December 2003

INSURANCE: THE IMPORTANCE OF READING THE FINE PRINT TO KNOW WHAT YOUR POLICY COVERS

What would happen if an owner or visitor is injured while using equipment in the Association’s exercise room or in the lobby or outside the building? Would the Association be covered for his or her injuries? Maybe yes, maybe no - it depends on what the policy includes and excludes.

The recent decision of Union American Insurance Company v. Haitian Refugee Center, 28 Fla. L. Weekly D2220 (Fla. 3^rd DCA, September 24, 2003), emphasizes the importance of knowing what your insurance policy covers. Donaldson Dona St. Plite died after being shot by a member of a crowd at a street rally sponsored by the Haitian Refugee Center a mile from the Center’s headquarters. Mr. St. Plite’s Estate filed a wrongful death action against the Center, seeking money damages for the Center’s negligence.

The Haitian Refugee Center’s insurance policy limited coverage to "bodily injury ... arising out of [t]he ownership, maintenance or use of the premises shown in the [s]chedule and operations necessary or incidental to those premises." The trial court ruled that the Center’s insurance company provided liability coverage to the Center for the shooting death of Mr. St. Plite. The trial court found that the event at which Mr. St. Plite was killed was "an operation necessary or incidental to the business" of the Center.

The Florida appellate court disagreed with the findings of the trial court. The appellate court pointed out that the policy used the word "premises" and not "business." Because the death occurred at a location away from the Center and in a manner unrelated to the Center, the court concluded that the Center’s insurance policy did not cover Mr. St. Plite’s shooting death.

This case emphasizes the importance of knowing what your insurance policy covers. As we all know, insurance policies are typically long and difficult to read. Nonetheless, it is important to know what type of coverage you have in the event someone is injured on your property. Take the time to read your insurance policies. Consult with your insurance agent. It may help avoid surprises down the road.

FIRE AND SAFETY CODE: ALL HIGH-RISE CONDOMINIUMS MUST BE RETROFITTED WITH FIRE SPRINKLER SYSTEMS BY 2014

Do you live in a high rise condominium in Florida? Does your building contain a fire sprinkler system? If not, despite the cost, your condominium association may be required to install a fire sprinkler system in common areas.

Florida Statute §718.112(2)(l) requires the Association’s Bylaws to provides for "a provision that a certificate of compliance from a licensed electrical contractor or electrician may be accepted by the association’s board as evidence of compliance of the condominium units with the applicable fire and life safety code." Thanks to Florida Senate Bill 592, which became effective as of May 21, 2003, Associations can opt out of individual unit and common element installation of a fire sprinkler system under certain circumstances.

The first test under the statute deals with the height of buildings. Section 718.112(2)(l) provides that a Florida condominium association may not forego the retrofitting of a fire sprinkler system of common areas in a building over 75 feet in height. The common areas include any enclosed hallway, corridor, lobby, stairwell or entryway.

If your condominium building does not exceed the height threshold, then the statute next provides a complicated procedure for opting out of the fire sprinkler requirements. The statute provides that the unit owners can forego retrofitting of the fire sprinkler system if two-thirds of all voting members agree to do so. The vote to opt out may not be obtained by general proxy or limited proxy. The vote must be obtained either (1) by a vote cast personally at a duly called membership meeting or (2) by execution of a written consent by the member. A certificate attesting to such vote must be recorded in the public records.

The Association must provide each unit owner written notice of the vote to forego retrofitting of the required fire sprinkler system in at least 16-point bold type, by certified mail, within 20 days after the Association’s vote. A copy of the notice must be provided by the current owner to a new owner prior to any closing and to a renter prior to signing a lease.

Local authorities cannot require completion of retrofitting of common areas with a sprinkler system before the end of 2014. However, it is important to note that if the retrofitting has not been completed as of December 31, 2014, the building will be in violation of the Florida Fire Prevention Code. Associations should therefore begin the process well in advance of the deadline to either opt out of the requirements or to have fire sprinkler systems installed. Remember to follow each point mentioned above.

FIRM NEWS

In observance of national holidays, the firm’s offices will be closed on Thursday, December 25, 2003 and Thursday, January 1, 2004. The firm’s offices will also be closed the afternoon of December 16, 2003.

