Legendary Sir Paul McCartney recently told the BBC that it was John Lennon who asked for a “divorce” of the Beatles. McCartney was left with the task of petitioning the court to dissolve the business partnership that was “The Beatles,” which gave him the unfortunate reputation of being the Beatle who broke up one of the most beloved music groups of all time. This reputation, says McCarthy, frustrated him for the past 50 years.

The Beatles’ partnership agreement was 2-3 paragraphs long, written on a single sheet of paper. McCartney’s lawsuit finally settled after four years, with the parties reducing their agreement to an 87-page settlement agreement. What started out as a simple agreement between good friends became a protracted battle in the courts.

Business breakups, big and small, can be emotionally and financially taxing. Help prevent this stress by:

• Enter an operating or partnership agreement with all members/partners at the start of the business enterprise.
• Keep track of how much money and sweat equity each member/partner is contributing.
• Create triggering events for termination of the business and buyouts of each other’s interests.
• Create a means to easily value the business for purposes of a buyout.
• Put non-compete agreements and non-disclosure agreements in place between members/partners.
• Create agreements on who owns real and personal property of the business, intellectual property (e.g. trademarks and copyrights), and proprietary information (e.g. client lists, proprietary processes, etc.) upon dissolution of the business.
• Consult with an experienced business attorney at the formation of the business.

An experienced business attorney can guide you and your business through all stages of the business life cycle. If you are starting a business, or experiencing a business breakdown, contact one of our business attorneys for a consultation.

More and more, insurance companies that provide unit owner insurance are suing community associations to recover payments made to the unit owner that are related to water leaks in the unit. These type of lawsuits are problematic. First, the insurance companies are waiting years to bring them, although still within the statute of limitations for the lawsuit, but nonetheless to the detriment of the community association’s defense of the case as records and memories fade overtime. Secondly, the cases are many times brought in small claims court as a result of the insurance company seeking at most $5,000.00 in “reimbursement” from the community association.

The issue with defending a small claims court case is that the cost of defending the lawsuit can be more than the amount the insurance company is seeking which puts pressure on the community association to simply settle. The basis of the insurance company’s lawsuit against the community association is negligence; the insurance company claims that the association had a duty to take some action, failed to take the action and such a failure led to loss that resulted in the insurance payment to the unit owner.What can be done to limit a community association’s exposure to such lawsuits? First, the community association should consult with its attorney to determine if an amendment to the declaration for the association should be adopted related to subrogation.

Next, community associations need to promptly respond to complaints related to leaks and properly document repair work in a detailed manner so that the location and extent of work is easily understood. The documentation related to repair work should be kept for seven years and be readily accessible. Community associations should perform routine maintenance and inspections of property that the association is required to maintain in order to identify in advance of a water leak areas of needed maintenance. Anytime there is a water leak or other casualty to unit, the association must thoroughly document, in writing, what happened to cause the leak, what was done in response to the leak and all communications between the association, the unit owner and the unit owner’s insurance company and adjuster. Such documentation should be shared with the community association’s attorney and kept in the association’s official records.

If a unit owner does not pay his or her assessments, the condo association has the power to file a claim of lien and, ultimately, foreclose on the unit. But in order to do the above, the condo association must strictly comply with the statutory pre-conditions and requirements which follow:

1 – Perfecting the Lien: Call or send a nice Reminder/Demand Letter (Optional)
Contact the owner And let them know they are late in paying their assessment. This simple step may result in the unit owner paying all amounts due and owing, without any additional action required by the association.
 2 – Notice of Intent to Record a Claim of Lien (mandatory pre-condition)
A notice of intent to lien is a formal statutory letter sent to the delinquent unit owner stating the association’s intent to place a lien on the unit for the owners failure to pay assessments. The notice of intent to lien must be delivered to the owner of the unit by both registered or certified mail, return receipt requested, and first-class United States mail to the owner at his or her last known address as reflected in the records of the association. If the address reflected in the records of the association is not the condominium unit address, the notice of intent to lien must also be delivered to the owner at the address of the unit. Delivery of the notice is deemed given upon mailing. § 718.121(4), Fla. Stat. The association must give the owner thirty (30) days to pay the outstanding balance before proceeding to the next step.
3 -Record the Claim of Lien
Thirty (30) days after sending the notice of intent to lien, the association can record the claim of lien in the public records. § 718.121(4), Fla. Stat. In Florida, the claim of lien must be drafted by an attorney because a legal description is required and it creates property rights. To be valid, the claim of lien must include:
• a legal description of the condominium parcel;
• the name of the record holder;
• the name and address of the condominium association;
• the amount due;
• the due dates; and
• it must be executed and acknowledged by an officer or authorized agent of the association.
The claim of lien secures all unpaid assessments that are due and that may accrue after the lien is recorded through the entry of final judgment, as well as interest, administrative late fees, and all reasonable costs and attorney fees. § 718.116(5)(b), Fla. Stat. The claim of lien is only valid for one (1) year after it is recorded. In other words, a legal action to foreclosure the lien must be commenced within one (1) year of filing the claim of lien.
If the unit owner pays the amount owed in full, the owner is entitled to a filing and recording of a “Release of Lien” in substantial compliance with the form found in in § 718.116(5)(d). The unit owner may contest the lien by filing a “Notice of Contest of Lien.” If the unit owner files a Notice of Contest of Lien, the association must commence a legal action to enforce the lien within ninety (90) days from the date the association received such notice. If the association does not commence an action within that ninety (90) day period, the claim of lien is voided. § 718.116(5)(c).
4 – Notice of Intent to Foreclose the Lien
The condominium association must provide written notice to the unit owner of its intention to foreclose its lien thirty (30) days before filing a lien foreclosure action. The notice must be delivered by physically delivering a copy to the unit owner, or by certified or registered mail, return receipt requested, addressed to the unit owner at his or her last known address. The notice is deemed to have been given at the time of mailing. § 718.116(6)(b).
5 – Foreclose the Lien
Thirty (30) days after the condominium association provided written notice of intent to foreclose, the association may bring a legal action in its name to foreclose the lien in the same manner a mortgage of real property is foreclosed, and may bring an action to recover a money judgment for the unpaid assessments without waiving any claim of lien. The association is entitled to recover its reasonable attorney’s fees incurred in either action. § 718.116(6)(a). At the foreclosure sale, the association has the power to purchase the condominium unit and to hold, lease, mortgage, or convey it. § 718.116(6)(d).

A proposed bill would expand the list of permits and authorizations qualifying for extension due to a Governor-declared natural emergency.

Section 252.363(1)(a), Florida Statutes, provides that certain permits and authorizations are eligible for an extension once a natural emergency is declared by the Governor for the length of time the declaration is in effect plus an additional six (6) months.

Condominiums in Florida lead the way in green living. For those who want a smaller carbon footprint, or simply want a smaller electric and water bill, living in a multi-family condominium building can be the simplest way to do both. Did you know?:

• Apartments/Multi-family dwellings use, on average, 30% less electricity per person and 50% less electricity per household than traditional single-family detached homes. Nationwide, that is an average of $1,200.00 savings per household per year!

• In Florida condominiums where unit owners have assigned parking spaces, owners can install electric vehicle charging stations. Check the Declaration of Condominium to determine your parking rights before buying that shiny new Tesla!

• Florida condominiums must permit installation of energy devices based on renewable resources, so long as they are contained within the unit. These include solar panels, clotheslines, skylights, energy efficient blinds, low-e glass windows, and many more. Check the Declaration of Condominium to determine unit boundaries before installing anything that might change the exterior of the building.

• Apartments/Multi-family dwellings use, on average, less water than single family homes. This is due to increased population density, decreased irrigation needs and shared amenities like pools, spas, etc.

• For condominiums located in urban centers, owners can reduce their driving needs by walking, biking, or driving shorter distances to stores, restaurants, etc. Some mixed-use condominiums even have these amenities right in the building.

