Cyber Citizens For Justice Weblog

A Bill before the Florida Legislature (HB1365) would grant extremely broad powers to condominium boards following damage to the condominium property caused by a significant event, such as a hurricane.

The powers granted are so broad as to:

• Permit a single director to appoint and grant director authority to anyone (not even necessarily an owner) for the purpose of assisting with recovery.
• Practically waive all requirements for posting notice of board and membership meetings.
• Borrow money secured by association assets without owner approval.

The motivation for this Bill is laudible. Associations clearly need to continue functioning following a disaster, when some or many of its owners and directors have truly become unavailable. But such broad powers can be abused - and Florida condominiums do have a history of abuse by overly zealous directors. And where is it defined what the definition of “unavailable” is? A minority of directors (or even one director) could easily decide that the majority of the board was “unavailable” following a disaster, coopt their own cronies onto the board, post notice of meetings in obscure places, then borrow money or make special assessments to fund their pet projects without any oversight at all.

Instead of granting such such broad powers, the bill should have require associations to provide for alternate directors, alternate posting locations, and alternate procedures before a disaster. Such alternatives would then be subject to the oversight of legitimate boards and the owners, and be approved by proper majorities.  The same bill also should rigorously define “unavailable” and restrict post-disaster decisions by a partial board or alternative directors to emergency safety, health and welfare measures.    

As currently proposed, HB1365 is seriously defective. Please contact your Florida State Senator & Representative (find their names here) and ask them to vote NO to HB1365.

Last year, then Florida Governor Job Bush, vetoed SB1556/HB0543 because it “changes the default provision of requiring the consent of all unit holders for termination in existing law and permits voluntary termination in virtually any circumstance, thereby diminishing security in ownership of private property”.

The developer’s lobby is back this year with the same bills - now SB0314 and HB0407. The bill’s chief Senate sponsor last year, Stephen Geller of Hallandale, defended the bill stating that “there have been too many cases of condominiums where the condo association has determined that needed repairs were so extreme or costly that they would exceed the condos’ value”.

Why, then, does the bill also allow for 80% optional termination - where there is no prerequisite for “disrepair” or “obsolescence”?

This optional termination allows 80% of the owners to sell the entire condominium property for no reason at all - other than a developer is offering them money, a “good deal”. So what’s wrong with that? If it’s a good deal for 80% of the owners, then isn’t it also a good deal for the other 20%? Not necessarily. In many cases, the condominium’s Declaration will require that the proceeds of sale be distributed equally - but the fair market values of the respective units may be very different. So a unit owner on the ground floor far away from the water would be very tempted by a distribution that amounts to twice their unit’s value. But that same distribution could amount to less than fair market value for a unit on the top floor of a high rise overlooking the bay. So 80% termination could well leave 20% of the owners disenfranchised and out of pocket!

There’s nothing wrong with termination because of “economic waste”. Nobody wants to prolong the life of a condominium which has fallen into disrepair, is an eyesore, and whose owners have abandoned it.

But the provision in SB0314 and HB0407 for optional termination shows these bills for what they are. A blatant attempt by greedy developers to make money at your expense!

Please contact your Florida State Senator & Representative (find their names here) and urge them to vote NO on in SB0314 and HB0407.

Two bills (HB1373 & SB2816) currently before the Florida Legislature will, if passed, appear to bring some long overdue protections to individual condominium owners in Florida.

But we can be sure that the powerful legal and service provider lobbies will work hard to oppose the bills, or dilute their effectiveness - if only because they will change the status quo by shifting some power back to the individual condominium owners.

So, if the bills are to survive intact, you will need to contact your Florida State Senator & Representative NOW (find their names here) and urge their support of HB1373 and SB2816.

