Katzman Garfinkel & Berger's Condo and HOA Law

Association restrictions a welcome relief from ineffective city ordinances?

noreply@blogger.com (Donna DiMaggio Berger) — Tue, 14 May 2013 22:25:00 +0000

Last Christmas I took my young niece and nephew to visit a house in western Broward County that is very celebrated for its holiday display. As promised, the house was ablaze with lights, the grounds were filled with toys and other scenes designed to entrance young visitors and even an outdoor movie screen had been set up to play Disney Christmas movies.

Not surprisingly, my niece and nephew were delighted and my husband and I also saw the charm although we both looked at the narrow cul de sac packed with cars and trash on an empty lot and overflowing to the neighbors' surrounding homes and said simultaneously: "nice but not to live next door to this."

It turns out I did know someone who lives in this cul de sac and they lamented about having to deal with the issues not just for the Twelve Days of Christmas but starting in September and running through January. While it is easy to paint anyone who is not fully supportive of a 5-month holiday celebration that draws tens of thousands of visitors steps from your front door as "anti Christmas and anti kids" the reality can be quite different. Try getting an ambulance through during one of the more active nights and you might just need Santa's sleigh to take you to the hospital. On a less serious note, plastic displays that look lovely at night can look cheap and unappealing in the unforgiving light of day and particularly to that new homebuyer inspecting a property in mid October when a holiday display is not an expected sight.

According to one report, the homeowners previously lived in a community association but when their increasingly lavish display became incompatible with the association lifestyle the decision was made to move to a home outside the parameters of a mandatory association.

While many people critique association rules and regulations, the folks on that Plantation cul de sac who have been unable to obtain help from their city officials might just embrace them come September!

Read the Sun Sentinel story here:

http://www.sun-sentinel.com/news/broward/fl-plantation-christmas-lights-20130512,0,7701237.story

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

What individual owner behaviors pose a safety and security risk for your community?

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 13 May 2013 02:05:00 +0000

If you live on a farm with the nearest neighbor miles down the road, the following behaviors may impact you and your family but they are not likely to hurt anyone else. However, choose the same behavioral path with the nearest neighbor separated by only some drywall or a fence and the result can be much more harmful.

Smoking: The biggest issues right now with smoking in multifamily buildings concern secondhand smoke and its detrimental impact on health. While that behavior certainly falls within the category of personal conduct impacting others, another possible impact is burning down the building if you fall asleep while smoking. More than one celebrity has died with a lit nicotine product in hand; no need to add innocent condominium and cooperative owners to that list.
Candles: Most people love the smell of scented candles as an enhancement to a home's ambiance. However, that beautiful scent can soon turn to the smell of acrid smoke if the candle lights nearby objects on fire. Burning candles requires some form of vigilance and people who live next to candle aficionados hope that vigilance is utilized.
Questionable taste in guests: Tell people who they can and can't have in their homes as guests and you are certain to encounter a vigorous debate if not an outright fight. However, some guests and occupants do create safety and security problems for the entire community particularly when those guests and occupants engage in domestic violence. Registered sex offenders and sexual predators also do not make the most welcome guests in shared ownership communities for all the obvious reasons.
Poor screening of renters: It has always amazed me that some people care very little about screening the people who will be living in their home. Perhaps in some cases, it is naiveté and in others perhaps the property was intended to be a rental so the owner lacks an emotional connection to it. In any event, owners who fail to find out who is moving into their properties put their neighbors at risk for reasons outlined in the questionable guest category above.
Poor screening of workers: It might not cross some people's minds to find out who is cleaning their home, cutting their lawn, working on their roof, serving as a caretaker for an ailing parent, etc. If these folks are working on your isolated farm, that is one thing. If they are working in a community and they are intent on mischief or wrongdoing, that lack of foresight and screening also becomes your neighbors' problem.
Reckless driving: Driving an ATV on country back-roads might result in no harm other than some frightened critters. However, in a crowded community, reckless driving on HOA roads or in the condominium association's parking garage or parking lot can result in injury or death.
Noise/Nuisance: Some might argue that cranking up the decibel levels with little to no soundproofing to shield your neighbors can result in hearing loss. If nothing else, the noises you make at odd hours could certainly result in your neighbors losing sleep.
Not addressing water leaks: You know better than anyone if there is water entering your unit on a steady basis. If you contend it is your association's responsibility to repair that leak, you still have a responsibility to mitigate your damages (and that of your neighbors) by stopping the water entry if possible. Allowing water to sit in your unit can create mold which can spread quickly throughout a multifamily building.
Pest infestation: If you know you have bugs in your property, do something about it. If you live in a single family home in an HOA and find out you have termites, failing to address that problem can spread to your neighbors' homes. If you live in a multifamily building and have refused to allow the association to perform routine pest prevention in your unit, you are putting your neighbors' homes at risk when the pests in your place decide to check out the neighboring digs.
Dogs and Choice of Breeds: I remember the case years ago about the woman killed by a particularly aggressive dog breed, the Presa Canario, in her building. This is not an indictment of certain breeds but some dogs do need more exercise and places to roam and have more aggressive personalities. Those breeds are not the best choice when you are living in a multifamily building where you share space in the corridors and elevators with others. Some may not even be the best choice when you live in an HOA and share common park space and other green areas. Leash laws should naturally be obeyed at all times no matter how much you love Sparky.

Many of the more insidious problems in shared ownership communities involve people forgetting what it takes to be a good neighbor. If none of the behaviors above concern you, perhaps that farm is the place you ought to be!

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Speedier Bank Foreclosures in Florida thanks to recent legislation!

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 06 May 2013 01:47:00 +0000

Another important victory for Florida community associations occurred during the 2013 Florida Legislative Session! HB 87 - Mortgage Foreclosures by Representative Kathleen Passidomo (R - Naples) has passed the Legislature by a 36 to 13 vote! The third time must be the charm as this year finally saw the passage of this much-needed relief after failing two years in a row.

Far too many associations have been held in limbo waiting for banks to foreclose on delinquent properties in their communities. HB 87 will give associations a new tool in the form of an Order to Show Cause to force banks to proceed expeditiously with their foreclosure actions unless they can produce a compelling reason they cannot do so. Of course, if an association is already renting out property to which it took title and does not wish to speed up the bank's foreclosure, it should not avail itself of this new Order to Show Cause tool. However, for the vast majority of associations who cannot rent out delinquent properties in their community either because they have not taken title to those properties or those properties are not in rent-able condition, this bill will provide an ability to speed up the bank's foreclosure action.

