As an attorney, one thing that I have always said is that the worst job in the world is board member of your condominium association or HOA. I have a few friends and clients who take on this thankless task.  One of our firm attorneys is a former HOA board member of his community and has moved up to his community’s Community Development District.  My secretary of over 25 years, who sees this first hand on a daily basis, is secretary of her own condo board.  She knows better!  My father, who is an elected city commissioner (which is another story in and of itself) has simultaneously (though not currently) been president of his condo association.  He has convinced my mother to serve on the condo board while he sits out for a few years.  Crazy!

Me, not a chance! We have lived in our community of 1500 homes for over 22 years.  We pay our assessments and keep our property clean and follow the rules.  The HOA does a great job and, in the time we have lived here, our assessments have remained steady, going up an average of about $3 per month each year.  You can imagine my surprise, shock even, when I received the annual budget a few weeks ago and the notice or our assessment for 2018.  The increase was $29 per month, a 16% increase.  The board explained that $25 of the increase is directly related to Hurricane Irma repairs and will be for 2 years only.

The explanation seemed reasonable and I have to trust the judgment of the board since I have no desire to be involved in the process. However, I can imagine the heat that board members are taking over this decision.  I am sure they are being bombarded by calls and emails as well as unpleasant conversations with neighbors while walking their dogs or shopping at Publix.  (Note that I have no idea who our board members are so none would hear from me if I were moved to object).

The real estate attorney in me does question why a $600 assessment ($25 x 24 months) is necessary following Hurricane Irma. My knowledge of the community damage is obviously limited to what I have observed walking and driving through the neighborhood.  To me, the damage seems less extensive than following Hurricane Wilma 11 years ago.  We seemed to have fewer trees down this time.  Perhaps sidewalk damage was more extensive this time (from uprooted trees), but the HOA has a sidewalk repair line item in the budget as our trees continue to mature and roots damage the sidewalks.  But the year following Wilma, our assessments did not increase outside of the normal range.

What about insurance and reserves? Did the board reduce our coverage and resources so that the HOA was more exposed following Irma than we were following Wilma?

There are countless other questions that I could ask. But if I ask, someone might push me to get involved.  And that brings me back to the beginning.  There is no job worse than HOA/Condo board member.  Therefore, I will continue to pay my assessments and let someone else have the job, thank you.

There are many pre-closing costs incurred in residential real estate closings. These costs are generally fronted by the title company or the buyer’s attorney.  If all goes well and closing occurs, the costs are reimbursed.  However, too often, something goes wrong and the closing doesn’t happen.  We, and I include myself and my firm in this category, closing agents are often stuck with these unreimbursed costs.  Hopefully, our buyer will find another house and we’ll have an opportunity for reimbursement later.  That is not always the case.  Fortunately, many of these pre-closing expenses are small.  One potentially large expense is the estoppel letter from the condominium association or HOA.

Condo and HOA estoppel letters are important parts of residential closings. These tell us whether the seller is current in payment of assessments of if there is a collection action pending that has not yet shown in the title search.  The estoppel confirms the amount of the assessments and how much has been paid to date so that proper pro-rations can be made on the closing statement.  And, hopefully, the estoppel will provide other information, like whether the association has a right of refusal or other approval or purchase rights.

For the work of preparing and providing an estoppel letter, the association or management company usually charges a fee. This fee is unregulated in Florida and we see fees today ranging from as low as $100 to over $450 or even higher if a rush is required.  These fees almost always have to be paid up front.  “Rush” cam mean as much as 2 weeks from the date of request.

HB 483 and its companion in the Senate, SB 398, propose to cap estoppel fees, promulgate a from estoppel which would contain mandatory, standard information and set deadlines for providing completed estoppels to the requestor. In addition, the fees would be payable at closing and out of closing proceeds, relieving the burden from the closing agent.