The major changes to the Condominium Statute (FS 718) proposed are summarized below:

• 718.111 Requires advance notice of non-emergency access to condominium units, requires association records to be available for inspection by owners within 30 miles of the condominium , further protects personal information of owners and renters. defines how and when a condominium should be reconstructed or terminated after a casualty, and how costs not covered by insurance are to be shared amongst owners.
• 718.112 Removes the limit on the number of unit owner queries which an Association must respond to, prohibits actions and resolutions without open board meetings, enables 20% of owners to require an agenda item at board and owner meetings, requires that ballot boxes be kept locked until an election meeting, limits the amount a board can borrow except in an emergency, and requires more immediate action following a recall.
• 718.113 Requires professional inspection of the condominium building every 5 years, and prohibits association rules which limit religious freedoms, or which conflict with statutes or condominium documents.
• 718.1123: Provides protections from abuse against owners by the Association or its agents.
• 718.1224: Prohibits Strategic Lawsuits Against Public Participation (SLAPP suits).
• 718.3025: Prohibits contracts between associations and service providers which contain automatic renewal clauses, or whose term exceeds 3 years - and requires association attorney approval of certain high value contracts.
• 718.303: Requires that hearings for rules violations be held by a committee of non-directors, and more stringent notification requirements for rules violations.
• 718.501: Provides for mandatory remedial education of associations which have been found in violation of the statutes, and for owner notification of such violations.
• 718.5011: More clearly defines the role of the Ombudsman.

On 20 Apr 2006, the Lake Place Condominium Association was served with 26 recall ballots signed by owners unhappy with three of their directors.

Since their Board of Directors ignored this recall, these owners filed a Petition for Arbitration on 28 Apr with the Department of Business & Professional Regulation (DBPR).

Not until 9 Oct 2006, some 163 days later, did DBPR respond - finding that the recall was, indeed, valid.

During that time, these owners had to live with the decisions of the same three directors who had legitimately been recalled - and who were spending significant amounts of the owners’ money on an attorney who was acting in their interests - not the interests of the owners.  This disgraceful performance raises two major questions and a host of follow-up questions.  The two major questions are:

• Why did it take DBPR 163 days to reach a decision?
• Why should owners have to pay the legal costs of these ousted directors?

Obviously we don’t know why the DBPR took so long to reach a decision but since justice delay is justice denied there’s good reason to speculate about some possible answers.

 Is the DBPR so overwhelmed by similar complaints that it’s impossible to act promptly?

Is the DBPR so mismanaged that it can’t do a vital assigned task?

Is the DBPR management inept at establishing and following sensible priorities?

Is the DBPR too understaffed or inept to complete its assigned tasks in a reason time?

Are political considerations or pressure hobbling the DBPR? 

Has the management of the DBPR brought this situation to the attention of the governor, the legislature and the press? 

If not, why not? If the DBPR’s senior staff doesn’t care about owners’ rights and doing its assigned tasks proficiently and promptly, why are we wasting money funding it?

Perhaps it’s time for owners to lobby the legislature to eliminate decorative but unproductive bureaucracies.  Do nothing cronies, hacks and stoogies are unaffordable luxuries.  It’s cheaper to ignore owner’s rights by not having a bureaucracy.  Then the governor and the legislature could honestly say that we don’t have the right people to handle that issue.  The latter approach would at least keep taxes down.

As for the second major question, why should owners pay …   That the law, stupid; or to put in more technically and politically correct terms, that’s the stupid state law.  Fortunately, you can do something about stupid laws.  Get involved.  Lobby to get them repealed or revised. Ask for a hunting license to literally shoot  bureaucrats suspected of bungling, starting at the top.  If forces to compromise, settle for being allowed to shoot down budgets for bungling bureaucracies, starting with the DBPR. 

While you’re at it, run for your board.  When you win, revise your community’s governing documents.  Two important revisions to consider are :

1) set qualification standard for board candidates to prevent bozos from being elected, and

2) limit the board’s powers to botch things so badly as to trigger a recall.

 An ounce of prevent is worth more than a pound of cure.

I

Condominium and Homeowners Associations are required by Florida statute to give notice to owners of board meetings, and permit owners to attend such meetings.
But what defines a Board “meeting”? What if the directors exploit the convenience of E-mail to conduct their detailed discussions, and then gather infrequently for board meetings to rubber stamp decisions which have been reached in secret via E-mail? How would owners then be able to observe their board at work on their behalf?

