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LEGISLATIVE UPDATE
By
Eric Glazer, Esq.
Published March 27, 2017
I had the honor and pleasure
of spending a few days in Tallahassee last week. I testified at
hearings before the House of Representatives. I drafted proposed
legislation and had several meetings with legislators and staff.
One thing is very clear this legislative session. IF YOU
ARE A BOARD MEMBER OR MANAGER LOOKING TO COMMIT CRIMES OR TAMPER
WITH ELECTIONS, THE LEGISLATURE IS GUNNING FOR YOU. THE JIG IS
UP!
As all of you know the Miami Dade Grand Jury
Report was scathing and presented condominiums in a very
negative light and a place where corruption reigns. In response,
House Bill 1237 was filed by Representative Jose Diaz and Senate
Bill 1682 was filed by Senator Rene Garcia. Representative Diaz
was very gracious and met with me regarding some serious
concerns I have about the bill. To be very clear, I am all in
favor of getting extremely tough on the bad apples in the bunch.
However, I don’t want people to have false hope and think that
if the bill passes they can now walk into their police
department complaining that their director won’t give them
access to records, and the police will now go out and make an
arrest. I think we can all agree that won’t happen. So I’ll list
below how the current bill reads, what I perceive is a potential
problem and more importantly what I perceive may be a potential
fix.
The bill prevents a board member or
management company from purchasing a unit at a foreclosure
sale resulting from the association’s foreclosure of its
lien.
Problem: Why should a board
member be prohibited from participating in a public sale,
but the next door neighbor isn’t? Remember that if the board
member or manager buys the property, rather than the
association, that board member may wind up owing a large
amount of assessments to the association that would
otherwise get wiped out if the association buys it.
FIX: A
BOARD MEMBER OR MANAGER MAY ONLY BUY A UNIT AT A FORECLOSURE
SALE IF PRIOR TO THE FORECLOSURE SALE THE BOARD OF DIRECTORS
HAS PASSED A MOTION AT A PROPERLY NOTICED MEETING THAT
APPROVES THE PURCHASE OF THE UNIT BY THE BOARD MEMBER OR
MANAGER. IF A MANAGER OR BOARD MEMBER DOES BUY THE UNIT, ALL
SUMS DUE TO THE ASSOCIATION FOR PAST DUE ASSESSMENTS SHALL
BE PAID WITHIN THIRTY (30) DAYS.
Any director who knowingly,
willfully and repeatedly violates the access to records law
is guilty of a misdemeanor in the second degree. “Repeatedly
violates” means more than two violations within a 12 month
period.
Problem: Under present law…..a
director is not under a responsibility to provide access to
records, an association is. So, a director cannot be found
to violate the law, only an association can. You can’t say a
director is guilty of a crime if the statute does not impose
an obligation on the director to provide access. And….Who
determines if a violation has been committed? The statute
says records request cases get determined by an arbitrator.
Need there be a finding first by an arbitrator that a
director “repeatedly violated” the law? Can a criminal court
judge make this finding without going to arbitration first?
Do we want to clog the criminal courts with records cases
now? Do we want people being able to go directly to the
police before going to arbitration? If they do will the
police really investigate and make an arrest?
AMEND
FLORIDA STATUTE 718.1255 TO STATE “IN ANY ARBITRATION
PROCEEDING INVOLVING ACCESS TO RECORDS, IF THE ARBITRATOR
FINDS THAT A SPECIFIC DIRECTOR OR DIRECTORS WILFULLY IMPEDED
AN OWNER’S ACCESS TO RECORDS THREE OR MORE TIMES IN A TWELVE
MONTH PERIOD, THAT DIRECTOR OR THOSE DIRECTORS SHALL BE
PERSONALLY ASSESSED THE PETITIONER’S ATTORNEY’S FEES AND
COSTS, AND SAID FEES AND COSTS SHALL NOT BE ASSESSED BY THE
ARBITRATOR AGAINST THE ASSOCIATION. IN ADDITION, THE
ARBITRATOR SHALL ENTER AN ORDER IMMEDIATELY REMOVING THOSE
DIRECTORS FROM THE BOARD OF DIRECTORS AND THE VACANCY OR
VACANCIES SHALL BE FILLED BY THE REMAINING DIRECTORS. THE
DIRECTORS THAT ARE REMOVED AS A RESULT OF THE ARBITRATOR’S
ORDER MAY NOT BE ALLOWED TO SERVE ON A CONDOMINIUM BOARD OF
DIRECTORS FOR A FIVE YEAR PERIOD. BEFORE THE ARBITRATOR
ENTERS A FINAL ORDER, HE OR SHE SHALL ENTER AN ORDER JOINING
THE DIRECTOR(S) AS A RESPONDENT AND SAID ORDER SHALL BE
SERVED ON THE DIRECTOR(S) WHO SHALL BE ENTITLED TO NOTICE
AND AN OPPORTUNITY TO BE HEARD. JOINDER, NOTICE AND
OPPORTUNITY TO BE HEARD IS SATISFIED IF THE DIRECTOR(S)
ALREADY TESTIFIED IN THE ARBITRATION PROCEEDING. ANY
DIRECTOR ASSESSED FEES AND COSTS AND/OR REMOVED FROM THE
BOARD IS ENTITLED TO FILE FOR A TRIAL DE NOVO, BUT SHALL NOT
USE ASSOCIATION FUNDS FOR THE FILING FEE OR FOR THEIR
ATTORNEY’S FEES.
