Several ROCs have contacted me this summer about an increase in the number of residents that have not paid their monthly or quarterly rents or maintenance fees.   The effects of the economic crisis are now being felt in resident owned communities and there have even been several ROCs in Florida that have been forced to file for bankruptcy protection due in part to unpaid maintenance fees.

I often remind ROC board members that community associations are not banks.  ROCs that continually allow residents to pay rents, maintenance fees, or assessments after the due date function as a bank for those residents by giving those residents an interest free loan for the amount that’s due–and each day that that loan remains unpaid puts greater economic pressure on the ROC and the residents that do pay on time.  

ROC managers know that the longer rent or maintenance fees remain unpaid, the greater the chance that the association will have to resort to legal action to attempt to collect the unpaid amounts–which will be growing with each missed payment.

I’d like to offer a few suggestions to help ROCs deal with this dilemma:

  • Every ROC should have a policy for dealing with residents that fail to pay rents, maintenance fees or assessments on time.   Every resident should be made aware of the policy and board members should stress that the policy is necessary in order to allow the community to meet its financial obligations.
  • This is not the time to "play favorites".  Unless there are extraordinary circumstances, all residents that are delinquent in payment of rent or maintenance fees should receive the same treatment.    For example, if the association’s policy is to send a letter to any resident who is more than ten days late in making a payment, that letter should be sent to all residents that are ten days late, even those residents that have "always" paid in the past and "won’t be a problem".
  • ROCs should take immediate steps to put a resident on notice that he or she is delinquent in a payment.   Each of the statutes that provide remedies to ROCs when rents, maintenance fees, or assessments are not timely paid require certain written notices to be sent to the delinquent resident and the longer the association waits to send that first notice, the longer it will take for the ROC to be able to take the legal steps needed to help collect the unpaid amounts due.
  • It’s very important to find out as quickly as possible whether a lender has a secured interest in the home.   The ability of a community association to successfully recover amounts due and owing from a resident may be substantially impacted by the existence of a mortgage on or security interest in the lot, home or RV.   This determination should be made by the ROC manager or attorney prior to taking any legal action.  

Hopefully, we’ll soon see better news on the economic front.    In any event, ROC managers and board members should continue to take the appropriate steps needed to protect the financial welfare of their communities.

 

One of my blog readers recently emailed me and wanted to know whether Florida’s "Sunshine Law" applies to meetings between less than a quorum of the members of the board of directors of an ROC.

Many members of resident owned communities incorrectly believe that the meetings of their ROC board or ROC committees are governed by Florida’s "Sunshine Law," which can be found in Chapter 286 of the Florida Statutes.   It’s clear from the provisions of this chapter, and in particular Section 286.011, that Florida’s "Sunshine Law" only applies to meetings of boards or committees of state, county, or municipal agencies or other similar political subdivisions and not private enterprises.  In other words, only a very few ROCs (those that are agencies of state or local government–such as a community development district) are subject to Florida’s "Sunshine Law".

Thus, in most situations, I see nothing wrong with a ROC President or other board member meeting with other board members as long as less than a quorum of the board is present during that meeting, even if the purpose of that meeting is to determine how the board members at that meeting are going to vote on a matter coming before the board in the future.   An effective President or board chairperson should already have a pretty good idea of how his or her board is going to vote on important matters before the board meeting and it’s certainly logical that he or she contact the other board members in advance to find out how each member intends to vote and the reasons for that member’s vote.

As long as there is less than a quorum of board members in the room where the meeting is occurring, even if ROC business is being discussed, there is no violation of the applicable provisions of Florida Statutes Chapters 718, 719, or 720.  I do want to remind ROC managers and board members that an illegal meeting occurs when a quorum of the board finds itself on the same conference call, receiving an email sent to them simultaneously, or in a "chat room" or other internet "meeting" area if that meeting was not properly noticed and made open to all members and does not fall within the limited exceptions that allow "closed" meetings.   The State’s Department of Business and Professional Regulation will not take kindly to any such illegal meeting–even if it was held in "cyberspace".

I recently received an email from a board member of one of the resident owned communities we represent.   One of the members of this ROC had requested a list of all of the "summer addresses" of the residents in the community.   The board member wanted to know whether the ROC had to provide the member with those addresses and whether it was appropriate to mail that member a list containing those addresses.

