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Is the Party Over? AirBNB Makes its “Party House” Ban Official

By: Erin Glover-Frey, Esq.

One of the biggest issues plaguing Florida condominiums and HOA’s are short-term rentals and the havoc of “party houses.” When bars shut down in 2020 during the COVID pandemic, creative party hosts turned to renting entire houses on AirBNB for just one night, in which to host both friends and strangers for a rager. Quickly seeing the problems these “party houses” created for neighbors and citing to public health concerns, in August, 2020, AirBNB created the first of several restrictions on party houses, including barring more than 16 occupants per unit and suspending guests who publicly advertise parties on social media.

In June, 2022, AirBNB took one step further to make its party house ban official. The official policy of the company is now to limit each rental to 16 guests, except for large properties big enough to accommodate more. Guests who wish to book for one night only on a holiday weekend may be required to have a positive prior review for approval of the booking. For two-night bookings on holiday weekend, such as the 4th of July, AirBNB will monitor for local residents or last-minute attempts to book a property.

Additionally, AirBNB has instituted a Neighborhood Support Line, available at www.airbnb.com/neighbors, where neighbors can report disruptive parties. AirBNB may suspend guests and hosts who are reported offenders. Community associations can also turn to the Neighborhood Support Line for help in shutting down chronic nuisance party houses.

As always, associations can use their authority to fine, suspend use of common areas and elements, and charge back expenses against owners who allow nuisance party houses or whose guests and tenants cause damages to the common property.

NEW LAW: Condo Safety

A Bill was adopted unanimously by the Senate on May 24, 2022 by the House on May 25, and signed into law by the Governor on May 26. Here are some of the highlights. 

This new bill imposes substantial new structural safety and reserve requirements on Florida condominiums and cooperative associations. The law is effective immediately and is intended to prevent further disasters like the Champlain Towers South collapse in Surfside, Florida. The new requirements include: 

  • Milestone InspectionsCreation of Fla. Stat. Ch. 553 and amendment of Ch. 718/719, requiring submission to local building official of periodic “milestone inspections” of load bearing walls, structural members, and structural systems, sealed by a licensed architect or engineer, for any building three or more stories in height, except for a three story building with three or fewer single-family units. 
  • PHASE 1 INSPECTION – Upon notification from enforcement agency of past-due milestone inspection, the association must submit the inspection report within 180 days. The new law requires the “local enforcement agency,” presumably the local building department, to send notice to associations of the milestone inspection requirement. The ciation then has 180 days to perform a “Phase 1” inspection 

SUMMARY – If a condominium building is 3 or more stories in height, a “milestone inspection” is required and must be performed by a licensed architect or engineer. The inspection must be performed within 30 years from the date the Certificate of Occupancy (“CO”) was issued for the building. However, if the building is within 3 miles of the coastline, the milestone inspection must be performed within 25 years of the CO date. 