The highlights of this bill include:

Reduces the time period within which a lender can seek a deficiency judgment from the current 5 years to 1 year.
Requires that the lender's complaint disclose certain facts and confirm the availability of certain documentation supporting the lender's right to foreclose in order to ensure that the foreclosure can be successfully prosecuted.
Makes it harder for parties seeking to set aside or challenge a final judgment of foreclosure in order to safeguard the quality or character of the title to the property.
In the case of an owner-occupied residential property, the amount of a deficiency judgment may not exceed the difference between the judgment amount (or in the case of a short sale, the outstanding debt) and the fair market value of the property on the date of sale.
A condominium association, cooperative association or homeowner's association may request an order to show cause for the entry of a final judgment in the bank's foreclosure action in chambers and without a hearing.
The order to show cause shall set the date and time for a hearing to show cause and that hearing date may not occur sooner than the later of 20 days after service of the order to show cause or 45 days after service of the initial complaint.
The order to show cause shall state that the court may enter an order of final judgment of foreclosure at the hearing and order the clerk of the court to conduct a foreclosure sale.
The court may enter a default against the lender if it fails to appear at the hearing to show cause, fails to file defenses by a motion or by a verified or sworn answer or files an answer which does not contest the foreclosure.
Allows for the granting of attorney's fees for the order to show cause if the mortgage provides for reasonable attorney's fees and the requested fees do not exceed 3% of the principal amount owed at the time of filing the complaint.
The provisions of this bill apply to "all mortgages encumbering real property and all promissory notes secured by a mortgage, whether executed before, on, or after the effective date of this act." However, the order to show cause provisions "apply to causes of action pending on the effective date of this act."
HB 87 takes effect upon becoming law which means that the date when the Governor signs it or lets it pass into law without his signature is the effective date of the foregoing provisions.

The mortgage defense attorneys and their clients have already mounted an effort to urge the Governor to veto this bill. We have been waiting a long time to give associations a greater say in the mortgage foreclosure actions that have been pending, in some cases, for years. We are in the homestretch with relief on the way. If you would like to send a message to the Governor about this bill you may email him at: rick.scott@eog.myflorida.com.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

My time on my HOA Board

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 29 Apr 2013 01:43:00 +0000

One of the first questions I ask legislators, candidates seeking a job with my firm and vendors who sell services to community associations is: Have you ever served on your community's board of directors?

How can any of us really know what a volunteer director job entails if we have never filled that role?

I served on my homeowners' association board for two years and that was almost ten years ago. Prior to me, my husband served on the board and prior to that, other residents who were lawyers were recruited to serve on the board in the hopes that a legal background would somehow assist the board. I am not sure how much that theory was borne out in reality but my experiences from my time on the board have stayed with me and I believe have made me better able to relate to my association clients and their daily issues.

Our HOA board meetings were all held in the various directors' homes and they were not well-attended. Occasionally, a resident with a specific request such as an exterior modification would attend and then leave after his or her item was discussed. Usually it was just the five of us alone discussing what needed to be done. The director hosting the meeting usually laid out coffee and refreshments. Although we were in comfy surroundings, we were there for business purposes and most of the directors were all very well prepared. My first year we had a director who really did not understand that the "job" entailed actually reading the minutes, attending meetings and performing the tasks assigned to him so he quickly tendered his resignation when he realized that our self-managed community (we did not have a professional manager and still do not to this day) meant managerial and operational tasks fell on the directors' shoulders.

I was the only woman on the board and more than two decades younger than my male counterparts. Some memories of my time as a director are fairly vivid:

I was initially asked to become the secretary(with one director suggesting it was a natural fit given my gender) but I declined that offer.
One director was focused mainly on planting live oak trees in every home's front yard, claiming we had a landscape maintenance easement to do it. When I countered that the easement did not quite give us the liberty to undertake this project to the extent he desired nor was the entire community in support of it, this director suggested I resign from the board. I again politely declined that offer.
We had a resident who was unhappy with a violation letter he received requesting he put a door on his mailbox. He parked a car that was meant for the junkyard on his swale in protest. Eventually he moved his car and his mailbox to this day remains without a door.
We had zero delinquencies during my entire 2 years on the board.
We spent less than $1,500 in legal fees during my entire 2 years on the board.
We threw four well-attended social events each year which continues to this day.
We directors did not all agree with each other but we did listen to each other.
Our board meetings tended to last well over 2 hours and that was with no one in attendance!

When my term was up, I did not run for re-election. I suppose working in the community association industry made it less appealing to go home and work again as a volunteer director. Even so, I am grateful for my time on the board. It made me much more empathetic to the problems and complaints I hear on a daily basis from directors, managers and residents.

So what did I learn during my 2-year tenure on my community's board of directors? I learned that some of my fellow directors had engineering, managerial, entrepreneurial and other skills of which I had no idea previously. I learned that most of my fellow directors were very nice people who were serving on the board because they felt it was their duty to "give back" to the community in terms of their time and skills. I learned that there are bullies on boards just as there are bullies in the schoolyard and they should be dealt with the same way. I learned that serving on the board can be boring, exciting, frustrating, gratifying, enlightening, mystifying, easy and difficult depending on the circumstances.

I am grateful to those who serve their communities well and for the right reasons.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Owner sues HOA Board for failing to preserve restrictive covenants

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 22 Apr 2013 01:51:00 +0000

Occasionally, I will hear from an older Florida homeowners' association that is considering allowing its restrictive covenants to simply expire by application of law. In some of these communities, there is not much in terms of common areas to maintain and insure or the entire concept of a mandatory association has lost its appeal. A new case out of the 4th DCA involves an action centered around an owner’s legal standing to compel the HOA’s Board of Directors to proceed with the “Preservation” of the Association’s restrictive covenants in compliance with Florida Statutes, Sections 720.05 & 720.06 in order to preserve such covenants from being extinguished under Florida Statutes, Chapter 712 - commonly referred to as the Florida Marketable Record Title Act (“MRTA”).

The very recent case of Southfields of Palm Beach Polo and Country Club HOA, Inc., et al v. McCullough may make some boards who are otherwise inclined to ignore the effects of MRTA to reconsider. In this case, Victoria McCullough, a landowner in the Southfields equestrian community, filed a complaint in Circuit Court claiming that the Association’s board was refusing to preserve the Declaration by failing to record the permissive notice of preservation allowed under Florida Statutes, Section 712.05. McCullough requested an injunction and a writ of mandamus to compel the board to file the required notice.

McCullough relied on the fact that in 1981, the Association’s governing declaration was recorded to impose certain covenants, conditions, and restrictions within the Southfields community. The declaration stated that its “provisions hereof shall be liberally construed to effectuate the purpose of creating a uniform plan for the development and operation of the Property.” The declaration created a homeowners association whose stated purpose, according to its articles of incorporation, is “to provide for the regulation, maintenance, and preservation of the development of Southfields.”

The Court determined that the declaration was intended to preserve the equestrian nature of Southfields which thereby required that the board exercise its powers to maintain the declaration until and unless ninety-five percent of landowners vote to dissolve the declaration and disband the Association.

