Condominium Associations

Condominium Associations

Regulations requiring civil discourse in your community

For whatever reason we are getting more and more complaints from Associations that a resident is yelling and cursing at other residents either in person, on the property, or by use of nasty e-mails. Such conduct is very disturbing to many and they then ask us what they can legally do about it to get the person to stop.

Although most Condominium and Homeowners’ Associations have “nuisance” provisions in their governing documents which allows the Association to take legal action if a resident is causing a nuisance as defined in their documents, usually the nuisance provision only concerns matters such as playing music loud after hours or having loud parties with lots of noise and cars.

However such nuisance provisions usually do not cover people using profanity or personally acting abusive or threatening against other residents while on property or in e-mails or letters.

In order to beef up the nuisance language to cover vulgar and nasty behavior, we have found adding something like the following to the Declaration of Condominium or Declaration of Covenants will do the trick: “No owner, tenant or guest may disturb any other owner or resident with the use of profane, obscene, threatening or abusive comments either orally or in writing or by their conduct on the property that is abusive or threatening.”

Such an amendment will require a membership vote. However, once approved, it will be much easier for the Association to bring legal action against the owner for violation of the new nuisance provision by the owner or their guest or their tenant. If such legal action becomes necessary, per statute, the owner will be responsible for the Association’s prevailing party attorney’s fees.

Although it still is pretty rare for a community to have many residents who act is such an unsavory manor, we see that the ones who do seem to be getting bolder and bolder with the intensity of the vulgarity, rudeness, aggressive and threatening manner.

Sometimes we will see that nasty e-mails are written late at night, when the drafter can hide behind their video monitors and then the next day when they are confronted in person, they act a bit more pleasant.

Others don’t seem to give a flip and will spew venom loudly and often at anyone or everyone.

Many times Board members or management will try to talk with the vile folks in a reasonable manner and many times such attempts at being civil will go nowhere. Directors need to understand that usually they are not usually dealing with an individual with a normal personality. Maybe no one ever taught them that they can get win more with honey than with vinegar. The Directors have no legal obligation to respond to nasty e-mails and letters from fellow residents.

Sometimes law enforcement has to be called to remove these bad actors from Association meetings, prevent them from joining the meeting, or to protect residents being threatened. Residents should not hesitate to contact the police or sheriff’s office if they are physically threatened or assaulted. Usually law enforcement will have a chat with them so they understand that such behavior must stop and if warranted, they will be arrested.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.
Condominium Associations

I beg your pardon, Florida has promised you a rose garden

This was a slim 2019 legislative session when it came to new laws affecting Condominium or Homeowners’ (HOA) Associations with only 2 new laws passed. In House Bill 7103, older condominiums over 75 feet tall got another last minute reprieve from having to retrofit their buildings with fire sprinklers, opt-out or adopt an engineered life safety system until 1/1/2024.

For those green thumbs out there, Senate Bill 82 became law effective July 1, 2019 which says that: “a county, municipality, or other political subdivision of this state may not regulate vegetable gardens on residential properties. Any such local ordinance or regulation regulating vegetable gardens on residential properties is void and unenforceable.”

It defines “vegetable garden” as “a plot of ground where herbs, fruits, flowers, or vegetable are cultivated for human ingestion”.

The local government may still regulate watering, fertilizer or control of invasive species of a general nature as long as the regulation is not specific to regulating vegetable gardens.

It appears from the language in the bill that the local government cannot even regulate where on the residential lot the vegetable garden can be located. So, we may start to see a variety of vegetable gardens in the front yards when driving around town.

You may note that this new law only pertains to local governmental entities’ regulations and does not mention (or therefore apply to) private HOA’s or condominium association rules and regulations. Therefore, private neighborhood and condominium associations should still be able to regulate whether vegetable gardens are allowed and if so where they can be located on the residential lot or property through the Associations’ Architectural Review or Control Boards (ARB or ARC) or through the Board of Directors.