  • Florida Statutes Section 718.111(12)(a)7, which applies to condominium associations, and Section 719.104(2)(a)5, which applies to cooperative associations, are identical and provide that  the association shall maintain "a current roster of all unit owners and their mailing addresses, unit identifications, voting certifications, and, if known, telephone numbers".   The statutes provide that this roster is part of the association’s "official records".    The applicable provision of Chapter 720 governing mandatory homeowners associations almost mirrors its Chapter 718 and 719 counterparts.   
  • Based on language of these statutes, and the "catch all" provisions in Sections 718.111, 719.104, and 720.303 (4), which include almost every other written record in the association’s possession that is in any way connected with the operation of the community, once a member gives the association his or her "summer. address,"  that address becomes part of the association’s official records and any other member can request to inspect and copy that address.
  • The association is not required to mail the roster to requesting member.  The association’s obligation in response to an appropriate record inspection request is simply to allow the member to inspect and copy those records.  However, I see no problem with the association mailing the roster to a member as long as any other member requesting the roster is notified of this option.  In other words, all members requesting the roster should be treated equally.   Obviously, if the roster is consistently kept current, the association can minimize time and inconvenience to its office staff by simply mailing the roster to the member and the member can be charged a reasonable cost for copying the list.

ROC members should understand that whatever addresses and telephone numbers they give to the association will have to be produced to another member that properly requests them.   ROC managers and board members should immediately contact the attorney representing their community upon receiving a request to inspect or copy records.

 

I’ve found a few more websites that ROCs, especially resident owned mobile home and RV communities, might want to visit.

  • A county by county directory of Florida ROC websites can be found at Michael Freeman’s website.  Please take a look at his site and if your community’s website is not on the list, email him with your ROC’s website address.
  • About 50 ROCs in the Pinellas County area have established a "ROC forum" and their website describes the forum and lists member communities.  This website also has  contact email addresses for some of the other regional ROC groups in Florida.   Some of those groups, such as Mid-Florida ROC (in the Lake and Sumter County area) and LEEROC (which has expanded from Lee County into other counties in Southwest Florida and has been renamed SWFLROC), are very active and you might want to contact one of those groups if your ROC is located in or near an area served by one of these groups.  

I’ll continue to post websites that may be of interest to ROCs and if you have any sites that might fall into this category, please send them to me.

I had an interesting discussion about bees with a ROC manager last month while visiting one of the communities we represent in Manatee County.   The manager had attended a presentation on the "Africanized Honey Bee" (also referred to as the "Killer Bee"), a much nastier and far more dangerous "cousin" of the European Honey Bees that have lived in Florida for many years.   Unfortunately, the Africanized Honey Bee has now infiltrated almost all of the east coast of Florida from Palm Beach County south.   The most heavily populated areas for these "killer bees" on Florida’s west coast are currently Hillsborough, Pinellas and Lee Counties with a smaller population being found in Sarasota and Manatee Counties.  It’s predicted that within the next five to ten years Africanized Honey Bees will have spread throughout the entire area of the state south of Interstate 4.

Here are just a few of the more sobering aspects of the invasion of these "killer bees":

  • European Honey Bees will send out a few bees that may only hit a person that approaches their hive as a warning if these bees feel threatened.   These bees may swarm and sting if they still feel threatened.   However, the Africanized Honey Bee may feel threatened if a person gets within 150 yards of their hive–and, while they may only send out a few bees to investigate, if they still feel threatened (and remember, this may be at a distance of more than a football field from the hive!), the person may find himself under attack by at least one-third of the hive–or a minimum of 1,000 bees.
  • Any general commotion (such as lawn mowers or edgers, radios, sirens, loud talking,  or children playing) may be viewed as a threat to the hive and once the "killer bees" begin their attack, unless and until the perceived "threat" gets at least 300 yards away from the hive, the attack will continue. If the victim dives into a pool or other body of water to escape the attack, the bees will simply wait for the victim to come up for air and start stinging again, even though a bee will die approximately sixty seconds after stinging its victim.
  • These bees can fly at a speed of approximately 12 miles per hour, which is faster than most children or seniors can run.   If a victim is able to take cover in a car, home, shed, or other shelter, the bees may, again, simply wait for the victim to leave that protected area to recommence the attack and the hive may not return to normal for approximately twenty-four hours after the "killer bees" first perceive the threat.

The community’s manager referred me to the University of Florida’s Africanized Honey Bee website and I’d suggest that ROC managers and board members visit this site as it contains additional important information.

