Rob Jackson recently presented to the North Gulf Coast Chapter Community Association Institute at the Emerald Coast Conference Center in Fort Walton Beach, Florida. Rob covered some basic and easy to understand employment rules for community association managers and the new world of medical marijuana in Florida and how it may impact the workplace.
A copy of Rob's presentation is below:
Please feel free to contact Rob or any of the lawyers at Hand Arendall Harrison Sale if you have any questions about this presentation or are in need of updated policies or procedures for your association or business.
The 2018 legislative session resulted in changes to Florida Statutes, Chapters 720 and 712, dealing with the preservation and revitalization of community covenants and restrictions and the Marketable Record Title Act (“MRTA”), and the addition of a new requirement for homeowner association boards to address MRTA on an annual basis. The amendments to the MRTA Statute (F.S. Chapter 712) become effective October 1, 2018. Chapter 720 amendments go into effect July 1, 2017.
The purpose of MRTA is to extinguish ‘stale’ restrictions on real property; those that are more than 30 years old, measured from the ‘root of title’ (a recorded instrument creating or transferring estate in real property). If a ‘muniment of title’ (usually a deed) specifically refers to the book and page number where the restriction is recorded in the public records, the restriction for that parcel is not extinguished under MRTA. For the unwary homeowner’s association, MRTA may have the effect of extinguishing the covenants and restrictions for lots in the subdivision, and thereby the association’s ability to enforce the restrictions, because many deeds to single family homes/lots contain only a general reference to covenants and restrictions of record, and therefore don’t qualify for an exception to extinguishment. Condominium declarations, on the other hand, generally aren’t susceptible to MRTA extinguishment because the Condominium Act requires that the legal description for deeds to individual units include specific reference to the public record information for the declaration of condominium.
The good news for HOAs approaching 30 years from the recording of the original declaration of covenants is that there is a process, which has been simplified by the 2018 amendments to Chapter 712, whereby the board of directors of an HOA can preserve the covenants for an additional 30 years by filing a summary notice of preservation in the public records of the county where the subdivision is located. The covenants may also be preserved by an amendment to the covenants and restrictions that is indexed under the legal name of the property owners’ association, references the legal name of the property owners’ association and references the recording information of the covenant or restriction to be preserved. For homeowner association covenants which are past 30 years from the root of title, there is a revitalization process, although it requires an owner vote.
New Requirement for all HOA boards under §720.303(2)(2), “At the first board meeting, excluding the organizational meeting, which follows the annual meeting of the members, the board shall consider the desirability of filing notices to preserve the covenants or restrictions affecting the community or association from extinguishment under the Marketable Record Title Act, chapter 712, and authorize and direct the appropriate officer to file [notice of preservation].” Thus, strict compliance with the new statute would require that your board consider annually the impact of MRTA, even if the 30-year deadline is years away and regardless of whether a preservation notice has already been filed. The minutes of those meetings should reflect a discussion of the relevant dates and events relating to MRTA.
There were additional changes including a granting of authority for communities not governed by a homeowners’ association to now revive covenants and restrictions, and an expansion of the definition of ‘parcel’ to include those used for non-residential purposes. Understanding MRTA extinguishment and the processes to preserve and revitalize can be challenging, so consult with association counsel if there is any question about the status of your restrictive covenants. Being aware of the statute and its implications however, is the first critical step.* —Attorney Leslie D. Sheekley
*The information in this blog post is provided for general informational purposes only, and may not reflect current law in your jurisdiction. No information contained in this post should be construed as legal advice from Hand Arendall Harrison Sale LLC or the individual author, nor does it constitute legal counsel or solicitation of a prospective client. An attorney-client relationship with the Firm cannot be formed by reading or relying on this information; such a relationship may be formed only by a specific and explicit agreement with Hand Arendall Harrison Sale LLC.
2018 Legislative Update –
On July 1, 2018, the amendments to Chapter 718 (Condominium Act) and Chapter 7120 (HOA Act) signed into law by Governor Scott will be effective. Some of the changes are clarifications and modifications to the laws enacted in 2017, such as conflicts of interest, director term limits and website requirements for condominiums, and others are new additions.
