Community Association Industry Legal Blog

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.

The end of the calendar year means that most condominium associations are gearing up for their annual meeting and election of new board members. For many condominiums, this is a routine event, but for others, this may foster heated and contentious lobbying and under-handed tactics resulting in administrative challenges to the election process, and maybe even litigation. The current board and property manager for a condominium association should have a detailed understanding of the condominium election process. The Department of Business and Professional Regulation has published a State of Florida Condominium Election Brochure covering most of the procedural aspects of condominium elections. This blog will summarize important deadlines and considerations for these elections.

A condominium association’s governing documents in conjunction with Section 718.116, Florida Statutes, are the genesis of the condominium association’s authority to impose and perfect assessment liens against individually owned units within the community. This four-part blog will discuss the condominium association’s right to lien, perfecting the condominium association lien, and collection practices for condominium associations. Part IV of this blog will discuss overcoming Unit Owner defenses to the foreclosure and the ultimate sale of the condominium unit.

Just like all other lawsuits, the unit owner is entitled to assert defenses. Below is a discussion on the most common.

The recent case of Bank of America, N.A. v. Kipps Colony II Condominium Association, Inc., — So. 3d —-, 2016 WL 3766582 (Fla. 2d DCA 2016), is instructive for attorneys representing condominium and homeowners’ associations and emphasizes the need for such attorneys to have a firm grasp of Florida’s lien law with respect to prior mortgagors.

A condominium association may bring an action in its name to foreclose a lien for assessments in the manner a mortgage of real property is foreclosed, and it may also bring an action to recover a money judgment for the unpaid assessments. The association is entitled to recover its reasonable attorney’s fees incurred in either a lien foreclosure action or an action to recover a money judgment for unpaid assessments. See 718.116(6)(a). Condominium lien foreclosure is not subject to the alternative dispute resolution proceedings found under Section 718.1255, Florida Statutes, which means that the parties do not have to engage in mediation or arbitration.

The right of a community association member to information differs slightly depending on whether the person is a member of a homeowners’ association or a condominium association. However, in analyzing a person’s right to information, it is important to understand that the relevant statutes are meant to balance the member’s access to information while protecting the association from a member whose requests are harassing (intentional or not).

The Florida Condominium Act sets forth the process and procedure for perfecting a condominium assessment lien for delinquent assessments. A condominium lien creates an interest in real property in favor of the association. In many instances, it has been said that the association has a “perpetual” right to lien, so long as the association remains in existence. The condominium lien will take its priority in right based on the date the declarations were recorded. Because Florida association liens require the inclusion of a legal description, and liens create real property rights, only attorneys who are members of The Florida Bar may draft liens. A non-Florida attorney’s preparation of a lien on Florida real property constitutes the unauthorized practice of law. This is so, even if the non-attorney is a licensed community association manager. See The Florida Bar re Advisory Opinion — Activities of Community Ass’n Managers, 681 So.2d 1119 (Fla. 1996).