Part one of this blog discussed turnover in its initial stages: the events that trigger turnover and the files and papers the developer is required to produce to the homeowners’ association at the time of turnover. Once an association has completed those steps, the board must then turn to critical business and make crucial decisions for the association. Associations and their boards should bear in mind the following issues as they go through turnover and immediately thereafter.
During the construction and initial sales of units within a condominium association, the developer will manage the association’s operations and governance. This means the developer controls the association’s board of directors. Once the development is constructed and a certain percentage of units are sold, then turnover of control of the association to the unit owners must occur. What follows is Part II of what every condominium owner should know about developer turnover of the association.
During the construction and initial sales of units within a condominium association, the developer will manage the association’s operations and governance. This means the developer controls the association’s board of directors. Once the development is constructed and a certain percentage of the units are sold, then turnover of control of the association to the unit owners must occur. What follows is an overview of what every condominium owner should know about developer turnover of the association.
One of the most critical events a homeowners’ association will face is the “transition” or “turnover” of the association from the developer of the community to the homeowners of the community. However, many homeowners and purchasers may be unaware of what the process of turnover entails, or even what turnover of the community really means. “Transition” or “turnover” of the association means that homeowners in the community are entitled to elect at least a majority of the members of the board of directors of the homeowners’ association.
A Community Development District (“CDD”) is a governmental unit created to serve the long-term specific needs of a community. Created under Chapter 190 of the Florida Statutes, a CDD’s main powers are to plan, finance, construct, operate and maintain community-wide infrastructure and services specifically for the benefit of its residents. There are over 600 CDD’s in Florida and many of the current CDD’s were established between the housing boom of 2003-2008. Part 1 of this 4 part blog will discuss general aspects and considerations of CDDs in Florida.
The Florida Supreme Court’s recent decision in Bartram v. U.S. National Bank Association is instructive for condominium associations and community managers dealing with a unit in foreclosure, including those trying to determine whether or not to appear and defend a foreclosure by the lender, even though it does not deal directly with a condominium or the Florida Condominium Act.
Contracting with vendors and service providers is part of the normal course of business for many condominium associations in Florida. Generally, section 718.3026, Florida Statutes provides for certain requirements when an association contracts for products and services. If a contract for the purchase, lease, or renting of materials or equipment, or for the provision of services, requires payment by the association in the aggregate that exceeds 5 percent (5%) of the total annual budget (including reserves), the association shall obtain competitive bids for the materials, equipment, or services. Nothing contained in the Statute requires the association to accept the lowest bid for the products or services. When analyzing the bids for the work, the association can consider such factors as quality of the vendor, responsiveness of the vendor, and any other non-monetary factors. The board members will generally be protected for such decisions under the business judgment rule.
Condominium owners’ associations are unique under Florida law—particularly when it comes to the collection of delinquent assessments and liability. The already complicated bankruptcy process thus becomes even more complex when a condominium owner with unpaid assessments is involved. Assessments that arose prior to the filing of the bankruptcy petition are subject to discharge in the bankruptcy. But, the question then arises as to whether or not the unit owner is liable for post-petition assessments. While an owner/debtor who files for Chapter 7 is personally liable for assessments arising post-petition, there is a split in authority among Florida’s bankruptcy courts as to whether a unit owner remains personally liable for assessments when he or she files Chapter 13.
Hardly anything generates more buzz and quarrel within community associations than the annual board of director elections. During the annual meeting and election season, numerous legal inquiries are made regarding the law on the election process, election disputes and challenging election results. Challenging an election requires meticulous and timely action. This blog post discusses the requirements to challenging a community association election through the mandated arbitration process.
Most well-run community associations incorporate a new tenant application and approval process, and some even utilize such a program for new owners. A typical new resident screening program includes criminal background checks, credit checks, employment verification, and prior rental history. A community association is likely to deny any prospective new resident whose background check produces questionable items. But are associations cognizant of the liability concerns pursuant to recent changes in federal law regarding disparate impact claims for administering a flawed screening process? This blog post will discuss the recent changes to federal law involving new resident screening and how community associations can avoid disparate impact claims.