Happy holidays! May the new year bring peace, happiness and good health to all.

© 2003 by Gelfand & Arpe, P.A.

What happens if your neighbor installs what looks like a flying saucer on his or her roof? Is it a giant eyesore? Guess what? You may not be able to do anything about it.

A recent opinion and order issued by the Federal Communications Commission, In the Matter of Wojcikewicz, DA 03-2971 addressed the issue of whether a homeowner could install an antenna on his roof in order to get good reception where his community restricted installation of antennas and satellite dishes. The Over-the-Air Reception Devices rule, 47 C.F.R. §1.4000 ("OTARD"), prohibits governmental and private restrictions that impair antenna users in their use, installation, and maintenance of antennae and satellite dishes.

The Commission explained that the Rule applies when an antenna is installed "on property within the exclusive use or control of an antenna user where the user has a direct or indirect ownership or leasehold interest in the property" upon which the antenna is located. The Rule clearly delineates that a restriction is prohibited if it (1) unreasonably delays or prevents installation, maintenance, or use; (2) unreasonably increases the cost of installation, maintenance, or use; or, (3) precludes reception of an acceptable quality signal.

The Commission looked to the language in the community’s Declaration to determine whether the homeowner had a property interest in his roof. The Commission ruled that the Association’s requirement for homeowners to obtain Association approval before installing an antenna was impermissible because the requirement constituted unreasonable delay.

This decision emphasizes the limits placed on homeowners associations regarding enforcement of restrictions dealing with antenna and satellite dishes. The Commission allowed an Association to state preferences for placement of antennae as long as those preferences do not meet the above stated three criteria that prohibit restrictions. Communities with restrictions may want to think about amending their Declarations to give the Association complete ownership interests in roofs. If the unit owner has no interest in the roof, then the OTARD rule does not apply to him or her.

Did you ever enter into a contract where you have not quite gotten what you thought you were getting? What about the saying: "almost does not count?" Apparently, almost does count if one party to a contract substantially complies with what it bargained to do.

A recent Florida appellate court decision pointed out that one party to a contract may be entitled to full payment even though it does not provide the other party with exactly what the contract provided. In Strategic Resources Group, Inc. v. Knight-Ridder, Inc., 28 Fla. L. Weekly D2119 (Fla. 3^rd DCA, September 10, 2003), the court ruled that where a party to a contract substantially performs its obligations under the contract, a claim for breach of contract could be defeated and the performing party would be entitled to the full contract price.

In 1992, The Miami Herald entered into an advertisement contract with a home developer agreeing to publish the developer’s advertisements and to bill the developer for the exact space used for publication. The contract allowed the newspaper to "revise, alter or reject any advertisement." The developer sued the newspaper claiming it was over-charged between 1994 and 1997 of over $80,000 because the images in the Miami Herald ads were 3.83% smaller than the agreed upon size.

The appellate court found that while the newspaper had intentionally reduced the size of the images, it had not intentionally breached the contract. The court pointed out that the reduction in the size of the advertisements was only noticeable if measured with a ruler! The court determined that the newspaper had substantially performed what was required by the contract. The developer "received the benefit of its bargain," that is, almost what it thought it would get.

To avoid similar problems, Associations may want to review their contracts to see if the contracts spell out exactly what it is that the Association thinks it getting.

FIRM NEWS: MOVING UP

The firm is pleased to announce it is moving up from the 10^th floor to the 12^th floor; from Okeechobee Boulevard to Palm Beach Lakes Boulevard. We anticipate our move to take place toward the end of November or in the beginning of December, depending on construction schedules. If you are in the area, then please stop by and see our new offices. In the meantime, please be patient with us while we are packing up files and papers for the move to our new home. Our new address will be: Regions Financial Tower, 1555 Palm Beach Lakes Blvd., Suite 1220, West Palm Beach, FL 33401. Telephone numbers will remain the same.

The firm’s office will be closing its office in observance of Veteran’s Day on Tuesday, November 11, 2003 and in observance of Thanksgiving on Thursday, November 27 and Friday, November 28, 2003.