January 2002

MEMORANDUM TO CLIENTS

CORPORATE PROCEDURES: RING IN THE YEAR WITH UPDATED RECORDS

Besides the festivities associated with the end of the year holidays, the beginning of the new year brings with it certain legal requirements that community associations must follow. A few of these requirements are as follows:

Question and Answers Sheets. New AQuestion and Answers Sheets@ must be annually updated. Florida law requires condominium and cooperative associations to have the information available for owners and potential purchasers. Failure to update a Question and Answers Sheet may subject a condominium or cooperative association to significant liability involving claims over undisclosed information.

Although homeowners= associations are not required to annually update a Question and Answers Sheet, it is nonetheless a good practice to prepare similar documents. By educating potential purchasers as to community standards and expectations, the association can avoid later disputes which can become costly. Why not take steps in advance to avoid use restriction violations and assessment delinquencies!

Annual Report and Fee. The Florida Business Corporation Act and the Florida-Not-For- Profit Corporation Act require all corporations, whether condominiums, cooperatives, homeowners or otherwise to file an annual report and pay an annual fee. By the middle of January, each association should receive Annual Report form packets from the Florida Department of State, Division of Corporations. Remember, read the form carefully and make all necessary changes. Most importantly, file the completed form and fees ON TIME.

Records. There is always the question of how long records must be kept. Although the statutes provide only minimum time periods for keeping records, some items, such as minutes, should be kept indefinitely. Never dispose of documents relating to pending or anticipated claims.

PREMISES LIABILITY: SLIP AND FALL ON A BANANA PEEL

A recent decision by the Florida Supreme Court just made it easier to hold a store liable if someone literally slips and falls on a banana peel in a grocery store. The Court=s approach could just as easily apply to associations if someone slips and falls in common areas or in common elements, such as in the case of an oil spill in a parking area or standing water in a lobby.

In Owens v. Publix Supermarkets, Inc. and Soriano v. B & B Cash Grocery Stores, Inc., 26 Fla. L. Weekly S756 (November 15, 2001), the Florida Supreme Court held that the existence of a foreign substance on the floor of a business premises that causes a customer to fall is not a safe condition. The court further held the unsafe condition creates a rebuttable presumption that the owner did not maintain the premises in a safe condition.

Evelyn Owens sued Publix for injuries she sustained after she slipped and fell on a discolored piece of banana lying on the floor. Publix argued it had no actual or constructive notice that the banana was on the floor. Similarly, Elvia Soriano sustained injuries when she slipped and fell on a discolored piece of banana in B & B=s store. B & B=s former manager conceded the store falsified its inspection records. In both cases, the trial courts ruled in favor of the stores.

After examining decisions from other jurisdictions, including New Jersey, Louisiana and Colorado, the Supreme Court stated:

These cases clearly establish the modern jurisdictional trend of departing from the traditional rule of premises liability when a plaintiff slips and falls on a transitory foreign substance.

Troubled by the fact defendants could benefit from their own lack of record-keeping because plaintiffs often failed to establish when stores last swept its floors, the court held the trial courts erred in directing verdicts in favor of the grocery stores.

The Owens decision is directed toward supermarkets, self-service marts, cafeterias, fast-food restaurants and other business premises. Nonetheless, associations should be aware of potential liability. Associations may be faced with a similar burden of proving it exercised reasonable care by properly maintaining and inspecting the premises.

VOTING MACHINES: LET=S GET IT RIGHT THE NEXT TIME AROUND

Palm Beach County is replacing its voting equipment. Theresa LePore, Supervisor of Elections, encourages every citizen to become familiar with the new touch screen voting machines. Associations wishing to have a demonstration of the new voting machines at either their annual meeting or at a members= or other meeting are encouraged to call Tom Shea at the Palm Beach County Supervisor of Elections Office at (561) 656-6200.

FIRM NEWS

In addition to New Year=s Day, the firm will be closed on Monday, January 21, 2001 in observance of Martin Luther King, Jr. Day. Our staff wishes everyone a healthy, prosperous, and most importantly a peaceful New Year!

8 2001 by Gelfand & Arpe, P.A.