The trial court granted summary judgment as to both the prayer for injunction and mandamus. The Appellate Court agreed with the trial court’s conclusion that if parcels were to drop out piecemeal without the requisite votes required by the governing documents, the Association would begin to resemble a piece of Swiss cheese, with portions of Southfields covered by the restrictions and other portions not otherwise covered by the restrictions. The Appellate Court also agreed that the language of the declaration itself made it clear that the board of directors is mandated and has a duty to protect Southfields and the restrictive covenants running with the land. Finally, the Appellate Court agreed that injunctive relief, as well as, mandamus relief was appropriate to compel the board to fulfill its duty and take the required action to preserve the declaration.

The Appellate Court noted the Mandamus relief is ordinarily used to compel a public official to perform a ministerial duty, but that neither party raised an appellate issue whether mandamus is appropriate to compel a homeowners association to act. The Court pointed out that mandamus has been approved to compel a corporation to act, citing, Faro v. Simplex Med. Sys., Inc., 748 So. 2d 342, 342-43 (Fla. 3d DCA 1999).

Some older HOAs have drawn criticism for attempting to preserve or revive older covenants that will be or have been impacted as a result of MRTA and now some older HOAs are being criticized for not being proactive in protecting and preserving those covenants. This falls under the category of not being able to please everyone. For older HOAs that have a unique lifestyle connected with their community (for Southfields it was equestrian, for others it may be communities with age restrictions, a golf course or waterfront lifestyle, etc.), the issue of their community's character being tied to and defined by the restrictive covenants makes the board's decision to preserve or not to preserve a more important one.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

The Tax Man Cometh for Associations Too!

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 15 Apr 2013 02:30:00 +0000

Each of us is undoubtedly thinking about our own personal tax returns with April 15th upon us. However, board members have to think about tax time twice: personally and on behalf of the association.

Hopefully, every association has retained an accounting professional to guide them throughout the year and, in particular, when it comes to preparing the association's tax return. I reached out to Monte Kane of Kane & Company CPAs (industry experts in Florida) to give some insight into this process.

According to Monte, condominiums and HOAs file either standard Federal corporate returns, using Form 1120, or if they qualify for the "primarily residential" test, they can file the Federal Form 1120H. When an association files an 1120H return, it does not file a Florida income tax return. However, there are pros and cons to filing the 1120H which you should discuss with your CPA. Co-ops generally can only file an 1120C.

While we all dread April 15th, an association's return is due on the 15th day of the third month after the year end. A calendar year association's federal return would thus be due on March 15th with an ability to extend filing by 6 months.

Any officer of the association can sign the association's tax return but he or she must understand what is being signed which is the same requirement when a personal tax return is being signed. A community association manager should not sign the association's tax return unless he or she is an officer of the association.

While a shared ownership community association is a not-for-profit corporation that does not confer tax exempt status. Associations are taxed and they can be fined/penalized for not paying taxes timely and/or for not filing their returns timely.

Associations occasionally do receive a tax refund, usually when an association is required to make estimated payments and those amounts exceed the actual taxes owed. A refund may also be due and owing where an amended return is filed due to the fact that a prior accounting professional was not aware of certain specific elections that a board could make and/or was unaware of certain IRS Revenue Rulings. The accounting professional you choose to guide your board counts.

Some areas that require expert assistance include:

Income resulting from settlements of construction defect and other lawsuits
Reserves for contingencies can pose tax issues
Understanding what is subject to State Sales and Use Tax
Be familiar with Revenue Ruling 70-604 and have your members take an annual vote to approve it (this can save the association taxes on excess income)

Lastly, Monte reminds us that associations can avoid or reduce taxes with proper planning. He cautions, "We have seen too many associations where rules are not followed and the Board is exposing themselves in the event of an audit. Remember, boards are fiduciaries."

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Community Association Turnover from Developer Control: smooth sailing or rough seas?

noreply@blogger.com (Donna DiMaggio Berger) — Fri, 12 Apr 2013 15:54:00 +0000

Just how easy or difficult is the developer turnover process?

At some point in every community’s lifespan, the developer will (hopefully) finally exit and the association members will take over the reins and chart their own destiny. There are certain statutory triggers that require developers to relinquish control of the board in stages but does that always happen?

Every community has their own story in this regard. I recently heard from a community that was developed in 1986 that is STILL under developer control. Other communities have reported experiences where little to no documentation was turned over to the members the night of the meeting or even months afterwards. Other communities struggled for years to pick up the pieces after discovering extensive construction defects. Developers would be well advised to make the turnover process a lot more palatable so the final impression made is a good one.

When the day finally comes that the developer is prepared to leave the community, can the members be certain that they are receiving all the documentation to which they are entitled?

Is the process made smoother by the creation of an Ad Hoc Committee of concerned owners and hiring a lawyer to guide that committee and communicate with the developer as to the membership’s expectations? After transition occurs, association members often make the sobering discovery that things are not what they seemed to be while the developer was still in control. Contracts entered into by the developer may not have been true arms-length transactions; assessment amounts might have been kept artificially low; monies may be missing from certain accounts; and the construction may not be as sound as one would have hoped.

The Community Advocacy Network (CAN) has released a 5-minute Developer Turnover Survey which can be found online from April 4th through June 3rd. http://CANsurvey.questionpro.com.

Come share your honest feedback and rate your turnover experience with our 5-minute questionnaire—no matter how long ago your transition took place. Your responses will aid CAN in identifying long-term problems and providing support and solutions for condos, co-ops, HOAs, and other types of communities either facing or still reeling in the wake of their own developer transitions.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Jury finds Condo Association and Management Company 90% liable for child's death

noreply@blogger.com (Donna DiMaggio Berger) — Wed, 10 Apr 2013 18:50:00 +0000

In a tragic story dating back to 2011, a jury recently awarded $12 million to grieving parents and found a Jupiter condominium association 30% responsible, a management company 60% liable and an elderly driver 10% culpable for the death of a 9-year old boy.

The child was struck on his bike by an 81-year old woman exiting her Jupiter condominium community. The driver’s judgment together with association hedges that were twice as high as Jupiter Code permitted and a stop sign that was four feet shorter than the Department of Transportation required (and in the wrong location) created a fatal combination.

Without having access to the undoubtedly extensive discovery in this case, many questions remain about who did what and why. Did the manager inform the board about the condition of the hedges and the stop sign.? Did the board know and decide to do nothing either due to budgetary constraints or disagreement with the manager’s recommendations? Did the board assume the manager was on top of community maintenance and therefore was blissfully unaware that a problem loomed? Why was the landscape company not held responsible to ensure the hedges’ height complied with local Code?

The jury’s award reflects that it placed a greater expectation on the management company to take steps to prevent this tragedy. The association was held to be half as liable as the management company and the driver who actually struck and killed the victim was assigned the least amount of responsibility for the wrongful death.