An attack by what might very well have been a swarm of these "killer bees" was brought to my attention by the manager of a community in Lee County during my visit there earlier this month.   Check out the article from the Fort Myers News Press and in particular the victim’s unsuccessful attempt to escape the bees by diving into a body of water as well as an ingenious approach to solving the Africanized Honey Bee problem.

Apparently, these bees prefer to build their hives under mobile homes (obviously an unfortunate choice for many ROCs), temporary buildings, live and dead trees, logs, certain pieces of playground equipment, holes, bird houses, abandoned vehicles, eaves and soffit areas of homes and even in patio furniture.  Hives can reach five to ten gallons in size and potential victims obviously include lawn crews and landscapers, but these "killer bees" may view any person or pet coming too close to their hive as a threat.

If a hive of bees is discovered in your community, I’d suggest that the ROC manager or an authorized board member contact a pest control company trained to handle bee removal and let the experts (not the board or the manager or one of the community volunteers) get rid of the hive and the bees.   

ROC board members and residents won’t be happy with this answer, but I believe ROCs are violating Florida’s gambling laws when their members conduct "50/50" drawings at community events.  Here’s what leads me to this unpleasant conclusion–and, please remember, I’m only the messenger:

  • F.S. Section 849.08 states that anyone who "plays or engages in any game at cards, keno, faro or other game of chance, at any place, by any device whatever, for money or other thing of value, shall be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083".
  •  While a person may participate in certain "penny ante games" conducted under specific circumstances, "50-50" drawings are not included in the definition of a "penny ante game" in F.S. Section 849.085(2)(a).
  • The "50-50 drawing" appears to be a "drawing by chance" or "drawing," defined in F.S. Section 849.0935(1)(a) as "an enterprise in which, from the entries submitted by the public to the organization conducting the drawing, one or more entries are selected by chance to win a prize."  The only organizations that can conduct these drawings are those that are exempt from federal income taxation under certain categories of section 501(c) of the Internal Revenue Code.   I can’t see any ROC fitting within any of those categories (such as being a charitable or religious not-for-profit organization).
  • Even if a condominium, cooperative, or homeowners association somehow manages to qualify for 501(c) status, the ROC still has to comply with all the applicable provisions of chapter 496 of the Florida Statutes, which governs solicitation of funds–again, a difficult, if not impossible, task.
  • And, if by some miracle, the ROC has the appropriate 501(c) status and also manages to comply with the applicable provisions of chapter 496 of the Florida Statutes, the provisions of F.S. Section 849.0935(3) and (4)  include the additional requirement that any ticket used in connection with the drawing conspicuously discloses that no purchase or contribution is necessary to participate in the drawing (although the legislature has generously allowed organizations conducting these drawings to suggest a "minimum donation" in connection with the drawing).
  • Finally,  F.S. Section 849.11 provides that anyone who "sets up, promotes, or plays at any game of chance by lot or with dice, card, numbers, hazards or any other gambling device whatever for, or for the disposal of money" shall ( just as in F.S. 849.08) be guilty of a second degree misdemeanor.

We’ve all attended events where "50/50" drawings have occurred.  Many of us have purchased "50/50" tickets and a few of us may have even held one of the winning tickets.   No one is hurt, several lucky attendees walk away with a few extra dollars in their pockets, and the organization conducting the drawing makes a little money.   While it certainly seems improbable that any official of Florida’s law enforcement agencies would be concerned about any not-for-profit organization (church, charity, ROC or otherwise) conducting these "50/50" drawings, even if the "50/50" drawing technically violates the law, I found this article over a year ago while researching the issue for one of the ROCs we represent.  Apparently, at least in Pasco County, ROCs might want to think twice before conducting "50/50" drawings.

In any event, I’ll certainly understand if I’m not asked to draw the winning tickets at "50/50" drawings at the next ROC meeting I attend. 

 

 

I’ve received two calls this month about golf cart accidents in resident owned communities.             

The first call was from a resident who had been given my name at the office at one of the ROCs we represent.   This resident told me that he was attending a private function in the ROC’s clubhouse and drove his golf cart to that event.   He parked the cart by the clubhouse but left his keys in the cart–and, while he was in the clubhouse, another resident’s grandson started the cart and ran into another child.   According to the caller, he didn’t think the child’s injuries were severe, but was nonetheless concerned about his potential liability.   I advised him that, because our firm represented the ROC, I could only suggest that he find another attorney and contact his insurance carrier.  I then contacted the ROC’s manager to confirm that the event was not sponsored by the ROC and suggested that the ROC advise its insurance agent about the incident just to be safe.