  • The Phase 1 inspection requires the architect or engineer to perform a visual inspection of  the property and undertake a qualitative assessment of the building’s condition. If the Phase 1 inspection reveals no signs of structural deterioration, then a “Phase 2″ inspection is not required. A Phase 2 inspection is required if structural deterioration is noted. The Phase 2 inspection may require destructive testing, at the inspector’s direction
  • The engineer or architect performing either a Phase 1 or Phase 2 inspection must prepare a written inspection report. The report must be sealed and have a separate summary pointing out its material findings. The report must be given to the association and the local building official with jurisdiction over the building. 
  • IMPORTANT ASSOCIATION NOTE: The new statute lists the minimum categories which must be addressed in the milestone inspection report, by reference to the new statutory requirement for a “structural reserve study.” discussed below. The association must distribute the milestone inspection report to all unit owners, regardless of its findings. Delivery must be by mail, personal delivery, or e-mail to those who have consented to receive electronic notice. The association must also post a copy of the inspection summary in a conspicuous place on the property. The association must post the full report on its website, if the association is legally required to have a website. 
  • The new law gives local building officials discretion to prescribe timelines and penalties for non-compliance. County commissions may adopt ordinances establishing timelines for necessary repairs identified in a report, and such repairs must be commenced within 365 days after receiving the report. 
    • For pre-turnover condominiums and cooperatives, the developer must obtain and provide the association with a milestone inspection at turnover. THIS IS IMMEDIATE AND IMPORАTNT FOR TURNOVER CONDOS 
    • IFor post-turnover condominiums and cooperatives with buildings with certificate of occupancies issued prior to July 1, 1992, the initial milestone inspection is due December 31, 2024, and every ten years thereafter. 
    • For post-turnover condominiums and cooperatives with certificates of occupancy issued July 1, 1992 or after, milestone inspection due by December 31 of the year in which the building reaches: 
  • 25 years of age, for buildings within 3 miles of coastline, or 
  • 30 years of age, for buildings not within 3 miles of coastline 
  • And every 10 years thereafter 
  • Willful and knowing failure to obtain milestone inspections constitute a breach of officers and directors’ fiduciary duties. POTENTIAL PERSONAL LIABILITY 
  • The association must post (physically and on web site (IS THIS FOR ALL WHAT ABOUT ASSOCIATION’S THAT ARE NOT REQUIRED TO HAVE A WEBSTIER), if applicable) and provide a copy of the milestone inspections to each unit owner, regardless of findings. 
  • Allows local enforcement agencies to prescribe timelines and penalties with respect to compliance with the requirements.  Repairs recommended pursuant to milestone inspection must commence within the earlier of 1) 365 days from submission of the report; or 2) such sooner period of time as designated by the applicable Board of County Commissioners. Failure to perform repairs within the mandated time period requires the local enforcement authority to conduct a review to determine if the building is unsafe for human occupancy. 

Structural Integrity Reserve Studies and Mandatory Reserves. Amendment of Fla. Stat. Ch. 718 and 719 to require all condominium and cooperative associations with any building three or more stories in height to obtain “structural integrity reserve studies” every ten years to determine remaining useful life and funds necessary for repair of future major repairs and replacement, and to fully fund reserves for such components. MY UNDERSTANDING THIS GOES MUST BE COMPLIED WITH BY 2024 – Furthermore The definition section of the statute adds the term “structural integrity reserve study” to the definitions included in the regulation of condominiums. The law requires that these reserve studies must be maintained as part of the official records of the association for 15 years, the same as for the milestone inspections discussed above. Renters are entitled to inspect the foregoing reports. 

  • Must include: INCLUDES MORE THAN BEFORE WHICH WAS JUST ROOF, PAINTING, PAVING AND ANYTHING OVER 10K 
    • Roof
    • Load-bearing walls or other primary structural members 
    • Floor 
    • Foundation 
    • Fireproofing and fire protection systems 
    • Plumbing 
    • Electrical systems 
    • Waterproofing and exterior painting 
    • Windows 
    • Any other item with deferred maintenance or replacement expense in excess of $10,000 which, if not performed would negatively impact the aforementioned components.
  • Visual inspection must be performed by licensed architect or engineer, but other “qualified” persons can perform other portions of reserve study. Deadline of December 31, 2024 for any associations which do not already have structural integrity reserve studies. Failure to complete a structural integrity reserve study constitutes a breach of officers’ fiduciary duty. 
  • Association must post structural integrity reserve studies, milestone inspections, or other structural or life safety inspections on web site (if applicable), retain in its official records for 15 years, and make available to owners and renters. 
  • Developers are required to provide structural integrity reserve study at turnover for each building 3 or more stories in height. 
  • Reserves for included structural items are mandatory and cannot be waived, reduced, or repurposed. This change will have the effect of increasing the annual assessments for owners in condominiums which do not have reserves but will decrease the likelihood of an unavailability of funds when needed 

