HOA

Announcing Our Expansion to Florida’s Space Coast – New Location Opening Soon!

Law Offices of Stage & Associates, P.A. in Viera, Florida

Viera, Florida Office Location

The Law Offices of Stage & Associates, P.A. is proud to announce the future opening of our satellite office in Brevard County, Florida in February of 2015.

Our firm has had the pleasure of representing clients and associations alike through-out the state of Florida. While centrally located in Orlando, Orange County, Florida, the Law Offices of Stage & Associates, P.A. has equally worked across the state in all of Central Florida, including Pasco County, Marion County, Volusia County, Polk County, Lake County, Hillsborough County, and many more. With the expansion of our firm to the Space Coast, we are looking forward to representing homeowners and associations alike in the cities that span along Florida’s east coast.

Tentatively opening on February 15th, 2015, our new location will be centrally located in Viera, Florida to expand our services conveniently to the residents of Viera, Suntree, Rockledge, and Melbourne, as well as all residents ranging from Titusville to Palm Bay and in-between. Our attorneys will be able to meet with clients at this satellite office on an as-needed basis and will be staffed full-time with a paralegal and notary for our client’s needs. Our new location is also conveniently located within miles of the Moore Justice Center as an added benefit.

We look forward to working within the various communities that make up our Space Coast. Please check back soon for all further information.

Revitalization Q & A

Revitalization Question

Today I answered a question on avvo.com regarding the revitalization process and I think it is important to post the question and my response in this blog for those who do not or have not visited the Avvo website.Question:

Our HOA’s CC&R’s have expired and an attempt is being made to revitalize the Declaration. In the interim, I am told we are a voluntary association and a not-for-profit corporation governed under FS617.
Can the previous Board simply “take over” the corporation and run it without ratification by the owners? There is no confidence in the current Board and their continuing possession of documents, control over Management Company and bank accounts is regarded as hostile. Do owner/shareholders have a right to reorganize under any law?

Response: 

Here’s a crash course on the Marketable Record Title Act (MRTA) and revitalization process governed by Fla. Stat. 720.403 – 720.407:

1. It is possible for the Declarations to be valid against some lots, but not all. The Declarations can be preserved by being specifically referenced in a deed by the Official Record Book and Page Number or by reference to a plat that has the deed restrictions recorded on the plat. An analysis of each lot is required to determine if the deed restrictions have been extinguished by MRTA against that lot because the last reference is more than 30 years old.

2. Revitalization can be used to breathe new life into the Declarations if they have ceased to govern one or more lots.

3. The Declarations have no force and effect against those lots where the deed restrictions have expired and there is no duty to obey the restrictions or pay assessments. If the Declarations are revitalized they are not retroactive — meaning the HOA cannot go back and collect assessments for the period of time between expiration and revitalization.

4. It takes at least a majority of the homeowners to approve revitalization. It could be more if the Declarations require more than a simple majority to approve amendments to the Declarations.

5. Revitalization is a very strict process which requires the HOA to appoint an organizing committee and to have a court reporter present at a meeting to vote on revitalization. While written consents can be used to gather the votes, if the bylaws and articles of incorporation do not provide for written consent the HOA is required to hold a meeting so homeowners can vote in person or by proxy (if proxies are allowed).

6. If revitalization is approved by the homeowners the HOA has to apply to the Dept. of Economic Opportunity (DEO) for revitalization and, if granted by DEO, re-record the Declarations, index them against each lot and deliver a copy of the revitalized Declarations to each homeowner. The revitalized Declarations cannot be more restrictive than the original Declarations, although there are a few exceptions in the statute.

To answer your question, in the interim the HOA still has bylaws and articles of incorporation which must be honored, including having elections and annual meetings.

The revitalization statute was recorded in 2004. My opinion is this statute presents a constitutional issue on property rights and contract impairment for anyone who purchased their property before the statute was enacted. Statutes cannot be applied retroactively to change existing contracts and the Declarations, bylaws and articles are contracts between the HOA and the homeowner. This issue has not, to my knowledge, been litigated.

If you feel your HOA is not following the procedures for revitalization properly you should consult with a HOA lawyer for an opinion. If revitalization is granted by DEO and you feel the HOA did not follow the procedures in the statute and any requirements in the Declarations, bylaws and articles (which is required by the revitalization statute), you have a very short period of time to petition DEO for an administrative hearing to challenge the revitalization.

Secret Board & Committee Meetings

I know it’s been a long time since I wrote a blog, but I have to say it’s not due to laziness, but rather success.  I have come up with a creative way to deal with HOAs and COAs (condo associations) pre-suit and business has been brisk.  I did answer an interesting question on www.avvo.com just now and I feel I need to share this one.  Here it is:

My HOA has recently enacted a “fine committee” after the recent change in law (720.305)2). I have tried in vain to find any details of what this committee does, its scope of work, a list of violations and fines and who the members are. There is nothing in meeting minutes and nothing has been added to the documents of the association that I can find. Does the HOA have the obligation to notify all homeowners and post the detailed information and process of each committee it forms? Or can it operate in secret on a need to know basis? They have done something similar with a very brief bullet in one newsletter that refers to a “stated late fee and collections Board policy” none of which I can find anywhere. Neither issue is covered in the rules and regs. Thank you for your time.