This is a cautionary tale for other managers and boards who may be unaware of the condition of their communities. Certainly, regular “premises audits” would be advisable as well as ensuring that vendors such as pool companies, landscapers, etc. all warrant that their work will comply with local codes and ordinances. For those managers who may have identified items needing repairs and/or upgrades only to be ignored, it may be time to resign the account.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Should boards reveal the names of delinquent owners?

noreply@blogger.com (Donna DiMaggio Berger) — Sun, 07 Apr 2013 20:48:00 +0000

A blog reader recently asked me what I thought about boards mentioning the names of delinquent owners at meetings when the question "who isn't paying their assessments?" is raised.

I advised that some boards handle this situation much more sensitively than others, preferring not to humiliate or punish anyone but merely conveying the specific information requested. For instance, a response to "how many delinquencies do we have?" can very easily be "we currently have 7 homes not paying and these files have been sent to legal." That question does not require the disclosure of specific names or property addresses.

What if, however, the questioner did ask the board to name names? Should they?

Publishing a "dunning" list of delinquent owners is never advisable as the information can be/become inaccurate while the list is still posted. Doing so could expose a board to potential defamation claims. However, responding to a question at a meeting from a member who has the right to know the specifics of his or her association's financial health is a different matter entirely.

This reader was incensed over the practice as she was delinquent in her assessments as a result of having financial difficulties that were exacerbated, in her opinion, by job market issues. The reader asked if the law could be changed to prevent boards from advising community members of the names of the delinquent members. She suggested instead that the boards "discuss the names privately and just give a lump sum at the general board of directors meeting."

Naturally, this owner can contact her local State Representative and/or State Senator and request that he or she give some thought to changing the law next year. Her public policy makers might be receptive to her request and we could see a proposal next Session which prohibits boards from disclosing the names of the people who owe the association money to the general membership. That is how new association laws are made each year.

What do you think? Should boards alone have access to the names of the association members who are not paying their dues or should that information be disseminated to the members requesting same? Does naming names encourage folks to pay their assessments timely or is it simply designed to embarrass people or does it accomplish both?

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Are folks really being forced to buy homes inside associations?

noreply@blogger.com (Donna DiMaggio Berger) — Sun, 31 Mar 2013 22:31:00 +0000

Many folks in various association groups on Social Media complain about the concept of shared ownership community governance and lament the fact that they cannot purchase homes (particularly in Florida) anywhere else other than inside a mandatory community association.

I ran through my list of friends and colleagues and found them about evenly split between those who live in a mandatory association and those who do not. There are choices for housing all over the state that do not come with a mandatory association but typically that means you will be buying an older home and refurbishing it.

My friends who bought inside community associations typically list the following reasons for doing so:

Recreational amenities they couldn't afford on their own (ie: tennis court, swimming pool, etc.)
Security they couldn't afford on their own.
Shared vision about how the community should look and enforcement of same.
Lower maintenance responsibilities (particularly true when the association has the responsibility to paint, pave, pressure clean, landscape, etc.)
Prime location (beach, golf course, etc.)
Wanted new construction
Purchase inside a community association was happenstance

My friends who bought outside a community association typically listed the following reasons for doing so:

Previous negative experience in an association
Location (wanted an historical area, a remodel, acreage for horses, etc.)
Purchase outside a community association was happenstance.

Whether or not there are fewer housing units being constructed outside a planned development scheme these days requires some extensive research. Still one question does not beg research or a philosophical debate: what do developers build?

The answer is that developers will build what they can sell. If fewer and fewer people bought in communities with mandatory associations, over time fewer of these communities would be built. It is the simple law of supply and demand.

What has surprised me recently is some areas where the owners have not only formed voluntary associations but would now like to take it a step further and encumber the lots with private restrictions forming a mandatory association. Why would these folks who have lived in their homes for some time unfettered by association restrictions and politics decide to go that route? When asked, the resounding answer was overall disgust with the lack of municipal responsiveness when problems do arise.

The sad reality may be that there is unhappiness and disappointment both inside and outside mandatory association communities with the target of that unhappiness and disappointment either being an elected board of your neighbors or your elected local officials.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Leaning In: Is there a Gender Gap on Community Association Boards?

noreply@blogger.com (Donna DiMaggio Berger) — Sun, 24 Mar 2013 23:41:00 +0000

I just finished reading Sheryl Sandberg's book, Lean In, about women, work and the leadership gap that still exists. For those of you who don't know, Sandberg is the COO of Facebook and her book has stirred up quite a bit of water cooler talk.

The premise of Sandberg's book is that women and men have to both lean in to embrace roles that traditionally have not been their territory. For women, that means filling leadership roles at the office and for men, that means pushing for more time at home and with the kids.

Despite the controversy surrounding Sandberg's book, I found it to be filled with nonjudgmental observations by a woman of my generation who has filled quite a few interesting seats from the Treasury Department to Google to Facebook.

So what does this book and its topic have to do with your community association?

It got me thinking about whether or not there is a gender gap on most community association boards? One of the themes in Sandberg's book is that most women don't push for a seat at the table. When I meet with different types of association boards, I usually find both genders represented on the board, seated comfortably at the same table and the women are hardly reticent to express their opinions. However, if I had to do a more formal poll, I'd probably say there are more men sitting on boards than women, at least from what I've seen.

I think back to my own HOA board and at the time I served, I was the only woman out of the 5 directors who was female. I was also a few decades younger than my counterparts. I was asked to be the Secretary of the board because that was what the "female director" did. I declined and one of the other directors begrudgingly took on that task. Later I was asked to resign and I declined that offer as well.

I do think that the older the demographic on a board of directors, the less this gender gap shows up. Why? Perhaps it is because the older you get, your perspective and your inhibitions change and you grow a little bolder?

Far too many associations complain (both rightly and wrongly) that there is little to no leadership qualities displayed by their board of directors. Is that lack of leadership attributable to a gender gap or something else.

What do you think?

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Recent Florida Supreme Court Ruling Helps Association Injured by Insurance Broker

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 18 Mar 2013 17:16:00 +0000

On March 8, 2013, the Florida Supreme Court issued a 5-2 ruling in the case of Tiara Condominium Association, Inc. v. Marsh & McLennan Companies which has been widely cheered by plaintiff's attorneys.

The nature of this dispute stemmed from more than $100 million in damages that this Riviera Beach community suffered in 2004 from two separate hurricanes. The board had been assured by its insurance broker that the association had $50 million in coverage per occurrence. In reality, the association discovered it had only $50 million in total coverage. The association settled with its insurance company for $89 million and sued the broker for the rest.

The trial court dismissed Tiara's claims and the U.S. Court of Appeals for the Eleventh Circuit affirmed that Tiara's claims for breach of contract, negligent misrepresentation and breach of good faith had been properly dismissed.

The following certified question was sent to the Florida Supreme Court:

Does the Economic Loss Rule prevent a policyholder from suing its broker if they have a contract where the only damages sought are economic?