The “Home Tax Bill” would amend F.S. Sections 718.116, 719.108 and 720.3088, the Condominium, Cooperative and Homeowner Association Acts, respectively. The Act would shorten the time period that Associations have to provide estoppels from 15 days to 10 business days, a minor adjustment.  More importantly, the Act creates a mandatory estoppel form which contains the information an association must provide in its estoppel.  This would include whether there are any existing rules violations pertaining to the unit, the association’s approval requirements for sale or lease of the unit, what utilities are included in the payment of assessments, the parking space and storage unit assigned to the unit, the regular periodic assessment and date paid through and the date the next installment due, if delinquent, the name and contact of the attorney, itemized list of all other assessments and capital contributions due and whether there are any rights of refusals.  The cost of estoppels would be capes at $200 for non-delinquent units, plus $100 for “rush” requests and plus $200 for delinquent units.

Community association groups and attorneys representing community associations oppose the Act arguing that is places too great a burden on associations and that the cost of unpaid estoppels would be passed on to unit owners. These arguments are weak.  For associations which are managed by professional, paid managers or management companies, estoppel information is or should be readily available, regardless of how the manager is staffed.  In fact, most management companies have employees who are dedicated exclusively to providing estoppels.  Further, a large percentage of the information that would be required on the new form is in fact, form language.  The financial information is the same information that is provided today.  There is no real extra burden.  Large property management companies quietly state that estoppel departments are a profit center to their business.  Their associations won’t suffer.  Self-managed associations are generally small and don’t get a large number of requests, certainly, not at one time.  For the few that they do every year, the timing requirements won’t put these associations out any more than they already are.

The risk of unpaid fees is not a real risk either. The Act provides that the owner of the unit is ultimately responsible for the fee.  If it remains unpaid for any reason, the association may collect it as an unpaid assessment.  That means the association may lien and ultimately foreclose the unit if necessary.

The Act brings fairness in a business transaction that was one sided in favor of property managers. Community associations have not really benefitted from estoppel fees and should not oppose the Act.  This is not the first time this legislation has been proposed.  Community associations should join the Florida Association of Realtors in supporting it as unit closings will ultimately go faster and smoother.


        A Florida Condo Association is on the losing end of a disability discrimination case for the second time after HUD settled a case at the end of August. Del Vista Towers Condominium Association and its management company, AKAM On-Site, entered into a Conciliation Agreement with HUD on August 23, 2016, agreeing to compensate an aggrieved resident and to make a donation to a non-profit disability rights organization. In addition, the association and management company have agreed to develop a reasonable accommodation policy which must be approved by HUD.

             The complaint stems from an investigation launched by HUD in April of 2014 following HUD’s receipt of numerous reposts of rights violations from Del Vista Towers residents. One resident complained that she had requested that her disabled son be given accommodation for use of a service dog. She was denied accommodation because the association was defending several expensive lawsuits regarding service animals. Later, her lease was not renewed. The resident alleged retaliation. Other residents had similar complaints. Many reported that they feared requesting accommodation because of the history of retaliation by the association.

             This was not Del Vista Towers’ first loss in a disability discrimination case. In 2014, the Association was a defendant in a federal lawsuit. A resident, aware of the condo’s no-pet policy, sought accommodation for his pit bull as a service animal. The board denied the request on the basis that pit bulls are restricted breeds in Miami-Dade County. The resident brought suit in Federal Court in Miami. The court ruled in the resident’s favor. In denying the association’s motion for summary judgment, the court held that “emotional support animals need not be specifically trained, because the symptoms the animal ameliorates are mental and emotional rather than physical.” If the county ordinance were to be enforced, housing discrimination would exist in practice.