DBPR Enforcement Authority and Reporting Requirements. Amendment to Fla. Stat. Ch. 718 and 719 to: IMPORАTANT 

  • Authorize the Division of Condominiums, Timesharesand Mobile Homes to enforce milestone inspection and structural integrity reserve studies. 
  • Require, no later than January 1, 2023, each condominium and cooperative association to provide to the Division, and keep updated, information including: 
    • The number of buildings on the condominium or cooperative property that are three stories or higher in height; 
    • The total number of units in all such buildings; 
    • The addresses of all such buildings; 
    • The counties in which all such buildings are located. 
  • Unit Owner Disclosure Requirements. Amendment to Fla. Stat. Ch. 718 and 719 to require the developer to disclose to purchasers the milestone inspections and structural integrity reserve studies, and providing that subsequent purchasers are entitled to obtain such materials at their expense (without exclusion to other documents identified in the statute). Amendment to Fla. Stat. Ch. 718 and 719 to require the developer to include the milestone inspections and structural integrity reserve study in the prospectus filed with the Division. 

Additional statutory amendments are possible in future legislative sessions, as Senate Bill 4 directed the Florida Building Commission to consult with the Florida Fire Marshall and prepare recommendations to the governor by December 31, 2022. Given the impending deadlines, condominium and cooperative associations should not delay in ensuring compliance with the new statutory requirements.

Property Fraud Alerts

By Erin Glover-Frey, Esq.

Our office has seen an uptick in victims of fraudulent deeds. This is where a person with no legal claim to your real property either forges your name on a deed or in some other way lies and manipulates a deed to steal real property and sell it to some unwitting purchaser.

While a fraudulent deed is void as a matter of law, it can be an expensive process to have that deed declared void by the court. Often, the true property owner does not find out about the fraudulent deed until years after the fact, making proof that it was a fraud, and finding the fraudster for service of process, more difficult.

As a measure of protection, the Volusia County Clerk of Court now offers a Property Fraud Protection program. Every time a deed, mortgage or other instrument that affects your property is recorded, you will receive a free alert by email or phone. To sign up, go to:

https://www.clerk.org/propertyFraudAlert.aspx

Flagler County Clerk of Court offers a similar Recording Activity Notifications service. Information is available here: https://flaglerclerk.com/recording-activity-notifications/

Fair Housing Act and Older Governing Documents.

The Fair Housing Act (“FHA”) makes it illegal for housing providers to discriminate on the basis of certain protected classes including race, color, sex (which includes gender, sexual harassment, gender identity and sexual orientation), national origin, religion, familial status, and disability. Discrimination can take many forms, including publishing any discriminatory terms of purchase or use. Examples of “publication” include rules that prohibit children from using certain portions of association property or the inclusion of historical discriminatory terms in the governing documents that were enacted and recorded prior to the FHA. 

The discriminatory term we see most often in older covenants is discrimination against people under 18 residing in a community. This is familial status discrimination, which includes discrimination based upon children under 18 years old living with their parents, pregnant women, and people attempting to adopt children under 18 (foster parents). If a covenant against children living in the community is still in the public record, then an association can potentially be held liable for a violation of the FHA.

An exception to discrimination based upon familial status is in 55+ communities. But even there, rules restricting use of amenities, etc., must be age neutral. For example, instead of a pool rule requiring all babies to wear diapers, the rule should prohibit all persons who are not in control of their bowels to use an approved swim diaper.

Other grounds for discrimination are seen less often in governing documents. Race has been a protected class since 1968, so discrimination based upon race in condominium and HOA governing documents, which by and large developed after 1968, is rarely seen.

What should an Association do to avoid FHA liability, especially when amending governing documents is often difficult, costly, and uncertain to achieve the requisite vote? Recognizing this difficulty, in 2021, the Florida Legislature adopted  FS 718.112(1)(c) for condominiums, and FS 720.3075(6) for HOAs, which both provide that: “The association may extinguish a discriminatory restriction as provided under s. 712.065.”