Your question set off numerous red flags for me when I read it.  The whole purpose behind many of the revisions to Chapter 720 of the Florida Statutes, the Homeowners Association Act, was to create transparency.  When governments operate in secret there is a chance for corruption and dictatorships to form.  The same goes for HOAs, which despite court rulings, rule like quasi-governments.

First, your HOA cannot impose fines against the owners unless the authority to do so is included in the governing documents (Declarations, Bylaws and Articles of Incorporation).  An older version of the statute provided rules for fining “if the governing documents so provide.”  The statute was revised to remove the language allowing fines to become liens and foreclosures if unpaid.  Later it was revised to add that language back in if unpaid fines were more than $1000, but it also did not include “if the governing documents so provide.”  This did two things.  The HOAs began claiming they had a right to fine by statute and instead of fines being $100, we now see fines of $1000 and more.  The HOAs do not have a right to fine by statute.  The statute in existence at the time the HOA was formed governs unless there is language in the HOA documents which say it is governed by Chapter 720 “as amended for time to time” or something similar.

All committees are required to keep minutes and if the committee has decision-making authority, then the meetings must be open to members and properly noticed.  The exception is fining committee hearings, which are not meetings, in which an owner is requested to appear and the committee will consider a fine.

Board meetings and committee meetings which will consider and adopt policies must be open and properly noticed.  Any meeting which will adopt a policy or rules and regulations affecting parcel use must be noticed by sending the owners individual notices to their address of record 14 days in advance of the meeting.  Policies and rules cannot be adopted without an open board meeting.

If the Board of Directors is meeting in secret to adopt policies and rules, or adopting these by corresponding with email, they are violating state law.  The problem is there is no agency to regulate the HOAs and their violations are a civil matter, not a criminal matter.  Your only recourse is to ask for pre-suit mediation and then sue them if they don’t settle, or start talking to your neighbors to get involved — they need to wake up and pay attention to what is going on now.   If they wait until it affects them personally, they are liable to find themselves on the wrong end of a court

I’m Back….And the Topic Today is Conducting Board Business in HOAs & COAs

It has been a while since my last blog.  I attribute this to the summer peak in business.  I don’t know if it’s the hot weather, adults dealing with children home from school for a couple of months, or the people from the North leaving the state and not being around to keep an eye on their association, but business is always brisk in the summer with associations behaving badly.

The topic for today is a change in the law stipulating to how board members can conduct board business. It is one I think will generate more litigation because board members can discuss board business by email and leave the homeowners out of the discussions. A new provision in the Florida Statutes allows board members to conduct and discuss board business through email, but any voting must be done at a meeting.  What we are now seeing is board meetings that last 15 minutes and under because the board members walk in and sit down, make a motion to vote on a topic, second the motion, vote and done.  Homeowners are not even aware of what the issues are much less get a chance to speak on the matter.

I recently read meeting minutes where the board voted to approve a contract with XYZ Landscaping.  No mention of two other bids or voting to see which landscaping company they should vote on — it was already a done deal and they were just ratifying their decision. What does it matter anyway, right? With no state agency regulating HOAs there is no penalty for cheating unless the homeowner has deep pockets to sue.

HOA Emergency Powers – Legislative Update FS 720.316

There is trouble brewing on the horizon and it doesn’t come from a hurricane, but the effects will be felt after a hurricane or some other natural disaster passes through.  I’m talking about the provisions in House Bill 807, which is now state law (FS 720.316) effective July 1, 2014, which give homeowner associations emergency powers in case of a natural disaster.  Those powers include levying special assessments, borrow money or pledge assets as collateral without a vote of the membership.  You want to know why I think it’s a bad idea? Subsection (2) of the law states the authority granted in subsection (1), which I stated above, is “limited to that time reasonably necessary….”  Any time you see the word “reasonable” in a statute it will take a judge, at least two lawyers and close to $200,000 or more in legal fees and expenses to determine what is “reasonable.”

Why would the Florida Legislature think giving HOAs a free pass on this is a good idea?  Do they really think life in a HOA is perfect for most people and all will be okay? These are the same people who could not get a bill passed to allow for a state agency to regulate HOAs — they should know giving them more power will only add to the corruption and abuse that goes on in an unregulated industry.  My only guess is someone spiked the refreshments on Capitol Hill. This is why my friend, Jan Bergemann of CyberCitizens for Justice, thinks the HOA statute is the “Attorney Employment Act.”  It will surely keep me busy for years to come.

