confirms that when an owner needs assistance in casting their election ballot they can get it.  The key however is the definition of “need”.  Going on vacation or delegating to an adult child, realtor or tenant for convenience simply is not the “need” required by the statute.  The assistance needed must be due to blindness, disability or inability to read or write. In those circumstance the voter may request the help of a person of their choosing (e.g., family or friend) and they are not obligated to use an association employee, manager, or even a board member. The help provided is not voting for the person.  On the contrary it is to facilitate the owner voting for themselves by reading the entirety of the ballot (instructions and candidate names as written) to them.  The reader is not supposed to apply any tone or emphasis aimed at gaining a particular vote for one candidate over the other.

You may wonder where voting certificates factor in to the equation.  Voting certificates are only required if the governing documents require them.  For those that do they can impact units owned by spouses, multiple un-married persons, corporations, or any combination thereof.  In such an instance, once the voting certificate is complete and turned in, should the designated voter require assistance, the same criteria noted above would apply.

Originally posted on floridacondohoalawblog.com. Written by Marilyn Perez-Martinez

The Project Costs What!?! That Requires A Membership Vote

Condominium Associations are in the maintenance game it seems at times. Just when one project ends, another is beginning.  Maintenance is simply a fact of life for all condominiums.  A big problem arises in many condominiums, however, when the maintenance project is deemed by the membership to be too expensive as they believe the cost triggers their right to vote on whether the project can proceed.  This hiccup in condominium living usually comes up when the contract for the project is being discussed at a board meeting or when the dreaded special assessment notice gets posted.

It is of crucial importance that both owners and board members understand that just because a project carries a hefty price tag that does not make it subject to member approval.  Maintenance (which for purposes of this article includes repair and replacement work as well) of the common elements simply falls to the association no matter the cost. Note that I said maintenance rather than material alterations or additions.

Material alterations or additions occur for the most part, when you “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 functions, use or appearance.”  Sterling Village v. Breitenbach, 251 So.2d 685 (Fla. 4th DCA 1971).  Simply put, changing the lobby carpet to tile and changing the building’s color from white to gray are usually considered material alterations.  Even then, however, a member vote may not always be required.  The Condominium Act provides that if a material alteration is to occur, the association must first obtain the vote of the membership authorizing the alteration.  If the condominium’s declaration is silent as to the approval required, the statute requires it to be by 75% of the total voting interests.  If the declaration, however, touches on the issue of material alterations one applies its requirements.  In such a situation, if the declaration allows the association to undertake material alterations without a member vote then it can proceed.  If it allows material alterations up to a specific financial limit then the association can proceed within that financial limit without a member vote.  The declaration can however still require a member vote and have the vote be a much lower threshold than the 75% set forth in the statute.  It can also be higher.

Note that the cost of a project which is otherwise purely maintenance does not factor into whether a member vote is required.  Nor is cost a consideration when a material alteration is going to occur unless the declaration specifically takes cost into consideration.

Something else for associations to consider is that the same project may have elements of maintenance for which a member vote is not required and elements of work which rise to the level of material alterations where a vote is required.  To figure out if your project has elements of both requires an understanding of what the law deems a material alteration coupled with the findings of any industry professionals and the involvement of the association’s counsel.

There are also exceptions to the material alteration doctrine which make a project maintenance despite it obviously palpably and perceptively changing the common elements in the manner described in Sterling Village. If you feel your condominium’s project might be subject to one of these exceptions, you should discuss it with the association’s attorney who will help create a roadmap for determining if the exception really exists.

 

Originally posted on floridacondohoalawblog.com. Written by Marilyn Perez-Martinez