The economic loss rule originated in the product manufacturing arena to limit losses and the ability to pursue a tort claim to a customer's expectations of a particular product. Over the years, courts began expanding the reach of the economic loss rule to other areas and to contracts for professional services such as those provided by accountants, insurance brokers, etc. This expansion of the rule required attorneys seeking recovery for damages that were purely tied to a loss of money (as opposed to loss of life, injury, property damage, etc.) to perform extraordinary mental gymnastics to attempt to collect when those claims were otherwise supported by contract law.

Justice Jorge Labarga, writing for the majority, stated that the Economic Loss Rule was not a bar to the Tiara board's claim against its broker and went even further by proclaiming that from this point forward that rule would once again apply only to product liability cases.

So what does this case mean for your association? It underscores the need for your community to really understand what kind of insurance coverage you are purchasing. The Tiara board wound up making legal history with its claim but something tells me that they would rather have foregone the battle and simply reaped the benefits of the coverage they thought they had.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Different perspectives on foreclosures could hurt association bill's chances.

noreply@blogger.com (Donna DiMaggio Berger) — Thu, 07 Mar 2013 22:35:00 +0000

Yesterday, a bill designed to speed up stalled bank foreclosure actions filed by Representative Kathleen Passidomo ( a Republican from Naples,FL) was debated at length in the House Justice Appropriations Committee. The bill did pass out of this committee by a vote of 9 to 2 but only after much emotional testimony that clouded the real issues at times.

The individuals who spoke in opposition of the bill did so from the perspective of folks who had previously lost a property to foreclosure. While it usually tugs at the heartstrings to hear of people losing homes as a result of their inability to make their mortgage payments, one could be equally sympathetic to the folks who continue to pay and now must pay more to make up for often significant shortfalls in their association's budgets. Some of those still-paying folks have one foot on the foreclosure path themselves if relief doesn't arrive in time.

The individuals who testified yesterday in opposition also did not seem to understand the significance of the bill's provisions which would shorten the amount of time that banks can pursue deficiency judgments from the current five years to one year! Instead, the focus was that Pep. Passidomo's bill would force banks to move their foreclosures forward expeditiously, a result that is soundly applauded by most people in the community association industry, including the writer of this blog!

A mortgage defense attorney testified that her own home was the subject of a foreclosure action which seemed odd in terms of being compelling testimony against this bill. Many delinquent owners have managed to stave off bank foreclosure actions for years as a result of the bank's own shoddy housekeeping or as a result of missing or flawed loan documents. However, at some point the bank usually overcomes those hurdles and then the owner must pay or leave.

What most opponents missed yesterday was the concept of this bill addressing the greater good. The fact remains that speeding up bank foreclosures will help struggling associations and the majority of people living in them. The folks that are displaced as a result will hopefully eventually own again with a mortgage which they are capable of paying.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Hanging on for far too long...developers' reservation of rights often pose long-term problems for association residents

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 04 Mar 2013 05:05:00 +0000

Most new home buyers look at a potential community and rightfully spend quite a bit of time investigating the types of recreational and other amenities that make up the total package attached to that particular community's lifestyle. However, not nearly as many potential purchasers carefully review the association's governing documents to see just how long that developer will continue to play a role in the community both in terms of the use and maintenance of those amenities but the costs associated with them as well.

Typically known as a developer's reservation of rights, this lingering authority can greatly impact residents' enjoyment of their community depending on how it is exercised and over what community components or operational aspects. Developers can and do insert clauses in their documents that allow them to control items such as parking spaces, storage areas, boat docks and other common areas and limited common elements well beyond the time that owners have assumed responsibility of the board and the association's operations.

Many owners are shocked to learn that a developer can continue to exercise control over certain aspects of the community as long as the developer still owns a unit or units and the governing documents clearly spell out the developer's reservation of rights. A recent Florida Third District Court of Appeal case underscored a developer's rights in this regard. In the case of Courvoisier Courts LLC v. Courvoisier Courts Condominium Association, Inc, the 3rd DCA reversed the trial court and held that a developer could maintain control over unassigned parking and storage spaces even post transition since the declaration contained clear and unambiguous language allowing it to do so. In this case, the developer transferred a number of unassigned parking and storage spaces to a penthouse unit it still owned with the intent to sell these valuable commodities at a future date. If there had been any sort of ambiguity in the documents, presumably Florida case law would have continued to strictly construe such ambiguity against the developer. However, in the Courvoisier case, no such ambiguity existed.

What is the moral of the story? It is important for potential purchasers to not only understand how the community will operate at the time of purchase but also how it will operate months and years down the road. If a developer has taken far too many liberties in terms of its reservation of rights, a purchaser cannot assume that the developer will never exercise those rights nor can he or she assume that a court will not uphold them. In those instances, the best course of action may be to keep looking for that dream community.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Your Right to Privacy vs.Community's Security Protocol

noreply@blogger.com (Donna DiMaggio Berger) — Fri, 22 Feb 2013 20:29:00 +0000

Last week a member of my HOA's board of directors caught me out on a jog and asked me if it was legal for the guards at our entrance gate to scan in the drivers' licenses of people seeking access to our community. Apparently, more and more associations with guard gate features are gathering this kind of information in an attempt to keep track of who is entering and exiting their premises.

Knowing exactly who has entered your community can be extremely useful information in a crisis situation; a recent situation comes to mind. A resident in our community returned from work to find that her nanny and her child were not in her home. Naturally, she became frantic when she could not locate the caregiver on her phone. The guard's log (with scanned picture ID) did show that her mother-in-law had entered the community earlier in the day and had taken the child assuming the mother knew. Crisis averted although I'm sure there was some discussion about better future communication between the two of them.

So why did the director in charge of security for our community inquire about the picture identification in the form of drivers' licenses being scanned? Well, he advised that a non-member, non-resident guest became irate when she was asked to produce her driver's license. She did so very reluctantly to gain access and then later threatened to sue as she believed her right to privacy had been violated.

Research reveals that there is a federal Driver's Privacy Protection Act of 1994 which restricts a state government from disclosing highly personal information such as that found on a driver's license without express consent. However, there are no restrictions preventing private citizens from collecting this information directly from individuals who wish to gain entry to private residential property, particularly when they are not owners of such property.

The bigger question in my mind is not whether the association can request a picture ID to enter the community from folks who don't live there (I believe they can) but it is what is done with that sensitive information after the fact. Under Chapters 718, 719 and 720, these scanned licenses could fall under the catch-all document inspection provision as follows: "all other records of the association not specifically included in the foregoing which are related to the operation of the association." The privacy restrictions upon an association's disclosure of drivers' license numbers pertains solely to members; there is no mention of securing the privacy of this kind of information related to vendors' drivers or non-member invitees who seek access to the community.

In this day and age of rampant identity theft, associations are well advised to seek a legal opinion on how sensitive information is to be gathered, stored and destroyed.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Do association members have a duty to work towards a resolution of some of their own problems?