The new vegetable garden law states that the Legislature intent was to: “encourage the development of sustainable cultivation of vegetables and fruits at all levels of production, including for personal consumption, as an important interest of the state.”

This new law seems to harken back to the “victory gardens” of WWI and WWII, although there is no apparent current war effort to support. It is nice though for those who want to grow their own fruits, flowers and vegetable as a means to promote a healthier lifestyle with a diversity of produce.

If vegetable gardens catch on in parts of Florida counties and cities that aren’t regulated by private community associations, then some private HOA’s and condominium associations may adopt new rules or regulations to allow for such gardens at specified locations on the residential lots or on the common areas.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.
Condos and HOA's

Minimizing adverse effects of investor landlords

There has been a growing phenomenon in Southwest Florida of investor corporations, limited liability companies or trusts buying homes in neighborhoods and units in condominiums whose investor owners have no intention of ever living in the home or unit. They are looking for rental investment income. They want to just lease the units to whomever for a number of years and then sell the properties for a profit.

It is common knowledge that many tenants do not treat the use of the home, unit, or common areas as well as owners do. These tenants do not have personal investment in the homes or units that homeowners and unit owners do. Many such tenants will rent for a few months or a few year and then move on. They do not have the same incentive as owners to keep the places up.

In addition because of the transient nature of these type renters, many will violate the community’s rules such as having many loud parties, having many visitors at all times of day and night, leaving their things out on the common areas, rarely mowing the lawn or weeding the gardens, possessing unlawful pets or keeping unpermitted vehicles on property.

It can take a lot of the Association’s time and money to try to police such unruly tenants.

Most of the out of town, out of sight, investor purchasers pretty much can care less who they rent to or what their renters do as long as they get their monthly rent and the place does not burn down.

So, in order to minimize the adverse effects such investor purchasers and their unruly tenants cause, we have found that one of the best solutions is to have the owners amend the governing documents of the community to prohibit new owners (other than those who acquire title by inheritance) from leasing their home or unit for a period of time. Usually its twenty four (24) to thirty six (36) months from acquisition of the home or unit before the new owner can lease.

Such an amendment will take a membership vote to approve at a special meeting of the members and will require the approval percentage set forth in the Declaration of Covenants or Declaration of Condominium. It could be 3/4, 2/3 of all owners, or of those who vote at a members meeting, or a simple majority of the owners. You will have to check your Declaration to see what approval percentage of your owners would be required. Association Legal counsel can prepare the necessary documents for such a vote including a notice of meeting, proxy and propose amendments.

This may not stop all investor purchasers. However, the return on investment looks a lot bleaker if the new investor, who will not be living in the unit, will not be able to make any money (rent) on the home or unit for a few years after purchase.

Some realtors may claim that the sky is falling if you put in any limitations on new prospective purchasers. However, we have not seen any issues, in communities with such restrictions, from owners being able to sell their residences and we have seen no adverse effect on property values. If anything, such restrictions increase the property values. In addition, if you have too many rentals in your community, some traditional family purchasers may not be able to get a mortgage as many lenders have community rental caps.

As you can see, there is a way to slow down or stop faceless investors from taking over your neighborhood or condominium. We are seeing more of them year after year and if you put such new owner leasing prohibitions in your documents, there is a good chance potential investor purchaser will look instead down the street for a community that does not have such restrictions to purchase. This way your community can remain stable and harmonious with most homes or units being occupied by full time or snowbird single family owners.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.
Condominium Associations

Electric cars are coming to your condominium; who will pay to charge them up?

While electric vehicles have more or less been a novelty over recent years, many indicators are concluding that they will proliferate in much greater numbers in the near future.

If the indicators are correct, that means you or your neighbors will probably have one or more of these cars parking at your condominium soon. The question arise who is going to pay to charge up the electric cars? Everybody has to pay for their own gasoline. However, a person with an electric car could just plug it into an outlet on the common elements and then all the owners will be paying to charge up that owner’s car. This does not sound very equitable.