Let’s revisit this after a hurricane hits Florida.  I would like any HOA or member of a HOA hit by a hurricane to let me know how this new law worked out for you.  Please prove me wrong.

And speaking of new laws….we now have a challenge under the Florida Constitution for retroactive application of a new law to an existing contract.  The law doesn’t say it is intended to be applied to existing associations.  In the section authorizing special assessments, it comes slightly close. In subsection (1)(j) with “Notwithstanding a provision to the contrary, and regardless of whether such authority does not specifically appear in the declarations…”  Wait a minute — the first part says the HOA can’t do it if there is a provision in the association documents prohibiting it, but the part after the comma says the HOA can regardless of what’s in the governing documents!  More billable hours for all attorneys!

This one really disappoints me……

HOAs – Don’t Mess with the Disabled!!!

It’s that time of year when all the community association law firms start blogging about the legislative updates to the Florida Statutes that will be enacted July 1, 2014.  It’s interesting to read the various blogs because they always include what the writer interprets the meaning of the new statute will be and, if you read more than one blog, you get a more than one interpretation (flag on the play — litigation imminent!).

Here’s one that should be real clear and I credit John and Kim Whitt for standing firm and seeking justice. They proposed to our elected leaders to add two words to Fla. Stat. 720.303(2), which requires meetings to be open to all members. Those two words “and accessible” make a world of difference to people like John who is confined to a wheelchair.  Common sense and compassion for other human beings would lead you to think this is not necessary; after all, the Fair Housing Act requires HOAs to provide reasonable accommodations for those who request it in order to attend meetings. Well, no one goes around accusing HOA board members of using common sense with any regularity.  In fact, all I hear all day is about conduct that is not only senseless, but unreasonable, offensive, insensitive and ruthless.  But I digress.  While those two words didn’t make it into the statute, a version of it did:  “A meeting of the board must be held at a location that is accessible to a physically handicapped person if requested by a physically handicapped person who has a right to attend the meeting.”

This was no simple task and I congratulate the Whitts and our political leaders for accomplishing this. At this point I bet you’re wondering what led to this.  I am here to tell their story — the real story.  Not some version with a spin on it to make the people think it was an innocent mistake.

John and Kim Whitt are wonderful people.  They are nice people.  They are not troublemakers.  When they bought their home in 2009 in a beautiful, rural community in Pasco County life for them changed. The community is comprised of 45 or so well-kept spacious homes on spacious lots, many of which are adjacent to wetlands.  Everyone’s dream home, right?  The Whitts were eager to be involved in the community and to get to know their neighbors.  One obstacle faced them.  The HOA held it’s meetings, as it did for a number of years, in a vacant lot with a cattle grate, livestock fence and extremely soft soil.  The meetings are held in a far back corner under trees with roots that made it impossible and still make it impossible for John to attend the meetings.  John asked the board if the meetings, not all, but at least some, could be held somewhere so he could attend and even offered his house.  He was refused.  A former board member, who is a contractor, offered to install a concrete pad a no charge to accommodate John’s request.  The board voted against this. Of course in their version they offered to install the concrete pad and John refused, but that’s just the usual HOA spin on facts to try and get people to believe they meant well.  John even offered the HOA to remove him from membership and the deed restrictions so the HOA would not have to comply. It’s not like he was going to start a pig farm at his beautiful home.  Pig farms are prohibited by zoning ordinances in this area, but more on that later.  The HOA spins the tale the Whitts never wanted to be part of the community and when their request to be excused was denied they resorted to pushing the access to meetings as the issue.

Here we are five years later. The Whitts sued the HOA, but lost. I won’t rant about that until I’m ready to relinquish my license to practice law.  The former board member/contractor and two other couples who own homes in the community sued the HOA because the deed restrictions had expired while the Whitts were litigating and were not properly amended to extend them.  They won on summary judgment.  No HOA.  The HOA is appealing, but going through the revitalization process as the same time. They are promoting revitalization by claiming if the deed restrictions are not revitalized they will be a community with pig farms.  I don’t think any of the owners have a pot-bellied pig, much less a pig farm, which is illegal in this particular area anyway.  On top of that, the HOA has held the Whitts out in ill will to the neighbors every chance they get, blaming them for the high legal fees they incurred with a huge unpaid balance.  No one really knows what that balance is because not only will they not show the owners the amount due and the balance changes frequently.  If they think the HOA won, how come they owe so much money in legal fees?

The Whitts may have lost the case, but evidently a lot of people, including members of the Florida Legislature and some decent people in their community, thought they shouldn’t.  They were successful in getting the statute amended despite the HOA attorney saying they wanted to create the “Homeowners Association with Disabilities Act.”  They have suffered for it.  Homeowners in their community who do not even know them despise them based on the tale the HOA spins about this — a HOA that has been ruled to not have deed restrictions.

And just for giggles — the HOA now claims it is still a mandatory association without deed restrictions because the Articles of Incorporation and the Bylaws are still valid.