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 11 Feb 2013 00:42:00 +0000

Community association boards are often contacted about matters that might be more easily resolved on a neighbor to neighbor basis. I've often wondered why this is until I had an issue myself and debated bringing it up to my HOA board rather than confronting the issue head-on myself.

I live in a typical suburban homeowners' association with lovely homes and nice yards. My next door neighbor is an elderly widow who owns several dogs. While the dogs are friendly and cute, they do have one trait that makes them not very neighborly; they bark incessantly from morning to night. Normally this is not an issue as I am out of the house at work, social events, etc. However, during the times I do find myself home and wanting to either lounge at my pool or out in my yard, the racket becomes an issue.

Our HOA governing documents contain the typical language regarding nuisance. I was quite confident that my neighbors' barking dogs were a nuisance; the question then became what to do about it?

I toyed with the idea of mentioning it at our next board meeting but then remembered some of the complaints that came my way when I served on the board and my first question on most of them was: "did you speak to your neighbor about this problem yet?". Why do people shy away from this kind of interaction? Fear of conflict or violence or is it just the fact that it is often seen as being easier to task the board with solving these issues?

What were the typical complaints? Parking on a neighbor's swale or blocking access to their driveway, excessive partying by a neighbors' teenage children, dog poop and more. While the board could have addressed all of these issues, whatever happened to a neighbor discussing these issues in a non-confrontational way in an effort to resolve the matter? I do not naively believe that every such conversation will yield a successful result but certainly the starting point for a resolution is to find out if the behavior is deliberate and repetitive or unintentional and an anomaly.

I mustered up the courage to discuss the matter with my neighbor. I wish I could say it was an easy or even comfortable conversation as it was neither. She told me matter-of-factly that dogs bark but had no real solution to the non-stop barking. I made several suggestions and was not sure any of them would be adopted. However, the problem did resolve itself over the following weeks. Perhaps my neighbor took the dogs inside, got them trained or I just got lucky. In any event, I saved some time that the board could spend on more worthwhile pursuits by resolving the issue on my own.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

How much input does your board solicit from the members prior to undertaking new projects?

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 04 Feb 2013 15:08:00 +0000

There have been quite a few changes in my community over the last few months, most of which I had no idea were in the works. The first change I noticed entering my community one night was a brand-new 25-foot flagpole standing proudly at my community's entrance. While it looked nice, I wondered two things as I drove by it: how much did it cost and why was it necessary? While I personally like flags, I could see that some folks might not think that particular flagpole looked appealing in the spot that was chosen. Soon enough though, I forgot about the flagpole entirely and never sought answers to my questions.

The next change that became apparent were new video cameras at the guard house entrance, four in total. I remember during my time on the board several years earlier that adding these cameras had been discussed but nothing had been done since then. I remember thinking as I drove by these new electronic eyes capturing me on film "Good for Sam, he finally saw this project through to completion." About a quarter of a mile past them, I followed that thought with the follow-up questions of how much they cost and how were these cameras to be maintained, utilized, etc.

The third change that caught my eye was the fact that guests' driver licenses were now being scanned in by the guard, something that had never been done before. How did I catch wind of this change? I saw cars stacked up five and six-deep at our entrance when we've never had more than two in a queue before. I was also pleasantly surprised to learn that we can now receive text messages advising us when someone visits the community which is always helpful to ensure the lawn guy shows up as planned or to keep tabs on a teenage daughter.

The last change that took me by surprise was the fact that our community was allowing itself to serve as a sales center for a neighboring development going up. While this development has no connection with ours, apparently the private country club in my community wanted to be helpful and allow this activity inside our gates. Naturally, that may or may not be appropriate depending on one's perspective as a member of the HOA and not the club who pays for security each month.

Why didn't I know about any of these significant changes in my community? Well, perhaps missing board meetings played a significant role but we also have a newsletter and an association website which reveal these projects after they are adopted and funded. Had I known that some of these items would be discussed ahead of time, I might just have made it to that meeting. I wonder how many boards use these kinds of communication portals to take straw poll votes on which projects deserve priority attention and funding prior to heading off down those paths without such input.

Naturally, there is a certain amount of danger and frustration in trying to please everyone and waiting around for consensus isn't going to help many worthwhile projects become realities. Overall, I am pleased with most but not all of the changes that took place recently. Would my knowing about them before the fact have changed the outcome? Maybe not but I probably would have avoided driving off the road a time or two in astonishment.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Is your Condo or HOA Board enforcing phantom rules?

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 28 Jan 2013 04:03:00 +0000

We often hear of boards enforcing a variety of rules restricting pets, leasing, guests, commercial vehicles and more. Many times these restrictions are proper and the board is within its rights to enforce them. However, sometimes it is discovered that a long-standing restriction doesn't really exist.

How does it happen that some boards are enforcing phantom rules?

When association boards are elected, sometimes the new directors do not review the governing documents with care (or even at all) and rely, instead, on longstanding patterns of practice by previous boards. Some directors are astonished to discover that the new purchaser approval language doesn't mention at all a requirement for a personal interview despite the fact that they were themselves subjected to an interview when they moved in. The same false patterns can hold true for something as controversial as a pet restriction or as innocuous as the date of the annual meeting being wrong.

Naturally, at some point an owner may challenge an enforcement action and respond with the obvious: "show me where in the documents it says that." If a board cannot demonstrate the authority to enforce a certain restriction, it may wind up paying attorney's fees and costs to the opposing party as well as undermining membership confidence.

Every board of directors would be well advised to undertake an annual rules and regulation audit to determine which restrictions are currently enforceable pursuant to the association's governing documents as well as current law.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Just released 3rd DCA opinion could harm your already struggling association

noreply@blogger.com (Donna DiMaggio Berger) — Wed, 23 Jan 2013 21:07:00 +0000

A case decided today could mean financial hardship for already struggling Florida associations. The Third District Court of Appeal’s ruling in the case of Aventura Management, LLC v. Spiaggia Ocean Condominium Association, Inc., Case No. 3D11-2545, January 23, 2013, underscores the need to amend the statutes for condominiums, cooperatives and homeowners’ associations to clarify that when an association takes title to a unit via its own foreclosure, the association does not become jointly and several liable for past-owed assessments and further clarify that an association can collect the past due assessments from the previous owner up to the time a new owner (other than the association) takes title to the unit.

In the Spiaggia Ocean case, the condominium association took title to a unit via foreclosure of its lien for past due assessments and began renting out the unit. Subsequently, the first mortgagee filed its foreclosure action and the investor group, Aventura Management, purchased the unit at the foreclosure sale.

The association attempted to collect from Aventura the past due assessments, late fees and interest that had accrued since the original owner defaulted. The association maintained that as a third party purchaser, Aventura was responsible for all past due assessments up to the time it took title pursuant to Section 718.116(1)(a), Florida Statutes. The trial court granted the association’s motion for summary judgment, and Aventura appealed.

