January, 2000

CLIENT MEMORANDUM

RECORDS: THE SAME OLD THING EVERY YEAR, NOT FOR Y2K

the Association shall prepare a question and answer sheet as described in s.718.504 and shall update it annually.

Failing to update a Question and Answer Sheet may subject a condominium or cooperative association to liability. Some owners utilize the failure to maintain current documents as a basis for claims against an association. In addition, purchasers are generally entitled to rely upon the "Sheet," thus, failure to provide one or mistakes may subject an association to additional liability.

Homeowners' associations, though not mandated by statute, are encouraged to prepare similar documents. This type of information can assist all associations avoid costly disputes. Especially in communities without transfer screening or approval processes, managers and directors can educate potential purchasers and tenants as to community standards and expectations. Thus, resident violations and owner assessment delinquencies may be reduced in a more neighborly manner.

CONTRACTS: READ BEFORE YOUR SIGN, EVEN SELF STORAGE LEASES

No more room! As every square inch becomes more valuable, space for storage is frequently overlooked. This creates a problem not only for house purchasers seeking closet space. Many associations have no storage space, or not enough.

Association presidents and treasurers, and particularly their spouses and family members, find the stacking of association filing boxes to be annoying and unwanted clutter. Often renting a self-storage unit can be the key to solving the all-too-common problem of having too many things, but too little room for them. Renting a self-storage unit, however, can also unlock the door to unforeseen headaches.

A recent decision from Florida's Fourth District Court of Appeal in West Palm Beach, illustrates the problems a storage unit renter, whether an association or an individual, can face. The problems may be exacerbated if the renter does not carefully read and understand the facility's rental agreement before depositing valuables. In Shurgard Income Properties Fund 16 v. Muns, 24 Fla. L. Weekly D2448 (Fla. 4th DCA Oct. 27, 1998), a disgruntled renter sued a storage facility alleging that the facility wrongfully sold his property.

In July, 1990, Mr. Muns rented a storage unit from Shurgard, for fifteen dollars per month. Mr. Muns stored valuable nautical equipment and old manuscripts allegedly worth more than $50,000 in the space. Mr. Muns only insured his property for $10,000. He resided in Spain and left the name of a local person as a contact for notices or problems. Allegedly, sixteen dollars of rent was not paid resulting in Shurgard selling Mr. Muns' valuables for a fraction of their worth without notice to Mr. Muns.

Mr. Muns sued for breach of contract, negligence, fraud, and breach of several Florida statutes. Shurgard raised several defenses, most notably the lease language. The lease contained an exculpatory clause which capped Shurgard's liability for wrongful sale of the unit's contents at $250.

The trial court dismissed all of Mr. Muns' causes of action except the breach of contract claim. However, because of the exculpatory clause in the lease, the trial court apparently limited Mr. Muns' recovery to a mere $250. This left Mr. Muns without effective redress for his claim. Two appeals followed.

In Muns v. Shurgard Income Properties Fund 16, 682 So. 2d 166 (Fla. 4th DCA 1996), the appellate court addressed the exculpatory lease clause which limited Mr. Muns' recovery. The court wrote that, "[a]lthough disfavored, exculpatory clauses which limit or exempt liability for negligence are enforceable in Florida courts." Muns, 682 So. 2d at 167. Thus, the trial court properly limited Mr. Muns' recovery to only $250 on the breach of contract claim. The appellate court did, however, reverse the lower court's dismissal of Mr. Muns other claims on technical grounds, and the case was allowed to proceed to trial on those remaining causes of action. Thereafter, Mr. Muns won a jury trial and was awarded $98,600.

Shurgard appealed, arguing that the Self-Storage Facility Act was not intended to allow private citizens to sue storage facilities. Unfortunately for Mr. Muns, the appellate court reluctantly agreed with Shurgard. Analyzing the Act's legislative history, the court determined that the Act was not intended to afford relief to private citizens. Instead, the legislature intended to make it easier for facilities to recover from tenants who do not pay their rent on time. In making its ruling, the court warned:

We recognize that this is a very harsh result. It shows us that placing goods in self-storage units creates a substantial risk, one which a typical tenants' insurance policy may not insure against.

Though the court was sympathetic with Mr. Muns' the legislature did not provide him an avenue of relief!

What can be learned from Mr. Muns' unfortunate experience? Two things. First, read your contracts carefully before signing, whether the contract is for inexpensive storage or otherwise. An exculpatory clause that limits liability can come back to haunt you. Second, obtain proper insurance. For stored items, if the rental facility does not offer enough insurance to fully cover your stored goods, check with your insurance agent for a supplemental policy.

OFFICE NOTES

Please welcome Chris L. Sprengle! Mr. Sprengle joins the firm as an attorney who initially will be responsible for foreclosure files. Chris Sprengle graduated cum laude from Florida State University College of Law in May, 1998. After graduation, he was appointed as an Assistant State Attorney, prosecuting matters in St. Lucie County courts.

A Happy New Year to all. The firm's installation of new time and billing software has apparently occurred without a hitch. To ensure no Y2K problems, please note that the January 1, 2000 bills are being printed in December; thus, certain time and expenses occurring at the end of December will appear on the firm's February 2000 billing. Thank you for your patience.

Please also note that the firm's offices will be closed for the Martin Luther King national holiday declared for Monday January 17, 2000.