Condominium associations are often faced with the difficult task of determining whether a particular project is a material alteration of the common elements, requiring unit owner approval, and whether that material alteration falls within the maintenance exception to the requirement of unit owner approval. Continue reading “Maintenance versus material alteration”
Two of the fundamental purposes of a community association are to provide an enjoyable place for its members to live and to protect the value of its members’ properties. In furtherance of these goals, many community associations’ declarations include provisions limiting or requiring pre-approval from the association before a member may lease or sell his unit, so that the prospective purchasers or tenants can be screened to ensure compatibility with the community. While these provisions are generally “recognized as a valid means of insuring the association’s ability to control the composition of the [community] as a whole,” Aquarium Foundation, Inc. v. Sholom House, Inc., 448 So.2d 1166, 1167 (Fla. 3d DCA), in some cases Florida courts have refused to enforce them as an “unreasonable restraint on alienation.” Continue reading “Are your Declaration’s lease and sale approval provisions enforceable?”
As Florida courts continue to work through the backlog of first mortgage foreclosures (referred to in that way due to their first or priority lien position on the property), it becomes increasingly important for associations to thoroughly review the first mortgagee’s entitlement to the “safe harbor” provisions of Florida Statutes when responding to estoppel requests. For Homeowners’ Associations, the relevant language is included in the Homeowners’ Association Act, Fla. Stat. §720.3085(2)(c), which provides that: Continue reading “Consideration of a first mortgagee’s “safe harbor” request”
Over the last several years, homeowner’s associations and condominium associations across Florida have taken serious losses and written off large amounts of bad debt due to the housing market crash and the flood of mortgage foreclosures following in its wake. Most associations came to rely upon recovering at last some delinquent assessments once a mortgage foreclosure was finally complete. Fla. Stat. sections 718.116 and 720.3085 provide that purchasers are jointly and severally liable with former owners for assessments that accrue before transfer of title. Continue reading “What amending your governing documents can do to save your association money”
Community associations are sometimes faced with determining whether they can prohibit a sexual offender or predator from living in a community or from using common area facilities, such as a clubhouse, or whether they have a duty to notify members of the existence of a sexual offender or predator living in the community.
In determining whether a community association has any right to prohibit a sexual offender or predator from living in its community, its governing documents must be reviewed. Some associations’ governing documents may include restrictions on sexual offenders or predators living in the community, Continue reading “Sexual Offenders and Predators in the Community”
In order to avoid adverse tax consequences, community associations should consider conducting a vote to apply surplus funds in their operating budgets at the end of their fiscal year to the budgets for their next fiscal year.
The two common tax return filing options for associations are form 1120, referred to as the corporate income tax return, and form 1120-H, which is used by associations to take advantage of certain tax benefits that allow associations to exclude certain income (membership dues, fees, or assessments) from their gross, taxable income. Associations should consult with their accountants to determine which type of tax return they will file, as there are different qualifications and benefits for each. Continue reading “When do community associations need to vote to roll over surplus funds to the next fiscal year?”
In recent years, community associations across Florida have encountered difficulties in collecting assessments and other outstanding amounts from delinquent homeowners. Often, the delinquent units are leased to third-parties as a source of income for their owners despite the owners’ non-payment of amounts owed, which can be especially frustrating for a community association. Although tenants are not obligated to pay amounts owed by their landlords under most community associations’ governing documents, the Florida Legislature has provided both Chapter 720 Homeowners Associations and Chapter 718 Condominium Associations with multiple statutory avenues to intervene and recover rent directly from the tenants. Continue reading “Community Associations’ Recovery of Rent from Delinquent Tenants and Owners”