Homeowners without access to a computer or who aren’t computer literate could neither “observe” nor participate in board meetings conducted via electronic media.  It would be disciminatory to hold such meetings until computer ownership and literacy were far more common.  However, we’re rapidly approaching that point so it would be responsible to address the issue before it becomes another acute problem

Florida statutes for condos and HOAs are mute on this topic. They do explicitly permit directors to attend board meetings by telephone - but that is the extent to which they address modern technology.

The Florida Sunshine law, which applies to most public boards of administration, but which does not apply to condos and HOAs, is more specific in that it does address written correspondence between board members, including E-mail. Under that law, such correspondence is permitted between board members if it is limited to providing information about a subject to be discussed at an open meeting, and provided that there is no response from, or any interaction between, board members related to it (see chapter 01-20 of the “Government-in-the-sunshine” manual)).

But why should condos and HOAs not be subject to the Sunshine law? Their boards are taxation authorities in the same way that municipal and school boards are. Perhaps the difference is that, while it is impossible to own a home in the state of Florida which is not subject to municipal and school tax, it is still possible to own a home which is not part of a condo or HOA. However, it is increasingly difficult to do so, as municipalities have encouraged developers to create HOAs in recent years - as a way of unloading the responsibility for road maintenance and other services.

The Florida Sunshine law should be applied to the boards of administration of all deed-restricted communities like condos and HOAs, and the Sunshine law should be reviewed within the context of all modern forms of communication, including e-mail, instant messaging, and web logs.

In May, 2006, two owners of condominiums at Lido Towers in Sarasota filed a complaint with the Department of Business & Professional Regulation (DBPR) citing violation of Florida Statute 718.112(2)(c), which guarantees (condominium) owners the right to speak to agenda items at board meetings.

The complaint arose out of a letter sent to all owners by the association president describing a new “protocol” for board meetings which required owners to submit any statement they wished to make at board meetings in writing prior to the meeting - or be forced to wait until the end of the meeting to speak, after all board agenda items have been decided. This would effectively deny owners the right to speak to agenda items at the time of their discussion.

In their response to the complaint, DBPR affirrmed the right of owners to speak - but took the position that a violation does not occur until an owner is actually prevented from speaking - and closed the complaint without any communication with, or counseling of, the association president.

Evidently DBPR does not consider it a violation to mislead or intimidate owners regarding their rights. Instead, some persistent owner must be victimized and actually denied the right to speak before DBPR will intervene.

In April, 2005, the Florida Office of Program Policy Analysis and Government Accountability (OPPAGA) published a report citing several actions which DBPR should take “to improve the effectiveness of its services”. Those actions included:

• Strengthen enforcement action
• Increase use of mediation

A year later, neither of those actions was taken in the case described above.

Based on its long record of inaction and ineffective action, the DBPR is misnamed.   It would be far more accurate to call it the Department of Blather, Procrastination and Real Uselessness.  That might be unfair in the Alice-in-Wonderland world of politics where things are deliberately mislabeled to obscure their purpose.  But we who live in the real world perfer to know what our money, especially our tax dollars, buys. 

With elections coming up and the economy slowing down, it’s time to make sure your money is well spent.  The next governor should eliminate funding for the DBPR.  Consider voting for the candidate that promises to do so.  Afterall, the DBPR’s record shows that its actual “function” is to obstruct or prevent implementation of effective protection for millions of Florida voters.  Why pay for something we don’t want?  Why pay for what we already get for free from CAI and its local supporters?

Actually, it’s a shame that we homeowners have to ask for a “Homeowners’ Bill of Rights” in “The Land of the Free” – the United States of America. Even our Supreme Court recognized (quote):

“Special respect for individual liberty in the home has long been part of our culture and our law.”

But it seems that quite a few of our citizens (and especially “special interests”) have forgotten that this country was founded upon the principles of FREEDOM, as established in the United States Constitution. Otherwise, I can’t find a reasonable explanation that New Jersey’s Supreme Court will hear a lawsuit to decide whether or not homeowners living in an association have lost their constitutional rights, when they signed a contract and agreed to become members of a homeowners’ association. That’s what the Community Associations Institute (CAI) – the trade organization for lawyers and managers — claims in their Amicus Brief! When I first read that an attorney had stated that we owners signed our constitutional rights away at the gate, I wasn’t sure if he was joking or not. But it seems these attorneys – out for profit at the expense of the homeowners – are really serious!

