6 Tips for Preparing Your HOA for Hurricanes and Other Disasters

Hurricane season began June 1. Have you done all you can to minimize the damage at your HOA from a natural disaster, whether it’s a hurricane, flood, earthquake, tornado, fire, or some other unexpected event? Here we provide six tips for minimizing the damage from a disaster and speeding up your community’s return to normalcy.

Don’t Get Complacent

Don’t get complacent about disaster planning simply because you’ve never faced a disaster, or maybe the last one you encountered was years ago, contends Alan Chesler, a partner at Alan James Insurance in Sunrise, Fla.

To be proactive, take the following steps:

1. Document the conditions at your HOA. 

Take date–stamped photos of everything in your lobbies, common areas, and so on, advises Chesler. Stand in the corner of each room and take pictures so that all perspectives of the room are visible. Store the photos on a memory device in a safe place.

2. Make sure your buildings’ roofs are in tip–top shape.

Schedule a roof inspection to ensure tiles are secure, caulking is updated, and other roof elements are maintained, adds Chesler. Make sure you take pictures so you can verify lost tiles, air–conditioning unit damage, and so on.

3. If you have warning of a potential disaster, create a to–do list.

Have a “close down” plan for the building, says Chesler, which might involve:

  • Turning off pool pumps
  • Moving elevators to a higher floor so they don’t get flooded
  • Planning to inform residents the building will “close” several days before the storm
  • Distributing an evacuation plan

4. Make sure your insurance policies and coverages are up to date.

“Maybe you haven’t looked at your policy in a while, and the cost to repair or replace your property has gone up,” explains Jeff Vinzani, an attorney in Charleston, S.C., who represents associations. “You’ll need to increase your policy limits. You also want to make sure you have the right type of coverage, like replacement coverage, so that you’ll be compensated for the full cost of replacing your HOA’s property, not the depreciated value. Also, you need to ensure a board member or your manager has copies of the policies for when the time comes for you to rely on them.”

5. Give residents a list of disaster–prep essentials.

Provide residents with a list of things they should have in their possession, including their Social Security card, passport, credit cards, proof of residency (electric bill or driver’s license), insurance policies, prescriptions, photos of their unit, water, food, gasoline, propane, candles, and an operational and well–maintained generator.

6. Discuss disaster planning with your residents.

“Have a documented disaster plan, and put it in your policy manual and distribute it to owners,” says Duane McPherson, Carrollton, Texas–based division president at RealManage, an association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas. “Typically, boards will cover the plan once a year in an annual meetingdepending on where the HOA is located.”

McPherson says the detail in your plan will probably depend on the size of your community. “Bigger communities are typically the ones that will do that planning,” he says. “For smaller ones, it’s a case–by–case thing. We have one building that has several high–rise towers, and it has a pretty sophisticated plan. If there’s an earthquake, residents know where they need to go and what the exit pathways are. On the other hand, we have a larger, single–family development that’s down on the Pacific Ocean, and its plan addresses mainly how residents are going to exit the community in an orderly way and where emergency exits are.”

There’s really no excuse not to have a plan because it shouldn’t cost much to craft. “There’s so much out there from the Federal Emergency Management Agency and other governmental agencies’ websites,” says McPherson. “They essentially give you the template of a plan. You’ll also probably want to get your local disaster agency like your local police or fire department involved in it; they’ll probably also have information to give you. There may also be things you need an engineer to look at, but the plan should be mostly things you can do yourself while using consultants as necessary. There’s so much information out there compared to 15 years ago, it’s incredible.”

From the AP:  Court — Consumer watchdog structure unconstitutional

Impact of court ruling

“The CFPB court case is an important ruling,” says Margy Grant, Florida Realtors vice president & general counsel. “However, it’s important to understand that nothing has changed beyond the fact that the President can now remove the director of the CFPB for any reason. The agency will continue to operate as it does now, and Realtors need to continue to follow RESPA in its current form.”

WASHINGTON (AP) – Oct. 11, 2016 – A federal appeals court has ruled that the structure of a U.S. consumer watchdog agency is unconstitutional because it gives too much power to a single agency director.

The ruling issued Tuesday said the way the Consumer Financial Protection Bureau is organized violates the Constitution’s separation of powers because it limits the president’s ability to remove the director who heads the agency.

The law creating the independent agency after the 2008-09 financial crisis says its director can only be removed “for cause,” such as neglect of duty, and not over political differences. The court said that conflicts with the Constitution, which allows the president to remove executives for any reason.

The ruling came from a three judge panel of the U.S. Court of Appeals for the District of Columbia Circuit.

The ruling handed a victory to the banking industry, which has viewed the agency as a thorn in its side and accused it of overreaching in its regulation of consumer financial activities. The agency has taken legal action against banks, mortgage companies, credit card issuers, payday lenders, debt collectors and others. The CFPB says that over five years it has recovered $11.7 billion that it returned to more than 27 million harmed consumers.

The agency has been enmeshed in partisan politics since it was created by Congress in a major financial overhaul law in 2010 to protect consumers from harmful banking and lending practices. Wall Street interests, the banking and consumer finance industries and Republicans in Congress have fiercely opposed and criticized the agency.

The idea for the agency was conceived by Elizabeth Warren, now a Democratic senator from Massachusetts and a fiery critic of Wall Street. President Barack Obama had considered naming her to head the CFPB, but her nomination likely would have run into deep opposition from the Republicans in Congress. Richard Cordray, a former Ohio attorney general, has run the agency since it began operating in 2011.

