Newsletters

SUMMER 1999

WELCOME ABOARD

While the firm practices in several areas of the law, such as commercial litigation, bankruptcy and personal injury, the majority of the practice is devoted to representation of condominiums, homeowners and co-operative associations. The firm is proud to announce the following most recent clients to our growing list of association clientele: Almond Condo Assoc., Avila South, Golden Nugget Hotel/Condominium, Eden Point South, LeLaurier and Ten Tops. If we don't say it enough, we can assure you that we appreciate the business and the confidence placed in the firm.

55 AND OVER COMMUNITIES

In general, both Federal and Florida law prohibit condominiums from discriminating against persons based on their age. However, condominiums may be exempt from the law if they can demonstrate that they provide housing for persons 55 and over. To accomplish this objective at least one person in 80% of the units must be at least 55 and over, the condominium needs to amend its declaration to become a 55 and over community, and the association must maintain adequate surveys, updated at least every two years, which verify that at least one occupant is 55 or over. Unless these provisions are strictly complied with, the association cannot prohibit occupancy based upon age under any circumstances and can face severe penalties and liabilities for doing so.

A MISDIRECTED DIRECTOR

The firm was recently hired by a group of unit owners to sue a director who refused to resign as a member of the Board notwithstanding the fact that the unit owners had correctly recalled him. Even after winning in arbitration, the director refused to turn over the condo's records as ordered by the arbitrator. The firm, on behalf of the unit owners filed suit in county court, and the judge ordered the director to turn over the records to our office. Upon doing so, it was learned that this director had utilized $400.00 of association funds to install tiles in his own unit. The association then hired the firm to sue the director. We did, and obtained a judgment against the director for the $400.00 plus an additional $4,000.00 in punitive damages, plus court costs and attorney's fees.

HURRICANE SHUTTERS

Predictions are that this year's hurricane season will be a dangerous one. Florida law recognizes a unit owner's right to protect their unit against storm damage and requires each condominium board of directors to adopt hurricane shutter specifications, which include color, style and other factors deemed relevant by the Board, which shall comply with the applicable building code.

COLLECTING ASSESSMENTS

Many Associations are frustrated when a bank forecloses on a unit, becomes the new owner, and fails to pay the Association the outstanding condo maintenance that was due and owing by the previous unit owner. Florida Statute 718.116 protects the banks by requiring them to only pay the association the lesser of 6 months assessments or 1 percent of the original amount of the mortgage, or nothing at all if the mortgage was recorded prior to April 1st, 1992. However, remember that the bank is required to pay all assessments that come due while the bank remains the owner of the unit. Failure to do so entitles the Association to file a lien and ultimately a foreclosure action against the bank.

RESERVE FUNDS

Question: Can the Association commingle its reserve funds with its operating funds?

Answer: Yes, if combined for investment purposes. However, the funds must be accounted for separately, and the combined account balance may not, at any time, be less than the amount identified as reserve funds in the combined account.

DIRECTOR & OFFICER COMPENSATION

Question: Is it absolutely forbidden for either officers or directors of the Condominium to receive compensation for their services?

Answer: NO Florida Statute 718.112 provides that: unless otherwise provided in the bylaws, the officers and directors shall serve without compensation.

Hint: Never waive maintenance payments for an officer or director even if compensation is allowed in the by-laws. Florida Statute 718.116 mandates that no unit owner may be excused from the payment of his share of the common expense of a condominium unless all unit owners are likewise proportionately excused from payment.

CONDO QUIZ COLUMN

At Picture Perfect Condominium Association, unit owner Pearl Pest wants access to the following records: a) a list of all unit owner names and addresses; b) minutes of all Board meetings for the past two years; and c) correspondence between the association and the association's attorney regarding the association's pending lawsuit against Pearl Pest for having a pesky pussycat in violation of condominium provisions precluding pets from the premises. Peter Principle, the President of Picture Perfect hates Pearl Pest and her pesky pussy cat and refuses to allow Pearl Pest access to any of these records.

Is Peter Principle acting proper?

ANSWER: YES AND NO

Florida Statute 718.111 would require the Board to maintain and allow Pearl to inspect the unit owner roster and the minutes of the Board meetings. However, this same statute specifically indicates that a record which was prepared by an association attorney or prepared at the attorney's express direction, which reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association, and which was prepared exclusively for civil litigation, until the conclusion of the litigation shall not be accessible to unit owners. Therefore Pearl is not entitled to inspect the correspondence between the board and their attorney regarding Pearl's pending suit.