Condo & HOA Law, Naples Daily News

Naples Daily News Q&A | July 11, 2021 | Addressing Structural Issues of a Condominium

John C. Goede | GADC Florida Attorneys

By Attorney John C. Goede

 

Q: I am a Board member at a high rise condominium on Marco Island and we are deeply concerned about the recent tragedy in Miami involving the structural collapse of a condominium. What should we be doing?

Anonymous, Marco Island

A: The tragedy in Miami is a terrible situation and first and foremost we offer our prayers and concerns for the residents, families, and first responders involved in this terrible loss. As of the date of drafting this article, there are rumors and news reports about the building’s history and what the Board knew or should have known about the building. Without knowing more information at this time, I believe it is inappropriate to guess whether the Board acted appropriately.

More broadly, the Board has a fiduciary duty to its residents and a duty to maintain, repair and replace the common elements. This includes the structural integrity of the building. A problem, however, is that although some structural integrity issues are clearly visible and obvious, many structural issues are not visible to untrained eyes, and may not be visible at all to trained eyes.

There will be many opinions and takeaways from this tragedy, but one point which was also true before June 24, 2021, is that the Board has a duty to act reasonably prudent under the circumstances in response to known dangerous conditions. This same standard applies to dangerous conditions which should have been known to the Board. This does not necessarily mean that you must evacuate the building with every water leak, but it does mean that the Board has an obligation to investigate and engage experts when there is reasonable cause for concern. And it means that you have to act prudently and with haste depending on the facts and circumstances. If you have concerns, I recommend you consult your legal counsel. In addition to general legal principles, there are many factors which are specific to each condominium building and history that impact the Board’s actions.

 

Q: One of our owners passed away and the unit was owned by her trust. The son is apparently the beneficiary of the trust and has started moving in. Within a few days, the son has already broken a dozen rules and we discovered he has a criminal history. Can we prevent the son from living here?

T.R., Bonita Springs

A: Potentially. A revocable trust is a foundational estate planning tool with many benefits. For example, a trust can provide a vehicle to avoid the time and expense of probate, protect the trust assets against the claims of the beneficiaries’ creditors, and can provide for a third party to oversee the investment and distribution of funds to beneficiaries on predetermined dates and terms. There are many other reasons, including tax reasons, to use a revocable trust, but it is possible that the unit would stay in the trust following the owner’s death and that the son would become the beneficiary of the trust and entitled to reside in real estate owned by the trust and based on the terms of the trust. For purposes of this question, we will assume the owner did not have a surviving spouse as that can add an additional layer of analysis due to homestead rights.

If your condominium documents do not provide robust rights concerning the approval or denial of sales and leases, then it will be very difficult, if not impossible, to prevent the son from occupying the unit. As the beneficiary of the trust, the default rule would be that he has the legal right to occupy the unit as if he were the owner of the unit.

That being said, many condominium documents do have robust language concerning the approval or denial of sales and leases. I have seen and drafted many condominium documents which provide that although the Association cannot prevent the internal transfer of beneficial interests to the son under the trust, the Association can regulate occupancy. In other words, many condominium documents provide that the son in this situation would be treated like a tenant seeking to reside in the unit and therefore subject to background checks and other screening mechanisms employed by tenants. If this is the case, then it is possible that the son’s criminal history could prevent his occupancy while allowing the trust to otherwise own and rent the unit to someone that would be legally approved by the condominium association.

Q: I attended a webinar where the speaker indicated there is a new law that requires more letters in the collection of delinquent assessments. Is this true and who sends the letter if the attorney is normally in charge of all collection efforts?

P.P., Marco Island

A: This is correct. Historically, the Florida Condominium Act effectively required two letters before a lien foreclosure action could be filed. First, the condominium association had to send a letter informing the owner that the association would record a lien if payment was not timely made within 30 days. Then, if the owner did not make payment, the association had to record the lien and then send a second letter informing the owner that the association would file an action to foreclose the lien if payment was not timely made within another 30 days. The statute provided that all attorneys’ fees and costs incurred by the association and incident to collection of the past due assessments was payable by the owner.

Thus, under the prior statutory framework, there was no obligation for the association to send a warning letter or reminder letter before referring the delinquent account to an attorney or debt collection firm for collection. It is important to note that some specific condominium documents require reminder letters and warning letters, but it was not required by the statute.

The new statute both a) provides 45 days for payment under the two letters referenced above which previously only required 30 days; and b) provides that an association may not require payment of attorney fees related to a past due assessment without first delivering a written notice of late assessment to the unit owner which specifies the amount owed to the association and provides the unit owner an opportunity to pay the amount owed without the assessment of attorney fees. The Statute contains a form for the notice that must be used.

Most condominiums will provide a courtesy reminder anyway without it being required by the statutes, so this will not delay too many condominiums from pursuing delinquent accounts, but it does mean that condominium associations need to review their collection policy, if any, and review their warning letter, if any, and make sure that the policy and any reminder letters mirror the new framework established by Chapter 718. Because the entire process has been lengthened, you may also consider starting the collections process earlier than your current policy. If the Association does not follow these new requirements, it may not be able to recover attorneys’ fees incurred to collect the past due assessments, so it is important to follow these new requirements. If you have any questions about how your existing policy may not to be modified, I recommend you consult your legal counsel.