The second call was from several officers of another ROC I’ve worked with for almost fifteen years.  The ROC’s President was clearly upset as he told me that one of the community’s residents had been killed and several others injured the day before in a golf cart accident.  This horrible incident occurred in the community and these officers wondered whether it made sense for the board to pass a rule requiring that all residents with golf carts provide the ROC office with proof of insurance covering their carts.  While I advised these officers that such a rule might create more problems than solutions for their community (for reasons I’ll explain in an entry within the next few weeks), I told them  to immediately contact the ROC’s insurance agent about the accident, even though the golf cart was not owned by the ROC nor driven by either a member of the ROC board or an employee of the ROC.

Golf carts function as "second cars" for many residents in ROCs and it’s common to see drivers of almost all ages seated behind the steering wheel of these vehicles.   We tend to forget that golf carts are not "toys" and that severe injury or death can result from golf cart accidents.   I found an  entry in another Florida law blog that focused on the increase in golf cart accidents over the past few years and I recommend it to ROC managers and board members.

What can ROC managers and board members do to minimize the chances of golf cart accidents in their communities?  

Here are a few suggestions:

  • Is your insurance agent able to speak about golf cart safety?  How about someone from your local law enforcement agency?   If so, invite them to speak at one of your community’s regular coffees or other well-attended social events.
  • If your community doesn’t already have rules prohibiting children driving golf carts, or at least requiring an adult to be in the cart with them when they are driving and prohibiting children under a certain age from driving carts, consider passing such a rule or revising your current rules if needed.   Note that Florida’s statute  governing the operation of golf carts provides that a person must be at least 14 years old to operate a golf cart on a "public road or street" and that local municipalities are permitted to pass laws governing the operation of golf carts that are more restrictive than the state’s requirements.
  • Rules can also be amended or added to encourage all golf cart owners to obtain and maintain golf cart insurance.
  • ROCs should also consider requiring golf cart owners to register their carts with the office, obey posted speed limits, and remove the keys from the cart when the cart is parked or otherwise not in use.
  • Finally, I’d suggest posting this entry and the other blog entry I mentioned above on the community bulletin board and keeping the entries there for the next few months so your "snowbirds" can read them when they return.

Any golf cart accident, particularly one that causes injury or death, is one too many.  Let’s all do our best to educate ROC members and guests that golf carts are not "toys" and must be operated properly and safely.

 

 

 

 

This will be a very short post but I wanted to highly recommend the July 2009 issue of the Florida Community Association Journal.  A substantial portion of this special issue is devoted to hurricane preparedness and the magazine is loaded with helpful hints and information (including many addresses for links to websites about weather, shelters, pets, road closings, county resources and safety).  It also includes a "Hurricane Preparedness Directory", which is a region by region list of potential service providers.

If at all possible, try to get a copy of this magazine and keep it around for future reference.  I don’t believe the full content of the issue is available at the FLAJ site yet, but interested ROC managers and board members might consider the site as a good starting point to order a copy. 

Now let’s all get back to crossing our fingers and hoping that we’ll have a boring, uneventful, and safe hurricane season!

 

Members of resident owned communities in Florida have the absolute right to attend meetings at which a quorum of the community association’s board of directors are present.   A "quorum" is defined as a majority of the members of the board of directors.  Florida Statutes Section 718.112(1)(c), which applies to condominium associations, and Section 719.106(1)(c) , which applies to cooperative associations, specifically state that meetings of board of directors "at which a quorum is present shall be open to all unit owners."  Florida Statute Section 720.303(2) , which applies to mandatory homeowners associations, contains similar provisions.  The only time that a condominium or cooperative association’s board of directors meeting need not be opened to the unit owners is when the meeting is between the board and the association’s attorney with respect to proposed or pending litigation, when the meeting is held for the purpose of seeking or rendering legal advice.  The homeowners association statute has a similar exception that refers to proposed or pending litigation where "the contents of the discussion would otherwise be governed by the attorney-client privilege".

While the intention of Florida’s lawmakers to keep board meetings open to the members of  community associations seems clear, ROC boards have, from time to time, felt the need to create their own "exceptions" to the statutory requirements.   Here are just a few examples of my favorite attempts to justify a ROC board of director’s failure or refusal to comply with the requirements of Florida law:

1.   The board is meeting in "executive session" and can thus close the proceedings even   though a quorum of the board is present.

