Hurricanes may reshape condo laws

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Hurricanes may reshape condo laws
Originally posted on January 05, 2006

In 2004, the Florida Legislature created the Advisory Council on Condominiums. The council was empaneled to listen to concerns expressed by affected parties, primarily condominium unit owners and board members, and to make recommendations for improvement in the existing system.

The council organized on Jan. 6, 2005, and conducted eight public meetings in 2005. Three meetings were held in Tallahassee, one in Fort Myers, one in Miami, one in Dania Beach (Fort Lauderdale area) and one in Panama City (Florida Panhandle).

Approximately 200 members of the public appeared before the council to express concerns, make comments, and suggest improvements in the existing legal framework for resolving disputes between associations and condo dwellers.

The council issued its report in December of 2005, summarizing the public testimony which was given and making 11 specific recommendations. The council's report can be found at http://www.myflorida.com/dbpr/lcs/condominiums/advisory_council.

Here's the first six of the 2005 recommendations from the Florida Advisory Council on Condominiums:

. Emergency Board Powers: The council found that the current provisions of the condominium statute are inadequate to guide board members and unit owners after a catastrophic event, such as a hurricane. The council has specifically recommended that the law permit the use of statutory reserve funds for post-catastrophe purposes, if such use is authorized in the bylaws.

. Duties Of Directors: The council concluded that the current generic standard of "fiduciary duty" found in the Florida Condominium Act provides insufficient guidance to board members as to what is expected of them. The council has recommended adopting specific standards for condominium association directors in discharging their fiduciary duty.

. Reserves: The council concluded that further detailed study of condominium reserve funding is in order. The council heard many stories of associations which seriously underfunded their reserves (or never funded them at all), occasionally resulting in staggering special assessments. In a couple of cases, some people were driven from their homes, since they could not afford to pay a six-figure special assessment.

. Education Programs: The council recommended that the Division of Florida Land Sales, Condominiums and Mobile Homes broaden the menu of educational programs and resources available to condominium board members and unit owners.

. Complaints Against Associations: At least one member of the public asserted that when he filed a complaint against his association, the board "buried" the matter, and that the other owners were not aware of the association's alleged wrongdoing. The council recommended that when an association receives an official communication from the state's enforcement agency, that such communications be officially noted in the minutes of a board meeting.

. Theft Against Associations: Although the council did not hear one first-hand account of an association which had been victimized by theft, there appears to be a gray area between what violations of the condominium laws may constitute criminal activity, and what violations constitutes mere civil violations. Theft of association funds and kickbacks are clear examples of criminal violations. Election misdeeds and Sunshine Law violations are clearly not criminal, but civil violations. Gray areas include undisclosed conflicts of interest, self-dealing, and secret contracts between associations and board members (or their families). The council recommended that pilot programs be considered which would assist the various state attorneys (Florida's prosecutors) around the state in understanding some of the unique aspects of condominium governance, so that violations of criminal law occurring in the condominium setting can be appropriately prosecuted.

Next week, we will conclude with the remaining five recommendations of the advisory council, which have been forwarded for consideration by the governor and the Florida Legislature.

FREE COURSE ON CONDO ASSOCIATION OPERATIONS

A free course on the regulation of residential condominium and cooperative associations in Florida will be held on Wednesday from 9 a.m. to 1 p.m. at the Seven Lakes Condominium Association, 1965 Seven Lakes Blvd., Fort Myers. The course will be taught by Community Associations Institute (CAI), a contracted educational provider for the State of Florida's Department of Professional and Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes.

The course focuses on how federal and state statutes and regulations impact associations. Participants will review guiding documents such as Florida statutes and legislation including the Condominium Act and Cooperative Act, the Fire Safety Act, and the Florida Administrative Code. The course will also touch on federal laws such as the Fair Housing Amendments Act of 1988, the Housing for Older Persons Act of 1995, the Telecommunications Act of 1996 and the Fair Debt Collection Practices Act. Please note that this course does not count for manager CEUs for community association managers.

Registration is not required, but space is limited. To reserve a space, call Laura Hagan at (727) 525-0962 or e-mail FLeducation@caionline.org. Course seating may be limited to one owner occupant per condominium unit based on space availability.

- Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. This column is not a substitute for consultation with legal counsel. Past editions of this column may be viewed at www.becker-poliakoff.com.