The bill would require an association
with 500 or more units to post the official records on its
website.
Problem: Less than one percent
of condominiums in Florida have 500 or more units.
FIX: EVERY
CONDOMINIUM ASSOCIATION WITH 50 OR MORE UNITS SHALL POST THE
OFFICIAL RECORDS ON A WEBSITE ACCESSIBLE TO ALL OWNERS. AN
OFFICIAL RECORD SHALL BE POSTED ON THE ASSOCIATION’S WEBSITE
WITHIN FIFTEEN (15) DAYS OF THE ASSOCIATION’S RECEIPT OF
SAID RECORD. THIS POTENTIALLY CURES A HOST OF PROBLEMS.
DELIBERATE FAILURE TO POST THE RECORDS ON THE WEBSITE SHOULD
CARRY THE SAME PENALTIES AS 2 ABOVE
The bill would prevent a board member
from serving more than four consecutive 2 year terms, unless
approved by an affirmative vote of two-thirds of the total
voting interests of the association.
Respectfully, if
this person is able to get elected for four 2 year terms,
that person is either doing something right or the other
owners are completely disinterested and this person is doing
all the work. Why would you want to keep that person off of
the board, with all of the experience they have? And the
bill does not say when this two-thirds vote is to be taken.
Is it a vote that happens during the election itself? Is it
a vote that needs to be obtained before the election? If so,
how will it work with the other critical time constraints of
the election statute?
FIX: LEAVE
IT UP TO THE UNIT OWNERS IN THAT CONDO. THE STATUTE DOES NOT
SPECIFICALLY STATE THAT A CONDOMINIUM ASSOCIATION MAY IMPOSE
TERM LIMITS. AMEND THE STATUTE TO SPECIFICALLY STATE THAT
ANY ASSOCIATION, BY AND THROUGH AN AMENDMENT TO ITS BYLAWS
MAY VOTE TO IMPOSE TERM LIMITS FOR MEMBERS OF THE BOARD OF
DIRECTORS. UNDER NO CIRCUMSTANCES MAY THE BLAWS REQUIRE AN
OWNER TO REMAIN OFF OF THE BOARD OF DIRECTORS FOR MORE THAN
ONE YEAR IN A ROW.
Recalls would now be automatic. If the
Board receives a stack of recall ballots that equal more
than 50% of the units, the people are recalled, regardless
of whether or not all of the ballots are fake, fraudulent or
signed by non owners. It would now be up to the recalled
persons to file their own arbitration case.
Problem: This bill
encourages fraud. Just quickly gather as many recall ballots
as you can, have them signed by anyone, serve them on the
board …and you win.