To prevent such inequity, last year the Florida Legislature approved a new change to the statutes to say that if a condominium association has assigned limited common element parking spaces, an association’s documents or its Board of Directors may not prohibit a unit owner from installing an electric vehicle charging station for an electric vehicle within the boundaries of his or her limited common element parking area.

The new law goes on to say that the charging station installation may not cause irreparable damage to the condominium property, the electricity must be separately metered and payable by the unit owner installing the station. The unit owner is responsible for the costs of installation, operation, maintenance, repair and insurance of the station, and the owner is responsible for the costs of removing the station if it becomes no longer needed.

The Association can require the unit owner to comply with safety requirements and building codes, comply with reasonable architectural standards, engage the services of a licensed and registered and electric charging station knowledgeable electrical contractor or engineer, provide a certificate of insurance naming the association as an additional insured within 14 days of approval of the station, reimburse the association for the actual cost of any increased insurance premium amount attributable to the charging station within 14 days of receiving the Association’s insurance premium invoice.

The Association provides an implied easement across the common elements to the unit owner for the purpose of installing the station and furnishing electrical power and any necessary equipment to the station.

Last, the new law provides that labor and material furnished for the installation of the station cannot be the basis for filing a lien against the Association but a lien can be filed against the owner.

As you can surmise, it could be very costly for an owner to install such an individual charging station at his limited common element parking space. What if the station cannot fit in the assigned parking space? What about condominiums where there are no assigned limited common element parking spaces?

Because of the expensive cost of installing a charging stations and issues with location of installation, some Associations are looking to allow a group of owners who have, or may want to acquire electric vehicles, to install a communal charging station on the common elements so that the group can share in the cost of installation, electricity, maintenance and insurance. In order to do so however in some associations a material alteration approval vote of all the owners will be required while in others the board can grant the group the approval to install.

Sooner or later, your condominium association will have to deal with electric cars. Your board may want to consider proactively looking at installing shared charging stations to accommodate your owners. A plan might start with one (1) station with the idea of adding more once more and more electric cars arrive on site.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.
Condominium Associations

Some condominium association records now must be permanently maintained

Prior to a strange amendment to Section 718.111(12), Florida Statutes in House Bill 841 was approved and became effective July 1, 2018 last year, most association records had to be kept for at least seven (7) years. An exception was made for “ballots, sign-in sheets, voting proxies, and all other papers and electronic records relating to voting by unit owners” which only have to be kept for one (1) year. This exception makes sense because after a year you will have another annual meeting and possible another annual election.

For some reason though the sponsors of House Bill 841 thought it important to require condominium associations to now keep certain records “permanently” or forever.

The records to be kept forever are now: 1) Developer turned over documents including plans, permits and warranties; 2) Copies of the recorded Declaration and Bylaws and all recorded amendments thereto; 3) A “certified copy” of the Articles of Incorporation and all amendments thereto; 4) A copy of the current rules of the Association; and 5) A “book or books” that contain the minutes of all board and member meetings minutes.

Not sure why the copy of the Articles of Incorporation must be “certified”. Also, not sure why the minutes must be put into a book or books. Lots of associations just keep their minutes on their computer now and don’t print them out and put them in a book. Well, if you have been doing that, I guess you better go print out all of your associations minutes over the years and find a book to put them in.

If this book or books must now be “permanently maintained” forever, maybe the minutes should be printed on special paper that last forever. Might have to be some type of papyrus paper scroll to last close to forever.

These are the kinds of laws that are written by legislatures who are not closely reading what they are writing. Although they may have good intentions, the result of what they pass is probably not really what they intended.

Developer warranties and permits have or will expire probably within 10 years. Collier County maintains all officially recorded documents concerning real property in the County on its computers pretty much forever and they can be easily obtained on the County website at any time. This would include the Declarations of Condominium Articles of Incorporation and Bylaws and the Division of Corporations with the State of Florida keeps copies of all the Articles of Incorporations and amendments thereto of all Corporations in Florida. Everybody got copies of the house rules at closings. Copies of the minutes are also probably in lots of people’s computers as attachments to e-mails. What is anyone going to do with minutes that are over 7 years old anyway? Any statute of limitations concerning anything that happened in those meetings have probably long expired.

