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The New Jersey Condo Blog

Hudson County Court Distinguishes Controversial Palisades Decision

12/12/2017 Martin Cabalar

On December 7, 2017, a Hudson County Superior Court Judge, in the matter of Grandview II at Riverwalk Port Imperial Condominium Association, Inc. v. K. Hovnanian at Port Imperial Urban Renewal III, LLC, et al, Docket No. HUD-L-2839-14 ("Grandview II"), denied summary judgment to an architect retained by the developer who argued that the statute of limitations barred the association's claims pursuant to the Supreme Court's controversial decision in the matter of The Palisades at Fort Lee Condominium Association, Inc., v. 100 Old Palisade, LLC (“Palisades”)[1] because the developer knew of the defects more than six-years prior to the lawsuit being filed. In denying summary judgment, the Court specifically held that Palisades (1) was factually distinguishable from a project such at Grandview II that was originally developed as a condominium with the intent to transition the operational control to an association in the future and (2) did not modify the long standing rule that claims by a condominium association against the developer, its design professionals and subcontractors do not accrue until transition. Citing Terrace Condominium Association, Inc. v. Midlantic National Bank, 268 N.J. Super. 488, 503 (Law Div. 1993). 

Becker & Poliakoff represents the plaintiff condominium association in Grandview II and argued in opposition to the motion for summary judgment, among other things, that Palisades was not only factually distinguishable, but that it did not long standing New Jersey case law holding that such claims do not accrue, at the earliest, until transition of control by the developer. Fortunately for common interest communities throughout New Jersey the Court agreed that "no claim could be brought by the association until the transition occurred. That is until at least seventy-five percent of the units were sold to require the transition from owner to association control." 

As recognized by the Court, the statute of limitations is a rule of equity and as such equitable considerations must control the Court. There is an inherent conflict of interest in the argument put forth by the architect in Grandview II that a cause of action for construction defects by a condominium association accrues when anyone in the chain of ownership, including the developer, first knows or reasonably should know of a defect, even if transition to unit owner control had not yet occurred. While such may be equitable in the unique circumstances presented by Palisades, where the building was constructed as an apartment complex and subsequently transitioned to a condominium, it is not realistic to suggest that a developer would initiate an action against itself, or its contractors and design professionals, prior to transitioning control to the unit owners in the normal condominium context. 

While we believe the decision by the Hudson County Superior Court is correct and well-reasoned, it certainly will not bring an end to design professionals and subcontractors attempting to dismiss a condominium association's construction defect claims as being barred by the applicable statute of limitations based on the decision in Palisades and the developer alleged knowledge of defects. The Palisades decision, while innately fact driven, is nonetheless a decision by the Supreme Court. Thus, defendants may still attempt to argue that Palisades is not distinguishable and as a decision of the Supreme Court is the applicable controlling law. While we believe that argument to be incorrect for the very reasons argued to and set forth by the Court in Grandview II, if your association is currently experiencing problems due to potential construction or design defects it is suggested that you seek the advice of counsel immediately to best protect your interests.


[1] The full opinion in Palisadescan be downloaded at: http://njlaw.rutgers.edu/collections/courts/supreme/a-101-15.opn.html

Q&A: Access to Financial Documents

11/01/2017 Martin Cabalar


BY: MARTIN C. CABALAR

Q: How often do HOAs need to provide financial reports that include a balance sheet, receipts for work contacted and bank statements to the contributing members?

A: It is not readily apparent from the question whether the reader is asking on behalf of a condominium association, or a homeowner’s association, as many use the term “HOA” interchangeably. Here, however, the answer is the same for both.

The New Jersey Condominium Act (“Condominium Act”) requires condominium associations to maintain accounting records, “in accordance with generally accepted accounting principles [GAAP], open to inspection at reasonable times by unit owners.” According to the Condominium Act, such records include “(i) a record of all receipts and expenditures and (ii) an account for each unit setting forth any shares of common expenses or other charges due, the due dates thereof, the present balance due, and any interest in common surplus.” Thus, all those records required to be kept in accordance with GAAP, should be made available for inspection by any member upon request. New Jersey case law has also found that the right of access set forth in the Condominium Act applies to other types of associations, such as cooperative and homeowners associations.

