Archive for September, 2006

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
Is this too much to ask for, as we live in the “Land of the Free”?

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?

Obviously Mr. Poliakoff and his colleagues were not and are not serious and conscientious about addressing the problems facing more and more homeowners in deed restriced communities.  Otherwise, other attorneys would not specialize in opposing them and their client Boards to protect the rights of homeowners. 

The current messy state of affairs is a needless tragedy.  The mess was foreseeable and preventable.  It can be cured.  Four basic steps are needed.

First, put lawyers to work drawing up equitable governing documents and require their adoption.  Minor adaptations will be needed for each type of deed restricted community but the basic points are well known.  The two key points are to limit the Board’s power to be whimsical and to make changes difficult.

Second, create and adequately fund an ombudsman’s office with oversight authority and enforcement power and make it independent and apolitical.   

Third, impose eligibility requirements on directors of deed restricted communities.  Directors should be suitably educated in the relevant laws and their community’s governing documents, parliamentary procedure, and their fiduciary duties to the long-term best interests of the majority of the members of the community. 

 Fourth, make directors personally liable for any improper actions on their part arising from ineptness, ignorance of the rules or an unwillingness to obey and enforce the governing rules equitably and in good faith .  Unfortunately, some people are inept, ignorant of the governing rules or disinclined to obey and enforce those rules fairly and in good faith. They’re entitled to be that way. But, they aren’t entitled to exercise those traits at the expense of other members of a deed restricted community by serving on the board.  If such people are directors, they should not be allowed to escape personal responsibility for their improper acts through the coverage of Director’s and Officer’s insurance.