So be sure to comply all these readily available documents and put them in some form that will have them last forever. Maybe you can have them laser copied onto silicon disks or silicon “books”. For safe keeping maybe you can arrange to put the silicon books on a rocket to the moon where they can be safely and “permanently maintained” forever.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.
Condominium Associations

Can you legally stop rude behavior by residents?

More and more recently Condominium and Homeowner’s Associations have informed us of residents who have been behaving rudely to their neighbors. We have been asked what, if anything, can legally be done to stop such bad behavior.

For some reason, it appears a few people today find it perfectly acceptable to curse and swear at their neighbors, threaten them with bodily harm or make abusive and bullying type comments. Maybe this poor behavior is being learned and emulated from social media, interviews and speeches of some celebrities and new music lyrics where quite a bit of profane and obscene language is bantered about in a nonchalant way.

For many old school types, being on the receiving end of such language and aggressive behavior is quite disturbing. Of course if someone is threatened with physical harm or attacked in an aggressive manner, it might be prudent to call the police or sheriff before such threats or acts get out of hand. Sometimes it is important to determine between two individuals involved in an altercation who really is the abuser or attacker and who really is the victim. Sometimes the most vocal at the time of an incident is lying and claiming to be the victim when in actuality they are the perpetrator. It often takes time for others to ferrate out such a truth as lies can be uttered quickly and finding the truth can take time to reveal the lies.

Many times the rude behavior and language does not quite rise to the level of law enforcement intervention but is still quite shocking to many.

Although most governing documents for condominium and homeowners’ associations will have a nuisance provision, such a provision may just not cover the type of behavior we are talking about so the association may not have good legal means to get such behavior to stop.

A typical nuisance provision in an association documents reads something like: “No owner shall use his unit or the common elements or permit his unit or the common elements to be used, in any manner which constitutes or causes an unreasonable amount of annoyance or nuisance to the occupant of another unit, or which would not be consistent with the maintenance of the highest standards for a first class residential condominium, nor permit the premises to be used in a disorderly or unlawful way. The use of each unit and the common elements shall be consistent with existing laws and the condominium documents, and occupants shall at all times conduct themselves in a peaceful and orderly manner.”

It may be difficult to show that the kind of rude behavior we are discussing rises to a level of a nuisance or unreasonable amount of annoyance although it may be quite disturbing.

In order to bring such bad behavior into the fold of a nuisance or unreasonable amount of annoyance, we have suggest associations may want to amend the governing documents to includes something like: “No owner, tenant or gust may disturb any other person on the property with the use of profane, obscene, threatening or abusive comments or conduct.”

With this type beefed up nuisance language, we believe association residents experiencing rude and nasty behavior from their neighbors will then have the legal grounds to successfully bring legal action against them and be able to also recover prevailing party attorney’s fees if litigation becomes required in order to stop their bad nuisance behavior.

Maybe society is getting to the point where the pendulum is starting to swing the other way where civilized people aren’t going to condone or put up with nasty rude behavior of the few anymore. Sticks and stones will break bones and words can hurt people. It reminds me of the old saying that a really good comedian never has to curse. Likewise, good clever folks can make their point without having to go to the gutter of throwing profanity around.

However, until the low-lives “get it” to change their ways, you might want to amend your governing documents to add some teeth into your ability to make them stop.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.
Homeowners Associations

Dealing with elderly neighbor in violation of rules

For most violations of rules and restrictions contained in a Condominium or Homeowners’ Association governing documents, the enforcement procedure is fairly simple. A call or letter is sent by management telling the rule or regulation violator to knock it off. If the violation continues, then a certified letter is usually sent from the Association’s attorney to the violator giving him or her one last chance to stop the violation. If that does not work, then the violator is usually sued either in arbitration for some Condominium violations or in local courts for other Condominium violations and for Homeowners’ Association violations.

