Help Is on the Way for Florida's Homeowner Associations
Article
Courtesy of the Florida Community Association Journal
By
Eric M. Glazer, Esq.
Published
July 2013
For
far too long, homeowner associations have been treated like the
red-headed stepchild of the Florida Legislature. Condominium
associations in Florida are governed by a superior and more detailed
statute. Furthermore, unit owners in condominiums get assistance from
the Department of Business and Professional Regulation (DBPR) through an
informative website with online forms, a hotline to
answer condominium law questions, investigators to
answer complaints, and document examiners to review developer filings,
declaratory statements, and more. It was time to at least try and level
the playing field. This past legislative session Cyber Citizens for
Justice
(www.ccfj,net)
made it their
priority to get much needed legislative help to
Florida homeowner associations and sought my firm's legal assistance and
the assistance of Richard Pinsky, a lobbyist with Akerman.
The first task was to find legislators who were
willing to come to the aid of the millions of homeowners in the state.
This is not the easiest of
tasks, considering the fact that last year the Florida
Legislature passed a law that removed developer warranties in homeowner
associations for
driveways, roads, sidewalks, utilities, and drainage.
Finding legislators willing to take on the developer lobby was even
harder. Luckily, Senator
Alan Hays, Representative Michael LaRosa, and
Representative Debbie Mayfield accepted the challenge and stepped up to
the plate to help.
There were several glaring examples of how unfairly
homeowners in an HOA were treated as compared to condominium owners, so
my focus on creating new legislation started with that.
For example, the condominium statute automatically
removes board members who are arrested for stealing association
funds. The HOA statute did not contain such a
provision. As a result, there have actually been cases of HOA presidents
being arrested for stealing money from the association and continuing
to serve as president of the HOA... from prison. That won't be the case
any longer.
In addition, the condominium statute required the
purchase of insurance or fidelity bonding for all persons who
handle association funds. The HOA statute did not, but
it HOA statute allowed managers to charge members hourly fees, with no
cap, for access to association records. There are horror stories of HOA
members being charged hundreds
of dollars for a few pages of records. Now, there will
be a $20 per hour cap, and the first haJf hour is free.
In addition, homeowners will now be able to use their
cell phone or camera to take pictures of the association's records free
of charge. The topic of education is near and dear to my heart. I have
taught a Board Certification course for condominium directors for the
past few years, now having certified approximately 5,000 Floridians all
around the state. It made no sense that HOA board members did not have
to get certified, inasmuch as their responsibilities as board members
are certainly equal to condominium directors. So starting July 1, HOA
board members will now have to be certified as well.
In a condominium association, if a director wants to
do business with the association, the contract must be disclosed,
two-thirds of the non-interested directors must vote in favor, and the
owners have a right to cancel the contract. HOA owners had no such
protection until now. And
believe it or not, only the condominium statute
contains a provision that prevents board members from receiving
kickbacks from vendors for awarding the vendor an association contract.
Now HOA owners get the same protection in their association.
Owners in a condominium get to control their own
destiny and get "turnover" from the developer to the unit owners far
quicker than HOA members do. There are stories out there of HOA
developers staying in control of communities for decades. HOA developers
now must turn over
control of the association if they file a Chapter 7
Bankruptcy petition, if a receiver is appointed, if they lose the
property to foreclosure, or if they abandon or desert the property.
Homeowners will also now be allowed one seat on the board when 50
percent of the units are sold. Let's just
say that the developer lobby wasn't particularly happy
with this new legislation.
My original proposed legislation would have allowed
members in a homeowners association to get much needed assistance from
the
Department of Business and Professional Regulation.
Some people believe that this is simply an expansion of government and
bureaucracy, and another example of overregulation by the government.
My opinion differs. Providing assistance to owners, as
mentioned above, is not overregulation. It is simply much needed
assistance to homeowners, a means of getting help from developer abuse,
and having simple questions answered and matters addressed, without the
need to hire an expensive attorney. At no point along the way did I ever
get the feeling that any legislator was against the DBPR providing help
and assistance to HOA owners.
The problem in getting the legislation passed was that
at present, the state of Florida simply has no idea who the homeowner
associations are, where they are located,
or how many homes in our state are actually situated
within an HOA. So, effective July 1, homeowner associations will
now be required to register with the DBPR and provide
their name, address, employer i.d. number, number of parcels, and amount
of their
budget. It will not cost the association anything to
register. If the community is managed by a licensed manager, that
manager has the duty of complying with the statute. The thinking this
year was to first find out who the associations are, and perhaps next
year lean toward getting these associations the help they need from the
DBPR.
I had the honor and privilege of appearing before
committees of the Florida House and Senate to promote this legislation
and personally met with senators, house members, and their staff in an
effort to get the legislation passed. As the bill picked up steam by
unanimously passing each sub-committee, additional excellent provisions
were suggested by others.
For example, associations will now be required to send
owners copies of amendments to the governing documents within 30 days
of the
amendment being recorded. In addition, in order to
thwart a recent decision of the 3rd OCA, an association will no longer
be financially
penalized should the association foreclose on a unit
and take title by having the unit ledger automatically go to zero. That
court decision,
unfortunately, resulted in associations not being paid
a dime in past due assessments by subsequent purchasers at a bank's
foreclosure sale.
Additionally, now in an HOA, the right of the
developer to amend the association's governing documents is subject to a
test of reasonableness, which prohibits the developer from unilaterally
making amendments to the governing documents that are arbitrary,
capricious, or in bad faith; destroy the general plan of development;
prejudice the rights of existing nondeveloper members to use and enjoy
the benefits of common
property; or materially shift economic burdens from
the developer to the existing non-developer members.
All of these amendments to the HOA Statute were
codified in House Bill 7119. The bill passed the House of
Representatives by a vote of 114 to
4. The bill passed the Florida Senate by a vote of 37
to 0.
Governor Scott signed the bill into law on June 14.
The effective date of all of these statutory amendments is July 1. All
in all, it was a pretty successful year for homeowner associations in
Florida, and for the first time in a long time, homeowner associations
certainly have the legislature's ear.
Of course, there is a lot of work still left undone, but after years of
no help and even going in reverse, this year was the jump start needed
to pass additional laws next year in the best interest of our Florida
community associations.
Eric M. Glazer, Esquire is with Glazer & Associates, P.A., with offices throughout Florida.
He is also the host of the
CondoCraze and HOA's radio show that airs each Sunday at noon on 850 WFTL.
For more, information, call (954) 983-1112 or visit
www.hoa-laws.com.
