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October 1, 1996 MEMORANDUM TO CLIENTS
CONDOMINIUM AND COOPERATIVE ASSOCIATION RESERVES AND ACCOUNTING: REPORT AND PAY NOW, OR PAY SIGNIFICANTLY MORE LATER Many condominium and cooperative associations are learning the hard way about the Division of Land Sales' Bureau of Condominiums' investigation and fining powers. Since 1992 the Bureau has had increased authority to take action for violations of the Condominium and Cooperative Acts. Action includes not only the ability to investigate, but also the ability to fine. The Bureau now vigorously and frequently undertakes enforcement efforts. Specifically, the Bureau targets condominium and cooperative association financial disclosure and reserve account requirements. If an association fails to comply with statutory requirements, then an investigation is easy. An association's own documentation, or lack thereof, will clearly illustrate any violations! Surprise is usually a condominium or cooperative association's reaction to a Bureau's enforcement action. The Bureau now fines or penalizes condominium and cooperative associations. The fines generally start at $300.00 per violation. While the amount may not seem to be large, for directors the impact can be emotionally, socially and politically devastating. Thus, associations are reminded to strictly comply with the financial reporting and accounting requirements. GET THE LEAD OUT, SERIOUSLY
New regulations by the Department of Housing and Urban Development concerning lead affect a majority of sales and leases. The law targets housing constructed before 1978. The law's goal is to require the disclosure of lead based paints or paint hazards in housing. Disclosures are required to occur before a purchaser or lessee becomes obligated under an agreement. Record keeping is required, including keeping disclosure statements for no less than three years from the lease agreement date. While failure to comply with the regulations will not automatically invalidate a lease, a property owner may be liable for civil penalties and treble damages, court costs and attorney's fees should there be litigation. The regulations probably will not affect condominium and homeowner associations which do not lease property; however, cooperative associations which technically "lease" units or apartments to members on a long term basis, would, unless otherwise qualifying for an exemption, be required to provide disclosures and comply with the law. Sellers and lessors of property are urged to review their purchase and sale and lease agreements, marketing representations and record keeping practices. SCHOOL'S OPEN: WATCH FOR CHILDREN!
That annual trek has begun. Children, sometimes with their parents, sometimes on foot, sometimes by bicycle or whatever contraption a child may convert to a mode of transport, are starting their journeys to and from schools, libraries and play. All of us should exercise due care when in areas that children congregate. As a reminder, the Florida Fourth District Court of Appeals recently restated the duty that a motorist has towards children. Quoting the Florida Supreme Court:
Craig v. The School Board of Broward County, Florida, ___ So. 2d ___ 21 Fla. L Weekly D1937, 1938 (FL 4th DCA, August 28, 1996), citing Miami Paper Co. v. Johnson, 58 So. 2d 869, 871 (Fla. 1952). No matter the rush, lets take a moment more to watch out for the kids. ANNUAL MEETINGS: VOTING AND WAIVER OF RESERVES
With "season" approaching the time to start planning for annual meetings has arrived! Advance planning is especially necessary to allow for preparation of materials, timely notices, and scheduling of space. The usual rule of thumb allows annual meetings to be set 100 days in advance of the meeting. This advance effort allows directors to formally approve the meeting date, provide a notice to members seeking nominations, hold a second directors' meeting to ratify the ballot, and to furnish a final meeting notice. Whether legally required or not, to facilitate owner understanding of the process, nearly all associations follow The Condominium Act's balloting requirements; however, please note that most homeowners' associations are required to allow nominations from the floor. Care should be taken when planning meetings with special topics, such as amendments or the waiving or the reducing of reserves. Usually, notices and agenda must specifically identify these items. As discussed in the July 1, 1994 Memorandum to Clients, most condominium and cooperative associations desiring to waive or reduce statutory reserves must obtain the consent of a majority of all voting interests. Because of scheduling requirements, please contact your association attorney as early as possible to confirm availability for your annual meeting, if desired, and for the preparation of meeting documents. GREETINGS AND SALUTATIONS: FAMILY ADDITIONS AND ANNOUNCEMENTS
What happened to summer? The traditional "slow" season was anything but slow for the firm. We have many joyous announcements. We welcome George D. Pilja. Mr. Pilja is a graduate of the University of Illinois College of Law. He successfully completed the Florida Bar Exam. Upon final Florida Bar approval, he will become an attorney associated with the firm. In the interim, Mr.Pilja will be clerking for the firm. Laurie G. Manoff has an excellent excuse for not being available last month, the arrival of Brandon Foster Manoff at six pounds, six ounces. Brandon and his parents are doing well. Ms. Manoff will be returning to the office in mid-November. Mr. Gelfand has been invited back to lecture at the University of Miami's Institute on Condominiums and Cluster Housing. He will lecture on a new but increasingly important topic: Insurance Update - Overview of Insurable Interests; Statutory Requirements and Operational Issues Facing Associations. Though the firm does not have enrollment information, professionals interested in attending the October 24 - 25, 1996 Institute should contact the University directly at: 305-284-4762. Donna Simmons, formally Ms. Arpe's assistant, is now the firm's Office Manager. Ms. Simmons is available to assist clients concerning non-legal administrative matters.
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