Numerous complaints from AARP members – meaning mostly homeowners over age 50 – finally caused this large organization to get involved by publishing:

The BILL of RIGHTS for HOMEOWNERS in ASSOCIATIONS

(Subtitled: Basic Principles of Consumer Protection)

which can be read here.

David Kahne, the bill’s author, spoke on September 9 on the talk show “On The Commons”. Kahne is a well-known attorney from Houston, Texas who fights for homeowners’ rights and against frivolous foreclosures in associations. He explained the reason for writing this bill and what this bill will achieve, if enacted by the state legislatures. He emphasized just how important for homeowners this bill and its ten main sections will be when it is enacted.

These are the main RIGHTS this model statute is asking for:

• The Right to Security against Foreclosure
• The Right to Resolve Disputes without Litigation
• The Right to Fairness in Litigation
• The Right to Be Told of All Rules and Charges
• The Right to Stability in Rules and Charges
• The Right to Individual Autonomy
• The Right to Oversight of Associations and Directors
• The Right to Vote and Run for Office
• The Right to Reasonable Associations and Directors
• The Right to an Ombudsperson for Homeowners

I don’t think so, but obviously some specialized attorneys, managers and a few board members think so! Maybe they would be better off living in Cuba – or some other dictatorship?

In the article “Will AARP Bill of Rights Help FL Condo & HOAs?” it was predicted that “our Florida legislators will congratulate themselves with having the forsight to adopt these laws - and take no further action”.

Well, Condo lawyer Gary Poliakoff did it for them! In his letter to the Sun-Sentinal of Sep 2, 2006, Poliakoff says “Floridians may be pleased to learn that eight provisions… are already incorporated into the Condominium Act”.

Incorporated, yes. Enforced, NO! And Ambiguous to boot!

But Poliakoff’s law firm specializes in representing one side, the Board’s not the members, in disputes arising of this ambiguous and unenforced legislation. So they have a clear financial interest in maintaining the status quo. If the laws were enforced or unambiguous, then homeowners and associations would spend less money with law firms like Poliakoff’s.

In his letter to the Sun-Sentinel, Poliakoff is really congratulating himself on maintaining such a lucrative money machine. 

And the Florida HOA or Condo owners are screwed again!

Mr. Poliakoff and his colleagues have a duty to protect their client’s interests but there are or should be limits on how they go about doing so.  They certainly should not make or repeat deceptive statements. 

Experience shows that running a deed restricted community raises many important and increasingly widespread problems.  Denying this is deceptive

Experience shows that the guidance given to board running deed restricted communities is inconsistent and often contrary to the rights of the majority of the members.  Denying this is deceptive.

Experience shows that it is possible and practical to limit the powers of governing boards to what’s needed to operate a deed restricted community.  Denying this is deceptive.

Experience shows that attorneys for the boards of deed restricted communities and  management firms servicing such communities have a duty to protect the interests of their client boards of directors.  Unfortunately, that often puts those attorneys and/or service organizations into conflict with the best long-term interests of the members.  Denying this is deceptive.

Mr. Poliakoff certainly is entitled to speak and he has much wisdom to share.  But he should be careful to make it clear that his view is neither the only view nor an entirely unbiased one and so should be taken with a grain of salt.

Mr. Poliakoff and his colleagues have had years to improve the lot of homeowners in deed restricted communities in Florida.  Why haven’t they done so?  Despite claims to the contrary, the task is not impossible.  AARP developed a sound “Bill of Rights” for all homeowners in deed restricted communities in just a few years.  Why couldn’t Mr. Poliakoff and his colleagues have done so from the outset?  Despite claims to the contrary, Mr. Poliakoff and his colleagues had decades which certainly should have been more enough time.  Despite some protesters’ assertions, they are not incompetent and, if they were, then who is competent?