THE
RECALL STATUTE IS NOT BROKEN ---- EXCEPT FOR ONE THING. EVEN
IF AN ASSOCIATION FIGHTS A RECALL WITH ABSOLUTELY FRIVILOUS
DEFENSES, THE STATUTE FORBIDS AN AWARD OF PREVAILING PARTY
ATTORNEY’S FEES. WHY? MAKES NO SENSE. SO, AMEND THE STATUTE
TO SAY THAT IF AN ARBITRATOR FINDS THAT A BOARD OF DIRECTORS
FAILED TO CERTIFY A RECALL IN BAD FAITH, THE UNIT OWNER
REPRESENTATIVE SHALL BE ENTITLED TO AN AWARD OF PREVAILING
PARTY ATTORNEY’S FEES. IF SO AWARDED BY THE ARBITRATOR,
THOSE UNIT OWNERS WHO VOTED IN FAVOR OF THE RECALL AND WHOSE
VOTES ARE DEEMED VALID BY THE ARBITRATOR SHALL PAY NO
PORTION OF THE ATTORNEY FEE AWARD AND SHALL BE APPROPRIATELY
CREDITED ON THEIR ACCOUNT LEDGERS. FLORIDA STATUTE 57.105
SHALL BE APPLICABLE IN ALL RECALL CASES. (IT IS THE STATUTE
THAT POTENTIALLY MAKES ATTORNEY’S FINANCIALLY RESPONSIBLE
FOR PAYMENT OF FEES AND COSTS IN CIVIL CASES WHERE FRIVILOUS
POSITIONS ARE TAKEN).
The bill attempts to privatize the entire
arbitration process . The
Division would no longer have to employ arbitrators who
basically make next to nothing to act like Administrative
Law Judges and hear your cases. The filing fee of $50.00 is
low primarily because the salaries of the arbitrators are
low. Even though the Grand Jury Report does not condemn the
arbitrators, all of a sudden there is an attempt to allow
private arbitrators to be hired. Private arbitrators will
not work for the wages that the current state arbitrators
do. There is no doubt in my mind that if this measure
passes, Joe Citizen better get ready to pay a lot more to
have their arbitration case heard. And if they can’t afford
it – they won’t have their complaints heard at all.
FIX:
LEAVE THE ARBITRATORS ALONE. FIX 718.1255 AND HELP THE UNIT
OWNERS BY AMENDING TO SAY THAT IF AN ARBITRATOR REFERS AN
ARBITRATION CASE TO A MEDIATOR AND THE MEDIATOR DECLARES AN
IMPASSE, THE ARBITRATION PROCEEDINGS SHALL RESUME. AS OF
NOW, IF AN IMPASSE IS DECLARED, THE CASE GETS DISMISSED.
THAT MAKES NO SENSE. THIS SAVES OWNERS THOUSANDS OF DOLLARS
WHICH WAS THE VERY INTENT OF THE STATUTE IN THE FIRST PLACE.
The bill then mentions lots of ways it
would now be a crime to tamper with the election process.
I know what it’s
like to uncover fraud in an election. The people engaged in
it need to know that there are criminal penalties for
providing false votes, destroying documents and engaging in
election fraud. Monetary penalties, usually paid by the
association is not sufficient. However, the statute
currently requires election cases to first go to
arbitration. Let the arbitrator make this determination so
that our police stations are not the place of first resort
and they are not bombarded with election fraud cases that
they will not and don’t have time to investigate.
AMEND
FLORIDA STATUTE 718.1255 TO STATE THAT IF AN ARBITRATOR
MAKES A SPECIFIC FINDING THAT ANY INDIVIDUAL DELIBERATELY
PARTICIPATED IN ELECTION FRAUD, MEANING KNOWINGLY AND
DELIBERATELY DESTROYING OR ALTERING DOCUMENTS USED IN THE
ELECTION PROCESS, THE ARBITRATOR SHALL SEND A COPY OF THE
FINAL ORDER TO THE STATE ATTORNEY’S OFFICE OF THE COUNTY
WHEREIN THE CONDOMINIUM IS LOCATED. WITHIN SIXTY (60) DAYS,
THE STATE ATTORNEY’S OFFICE SHALL EITHER PROCEED WITH OR
DECLINE PROSECUTION AGAINST SAID DIRECTORS. THE DECISION BY
THE ARBITRATOR SHALL BE ALLOWED IN AS EVIDENCE IN ANY
SUBSEQUENT CRIMINAL PROCEEDING. IN ADDITION, IF THE
ARBITRATOR FINDS THAT A SPECIFIC DIRECTOR OR DIRECTORS
WILFULLY COMMITTED ELECTION FRAUD, THE ARBITRATOR SHALL
ENTER AN ORDER JOINING THE DIRECTOR(S) AS A RESPONDENT AND
SAID ORDER SHALL BE SERVED ON THE DIRECTOR(S) WHO SHALL BE
ENTITLED TO NOTICE AND AN OPPORTUNITY TO BE HEARD. JOINDER,
NOTICE AND OPPORTUNITY TO BE HEARD IS SATISFIED IF THE
DIRECTOR(S) ALREADY TESTIFIED IN THE ARBITRATION PROCEEDING.