2.   The board’s having a "workshop" or "agenda" meeting.  Even though there’s a quorum present, the board’s not voting on anything so the members don’t have the right to attend.

3.    This is not a meeting of the board of directors–rather, it’s a meeting of the "(insert appropriate committee name) committee"–even though a quorum of the board is present.

4.    The board’s discussing some very sensitive matters (such as personnel issues or a member’s failure to pay maintenance fees) and the meeting is closed to protect the privacy of the individual(s) being discussed.

5.    A quorum of the board just happens to show up on a regular basis at the same table at a nearby restaurant or wanders into the small conference room next to the community’s office every Monday morning.   Of course, no association business would ever be discussed at these "coincidental" gatherings…

As I continually advise my ROC clients, if it looks like a duck, walks like a duck and quacks like a duck…it’s a duck!   Regardless of what an ROC’s board wants to call it, if you get a quorum of the board in a room together (or on a conference call, or in an internet chat room, for that matter), you’ve got yourself a board meeting and unless the very specific exception for seeking or receiving legal advice in regards to pending or threatened litigation applies, the meeting must be properly noticed and all association members have the right to attend.

Of course, the rules of reason apply.  The presence of a quorum of board members at the pool, at a social event in the clubhouse, or our seasonal ROC seminars usually won’t constitute a "board meeting".   However, board members should be aware of the fact that the minute that it appears to even one association  member that a quorum of them are getting together (whether meeting in a corner of the clubhouse or by the pool even if during a purely "social" event), the board sets itself up for a claim that it is violating Florida law by having a ‘closed meeting".   Those of you that have heard me speak know that I firmly believe that (a) every ROC has at least one resident "gadfly" whose sole purpose in life seems to be making board members’ lives as miserable as possible and that (b) the minute an ROC’s residents have any reason to believe that its board of directors are meeting "behind closed doors" those residents will immediately assume that the directors are up to no good.

You don’t want to give the gadfly any ammunition and you want to keep your ROC happy and healthy…so keep the meetings open and let your ROC members see the hard work your ROC board does to make your community a great place to live.  

I read two articles in last Sunday’s edition of the Sarasota Herald-Tribune that should be of great interest to resident owned communities.

The first article focuses on the "false sense of security" that many Florida residents may have when the next hurricane approaches because they purchased "home protection products" even though the claims that these products make homes "hurricane resistant" or even "hurricane proof" may never have been tested or may in fact were found to be false.   It’s a lengthy report but well worth reading if for no other reason than to remind managers and ROC board members of the dangers involved in recommending products or service providers.   Remember, we live in a world where potential liability lurks just around the corner.   No ROC wants to be sued because it recommended a product or service to one of its residents and that resident was injured or suffered damage to his property because the product or service recommended by the ROC board member or manager didn’t perform as advertised.

The second article concerns the foreclosure crisis and reports that many lenders have now decided to delay taking title to properties that are in the process of being foreclosed.   There are a number of reasons for this, including those I’ve listed below:

  • Lenders are now being required by judges to produce more records and file more pleadings and this adds to the time involved in the legal proceedings
  • Lenders already have much more foreclosed real estate in their portfolios than they can sell at this time
  • Every lender knows that once that lender takes title to a property at the foreclosure sale, that lender becomes responsible for both assessments and fees for the parcel and the maintenance and upkeep of the property                                           
  • Lenders have no desire to pay any amounts for properties that are "non-performing" (that is, properties that are generating no income for the lender) and thus many of them have decided to leave these "non-performing" properties in "foreclosure limbo" rather than taking title to them.

This article simply confirms conversations I’ve had with representatives of several lenders within the past few weeks.

What this means for ROC’s is quite simply that whatever rights ROC’s have to collect unpaid assessments under Florida Statutes Sections 718.116(1)(b) (for condominiums), 719.108(1)     (for cooperatives) or 720.3085(2)(c) (for mandatory homeowners associations), those rights are triggered by the acquisition of title to the property–and if the lender chooses to delay the foreclosure proceedings, that "trigger date" will occur later (in some cases, much later) rather than sooner.  During this "limbo" period, ROC’s will be forced to deal with properties that may not be properly maintained and are not providing any income to the community’s coffers.  This is already creating substantial hardship for many communities thoughout the country. 

I certainly cannot tell you that relief is just around the corner from the many problems being created by the foreclosure crisis and the epidemic of untested, unproven, or defective "hurricane protection products" but I’ll do my best to keep you posted when I read about any further developments.