Conflicts of Interest [§718.3026(3) and §718.3027]
There were significant additions to Chapter 718 in 2017 regarding director and manager conflict of interests, and associated penalties. The 2018 legislative session further amended the provisions to remove some confusion associated with the conflict provisions being in both 718.3026 (dealing with contracts), and 718.30127 (entitled “Conflicts of Interest”). Now they are contained only in 718.3027, with some further amendment.
Official Records [§718.111]
The association is not to post items not available for inspection by unit owners such as attorney-client privileged documents and communications or payroll records of employees, but the association will not be liable for doing so, unless the disclosure was made with a knowing or intentional disregard of the protected or restricted nature of the information. [§718.111(g)(3)]
The failure of the association to post the documents required under the statute does not, in and of itself, invalidate any action or decision of the board or its committees. [§718.111(g)(4)]
Meeting Notices [§718.112]
Special Assessment meetings: Replaced the prior requirement of stating in the notice the “nature, estimated cost, and description of the purpose of the assessment” with a requirement that the notice state “that assessments will be considered and provide the estimated cost and description of the purposes for such assessments.” 718.112(2)(c)(1)
Website posting of notices: In addition to posting meeting notices on the condominium property, Associations may adopt rules and procedures for noticing owner meetings and agendas on a website, so long as the time requirement for noticing such meetings is met. Any rule adopted must include a requirement that the electronic notice be sent in the same manner as a notice for a meeting of the members, and must include a hyperlink to the website where the notice is posted. This notice must be sent to all owners who have provided their e-mails as an official record. §718.112(2)(c)(1), § 718.112(2)(d)(3).
Board Member Terms [§718.112]
If a recall is determined at the conclusion of that meeting to be “facially valid”, then the recall of the member, or members, is effective immediately upon the conclusion of the board meeting. §718.112(2)(j)
A recalled board member may file a petition under 718.1255 challenging the validity of the recall
If the board determines at the conclusion of that meeting the recall is not facially valid, the recalling unit owner(s) representative may file a petition under 718.1255 challenging the board’s determination. §718.112(2)(j)4.
The arbitrator may award reasonable attorneys’ fees and costs to the respondents if they prevail, if the arbitrator makes a finding that the petitioner’s claim is frivolous. §718.112(2)(j)6.
Material Alterations and Substantial Additions [§718.113]
Fines and Use Right Suspensions [§718.303(3)]
Electric Vehicles [§ 718.113, § 718.121]
A condominium association may not prohibit a unit owner from installing an electric vehicle charging station within the boundaries of the unit owner’s limited common element parking area, however, the installation of an electric vehicle charging station is subject to a number of restrictions enumerated in the statute, such as safety, preservation of the condominium property, and the unit owner’s responsibility for associated costs. 718.113(8)
The installation of an electric vehicle charging station may not be the basis for filing a construction lien under Chapter 713, Florida Statutes, against the association, but a construction lien may be filed against the unit owner. 718.121(2), Fla. Stat.
Governing Document Amendments
Amendments to governing documents must contain the full text of the provision to be amended; proposed language to be added is to be underlined and deleted language must be stricken. §720.306(1)(e)
If the changes are so extensive that underlines and strike throughs would hinder, rather than assist the understanding of the proposed amendment, a notation must be inserted stating “Substantial rewording. See governing documents for current text.”
Amendments to governing documents are effective when recorded in the public records.
Immaterial error or omission in the amendment process doesn’t invalidate the amendment
*Notices for required for amendments must be mailed or delivered to the addresses of the owners on the property appraiser’s website, or electronically if the owner has consented in writing to receive electronic notices.
Fines and Suspensions
-The role of the committee is limited to determining whether to confirm or reject the fine or suspension levied by the board.
Fines are due 5 days after the date of the committee meeting at which the fine is approved.
The following language was added to §720.306(9)(a): “If an election is not required because there are either an equal number or fewer qualified candidates than vacancies exist, and if nominations from the floor are not required pursuant to this section or the bylaws, write-in nominations are not permitted and such qualified candidates shall commence service on the board of directors, regardless of whether a quorum is attained at the annual meeting.”