Importantly, the Condominium Act only requires that documents kept in accordance with GAAP be open to inspection upon reasonable notice. Thus, there is no requirement under the law to provide financial reports to members of an association, unless your governing documents specifically require that you do so. For example, many Bylaws require community associations to conduct an annual audit and distribute same to its members. If your Bylaws do not have such a requirement, then documents such as balance sheets, receipts for work and bank statements need only be open to inspection.


Finally, while the Condominium Act is silent as to whether owners have a right to make copies, and New Jersey case law has not resolved this precise issue, the New Jersey Department of Community Affairs takes the position that the right of inspection includes the right to copies of those documents. Thus, we recommend that you allow members to make copies of financial records that are required to be open to inspection. And, unless your Bylaws provide otherwise, the association may charge the cost for the copying. 

CondoMundoUSA

Votación Por Linea - Video

10/18/2016 Martica Miguez Platts



Si usted vive en una comunidad residencial que está dirigida u operada por una asociación, o si usted sirve en la junta directiva de la comunidad, quizás desee obtener la comodidad de votación por línea.   Nuestra firma de abogados acaba de lanzar un breve video de instrucción sobre nuestro producto por línea llamado BPBALLOT.   Dedíquele unos minutos a este video.
La votación por línea le permitirá a su comunidad aumentar la participación de su membrecía a la vez que reducirá la posibilidad de fraude electoral.  Estamos seguros que usted disfrutará y obtendrá beneficios del video.  Si tiene cualquier pregunta, por favor envíenos un correo electrónico a condomundousa@bplegal.como llámenos al 561-820-2870. 

Martica y Marilyn
Sus amigas de CondoMundoUSA






Estudio de Votación y Fraude en las Asociaciones / Community Association Voting and Fraud Survey

06/17/2016 Martica Miguez Platts
CondoMundoUSA les trae el Estudio de Votación y Fraude.  Este estudio tiene el propósito de identificar las preocupaciones relacionadas con el proceso de votación de los miembros de las asociaciones de comunidades.  Los resultados ayudarán a crear materiales educativos y ayudarán a encabezar cambios en las disposiciones legales que gobiernan el método de votación en las comunidades.

Solamente le tomará 5 minutos haga "click" en el idioma que prefiera. 

Español                       Inglés

Gracias, 

Martica y Marilyn


***************


CondoMundoUSA has created a survey intended to help identify concerns of community association members related to voting. The results will help create educational materials and help spearhead changes in statutory provisions governing voting in communities.

It should only take 5 minutes, please click on your preferred language.

Spanish                       English



Thank you, 


Martica & Marilyn

The Community Association Law Blog

In Defense of HOAs

12/04/2017 Donna DiMaggio Berger
HOAs certainly have their share of detractors.  Many HOAs operate a community of detached, single family homes which begs the question:  it's my house; it's my yard; other than the local building code, why should my HOA be able to restrict what I can do with them?  Does it really matter how I maintain my yard? Shouldn't the choice of exterior paint color be left up to me rather than the HOA board or an architectural control committee?  Shouldn't I be able to park whatever vehicle I want and park it wherever I want on my lot?  The answer to those questions depends on one's expectations and, unfortunately, sometimes people who prefer few or no restrictions find themselves living in communities with extensive rules and regulations.

While some people are quick to criticize HOAs and even call for the dismantling of their regulatory framework, there are significant benefits that a mandatory homeowners' association can provide.

In my hometown of Plantation, Florida, an ongoing controversy exists in terms of a holiday light display on a residential cul de sac which is not part of a mandatory community association. When I first visited the attraction, I marveled at the grand scale of the display: a large Ferris wheel in the middle of the lawn with adorable teddy bear passengers, an outdoor movie screen playing holiday classics, thousands upon thousands of lights and law decorations and masses of people milling around and gawking like me.  My second thought was "I really would not want to live on this street."