The 3rd DCA overturned the trial court’s ruling and ruled that as an intervening owner, the association was also jointly and severally liable for the past due assessments when it was the owner. The majority decision opined that the Statute did not provide an exception to the joint and several liability conundrum for associations who take title to delinquent property. As a result, the association could not collect the past due assessments, late fees and interest that had accrued since the original owner defaulted from the third party investor purchaser.

This opinion flies in the face of the conventional wisdom urging associations to pursue their own foreclosures and rent out the property rather than waiting months or years for the banks to turn over delinquent properties. It may still be the case that an association can recoup losses from such action rather than having to pursue a third party purchaser at the bank’s foreclosure sale but this decision will further delay or entirely prevent associations being made whole.

The dissenting opinion in Spiaggia Ocean really gets to the crux of the problem and addresses the overriding issue of the statutory intent- trying to assist associations and not savvy investors who pick up properties at foreclosure sales. In his dissenting opinion, Justice J. Shepherd wrote:

Applying these rules to the case before us, it is apparent the fundamental purpose of the Legislature in promulgating section 718.116 was to assist condominium associations to be made whole in the collection of past due assessments, while at the same time not unduly impairing the value of collateral held by first mortgagees. In furtherance of this design, the Legislature has given condominium associations a statutory lien on each condominium unit over which it has jurisdiction, to secure payment of assessments without the necessity of filing a claim of lien in the public records, with the single exception of first mortgagees, where record notice is required. § 718.116(5)(a). Thus, under the legislative scheme, third-party purchasers of condominium units, like Aventura Management, LLC, are subject to old-fashioned caveat emptor principles. Their protection lies in satisfying themselves before purchase, whether by contract or judicial sale, of the status of past-due assessments on the unit.

I could not have stated the issue any more succinctly and agree wholeheartedly with Justice Shepherd’s analysis. My group, the Community Advocacy Network (CAN), will be working diligently this session to seek redress for this type of a ruling, and craft a legislative change that makes it clear that an association is not considered a previous owner, thereby denying it the right to seek past due assessments, late fees and interest from third party purchasers.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

So a receiver was appointed for your community, does this mean the end of your troubles?

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 21 Jan 2013 03:01:00 +0000

For some folks. the mention of a receiver sends chills down their spines while for others it signals salvation for a community with troubles. Typically, in a community association setting a receiver would be appointed when the following occurs:

No one wishes to serve on the board or a board refuses to fill vacancies sufficient to constitute a quorum;

The board is unwilling or unable to act in the aftermath of a natural disaster or just as a result of dysfunction and the community's assets are being wasted as a result;

The association is being dissolved;

There are a number of abandoned units that the association wishes to rent out; and

Prior to the change in Florida law allowing associations to demand rents from tenants in delinquent properties, receivers were usually sought to fill this function.

Often, lawyers, managers and accountants are appointed to serve as receivers in shared ownership communities. However, there are no specific requirements as to who is eligible to serve as a receiver; it is up to the court's discretion to appoint same. Receivers are required to post a bond at the time of their appointment to cover the complete inventory over which they will be exercising control and discretion. It is very important at the outset then that the bond is high enough to cover any failures or misdeeds on the receiver's part.

Receivers are entitled to fees subject to the court's approval. Unless the Order appointing the receiver contains an automatic removal provision (i.e. upon dissolution of the association, election of a new board or other triggering event) the receiver will remain in place until someone moves the court to terminate the receivership.

Receivers have helped return many communities to health but, as is often the case in life, there are also examples where receivers have done damage. The last few years saw several receivers going to jail and others embroiled in litigation over excessive fees, questionable judgement calls and failure to relinquish control.

In Florida, we are looking at possible legislation in the 2013 Session that will facilitate the appointment of more receivers in community associations. It is in a community's best interests to always ensure a system of checks and balances is in place and that applies even when a court-appointed receiver is running the show.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Why should your condo, coop or HOA board consider amending the association's governing documents?

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 14 Jan 2013 03:08:00 +0000

Without fail, every month sees at least several new association clients who arrive with a sheaf of dusty parchment paper that they present to us with a ceremonial flourish and the ominous words: here are our governing documents.

After gently thumbing through the documents which are naturally unbound and have the consistency of fragile onionskin, the question "Are you here to discuss amending these?" is often met with a quizzical look and a negative head shake. Why are so many associations reluctant to amend documents that are so obviously in need of a major face-lift?

I think it's because many associations have been burned previously in the amendment process. Sometimes they have attempted to amend without professional guidance and not gotten the results they wanted and other times they have used their attorney to prepare the amendments and gotten a whopping legal bill at the end.

The amendment process does not have to be torture if a board does two things: keep its expectations reasonable and stay involved throughout the process. Here are my other recommendations to make amending your documents a little easier for everyone involved:

Decide if you need a complete overhaul or whether strategic "spot amendments" will do. Some boards think they need to completely rewrite the documents to remove archaic references to the developer; sometimes those kinds of amendments can be window dressing. You might save money by leaving it in there.

Have a frank and ongoing discussion with your association attorney about what you are trying to accomplish and how much you want to spend. If you are way off base, he or she will tell you. You should also get a realistic delivery date on those amendments so your membership meeting can be planned accordingly.

Speaking of your members, involve them early. It would be prudent to do a straw poll vote first to see if your community actually supports freshening up the documents; chances are they do but it couldn't hurt to check before you spend a lot of money on amendments that won't pass.

Some amendments are simply easier to get approved than others. Removing illegal and unenforceable restrictions on children and satellite dishes make sense to avoid liability and should easily win approval. However, tell folks what they can and can't do with their property and whom they can have in their homes as guests and you're likely to have a real battle convincing some of your members to cast yes votes.

If your association's governing documents haven't been touched substantively in years, you may be missing out on some important legislative changes over the years; you may also have hidden time-bombs in your documents that put your association at a distinct disadvantage when it comes to lenders and others.

The start of a New Year is the perfect time to dust off those old documents and give them a fresh outlook.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

When will we become proactive rather than reactive when it comes to storms impacting our communities?

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 07 Jan 2013 02:38:00 +0000

I was fortunate to spend New Year's Eve and the Sugar Bowl (despite the Gators' peformance) with my cousins in the Big Easy! I have always loved New Orleans, particularly because many of my extended family members live there. My husband and children, however, had never visited the city so it was nice introducing them to iconic places like the Franch Quarter and the Garden District and all the city's amazing places to eat.

The course of conversation one night turned to Superstorm Sandy and the inevitable comparisons with Katrina and New Orleans' fate came up. My children listened to stories of how their cousins each lost their homes to Katrina. When we sat in the Superdome, we couldn't help thinking about the thousands of people who had called that stadium home for far too long and some of the atrocities that took place there. New Orleans lost 1,800 of its citizens and suffered a staggering $100 billion in damage thanks to Hurricane Katrina.