Application of Payments
This amendment clarifies that regardless of whether a unit owner places a restrictive endorsement on or accompanying their payment to the association, such as “paid in full” or the like, it does not operate as accord and satisfaction as to a greater amount owing, and the association may apply the partial payment in the order of the statute, to interest, then to any late fees, costs and attorneys’ fees and then to assessments, and continue to seek collection of the remaining balance owing. §720.3085(3)(b)
The Florida Legislature was very active last year with many changes being made Chapter 718 of the Florida Statutes, which became effective on July 1, 2017. Below is a summary of many of the changes.
Offenses which can Result in Criminal Penalties
Conflicts of Interest
New Requirements for Websites
Board Member Term Limits
Association’s Right to Suspend Owner Voting
Estoppel Certificates (Applies to Chapter 719 and 720 as well)
Our firm is experienced in helping individuals, managers, and board members navigate the Association’s documents as well as the Florida statutes. If you have questions regarding how these new changes may affect you or your Association, please do not hesitate to contact us.
Home-sharing and short-term rentals have steeply risen in recent years thanks in part to websites such as Airbnb.com, VRBO.com, HomeAway and similar sites. The rise in use of these websites causes significant issues for community associations, such as those involving privacy, security, traffic-control and parking. Where the restrictive covenants are silent on the issue of short-term rentals, any ambiguity as to whether short-term rentals are allowed generally must be resolved in favor of the homeowners’ free and unrestricted use of the property. That being said, many community associations and/or neighboring homeowners often believe that short term vacation rentals are forbidden by the association governing documents, as most governing documents prohibit “commercial or business use” and restrict the property to “single family residential use” or some similar variation thereof.
The First District Court of Appeal ruled in a case originating out of Walton County in 2017 that short-term vacation rentals do not violate restrictive covenants requiring property to be used only for residential purposes and prohibiting its use for business or commercial purposes. This case appears to be a matter of first impression in Florida. The critical issue considered by the court in determining whether short-term rentals are residential uses of the property is the character of the actual use of the property by those residing thereon – i.e., whether the renters are using the property for ordinary living purposes such as sleeping and eating. The duration of the rental was not deemed a determining factor. The court noted that the nature of the property’s use is not transformed from residential to business simply because the owner earns income from the rentals or pays a lodging tax. Where there are several indicia of a business enterprise, however, other Florida courts have found violations of residential-use-only restrictions.
As to the restriction mandating single family use, Association documents typically do not define the term “single-family,” and there is no common-law interpretation of “single family” in the community association setting. Applicable local zoning ordinances may or may not provide a relevant definition of “single-family.” Nevertheless, most Florida cases construe the “single family residence” or other similar restriction as restricting only the types of structures allowed on the premises rather than who may use or occupy it.
Nuisance restrictions are also contained in most associations’ governing documents, but these provisions are typically very basic and provide little guidance in determining what constitutes a nuisance. Thus, unless the short-term renters are carrying on illicit behaviors and/or causing loud noises at all hours of the night, it would be difficult to use the provision as a bar to short term vacation rentals. To add to that difficulty, most such renters usually will have departed before any enforcement action is even begun, much less completed.
An association can amend the governing documents to prohibit short-term vacation use, but adding such a restriction will typically require a supermajority approval. For example, under the Florida Condominium Act, an amendment that prohibits owners from renting their unit, alters the duration of the rental term, or limits the number of times owners are allowed to rent their units during a specified period requires approval by two-thirds of the unit owners (unless otherwise specified in the governing documents), and is applicable only to owners who consent to the amendment and those owners acquiring title after the effective date of the amendment. As for homeowners’ associations, the governing documents will generally specify the percentage approval required to amend the governing documents, and if no threshold of approval is set forth, then the Florida Homeowners’ Association Act requires the approval of two-thirds of the voting interests to amend the governing documents.
In many instances, associations may assuage the effects of such rentals by adopting rules regulating the manner in which vacation rentals are operated and charging fees to accommodate for additional burdens borne by the association. Any such rules, however, may not effectively prohibit the use of such vacation rentals, must be reasonable, and must be consistently applied to all owners.