This nationally recognized holiday display takes place on an otherwise quiet cul de sac with fewer than a dozen homes and only one street that provides access to the residents and their guests and visitors.  The push and pull between the owners who host the display and their neighbors has, not surprisingly, played out in the media.  Several of the neighbors have been vociferous about the negative impact their neighbor's activity is having on them.  They claim that the lights, noise, garbage left on their lawns by visitors, weeks of set-up and removal of the display as well as the pedestrian and vehicular traffic over the span of many weeks all contribute to the diminution in their quiet enjoyment of their homes and their ability to celebrate the holidays on their terms.  They also fear that the display could hinder the ability of emergency vehicles to render assistance in their neighborhood while the display's visitors are clogging the streets.

There is little doubt that a holiday display on this scale would not be permitted in a mandatory homeowners' association and this is only one example of activity than an HOA could and arguably should regulate.  Every set of Association governing documents contains a clause that prohibits activity that interferes with the peaceful possession and enjoyment of the other homes in the community.   In this case, the governing documents could be amended to add specific guidelines regarding holiday displays and exterior alterations to a residence.  No HOA documents would permit any type of display which could be classified as a nuisance or which would bring a nightly influx of non-residents into he community.

A violation of the governing documents such as this holiday display would have resulted in fines and, if those fines exceeded $1,000, they could have become  lien on the property and possibly foreclosed.  Whether you believe that a massive holiday display in a residential area is a nuisance or a blessing, the tools available to a private residential community enforcing its private restrictions are undeniable and they can and should work to the benefit of other lot owners.

Detractors of mandatory HOAs may argue that the local city or county can regulate the use of residential property and enforce Code violations.  Well, that may be true in theory but in practice the local authority sets minimum standards, whereas your community may want higher standards of aesthetics.  Also, the local authority is often reluctant to become embroiled in these kinds of situations and, even when they do take action, they may not be as successful as an HOA would.  In the case at hand, the City of Plantation sued the display's owners and lost.  The City filed a nuisance lawsuit based on alleged traffic issues and the judge ruled against the City. Curiously, the nuisance impact on the neighbors was not addressed in that lawsuit.  In the end, this case illustrates how a private community could more effectively enforce private restrictions as opposed to relying on municipal Code enforcement.

What other advantages can an HOA provide?  Residents in an HOA benefit from the services and amenities that sharing expenses can provide, such as security services, recreational amenities like pools, exercise rooms, tennis courts and more. Lastly, highly functioning HOAs can foster a strong neighborhood connection.  In the case of the besieged cul de sac, that neighborly connection arose not because things were going well but because they were going very wrong.

Countdown to 7/1/18 and the New Website Requirements for FL Condominium Associations

10/30/2017 Donna DiMaggio Berger

By July 1, 2018, a Florida condominium association with 150 or more units which does not manage timeshare units must have an independent website or web portal wholly owned and operated by the association or a website or web portal operated by a third-party provider.

 

Creating an in-house website may prove to be too daunting for all but the biggest and most technologically sophisticated communities which means most Florida associations will contract with a third party provider for their website.

 

Many management companies provide their association clients with a webpage or website to facilitate owner payments and distribution of association information. These websites can be quite useful. However, under this new law, an association could be thrown into violation status if a change in management or a payment dispute with their management company results in their web portal being shut down, even for just a short period of time. Most management company agreements specify that the association webpage or website provided belongs to the Management company and NOT to the association. As such, your board may wish to establish its own independent website (even in addition to the one provided by your management company) to prevent any interruption in service and, thus, violation of the statute. Another alternative is to negotiate ownership of the association website in your agreement with your management company.

 

If your Florida condominium association consists of 150 or more units, you now must start evaluating your options for compliance. If you have a website provided by your management company, you must review your agreement to confirm whether or not that website is owned by your association or by the management company. What does your agreement provide in terms of transitioning your website content in the event you or the management company terminate your agreement? If your association currently has its own website independent of your management company, do you have a Content Management System (CMS) for that website or do you rely on a website designer to upload your content? If the answer is the latter, you must review that protocol with your webmaster as association documentation must be uploaded timely to your website in order to comply with the new law.

 

If your condominium association has 150 or more units and you do not have any website at this time, you have a lot of work to do in the coming months. The starting point is to organize your association documents into digital format for ease of uploading to your future website.