THAT DIRECTOR OR THOSE DIRECTORS SHALL BE PERSONALLY
ASSESSED THE PETITIONER’S ATTORNEY’S FEES AND COSTS, AND
SAID FEES AND COSTS SHALL NOT BE ASSESSED BY THE ARBITRATOR
AGAINST THE ASSOCIATION. IN ADDITION, THE ARBITRATOR SHALL
ENTER AN ORDER IMMEDIATELY REMOVING THOSE DIRECTORS FROM THE
BOARD OF DIRECTORS AND THE VACANCY OR VACANCIES SHALL BE
FILLED BY THE REMAINING DIRECTORS. THE DIRECTORS THAT ARE
REMOVED AS A RESULT OF THE ARBITRATOR’S ORDER MAY NOT BE
ALLOWED TO SERVE ON A CONDOMINIUM BOARD OF DIRECTORS FOR A
FIVE YEAR PERIOD. ANY DIRECTOR ASSESSED FEES AND COSTS
AND/OR REMOVED FROM THE BOARD IS ENTITLED TO FILE FOR A
TRIAL DE NOVO, BUT SHALL NOT USE ASSOCIATION FUNDS FOR THE
FILING FEE OR FOR ATTORNEY’S FEES.
The bill requires directors and officers
of an association, and the relatives of such directors and
officers to disclose to the board any activity that may
reasonably be construed to be a conflict of interest. The
bill then lists categories that make it a rebuttable
presumption that a conflict exists. The bill then allows the
Board to remove the member who allegedly failed to disclose
the conflict without a vote of the members, through a
lengthy complicated process.
Problem: This is a recipe for disaster.
What is good about the current statutes is that it takes a
majority of the unit owners to remove a
director, not a simple vote of the Board members who can now
allege at any time that a Board member failed to disclose a
conflict. The statute nowhere else allows a Board to remove
a director, not even if that director shoots someone living
at the condominium. But now, with this new law, we allow the
Board to remove someone based on a subjective feeling that
the member failed to disclose a conflict.
FIX: THE
CONDOMINIUM ACT DOES NOT PRESENTLY CONTAIN A SIMPLE
PROVISION THAT STATES THAT A DIRECTOR MAY NOT VOTE ON ANY
MATTER WHEREIN THE DIRECTOR HAS A CONFLICT OF INTEREST. A
CONFLICT OF INTEREST IS DEFINED AS VOTING ON ANY MATTER, THE
RESULT OF WHICH HAS A DIRECT FINANCIAL IMPACT ON THE
DIRECTOR OR A MEMBER OF THE DIRECTOR’S FAMILY. IF A DIRECTOR
IS FOUND BY AN ARBITRATOR TO HAVE VOTED ON A MATTER THAT THE
DIRECTOR HAD A CONFLICT THAT HE OR SHE FAILED TO DISCLOSE
AND THE DIRECTOR FAILED TO ABSTAIN ON A VOTE REGARDING SAID
MATTER, THE ARBITRATOR SHALL REMOVE THE DIRECTOR FROM THE
BOARD, SHALL ASSESS ATTORNEY’S FEES AND COSTS AGAINST THAT
DIRECTOR AND THAT DIRECTOR IS PRECLUDED FROM SERVING ON A
BOARD OF DIRECTORS FOR A PERIOD OF FIVE YEARS. ANY DIRECTOR
ASSESSED FEES AND COSTS AND/OR REMOVED FROM THE BOARD IS
ENTITLED TO FILE FOR A TRIAL DE NOVO, BUT SHALL NOT USE
ASSOCIATION FUNDS FOR THE FILING FEE OR FOR ATTORNEY’S FEES.
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About
HOA & Condo Blog
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Eric Glazer graduated from
the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for more than 2
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decades and is the owner of Glazer
and Associates, P.A. a seven attorney law firm with offices in
Fort Lauderdale and Orlando and satellite offices in Naples,
Fort Myers and Tampa.
Since 2009, Eric has been the host
of Condo Craze and HOAs, a weekly one hour radio show that airs
at noon each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
He is the first attorney in the
State of Florida that designed a course that certifies
condominium residents as eligible to serve on a condominium
Board of Directors and has now certified more than 10,000
Floridians all across the state. He is certified as a Circuit
Court Mediator by The Florida Supreme Court and has mediated
dozens of disputes between associations and unit owners. Eric
also devotes significant time to advancing legislation in the
best interest of Florida community association members.
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