If successful in litigation, the violator will then get an Order from the Judge to stop or cure the violation. If the violation continues or is not cured, then the violator can be found in contempt of court and fined by the Court or maybe even ultimately incarcerated if the contempt fines are not paid.

However, this fairly straight forward process many times does not work if the violator is elderly and suffering from dementia, Alzheimer’s or mental illness. Sometimes, the suffering person will wander around the common areas at odd times, steal things or damage common property, yell and scream at other owners or become a hoarder and live in a filthy unit or home. Often, family members, even spouses, want nothing to do with helping Association representatives try to abate the nuisance to other residents being bothered by their loved one’s actions. They will say they have tried to do all they can do already.

Many times, the elderly person who is losing, or has lost, their normal mental capacity will ignore calls or letters being sent to them by the Association, will avoid legal process of service and, if served, will not get an attorney and will then ignore a court order for compliance or contempt even if issued. Law enforcement usually will not get involved unless there is concrete evidence of a crime or a real threat of violence to others.

So where does an Association board turn to in order to try to rectify the situation when the normal legal routes probably will not be productive?

A starting point locally may be to check out Collier Senior Resources (CSR) which provides information and services for older adults and caregivers. CSR’s website is: collierseniorresources.org.

As stated in their website: “CSR embraces collaboration between like-minded organizations who are focused on older adults and caregivers. With this in mind and thanks to the efforts and support of Collier Senior Resources, the Leadership Coalition on Aging (LCA) includes over 40 local agencies and non-profit organizations dedicated to seniors and caregivers in our community. Consistent with our Mission, we have compiled a comprehensive and growing list of resources for Seniors and Caregivers. Many of the resources listed below are federal and regional; however, we strive to identify and provide resources that are local to help you find the answers to your questions and information you need. Local Resources reflects local providers and agencies committed to helping seniors and caregivers, specific to Collier County and Southwest Florida.”

Some of the listed resources that could be relevant to our person describe above include: Accessible Home Health Care of Naples, Administration on Aging, Alienated Grandparents Anonymous, Inc., Alzheimer’s Support Network, Assisting Hands Homecare, Care Right, Inc., Collier County Services for Seniors, Comfort Keepers, Executive Care, Florida Department of Elder Affairs, Grace Companion Care, Hanson’s Services, Inc., Home Care Assistance of Naples, Interim Health Care of Naples, Moorings Park Home Health, Parkinson Association of Southwest Florida, Seniors Helping Seniors.

As you can see, there are a plethora of local groups and organizations designed to assist the elderly neighbor who may not be quite fully with it anymore and may just need a little assistance and care from people knowledgeable of their condition. Changes are that quicker and better positive results may occur by looking into these type services rather than just trying to rely on the legal system to stop the violations by those suffering from mental conditions out of their control.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.
Condominium Associations

How associations can save auditing fees

Thanks to House Bill 6027 that was approved by the Florida Legislature in 2017, the members of condominium, cooperative and homeowners associations can now waive the preparation of costly financial auditing reporting each fiscal year and instead opt for simple reports of cash receipts and expenditures.

In the past, condominium associations could only waive for three (3) fiscal years in a row and then would have to have audited type reports prepared in the 4th year. This requirement of not being able to waive in the 4th year has been removed. There was also an exemption for associations under 50 units from having to prepare audited type reports that was removed. So now, all community associations are subject to similar regulations when it comes to year-end financial reporting.

For associations with total annual revenues of less than $150,000, only a simple report of cash receipts and expenditures has to be prepared and such a report can be prepared by a bookkeeper.

For associations with total annual revenues of $150,000 or more, but less than $300,000, a compiled financial statement prepared by a CPA is required. However, the members can vote by a majority of the owners present at a properly called meeting to waive a compilation and instead have a simple report of cash receipts and expenditures.