 

The association must post the following documents on its website:

 

a. The recorded declaration of condominium of each condominium operated by the association and each amendment to each declaration.

b. The recorded bylaws of the association and each amendment to the bylaws.

c. The articles of incorporation of the association, or other documents creating the association, and each amendment thereto. The copy posted pursuant to this sub-subparagraph must be a copy of the articles of incorporation filed with the Department of State.

d. The rules of the association.

e. Any management agreement, lease, or other contract to which the association is a party or under which the association or the unit owners have an obligation or responsibility. Summaries of bids for materials, equipment, or services must be maintained on the website for 1 year.

f. The annual budget required by s. 718.112(2)(f) and any proposed budget to be considered at the annual meeting.

g. The financial report required by subsection (13) and any proposed financial report to be considered at a meeting.

h. The certification of each director required by s. 718.112(2)(d)4.b.

i. All contracts or transactions between the association and any director, officer, corporation, firm, or association that is not an affiliated condominium association or any other entity in which an association director is also a director or officer and financially interested.

j. Any contract or document regarding a conflict of interest or possible conflict of interest as provided in ss. 468.436(2) and 718.3026(3).

k. The notice of any unit owner meeting and the agenda for the meeting, as required by s. 718.112(2)(d)3., no later than 14 days before the meeting. The notice must be posted in plain view on the front page of the website, or on a separate subpage of the website labeled “Notices” which is conspicuously visible and linked from the front page. The association must also post on its website any document to be considered and voted on by the owners during the meeting or any document listed on the agenda at least 7 days before the meeting at which the document or the information within the document will be considered.

l. Notice of any board meeting, the agenda, and any other document required for the meeting as required by s. 718.112(2)(c), which must be posted no later than the date required for notice pursuant to s. 718.112(2)(c).

 

The association must ensure that privileged information and privileged records are not posted on the association’s website. If protected information or information restricted from being accessible to unit owners is included in documents that are otherwise required to be posted on the association’s website, the association must be sure to redact the privileged content before posting the documents online.

 

The association’s website must be accessible through the Internet and must contain a password-protected section that is inaccessible to the general public and accessible only to unit owners and employees of the association. Upon a unit owner’s written request, the association must provide the unit owner with a username and password and access to the protected sections of the association’s website that contain any notices, records, or documents that must be electronically provided.

 

In a highly functioning community, a website is just another technological tool along with online voting and electronic transmission of meeting notices which can make a board’s job easier and the members’ experience more positive.

 

Biz Law Today

What Is “Product Hopping” and Why Should You Care?

08/04/2015 Becker & Poliakoff

ThinkstockPhotos-97429646This post was authored by Ann Marie Effingham, an intern for Becker & Poliakoff who is based out of the firm’s Red Bank, New Jersey office.

New Jersey is home to 14 of the world’s 20 largest pharmaceutical companies so when our sister circuit—the Second Circuit Court of Appeals—issued a decision of first impression regarding pharmaceutical patents, we should take notice. To summarize, the state of New York brought an antitrust action against Actavis PLC claiming the manufacturer’s introduction of the once-daily capsule that treats Alzheimer’s disease at the end of the manufacturer’s patent exclusivity period for the twice-daily tablets impeded competition in violation of the Sherman Act. The Southern District of New York granted a preliminary injunction barring Actavis PLC from restricting access to the twice-daily version until after generic competition entered the market, and the Second Circuit Court of Appeals affirmed the injunction.

The Second Circuit Court of Appeals explained that neither product withdrawal nor product improvement alone is anticompetitive. However, when product withdrawal is combined with some other conduct—the overall effect of which coerces consumers and impedes competition—a manufacturer’s actions are anticompetitive under the Sherman Act.

The Actavis PLC case is an example of “product hopping”—whereby a manufacturer introduces a “second-generation” formulation of a drug and removes the previous formula that is nearing the end of its patent lifecycle which then restarts the regulatory approval process for the generic manufacturer. In theory, a manufacturer could keep reformulating its patented product if it can show that continuous improvement in the drug is being made. However, under some circumstances this type of behavior is anti-competitive. Generic manufacturers enter the market at the end of the brand name’s patent lifecycle so when a brand name manufacturer engages in “product hopping” it keeps generic manufacturers from entering the market—which could ultimately lead to a monopolization.

