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May 1, 1994 MEMORANDUM TO CLIENTS
1994 CORPORATE ANNUAL REPORTS NOW PAST DUE As we discussed in the February 1, 1994 Memorandum to Client and as clients were reminded on their monthly bills, every corporation, whether profit or not-for-profit (including condominium, homeowner and other incorporated associations) is required to file an Annual Report. The report must be on the Department of State, Division of Corporations's form. The form must be timely received in Tallahassee with the $200.00 fee. Forms not properly completed or forms submitted without the fee will be returned to the corporation. The due date was May 1, 1994. If you did not file your form, do so now, and include the $25.00 penalty for a total fee of $225.00. If you did not receive your form, or if you are uncertain whether you filed the form, then contact your counsel. Corporations which fail to file and pay the fee will be involuntarily dissolved. The effect of dissolution may be disastrous!
Time and time again condominium unit owners and condominium associations ask the question: Who can sue the developer and general contractor for defects in the common elements of the condominium? The answer to this question has recently been determined by the Florida Supreme Court in Rogers & Ford Construction Corporation, v. Carlandia Corporation, 18 Fla. L. Weekly S592 (November 10, 1993). The condominium act specifically endows condominium associations with authority to sue the condominium's developer and general contractor for defects in the common elements. However, as the Florida Supreme Court noted, the association is not the exclusive holder of the right to sue for defects. The Condominium Act provides that unit owners own an undivided share of the common elements. Any defects or deficiencies in the common elements affect the unit owners' property interest. Therefore, the Florida Supreme Court determined that unit owners have a sufficient interest in the property to sue the developer or general contractor for defects in the common elements. There are potential practical problems which may result if less than all condominium unit owners were to sue the developer. Some of these problems include: unnecessary costs if multiple lawsuits are filed; potentially contradictory adjudications; determination and allocation of the appropriate measure of damages; and accomplishing the necessary repairs. Recognizing the need to avoid these potential problems, the Florida Supreme Court held that all the unit owners' interests should be represented by the single unit owner who brings an action against the developer or contractor for defects in the common elements. Unsettled issues include what occurs if there are two suits pending, such as a unit owner suit for common element damages, and an association suit for financial improprieties. This decision may affect how condominium associations proceed with claims of common interest concerning unit owners, such as construction defects. If a claim is brought, and if settled, consideration should be made as to whether an association is bringing the claim on behalf of itself, all unit owners or both. If a claim is not brought, or if a claim is delayed, associations must consider the impact of a unit owner bringing an individual claim during the delay. LEGISLATIVE UPDATE:
CONDOMINIUM AND COOPERATIVE ASSOCIATION FINANCIAL REPORTS
The first 1994 legislative act directly affecting associations is Florida Law 94-77 enacting House Bill 535. The law amends §718.111(13) Fla. Stat. (1993) and §719.103(13) Fla. Stat. (1993). These statutes required condominium and cooperative associations to file their annual financial reports with the Bureau of Condominiums. The old law also provided that the filings were confidential, not available for public inspection. The new law corrects overzealous disclosure and regulatory efforts in the 1992 amendments to the Condominium and Cooperative Acts. As a practical matter, the Bureau of Condominiums did not want to receive, did not have space to store, and did not review condominium and cooperative association financial reports. The new law deletes the filing requirement. Because the records are no longer filed, the confidentiality provision was similarly deleted. PARDON OUR DUST!
We appreciate your understanding. Clients who recently visited or telephoned our offices know about our "face-lift". During April and continuing into May, the firm has and is expanding. We are doubling our physical size by adding space immediately adjacent to the firm's existing offices. We are also adding additional telecommunications equipment. We will have additional space to serve you. We will also be able to avoid telephone busy signals. We will continue to monitor the telephone usage, especially in the autumn when telephone usage generally increases. Additional telephone equipment, if necessary, will be installed by the end of the year. In the interim, we appreciate your patience.
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