There are nearly 800 co-operative projects in the state of Florida, some of them dating back to the 1950’s. Prior to the condominium revolution of the 1970’s and 1980’s, co-operatives, or “co-ops,” were a way for many individual people to divvy up ownership of one building or land parcel. In a co-op, owners are shareholders of a corporation, the corporation owns the apartment building or land and “leases” the apartments or land back to the members, typically for a term of 99-years. As condominiums became more popular, co-ops became disfavored. However, in certain scenarios, the co-operative form of ownership may provide flexibility to owners that condominiums just can’t. For example, a coop can also be a mobile home park, a recreational vehicle park, or a campground? For vacationers to the Daytona Beach area, owning a co-operative campsite might be ideal to park the RV for Bike Week and then rent it out the rest of the year.

But with this flexibility comes additional regulation and some drawbacks. Mobile home parks and RV parks are subject to stringent health and sanitation requirements monitored and enforced by the Florida Department of Health. The RV park may need to pay bed or resort taxes to the local taxing authority if spaces are rented to the public. And there is caselaw that co-operative property may not be afforded the same homestead protection as a condo or single-family home when its owner dies.

It is important you understand the potential benefits and liabilities of owning a co-operative before purchasing. Similarly, owners who serve on the Board of Directors of a co-operative should understand the unique nature of this property type and the regulations particular to the individual co-operative property. An experienced community association attorney can help navigate these uncertain waters.

After an HOA foreclosure action has been filed and served on an Owner, BUT PRIOR to the Court entering a final judgment in the action or ordering the foreclosure sale, a homeowner can file a “qualifying offer” indicating his or her intent to pay all amounts owed to the association within a period of not more than 60 days.

Fla. Stat. §720.3085(6). The filing of a qualifying offer stays proceedings and the accrual of attorney fees and costs to permit the homeowner time to satisfy the association’s claim. A homeowner may not make an effective qualifying offer if the property’s mortgage is in foreclosure, if the homeowner has filed bankruptcy, or if the trial date of the foreclosure action is set for less than thirty days in the future.

With regard to foreclosures in general, Florida law permits homeowners to “redeem” a property in foreclosure at any time prior to certification of the sale by the clerk or a later date specified by the judge in the foreclosure order. Fla. Stat. §45.0315. A home is redeemed by paying all past-due amounts, including any foreclosure costs.

With regard to foreclosures in general, Florida law permits homeowners to “redeem” a property in foreclosure at any time prior to certification of the sale by the clerk or a later date specified by the judge in the foreclosure order. Fla. Stat. §45.0315. A home is redeemed by paying all past-due amounts, including any foreclosure costs.

How many times have you thought about resigning from your home owners association’s board of directors because you are frustrated and unappreciated. I can imagine many times. However, it is important not to resign without considering the implications and later regret. It is important to note, in Florida, Section 617.0807 of the General Not For Profit Corporate Act provides that a director may resign at any time by delivering a written notice to the board of directors. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date.

The statute further provides that resignations must be in writing and most reasonable people agree that email constitutes written communication. Therefore, resigning in haste via email (which I see often) can pose a big problem for association directors who later regret that decision. The statute does not require anyone to actually “accept” the tendered resignation so if a frustrated director writes an email to his or her fellow directors tendering a resignation in the hopes that someone will talk them out of it, it is already too late as they are off the Board. Of course, he or she can appeal to the board to be reappointed to the seat he or she just vacated by virtue of resigning but there is no guarantee that will happen.

If you are an association director who is considering resigning from your board, take your time to think about this very important decision before sending a hasty email. 

Check out our very first BS & Bagels! Watch to learn about Community Association maintenance, repair, and replacement issues with our host Erum Kistemaker, Managing Partner at Kistemaker Business Law Group, and guest Dave Kolodzik, President of Expert Inspectors.

Erum Kistemaker and Dave Kolodzik discuss Community Association maintenance, repair, and replacement issues.

The moratorium on evictions was extended through October 1st from the Office of the Florida Governor this week.

While Gov. DeSantis’ moratorium extensions have kept tenants in their homes, they didn’t cancel anyone’s past-due rent. Tenants who fail to work out a repayment schedule with their landlords, or can’t repay the missed amounts in full, can still face eviction as soon as the moratorium ends.

Advocates pushing the federal government to expand COVID-19 relief measures to help renters financially paint a grim picture of what will happen to families if they don’t get additional help.