Legal Scoop on Southwest Florida Real Estate

Legal Scoop on Southwest Florida Real Estate

Community Association Managers Should Proceed Cautiously

Posted in Condominium, HOA

caution tapeIn reference to some new roles of community association managers authorized by House Bill 7037, which became effective on July 1, 2014, the website, flcamtest.com directs some wise words to Florida community association managers: “As a practical tip, just because you are a CAM and CAN do those task [sic], does not mean you SHOULD do those tasks.”

Required Notices

Community associations, including condominium, residential homeowners’, and cooperative associations, are required to provide written notice to owners who are delinquent in the payment of association assessments prior to filing a lien against the delinquent owner’s property, and prior to foreclosing on the lien. While the statutes previously required certain information to be included in such notices, they now include actual forms that must be used for the notices, as well as a form for the release of the liens.

New Authorized Tasks for CAMS

The new law authorizes community association managers (CAMs) to determine the number of days required for statutory notices, determine amounts due to the association, collect amounts due to the association before the filing of a civil action, complete forms related to the management of a community association that have been created by statute or by a state agency, and draft pre-arbitration demands, among other more standard tasks. Since the statutes now have created forms for pre-lien and pre-foreclosure notices, CAMs are authorized to complete and send these notices.

It’s Not Just a Form

While perhaps filling out a form provided by the statute may seem pretty simple, there can actually be many variables that go into the calculation of the total amounts which can be claimed by an association. It should be verified that any claimed interest and late fees were properly calculated and provided for in the governing documents, and the effect of any foreclosures on the property on the amounts that are claimed due. Prior to filing a lien, an association should have its legal counsel verify that the calculations were properly made. The law in this area is constantly changing and association managers are not expected or equipped to keep up with current case law.

There are also requirements in the statutes that the pre-lien notices are sent by certified mail, return receipt requested, to the owner at their last address on record with the association and at the subject unit or parcel, if that is not the last address of the owner. If the notice is not sent properly, it can be deemed invalid and, thus, could possibly invalidate the entire lien, costing the association time and further delaying the recoupment of funds.

Potential Risks to CAMs and Associations

The new law also allows the CAM to contract with the association to indemnify the CAM for damages to the association resulting from the CAM’s ordinary negligence.  While this language may put the association at risk by protecting the CAM should they make a mistake in carrying out their new roles, it also may not fully protect the association manager should they make a mistake that damages the association.  Having the association counsel continue to prepare pre-lien and pre-foreclosure notices will further remove the CAM from that potential risk.  The attorney handling the foreclosure suit may also prefer that the pre-suit notices are prepared by the attorney in order to prevent having the suit thrown out due to insufficient notice.

Debt Collection Protections

Finally, the association managers may not be required to comply with the Fair Debt Collection Practices Act (FDCPA) when sending collection demands. The purpose of the FDCPA is to protect the individual debtors from improper and harassing collections practices by third party debt-collectors by requiring certain disclosures and opportunities to dispute the claimed debt. The preparation of the pre-suit collections notices by association managers removes this protection.

Pre-Arbitration Demands

With regard to the preparation of pre-suit arbitration demands involving association disputes, an association manager puts itself and its association client at risk of jeopardizing or delaying an association’s case if the claims are not properly stated in the initial pre-arbitration notice. Very likely an association attorney will take over the arbitration case after the demand is sent, and the attorney may need the demand to be resent if the claim is not made in the proper and legally sufficient manner.

Think Before Acting

Prior to this new legislation, association attorneys were increasingly concerned that some CAM’s who were performing some of these tasks were venturing into the “unauthorized practice of law.” Now that these tasks are “authorized” by the legislature, a CAM should carefully consider whether he or she feels capable of properly performing them, both for the protection of the CAM and the association.