FS 712.065(3), in turn, allows a majority of the board of directors to eliminate a discriminatory restriction within a covenant or restriction without unit owner vote and regardless of the vote required for an amendment. Thus, a unit owner vote is not required to simply eliminate the discriminatory restriction from the governing documents.

That said, it still is desirable to regulate use of common property, so, depending on the covenant, an amendment may be more desirable than eliminating the covenant all together. If use restrictions are contained in rules and regulations, then the rules and regulations can be rewritten or revised to avoid discriminatory language, but still achieve the effect of controlling undesired behavior (see pool use example above). In most communities, rules and regulations can be approved by board vote alone as well.

Pursuant to FS 712.065(2), discriminatory restrictions in covenants ARE NOT enforceable. So even if an association does not eliminate the discriminatory restriction, it cannot legally act on that restriction and no court or arbitrator will uphold the association’s right to enforce that restriction.

FHA litigation is costly and time consuming. Any steps an association can take to eliminate potential FHA liability proactively, such as extinguishing discriminatory covenants, may save the association potential liability exposure in the long run.

If your association’s governing documents were recorded prior to 1988, they may potentially contain discriminatory restrictions. Seek legal counsel to review the association’s governing documents to determine if any amendments or eliminations may be necessary to avoid FHA liability exposure.

Association Board Decisions Presumed Valid in New Third DCA Case

The business judgment rule is a legal concept dating back hundreds of years. Basically, this rule means that a court will not question a business decision of a manager or other decision maker, absent a showing that the decision was made in bad faith, or was arbitrary or capricious. The business judgment rule has always operated as a defense when community association is sued by a homeowner for any given decision. On February 23, 2022, the Florida Court of Appeals, 3 rd DCA issued a decision in New Horizons Condo. Master Ass’n v. Harding, No. 3D20-1471, 2022 Fla. App. LEXIS 1224 (3d DCA Feb. 23, 2022), which took the business judgment rule one step further.

In New Horizons, the 3 rd DCA stated not only was the business judgment rule a defense, it was a presumption. Companies do not have to plead business judgment rule as an affirmative defense or else waive that defense. In most cases, if you do not raise a defense at the beginning of your case, you cannot take advantage of that defense later on. Not so with the defense of business judgment rule. The 3 rd DCA held that the business judgment rule was a presumption for the suing homeowner to overcome, and
that the Association does not need to plead it as a defense. This holding will make it much easier for associations to prevail and have their decisions go unquestioned, and much more difficult for homeowners who will have to affirmatively plead and prove facts that an association’s decision was arbitrary,
capricious, or in bad faith.

If you are interested in speaking to a Kistemaker Business Law Group lawyer or want general information about the firm, our practice areas, lawyers, publications, or events, please contact us via email or telephone information contained on our website at www.daytonabusinessalawyers.com.

Disclaimer Content




HOW MARKETABLE RECORD TITLE ACT (MRTA) EFFECTS COMMUNITY ASSOCIATIONS

It is important that property associations/community associations (like HOAs/Condos/POA/s) know the age of their association documents, including the declaration, covenants, and restrictions, to ensure that they have not expired or been extinguished by MRTA. Extinguishment of such covenants and restrictions means that the association is no longer able to enforce its restrictions and generally manage the community (collect assessments). The good news for property associations is that MRTA provides methods to both preserve these documents before they are extinguished and revitalize these covenants even after extinguishment. §§ 712.06, 712.11 Fla. Stat. MRTA often poses more of a concern for homeowners’ associations as the deed and consequently the chain of title generally does not reference these recorded covenants and restrictions. This differs from the chain of title in a condominium, where the face of the deed will specifically reference the declaration, the book, and the page where it is recorded.