For associations with total annual revenues of at least $300,000 but less than $500,000, a reviewed financial statement prepared by a CPA is required. However, the members can vote by a majority of the owners present at a properly called meeting waive a review and instead have a compiled financial statement or simple report of cash receipts and expenditures prepared.

For associations with total annual revenues of $500,000 or more, a reviewed financial statement prepared by a CPA is required. However, the members can vote by a majority of the owners present at a properly called meeting to waive an audit and instead have a reviewed financial statement, complied financial statement or a simple report of case receipts and expenditures prepared.

A board of directors can always decide in a particular fiscal year to not put up a waiver vote to the members and have the requisite review, compilation or audit prepared or even a greater auditing report prepared if the board believes it would be beneficial to have a CPA review the books.

Many times boards will opt for the CPA review of the books, whether it be a compilation, review or audit, if it has been many years since the last CPA review, there has been an overhaul change to the members of the board, or a change in management. This is to make sure association expenditures have been, and will continue to be, on the up and up.

When there has been no evidence or indication of any problems with the association’s finances, many boards will decide to ask the members to waive the CPA’s reviews to save the association some money as the CPA reports get more costly the higher the level of reporting is chosen; with the cost increasing from a compilation to a review to an audit.

Association boards need to decide each fiscal year whether they want to go for a membership vote to waive the CPA reporting requirements. If a waiver vote of the members is to be taken, the vote is usually taken by proxy at the annual meeting of the members (usually in the first quarter of the year- January to March) and if not by the annual meeting should be taken before the end of the fiscal year.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.
Condominium Associations

Do directors and officers have to worry about getting sued personally?

Around this time of year there usually is a call for candidates to submit their names to be directors of their condominium or homeowners’ association for vacant seats coming up at next year’s annual meeting. Most associations have five to seven director seats usually with either one-year terms or two-year staggered terms.

Many times it is hard to get owners to run for the board because of the time commitment needed to be given to such a part-time unpaid job. Another obstacle to service is the fear a director may be personally sued if one or more owners don’t like the way the director may carry out their job. Time commitment and suit fear may scare away good candidates from running for the open positions.

Luckily in Florida, most condominium and homeowners’ associations carry Directors and Officers Liability Insurance (D&O Insurance) to defend and protect the directors if they do get sued. In addition, the directors are indemnified by the associations both by provisions in their Articles of Incorporation as well as provisions contained in Chapter 617, Florida Statutes covering not-for-profit corporations.

Basically, under the relevant statutes and the association’s Articles of Incorporation, a director is not personally liable for monetary damages to the corporation or any other person for any statement, vote, decision, or failure to act regarding association management or policy unless the director’s breach of, or failure to perform, those duties constitutes: 1.) a knowing violation of the criminal law, 2.) a transaction from which the director derived an improper personal benefit, 3.) willful misconduct, or 4.) recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety or property.

So, if a director does not do any of the aforementioned egregious acts, he or she will be indemnified by the association and will be covered under the association’s Directors and Officers Liability Insurance for legal defense and for damages if something went wrong as a result of alleged simple negligence and the director or officer was sued by an owner or third party.

It is important to remember that directors must act in a manner that a reasonable person would act. However, the director is not required to have any special knowledge in business or otherwise. If a reasonable person would think that an expert should be called in on a particular matter (such as an accountant, engineer or attorney), then such an expert should probably be called in before action is taken.

If an expert is called in, the directors and officers should follow the expert’s advice and if for some reason they don’t want to follow their advice, they should probably try to find another expert who can supply advice to support the act that they want to take. If they don’t find someone, who can stand by the act they want to take, then they probably should not then act in the unsupported manner as such act may then be considered reckless or in bad faith. If they then did get sued personally for their unsupported act, they may not then be indemnified by the association at that point nor protected by the Association’s D&O Insurance.