So what does this mean for the biopharmaceutical and medical device industry? The timing and rationale behind product reformulation is key. When product redesign is done simply to coerce consumers and impede competition, it is anticompetitive under the Sherman Act. The Second Circuit Court of Appeals noted that Actavis PLC’s own CEO admitted that the Defendants were “trying to . . . put up barriers or obstacles” to generic competition. Conversely, a large market share that is gleaned from natural growth, development of a superior product while simultaneously giving consumers the option of choice between products, or exceptional business acumen are all justifiable explanations for why a manufacturer may control a significant portion of the market.

A second product hopping case has arisen in the Third Circuit Court of Appeals. There, the Federal Trade Commission (FTC) has filed an amicus brief strongly supporting antitrust causes of action against companies that product hop. Hopefully the Third Circuit can provide more insight as to how to evaluate product hopping cases.

Employers Beware: You May Be Liable to Whistleblowers Without the SEC Ever Getting Involved

07/28/2015 Becker & Poliakoff

ThinkstockPhotos-184747120 (1)This post was authored by Peter Wojcik, an intern for Becker & Poliakoff who is based out of the firm’s New York office.

On June 17, the Second Circuit U.S. Court of Appeals heard oral arguments in Berman v. Neo@Ogilvy, LLC, making it the latest court to venture into the arena of interpreting Dodd-Frank’s whistleblower provision. In Berman, U.S. District Judge Gregory H. Woods of the Southern District of New York held that, before a whistleblower may be protected under Dodd-Frank’s whistleblower anti-retaliation provision, he or she must report securities violations to the SEC. This stands in stark contrast to other district court decisions that have allowed individuals to sue if they only disclosed the violations to their employers.

In Berman, the plaintiff alleged that he was fired after complaining to his employer about seeing transactions that he believed to violate U.S. securities laws, including Sarbanes-Oxley and Dodd-Frank. Never having reported these violations to the SEC, the plaintiff sued his former employer, alleging violations of Dodd-Frank’s whistleblower provision. The provision essentially prohibits an employer from retaliating against a “whistleblower” who:

  • Provides information to the SEC concerning violations of securities laws;
  • Initiates, testifies in, or assists in any investigation or judicial or administrative action of the SEC; or
  • Makes disclosures that are required or protected under the Sarbanes-Oxley Act and any other law, rule, or regulation subject to the SEC’s jurisdiction.

However, the provision also defines a “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the Commission . . . .” The plaintiff in Berman argued that he was entitled to protection because, although subsections (i) and (ii) protect disclosures to the SEC, subsection (iii) includes disclosures to supervisors. Judge Woods remained unpersuaded. In dismissing the plaintiff’s claim, Judge Woods noted that the provision’s language was clear: In order to be a “whistleblower” under the Act, the individual must provide the information “to the Commission,” i.e., the SEC.

District courts that have allowed Dodd-Frank whistleblower protection for individuals who report violations to their employers have essentially followed the plaintiff’s reasoning. Despite the plain language definition of a “whistleblower” under the statue, they have held that subsection (iii) is a narrow exception to the definition and encompasses protection for individuals who report to supervisors.

The Second Circuit is expected to hand down its decision later this year. Although the Fifth Circuit is the only circuit to already decide the issue (holding that whistleblowers must report violations to the SEC in order to sue), district courts across the U.S. are in disagreement. Regardless of how the court in one’s jurisdiction rules, however, the law is still subject to change. If courts continue to disagree, it is likely that the Supreme Court will take up the issue in the future. Until the High Court decides the issue, employers must be aware of the fact that they may be subject to liability under Dodd-Frank’s whistleblower provision once their employees report violations internally.

Construction Law Authority

Review of Legislation continues – Part 5

08/02/2017 Joseph Adams

2017 Legislation Changes Financial Reporting Requirements

Today’s column is the final installment of our annual review of legislation affecting Florida community associations.

In prior columns, we reviewed Senate Bill 398 dealing with “estoppel certificates,” and House Bill 1237 which only applies to condominiums and contains changes to the statute including board member term limits, the use of debit cards, recalls, mandatory websites for certain associations, suspension of voting rights, year-end financial reporting, the imposition of criminal penalties pertaining to certain conduct involving condominium elections and finances, and changes to the “conflict of interest” provisions of the statutes. Both SB 398 and HB 1237 became effective July 1, 2017.