IMPACT ON CONDOS

They are unique cases whereby the Condo documents could be effected by MRTA. While MRTA rarely impacts condominium communities due to the unique nature of their chain of title, when the declaration, covenants, and restrictions are not mentioned in the “muniments of title” they are subject to extinguishment under MRTA. Typically a CONDO deed contains a legal description which makes reference to the declaration specifically by its recorded book and page numbers, therefore protecting the CONDO documents from extinguishment under MRTA. However, where the deeds do not make such references, these documents are subject to extinguishment after 30 years under MRTA.

Prior to a 2018 amendment to MRTA and a 2019 decision in Eastwood Shores Property Owners Association, Inc., v. Department of Economic Opportunity, 264 So.3d 264 (Fla. 2d DCA 2019), a condominium could not revive its covenants under MRTA. This is because the section of MRTA governing revitalization referred specifically to homeowners’ associations or an association of parcel owners. § 712.01(4), Fla. Stat. (2016). This created a problem for the association in Eastwood Shores.

The Eastwood Shores Decision

In Eastwood Shores, the condominium association’s covenants were extinguished under MRTA because they were not referenced in the deeds of each unit. The association applied for revitalization of its covenants and was denied by the Florida Department of Economic Opportunity because it was not a homeowners’ association. Eastwood Shores, 264 So.3d at 265. Therefore, amendments were made to the MRTA statue in 2018 (see above).

These amendments are significant for condominium associations because they are now specifically included in the definition of associations that are covered by MRTA. This is means that in situations similar to Eastwood Shores, the condominium association will more simply be able to revitalize its covenants in accordance with the procedures set forth in § 720.403-720.407. § 712.11-12, Fla. Stat.

If your community has not reviewed your governing documents and discussed the possibility of extinguishment under MRTA please contact a lawyer to do so. Our office specializes in all areas of community association law.

If you are interested in speaking to a Kistemaker Business Law Group lawyer or want general information about the firm, our practice areas, lawyers, publications, or events, please contact us via email or telephone information contained on our website at www.daytonabusinessalawyers.com.

Revoking a Last Will and Testament in Florida

You may find yourself at a point in your life where you may want to change your will or even revoke it entirely. If you have a will that you would like to revoke, there are several specific ways to make an effective revocation of the will. In Florida, the Probate Code offers you three ways to revoke a will: (1) written instruction; (2) physical act; or, (3) operation of law. To effectively revoke a will or codicil, Florida requires strict compliance with the probate statutes. Thus, it is important to follow the requirements for each method of revocation precisely to ensure that the testator’s wishes are carried out properly. The requirements are as follows:

  1. Revocation by Writing

Fla. Stat. § 732.505, states that:

“A will or codicil, or any part of either, is revoked:

(1) By a subsequent inconsistent will or codicil, even though the subsequent inconsistent will or codicil does not expressly revoke all previous wills or codicils, but the revocation extends only so far as the inconsistency.

(2) By a subsequent will, codicil, or other writing executed with the same formalities required for the execution of wills declaring the revocation.”

Please note: If the new will or codicil does not state that it revokes all previous wills or codicils, then the court will reconcile the different terms of the new will or codicil with the old will or codicil. If the court cannot reconcile the conflict, then the provision or will that was last written will prevail. 

  1.  Revocation by Physical Act

Fla. Stat. § 732.506, states that: 

“A will or codicil, other than an electronic will, is revoked by the testator, or some other person in the testator’s presence and at the testator’s direction, by burning, tearing, canceling, defacing, obliterating, or destroying it with the intent, and for the purpose, of revocation. An electronic will or codicil is revoked by the testator, or some other person in the testator’s presence and at the testator’s direction, by deleting, canceling, rendering unreadable, or obliterating the electronic will or codicil, with the intent, and for the purpose, of revocation, as proved by clear and convincing evidence.”

Please note: It is important to highlight that if a testator chooses to revoke his/her will by physical act, then the destruction of the will must be at the testator’s direction and in the testator’s presence. Both requirements are necessary for the revocation by physical act to be valid. Thus, a will cannot be revoked accidentally.