When we visited plantations outside of New Orleans we saw levees built up outside the gates of those stately homes where none had previously existed. In fact, New Orleans now has one of the largest storm surge barriers in the world thanks to a $14.5 billion project paid for by the federal government. The Crescent City is now protected by 350 miles of stronger levees and higher flood walls. Some of my relatives remarked that the northern folks who thought the city of New Orleans should be abandoned due to its geographically vulnerable location might now think differently.

Superstorm Sandy has inflicted $80 billion in damage in New York and New Jersey alone. The difference though is that this storm was accurately predicted and well in advance of actual landfall. Experts now have data proving their theories that super storms are becoming more frequent and more powerful. Perhaps the time is now to assess all areas that could become potential targets to these kinds of storms and "weatherize" them in the same manner that New Orleans underwent so we can all rest a little easier.

http://www.cnn.com/2013/01/04/us/us-superstorm-threat/index.html?c=weekend-homepage-t

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Does your Condo, Cooperative or HOA Board count your money?

noreply@blogger.com (Donna DiMaggio Berger) — Sun, 30 Dec 2012 23:48:00 +0000

A blog reader recently raised the issue of association boards who charge fees for certain community services but only against owners who, in the board's estimation, "can afford it" while discounting or writing off those fees for others. While there is no reasonable debate that such a practive would be contrary to both the shared ownership statutes and most associations' governing documents, the question made me ponder just how often volunteer boards engage in the typical exercise of trying to figure out who are the "haves and have nots" in a community.

In my blog reader's HOA, the board decided to clean out the french drains in the community but only sent bills to the homeowners they knew could afford it. When I first read the email, I wasn't certain of the accuracy of the tale but upon further reflection, is such board logic really any different than employers who sometimes allow external factors to determine which of their employees "need" a bonus or salary increase more than others? That logic generally falls along these lines: "Susan is a single mother of two"; "Bob is a young, single guy"; or "Sally is close to retirement". We'd like to think that these kinds of decisions are based solely on merit but we all know the reality is quite different.

Is this selectivity practice in an association setting confined solely to this reader's community or is it more widespread than we may think? Some people will undoubtedly argue that a board can and should seek to help owners in need by leveling the playing field while others will argue just as vehemently that an association board does not have and should not have the latitude to count their members' money in this fashion.

How many of you have seen these kinds of decisions made in your community and what was the result? How many blog readers have been grateful or angry to be on the receiving end of this kind of disparate treatment? How many blog readers have served on a board that made decisions about who should pay and who should not when it came to certain community services?

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Cell phone companies want to put up more towers in residential areas; what do our communities want?

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 24 Dec 2012 06:03:00 +0000

I remember the first time I really got to know most of my neighbors in my Broward County homeowners' association. We were in the process of being wooed by a very large telecommunications company who wanted to convince us how swell it would be to have a 75-foot cell phone tower disguised as a giant flagpole with a car dealership-type flag directly adjacent to our community's entrance.

Despite the free cookies and large Chesire cat grins maintained achingly by the cell company ambassadors, none of us were buying into this vision. Why was my community not enthralled with the pitch? For some of us, our concerns centered on the aesthetics of viewing the unsightly structure on our daily departure and re-entry to the community. For others, their opposition stemmed from perceived health risks and a general outrage that big business was too lazy to situate a commercial structure in a more appropriate commercial location. Regardless of our individual reasons, we quickly got to know each other, got organized and the association hired counsel to fight the placement of this structure in a residential neighborhood.

Naturally, the cell phone company had their legal counsel try to bully and badger us but we were successful in our fight and the cell tower was ultimately located in a commercial location. I hadn't thought about that battle for quite some time until yesterday's front page article on the cell tower debate heading to the Florida Supreme Court. Apparently all our smartphones, tablets and other gadgets require a lot of juice and the cell phone companies would have us believe that the only space left to power them up is in or near our private residential communities and parks. The outcome of that case might see a lot more giant flagpoles and fake pine trees popping up in places they are not wanted.

While I enjoy my share of electronic gadgetry, I would undertake the battle again if my private residential community was in the crosshairs of big business. It will be interesting to see if other affected associations engage on this issue and follow a similar path to the one my community took. If nothing else, a common enemy can bring a warring community closer together than anything else. We still have neighbors who remain friendly until today because they put aside petty squabbles once they found themselves on the same side of the cell tower battle lines. Tecnhology is great but to most people, their homes are sacred. To read more on the Sun Sentinel cell tower article, click here: http://www.menafn.com/menafn/41368fe5-aed9-44a6-8177-6ad41940b33c/Fights-over-cell-towers-could-affect-service?src=main

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

Community associations and the growing identity theft crisis!

noreply@blogger.com (Donna DiMaggio Berger) — Mon, 17 Dec 2012 05:06:00 +0000

Identity Theft and Association Purchsae and Lease Approvals

The Federal Trade Commission estimates that as many as nine million Americans have their identity stolen each year. Yes, you read that correctly...nine million and that number is growing!

None of us are truly insulated from the possibility of having our identities stolen unless we refuse to purchase items by check or credit card and never venture out of the house to the doctor's office or other location where our private information may be required. However, for those of us living in community associations, the threat may be even greater, particularly if sensitive information was gathered during the approval process and such information is not destroyed or, at a minimum, safeguarded.

Some but not all associations do run background and even credit checks on potential purchasers and renters in their communities. Often, a social security number, date of birth and enough other information to effectively steal an identity is requested on the application. The association uses this information to presumably undertake its due diligence and determine if the renter or purchaser poses any sort of real or financial threat to the community.

Assuming the association's governing documents provide the board with the authority to perform such scrutiny, the real concern then becomes what happens with that sensitive information provided by the purchaser or renter? Is it immediately shredded or is it tossed in the garbage where it can possibly be retrieved by an identity thief? If it is not destroyed, where is it stored and who has access to it? Is the information kept under lock and key with only limited access by a defined group of people or is it tossed in a drawer and no further thought given to its existence?

As the identity theft crisis continues to grow, boards and managers who come into contact with sensitive information must start asking the foregoing questions and creating useful protocol to ward off a potential problem. Individuals applying to live in or rent in a community association should inquire about how their personal information will be handled both during the approval process and afterwards.

Victims of identity theft spend countless hours and real dollars trying to clear their credit history and correct their financial resources. Horror stories abound about the steps needed to pick up the pieces in the most drastic identity theft scenarios. As a result, many insurance companies are now offering relatively inexpensive identity theft endorsements to standard homeowners' and renters' policies. Homeowners should ask their insurance agents about the benefits of this coverage and the costs. Boards who collect sensitive information should similarly speak to their insurance agents about what they can do to protect themselves and their residents from an identity theft incident.

It's never too soon to start thinking about ways to protect yourself and your community from this insidious problem

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.