The final piece of legislation we will review is House Bill 6027, which applies to condominium, cooperative, and homeowners’ associations. This law also became effective July 1, 2017.

HB 6027 deletes the year-end financial reporting exemption for associations that operate fewer than 50 units or parcels. Under previous law, these associations were not required to prepare a year-end annual financial report based on revenues, but rather, could prepare a report of cash receipts and expenditures.

Now, all associations must prepare a financial report based on annual revenues, regardless of the number of units or parcels. As a reminder, the following thresholds are contained in the law:

  • An association with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements.
  • An association with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements.
  • An association with total annual revenues of $500,000 or more shall prepare audited financial statements.
  • An association with total annual revenues of less than $150,000 is only required to prepare a report of case receipts and expenditures.

Further, for condominium and cooperative associations, HB 6027 also deleted the limitation on the number of times an association can waive its financial reporting requirements. Previously, condominium and cooperative associations could not waive the statutorily required financial reports for more than three consecutive years. This provision has now been deleted, although there is a bit of a glitch in the statutes since HB 6027 removed the provision, while HB 1237, which also amended these sections, left them intact. It remains to be seen how the official version of the Florida Statutes, which is due to be released in the next couple of months, will address this conflict.

This concludes our review of legislation that was enacted this year. It is also worthwhile to note that one Bill affecting condominiums that the Legislature approved was vetoed by Governor Scott.  House Bill 653 contained a number of provisions that affected community associations, many of them similar to the provisions of HB 1237 concerning condominium associations, which we have previously discussed.

HB 653 also addressed the obligation of certain high-rise buildings to retrofit fire sprinklers and/or an “engineered life safety system.” HB 653 allowed high-rise condominium buildings to opt out of the obligation to retrofit an engineered life safety system (usually required when the building has opted out of a full sprinkler retrofit) upon approval of two-thirds of all voting interests. In vetoing HB 653, Governor Scott noted the recent deadly apartment building fire in London, England, and stated his view that life safety concerns outweigh the cost burden placed on some condominium associations.

The post Review of Legislation continues – Part 5 appeared first on Florida Condo & HOA Law Blog.

Community Association Legislative Guide, 2017

07/31/2017 Yeline Goin

CALL’s Florida Community Association Legislative Guide 2017 (“Guide”) is now available online.

The 2017 Legislative Session ended with several bills passing that will have a significant effect on community associations: HB 1237, Relating to Condominiums; SB 398, Relating to Estoppel Certificates, and HB 6027, Relating to Financial Reporting. In addition to these three bills, there were over 25 other bills filed which sought to amend the Condominium Act, the Cooperative Act, and/or the Homeowners’ Association Act. Most of the bills did not pass, but the many bills that were filed show that legislators are interested in community association legislation and how it impacts their constituents. There was, of course, one bill that did pass the House and Senate but was vetoed by Governor Scott – HB 653, which would have allowed older high rises to opt out of an engineered life safety system (ELSS). We address that issue in-depth in the Guide.

The 2017 Guide features the following:

  • An overview letter from me
  • A special report from Ellyn Setnor Bogdanoff, Esq., former State Senator who led our targeting lobbying effort to pass the ELSS legislation, addressing the Governor’s veto and outlining our thoughts about how to approach the 2018 Session
  • A summary of the community association bills that were signed into law
  • A summary of the community association bills that did not pass
  • A list of actions we recommend that you, as a community association board member, should take to comply with all of the new laws
  • A letter from Donna DiMaggio Berger, a shareholder with the firm and CALL’s Founding Executive Director
  • A list of upcoming CALL events and community association classes

The post Community Association Legislative Guide, 2017 appeared first on Florida Condo & HOA Law Blog.

Florida Condo & HOA Law Blog

Review of Legislation continues – Part 5

08/02/2017 Joseph Adams

2017 Legislation Changes Financial Reporting Requirements

Today’s column is the final installment of our annual review of legislation affecting Florida community associations.