In the legal case, the government has argued that the agency’s structure and powers are constitutional.

The case involves allegations that New Jersey mortgage lender PHH Corp. was involved in a scheme to refer customers to certain mortgage insurance companies in exchange for illegal kickbacks. The CFPB ordered PHH to pay $109 million in illegal payments it had received. PHH claims its conduct was legal and challenged the bureau’s structure as unconstitutional.

“Today’s decision offers much-needed clarity on the legality of marketing service agreements,” says National Association of Realtors® (NAR) President Tom Salomone. NAR offers additional details about the court ruling on its website.

AP Logo Copyright 2016 The Associated Press, Marcy Gordon, Sam Hananel. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.    

Types of Construction Contracts

construction-contractsParties to a construction contract generally select from one of several traditional methods by which the contract is priced. The following are among the most common:

Lump sum. The owner agrees to pay a specific dollar amount for whatever is required to complete the job, such as an agreed fixed fee of $3,306 to install a new hardwood floor. If the contractor makes a mistake in the estimate for labor or materials, the contractor bears the loss.

Unit price. The contract is priced by the number of units delivered multiplied by a set rate per unit, such as an agreed rate of $6.39/square foot for installing a hardwood floor. Contractors bear less risk under unit price contracts because an error in estimating the size of the job does not stick the contractor with overages.

Cost plus a fee. Under this arrangement, the contractor agrees to keep records of the costs for labor and materials. The owner agrees to pay for all the submitted costs plus a markup, which can be expressed either as a percentage or as a lump sum, such as an agreement that a contractor will install a hardwood floor and charge the actual cost of the materials plus 35%.

If there is a dispute regarding the price, courts will first attempt to determine which type of pricing scheme the parties agreed to use, determine which party assumed risk of error or contingencies, and finally determine which party bears financial responsibility.

Can’t Locate Your Homeowner’s Insurance Information?

hurricane-matthewIf you are one of the many Floridians suffering with Hurricane Matthew damage and can’t locate your insurance company’s information, here is a list of Florida’s largest property insurance company websites and claims numbers: http://ow.ly/ULPQ3054dW2.

Kistemaker Business Law Group is offering free legal consultations to assist those who sustained hurricane damages. Please give us a call or visit our website.



Do HOA Boards’ E-mails Violate Sunshine Laws?

sunshine-lawE-mail communication is an effective tool for prompt dissemination of information. Boards of directors can and probably should make use of that technology. However, communication among board members via e-mail comes with some risks.

If a quorum of the board is present together and discussing board business, that discussion constitutes a de facto board meeting, which must be properly noticed and open to the membership to attend, unless a narrow exclusion applies, such as a meeting with the association attorney regarding proposed or pending litigation. The key is defining what “present together” means.

A board meeting held by conference call where all parties can hear and be heard constitutes a meeting.

Owner doesn’t send association documents. Is deal dead?

Question: A seller has contracted to sell his home in a community governed by a mandatory homeowners’ association. Shortly before closing, the buyer cancels the deal, saying the seller failed to provide homeowners’ association documents as required by law. Is the seller required to provide the documents?

Answer: No. While a non-developer seller of a condominium is required to provide a set list of association documents, the same is not true of a seller of a property subject to a homeowners’ association. The buyer is only entitled to receive a Homeowner’s Association Summary Disclosure per Florida Statute 720.401. The summary disclosure requires the seller to inform the buyer of any assessments the homeowners’ association charges, as well as any land use fee, but does not require any actual association documents to be provided.

© Florida Realtors®

Kistemaker Business Law Group Sponsors Power of the Purse Event

13879205_10209805356150940_4797738291631314774_nErum Kistemaker recently attended the United Way Women’s Initiative of Volusia’s Power of the Purse fundraising luncheon and silent auction, which took place the Hilton Daytona Beach Resort/Ocean Walk Village.

In addition to attendance, Kistemaker Business Law Group was pleased to contribute to the event as a ‘Burberry’ sponsor.

As an affinity group of United Way, the Women’s Initiative of Volusia (WIV) has grown to encompass professionals, community volunteers and businesses leaders who inspire those around them to reach out wit13886263_10209805356230942_4293354085411125236_nh a full and giving heart.  The mission for Women’s Initiative is to create positive, measurable, long term change in the lives of women and children by focusing on root causes and pooling resources to increase our impact to those in need.

In its 13th year, the Power of the Purse event is the largest fundraiser for Women’s Initiative of Volusia and raises funds to support women and children in the Volusia and Flagler communities.  



Kistemaker Business Law Group Featured in Daytona Beach News-Journal

erum ellie njErum Kistemaker of the Kistemaker Business Law Group were recently featured in the Biz Buzz section of the Sunday Daytona Beach News-Journal.

Erum Kistemaker was named in the brief as new officers on the Volusia Flagler Assocation of Women Lawyers’ board as the organization’s vice president.


Condominium Restrictions on Rentals and Amendments

lawThe Florida Condo ACT, specifically addresses amendments which limit or prohibit unit owners from renting their units. Section 718.110(13) of the current version of the statute states that amendments prohibiting unit owners from renting their units, altering the duration of the rental term, or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period, apply only to unit owners who consent to the amendment, and unit owners who acquire title to their units after the effective date of that amendment.

Counting of Condominium Election Ballots

logoThe Florida Administrative Code provides that an “impartial committee” must be appointed to open election envelopes and count the ballots.

However, this rules does not apply to proxy votes. The rule specifically prohibits current directors, officers, and candidates from serving on the impartial committee. Spouses of these individuals are likewise disqualified.



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