  1. Operation of Law

Fla. Stat. § 732.507(2), states that:

“Any provision of a will executed by a married person that affects the spouse of that person shall become void upon the divorce of that person or upon the dissolution or annulment of the marriage.  After the dissolution divorce, or annulment, the will shall be administered and construed as if the former spouse had died at the time of the dissolution, divorce, or annulment of the marriage, unless the will or the dissolution or divorce judgment expressly provides otherwise.”

Please note: If a testator gets divorced after executing a will providing for the testator’s spouse, then the spouse is excluded under the will following the divorce (unless the will or divorce judgment provide otherwise). 

If you find yourself wanting to revoke your will, please contact our law firm or a skilled attorney to assist you. 

Business Law Non-Competes

How long can a non-compete last in Florida? To determine whether a non-compete/non-solicitation agreement is reasonable in time, Florida courts are guided by section 542.335, Fla. Stat.  Specifically, Florida law sets outside parameters for reasonableness with respect to four separate categories of covenants:  

(1) Covenants restricting former employees, agents, and independent contractors;

(2) Covenants restricting former distributors, dealers, franchisees, or licensees of a trademark or service mark;

(3) Covenants incident to the sale of a business; and (4) post-term covenants predicated upon the protection of trade secrets.

What does evictions moratorium mean for landlords?

Recently, the U.S. Supreme Court struck down the CDC’s extension of the nationwide Eviction Moratorium which was set to expire on October 3, 2021. The Supreme Court’s conservative majority stated that “The moratorium has put . . . millions of landlords across the country at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership – the right to exclude.”

What does this mean for Landlords? The lift on the moratorium ban has provided immediate relief to Landlords as they can start evicting non-paying Tenants. While some Courts still recognize the right to obtain rental assistance, evictions can now proceed. Due to the moratorium lift, the number of evictions filed have increased. This can cause delays and confusion for your case. And if you are a landlord who is not familiar with the eviction process to begin with, then your confusion can lead to devastating outcomes. Therefore, it is advantageous to hire a lawyer who understands how to navigate the eviction process. While evictions are not complicated, they are nuanced, and it is better to avoid unnecessary delay and potential costs by hiring an attorney to assist you in reaching the desired outcome of your case.

If you are a landlord, the moratorium lift means having a chance at recouping your lost costs. Don’t miss the opportunity because of potential confusion. If you have any questions on how to proceed next, please call our office at (386) 310-7997.

Kistemaker Business Law Group Welcomes new Paralegal/Office Manager

Kistemaker Business Law Group is pleased to welcome Rima Suleiman as the company’s new paralegal/office manager.

Rima Suleiman is a recent law school graduate of Florida State University where she received her J.D. Rima also received a University of Central Florida, B.S. degree in 2017 and graduated cum laude, Order of Pegasus. She is fluent in Arabic and can speak intermediate French. She also has a beginner’s understanding of Mandarin.

In law school, Rima was a judicial clerk to the Honorable Judge Feigenbaum of the Seventh Judicial Circuit Court. She conducted research and produced a thesis paper analyzing COVID-19 and States of Emergency: The Rule of Law and Risks to Civil Liberty.Prior to joining Kistemaker, Rima completed internships with former Florida Senator, Bill Nelson, and former diplomat to the U.S. Department of State, Ambassador Harriet Elam-Thomas. ​Under her direction, Rima researched and produced a case study on The KRG and the Ascent of Women as Political Leaders.

Rima was awarded the Lester N. Mandell Diplomacy Fellowship on behalf of the Global Perspectives Office at UCF and the Global Connections Foundation. Rima was also awarded both the Non-Traditional Literacy Engagement Award and Recognition of Excellence in the College of Arts and Humanities for the 13th Annual Service Learning Showcase at UCF for her volunteer work with children in the public school system.