In prior columns, we reviewed Senate Bill 398 dealing with “estoppel certificates,” and House Bill 1237 which only applies to condominiums and contains changes to the statute including board member term limits, the use of debit cards, recalls, mandatory websites for certain associations, suspension of voting rights, year-end financial reporting, the imposition of criminal penalties pertaining to certain conduct involving condominium elections and finances, and changes to the “conflict of interest” provisions of the statutes. Both SB 398 and HB 1237 became effective July 1, 2017.

The final piece of legislation we will review is House Bill 6027, which applies to condominium, cooperative, and homeowners’ associations. This law also became effective July 1, 2017.

HB 6027 deletes the year-end financial reporting exemption for associations that operate fewer than 50 units or parcels. Under previous law, these associations were not required to prepare a year-end annual financial report based on revenues, but rather, could prepare a report of cash receipts and expenditures.

Now, all associations must prepare a financial report based on annual revenues, regardless of the number of units or parcels. As a reminder, the following thresholds are contained in the law:

  • An association with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements.
  • An association with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements.
  • An association with total annual revenues of $500,000 or more shall prepare audited financial statements.
  • An association with total annual revenues of less than $150,000 is only required to prepare a report of case receipts and expenditures.

Further, for condominium and cooperative associations, HB 6027 also deleted the limitation on the number of times an association can waive its financial reporting requirements. Previously, condominium and cooperative associations could not waive the statutorily required financial reports for more than three consecutive years. This provision has now been deleted, although there is a bit of a glitch in the statutes since HB 6027 removed the provision, while HB 1237, which also amended these sections, left them intact. It remains to be seen how the official version of the Florida Statutes, which is due to be released in the next couple of months, will address this conflict.

This concludes our review of legislation that was enacted this year. It is also worthwhile to note that one Bill affecting condominiums that the Legislature approved was vetoed by Governor Scott.  House Bill 653 contained a number of provisions that affected community associations, many of them similar to the provisions of HB 1237 concerning condominium associations, which we have previously discussed.

HB 653 also addressed the obligation of certain high-rise buildings to retrofit fire sprinklers and/or an “engineered life safety system.” HB 653 allowed high-rise condominium buildings to opt out of the obligation to retrofit an engineered life safety system (usually required when the building has opted out of a full sprinkler retrofit) upon approval of two-thirds of all voting interests. In vetoing HB 653, Governor Scott noted the recent deadly apartment building fire in London, England, and stated his view that life safety concerns outweigh the cost burden placed on some condominium associations.

The post Review of Legislation continues – Part 5 appeared first on Florida Condo & HOA Law Blog.

Community Association Legislative Guide, 2017

07/31/2017 Yeline Goin

CALL’s Florida Community Association Legislative Guide 2017 (“Guide”) is now available online.

The 2017 Legislative Session ended with several bills passing that will have a significant effect on community associations: HB 1237, Relating to Condominiums; SB 398, Relating to Estoppel Certificates, and HB 6027, Relating to Financial Reporting. In addition to these three bills, there were over 25 other bills filed which sought to amend the Condominium Act, the Cooperative Act, and/or the Homeowners’ Association Act. Most of the bills did not pass, but the many bills that were filed show that legislators are interested in community association legislation and how it impacts their constituents. There was, of course, one bill that did pass the House and Senate but was vetoed by Governor Scott – HB 653, which would have allowed older high rises to opt out of an engineered life safety system (ELSS). We address that issue in-depth in the Guide.

The 2017 Guide features the following:

  • An overview letter from me
  • A special report from Ellyn Setnor Bogdanoff, Esq., former State Senator who led our targeting lobbying effort to pass the ELSS legislation, addressing the Governor’s veto and outlining our thoughts about how to approach the 2018 Session
  • A summary of the community association bills that were signed into law
  • A summary of the community association bills that did not pass
  • A list of actions we recommend that you, as a community association board member, should take to comply with all of the new laws
  • A letter from Donna DiMaggio Berger, a shareholder with the firm and CALL’s Founding Executive Director
  • A list of upcoming CALL events and community association classes

The post Community Association Legislative Guide, 2017 appeared first on Florida Condo & HOA Law Blog.