Imagine Courtesy of Eugene Zemlyanskiy on Flickr

Lee County Road Round-Up – Spotlight: Bonita Beach Road Update

Posted in Lee County Road Roundup

8293998585_d02b699ef7_q.jpgPhase III of the Bonita Beach Road widening project may be dead in the water, at least for now. The Bonita Springs City Council has voted to withhold contributing any funds toward the widening of Bonita Beach Road from four lanes to six lanes between Old 41 Road and U.S. 41, according to the News-Press

Lee County and the City of Bonita Springs share the cost of funding for certain projects. Without the support of the City of Bonita Springs, the widening project’s status is in question.

Stay tuned to our blog for further developments!

Florida Legislature Expands the Legal Work Permitted by Community Association Managers

Posted in Condominium, HOA

House Bill 7037, recently adopted this past legislative session, expands the permitted practices of community association managers.

The bill, effective July 1, 2014, enlarges community association managers’ powers, some of which include:

  • determining the number of days required for statutory notices;
  • determining the amounts due to the association;
  • collecting amounts due to the association before the filing of a civil action;
  • calculating the number of votes required for a quorum;
  • negotiating monetary or performance terms of a contract subject to approval by an association; and,
  • drafting pre-arbitration demands.

Some members of the legal community have expressed concern that these new powers could constitute the unauthorized practice of law.

Under the Florida constitution, the Florida Supreme Court has the exclusive authority to both define and regulate the unauthorized practice of law. What constitutes the unauthorized practice of law has been partly defined as “[g]iving legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments.” Also included in the definition are activities requiring the interpretation of statutes, administrative rules, and community association governing documents.

The Florida Supreme Court, in an Advisory Opinion (a nonbinding interpretation of the law) in 2002, stated that community association managers’ preparation of lien claims and determination of the requirements for properly noticing meetings would constitute the unauthorized practice of law—the former, an example of a legal instrument, and the latter inevitably requiring interpretation of a statute and association governing documents. Whether any provisions in the current bill will be challenged remains unclear.

Associations may view the bill as providing a reduction in expenses. However, errors in drafting, misinterpreting a statute or the association’s governing documents could sacrifice short term gains to long term legal costs in correcting an issue. The initial financial outlay for an attorney to prepare these documents can be negligible compared to the expenses incurred in bringing an association into compliance with the law.

Lee County Road Round-Up: Spotlight Homestead Road Update

Posted in Eminent Domain, Lee County Road Roundup

There have been some developments since the last blog post on the Homestead Road widening project. According to ABC7, funding from Lee County DOT is available for the project to proceed.

It is important to start planning now, as right-of-way acquisition may affect property owners along the segment of Homestead Road running from south of Sunset Boulevard to Alabama Road. If you are contacted by the Lee County Department of Transportation, you should contact an eminent domain attorney in order to assist you.

Stay tuned to our blog for further developments!

Habitat Women Build 2014

Posted in Uncategorized
2014 Women Build TNR Team

Pictured above (from left to right) Tyra Read, Max Dean and Nancy Ramos (Ramos Builders), and Shawnmarie Pitts (The News Press)

One of my favorite events I look forward to every year is the Habitat for Humanity of Lee and Hendry Counties Women Build. Women Build is Habitat for Humanity’s nationwide program to empower women to take action against poor housing conditions by recruiting, educating and inspiring women to build and advocate for simple, decent and affordable homes in their communities.

According to the Census Bureau, more than 16 million children are living in poverty. The good news is that since the program began in 1998, more than 2,100 homes have been built by women crews in the United States. For Habitat for Humanity of Lee and Hendry Counties, this is the fourth year it has participated in Women Build.

Beginning in March of each year, women form teams to raise the money needed to renovate the homes. The women also physically renovate the homes, which are completed so they can be delivered to the families in May for Mother’s Day. This year, my team was comprised of members of the Cape Coral Construction Industry Association. We not only met our goal for the funds we pledged to raise, we also volunteered on various days to work on the home located in Cape Coral. The home was then officially dedicated to a wonderful mother, Vanessa Saez (pictured below), on May 10, 2014, just one day prior to Mother’s Day. There was an official Blessing of the Home, as well, at the dedication. It was an amazing experience!