             Condo associations and landlords need to be aware of the Fair Housing Act in all respects and careful in its application as it pertains to disabilities and service animals. Courts and HUD will give deference to “reasonable accommodation” language in the statute and the burden is on the housing provider to show why accommodation would be “unreasonable”. Del Vista Towers has lost cases twice now, likely at a high cost to its residents.

tarping up

        I recently read a bog post about woodpeckers causing unexpected damages to a condominium in British Columbia (Read Here) causing unexpected expense to the association and unit owners. The story got me to thinking about what would happen if something like that happened here in Florida. No, we don’t have a woodpecker problem (though occasionally, some woodpecker will peck on a window) and due to rigid hurricane codes, our buildings are generally concrete block construction which would break a beak or two. But we have other critters that can cause major damage, including, termites, iguanas, rats, opossum and mold spores, to name a few. And, there is the big fear, the natural disaster we all dread: hurricanes.

             F.S. Chapter 718, the Florida Condominium Act, is very comprehensive. Section 718.112(f) requires that the association bylaws must include all of the expenses set forth in section 718.504(21). That section, which deals with the developer’s offering circular, lists all of the expenses that a developer must include in its initial association budget. The expenses include reserves. Section 718.112(f) goes on to provide that, after turnover, a budget may exclude any item which is no longer applicable. However, any association that believes that reserves aren’t applicable must look at 718.112(f)(2)(a) which provides that all budgets must include reserves for capital expenditures for deferred maintenance, including roof repairs, building painting, pavement resurfacing and any other deferred maintenance expenses exceeding $10,000 based on the remaining useful life. Reserve accounts may only be used for their specified purpose unless a majority of the unit owners vote to re-allocate the reserves.

             There is no specific requirement for associations to budget reserves for emergency repairs for things like termite infestation and damage. So what is an association supposed to do when these unexpected events occur? As mentioned above, the association may request a vote of the unit owners to re-allocate reserves to cover the unexpected damage. But, it would then be prudent for the association to make up for the re-allocated funds by special assessment, either one time, or over time, as those reserves will be necessary in the future. The association can also pass a special assessment to cover the need for the emergency repair.

             In the event of larger, but not urgent repairs, the association can borrow money from an institutional lender. There are banks that specialize in condominium financing. The association need not pass a special assessment to cover new debt service. Rather the debt service can often be treated as a line item in the association budget and added into the regular assessment to the unit owners.

             Finally, as to a catastrophic loss, such as those following a hurricane, the association is required to maintain insurance on the condo. The unit owners will likely then only bear the burden of the deductible. Sometimes this burden is significant, as condo deductibles may be high to save on premiums and the number of units to share the deductibles may be low. Unit owners should be certain to maintain condo insurance and make sure that the coverage includes special assessment coverage following a catastrophic loss. In this situation, the special assessment would be covered by the unit owners’ condo policy.

             With proper planning, condo associations and unit owners can have protections against unexpected damage to condominiums. Planning involves some up front cost and adequate funding of reserves. But these costs will always be less than the potential expenses when disaster strikes if unprepared.

Good Credit Score

        HOA’s may soon have more leverage to collect assessments from chronically late paying and delinquent homeowners. Call it an “incentive”. Sperlonga, a credit data aggregator, will become the first company to furnish HOA payment and account status data to Equifax. A test run will begin in August with full reporting planned for October. Once Equifax receives the data (perhaps the other reporting agencies will join at a later date), homeowners’ credit scores will be affected in the same manner as mortgages affect credit scores. On-time payments will have a positive impact on credit scores, while late and delinquent payments will have a negative impact on scores.

             Until now, HOA payments have not been reported. Matt Martin, chairman of Sperlonga said in a prepared statement that the new service “will help elevate Association payments to the same level of importance as the consumer’s other financial obligations”. Associations might see this as good news as owners will have more incentive to make timely payments of their maintenance obligations.

             However, critics argue that assessments are not the same as mortgages or other loans as associations do not provide financing for purchased goods. They provide maintenance and service only.

             Florida, obviously, has thousands of HOAs and condo associations. Over the next few months, associations boards should be in touch with their property managers to determine the cost of reporting to Sperlonga and the overall benefits to the association.

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    Welcome to Assouline & Berlowe’s Florida Real Estate Law and Investment Blog with news, insights, and commentary for investors, developers, and their advisors.


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