When association’s get sued for their officers’ or directors’ actions, we find it is rare that any of their actions were of such an egregious nature as to move outside the indemnity and insurance protections described for simple negligence. So if asked to run to be a director in your association, or if you get the inclination to do so, you should not use the fear of getting sued as an excuse not to. If you have the spare time and energy to put into the part-time job of being a director or officer, you will probably find your contribution to your community as rewarding on both a professional and a personal level.

Condominium Associations

When do community rules and regulations have to be enforced?

A typical question we get from new association directors is: When do our association’s rules and regulations have to be enforced?

In most condominium and homeowners’ associations, there are regulations contained in the Declaration of Condominium or Declaration of Covenants recorded in the county public records and also unrecorded “house” rules located in the association’s official records.

Typically there are many such rules and regulations that owners, tenants and guests are legally required to follow whether they have ever read them or not. The residents are considered to have constructive knowledge of rules and regulations because the governing documents are recorded in the public records. So, although they might not have actual knowledge of the rules and regulations (never seen them or read them), the residents are legally required to follow them because of their constructive knowledge.

Of course by not having actual knowledge of all the rules and regulations, there will most likely be violations by owners, guests and tenants even though the violations may be unintentional or unknowingly.

Typically, unless another resident reports any of these violations to the board or management, the board will not know that the violations are going on. This is not necessarily a bad thing because if a violation is not bothering anyone else in the community then who really cares about the violation existing.

However, if a resident reports a violation of the written rules and regulations, then the board of directors, as part of their fiduciary duty under the association’s documents, are required then to enforce compliance to make sure the violation ceases. If the board fails to do so, the resident could then go after the directors for failing in their duties.

This fiduciary duty does not mean that directors must run all over the community looking for violations. In the “mind of the board” there are no violations of rules or regulations (even though they exist) until such time as they are reported to the board or manager. You could have a violation that has been there for five (5) years and nobody reported it. Examples could be someone with an indoor house cat in a no pet condominium, an owner who made an unapproved patio on the common elements, or an owner smoking on a balcony where such smoking is prohibited.

Until, someone reports such a five (5) year ongoing violation to the board or management, there is no legal knowledge of the violation. Once the violation is reported, the board can then go after the violator usually with management calling and/or sending a violation letter to the owner of the residence in violation and providing a reasonable time to correct the violation.

If after such time the violation has not been cured and continues, then the board should send the information to the association’s legal counsel who will send the violator a last chance letter letting the owner know that if the violation is not immediately corrected, the association may have to sue the owner and resident violator. If litigation becomes necessary, the association will let the owner and violator know that it will be able recover its prevailing party attorneys’ fees from the owner and violator.

The owner and violator will not be able to claim estoppel (sitting on your hands when you know of a violation) in the five (5) year ongoing violation scenario because the Board had no knowledge of the long ongoing violation until just recently. Once, the Board knows of the violation however, it has to start enforcement in a reasonable time. Some cases say that you must actually bring a lawsuit within 6 months from knowledge of the violation or lose your right to do so.

It is also important in enforcing rule and regulation violations to take into consideration the defense concept of selective enforcement. This is when the board goes after one owner for a violation and the owner comes back and says there are many similar violations by other owners that the board has not gone after. Selective enforcement says that you must treat all know violators of the same violation equally. If you have knowledge of more than one violator, you must enforce all of violators in the same manner.

This selective enforcement defense only works when comparing apples to apples. If you are comparing apples to oranges (such as a paint color violation verses a pet violation), you cannot use the selective enforcement defense that: because you did not enforce the pet violation you cannot enforce the paint color violation.

If a particular rule on the books has not been enforced in a long time and past boards have allowed known violations to occur, if a new board wants to start enforcing the rule in the future, it needs to first send notice to all owners that violations of the rule will no longer be allowed and the association is going to start enforcing the rule. Under this scenario, old violations will probably be grandfathered in to remain but no new violations will be allowed.

Rule and regulation enforcement is one of the primary duties of officers, directors, management and the legal team of condominium and homeowners’ associations in order to maintain a harmonious, civil and aesthetic community that everyone can be proud to live in.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.