2014 Women Build Homeowner

Tyra Read and New Homeowner Vanessa Saez!

Women Build truly shows what women can accomplish (what some may believe is impossible) by swinging hammers, paint brushes and caulk guns, as well as by raising the funds needed to renovate the homes.

Bottom line: I am blessed to be able to participate in Women Build and help families achieve the dream of owning a home. I encourage anyone interested in participating in Women Build to contact Habitat for Humanity of Lee and Hendry Counties at 239-652-1677 or www.habitat4humanity.org/women-build or Cape Coral Construction Industry Association at 239-772-0027 or www.cccia.org. My team with Cape Coral Construction Industry Association has begun compiling a list of members for next year’s team and we would love for you to be involved.

Primer on Real Estate Commissions

Posted in Real Estate

With the uptick in real estate activity it is helpful to recap the two primary ways that a licensed sales agent is entitled to a commission from the sale of real estate.

Contract

Most agents have their clients execute a listing agreement, which primarily comes in two forms and entitles the agent to a commission in different contexts.

Generally, the exclusive right to sell agreement entitles an agent to a commission irrespective of who sells the property. For instance, an owner who executes an exclusive right to sell agreement and consummates a sale to a buyer without the aid of the agent is still obligated to pay the commission. Intuitively, an owner might think that once the contract expires without the agent procuring a buyer, the agent’s right to a commission is extinguished. However, most exclusive right to sell agreements contain “protection period” provisions that extend the agent’s right to a commission for a certain number of months after expiration of the agreement. These provisions trigger the agent’s right to a commission if a sale is consummated with a buyer whom the agent or seller communicated with (regarding the property) while the listing agreement was in effect.

The second type of agreement is the exclusive agency agreement. Contrary to the exclusive right to sell agreement, this contract simply means the owner will not enlist another agent to sell the property. These agreements normally do not entitle the agent to a commission unless the agent procures a ready, willing and able buyer. Thus, an owner who consummates a sale without the agent’s aid is not obligated to pay the agent a commission.

Doctrine of Procuring Cause

In the absence of an agreement, agents may rely on the procuring cause doctrine, which Florida courts recognize when the agent brings the parties together and the sale is consummated from continuous negotiations inaugurated by the agent. Invariably, the doctrine is a fact intensive inquiry into the circumstances of the sale. A court will look to various factors to determine whether the doctrine applies:

  1. Is there any agreement between the parties? If so, is it in writing?
  2. An exclusive right to sell agreement is normally dispositive of an agent’s right to commission. However, merely titling the agreement with that caption is insufficient; the agreement must contain language delineating the agent’s right to a commission regardless of who consummates the sale.
  3. In situations where the agreement does not contain a “protection period,” the length of time between the expiration of the agreement and the sale.
  4. A break in continuity of events leading to the sale indicating that the agent’s involvement may be questionable.
  5. A breach by the agent of the listing agreement.

Bottom line:  Disputes regarding real estate commissions can be avoided by a well drafted listing agreement. Realtors and property owners would be well served to elicit guidance from a real estate attorney to review listing agreements to ensure they align with the parties’ intentions.

Update: Condemnation of Underwater Mortgages

Posted in Eminent Domain

underwater-mortgage-small.jpgSince our last update at the beginning of this year, Irvington, New Jersey has taken a small step toward the use of eminent domain to acquire underwater mortgages. In late March 2014, the Council of the Township of Irvington, in a 6 to 1 vote, approved a resolution calling for the Township’s Planning Board to “identify properties ‘in potential foreclosure that may be designated as areas in need of redevelopment,’” according to Eunice Lee’s article in The Star Ledger.

The Township’s resolution authorized “the [P]lanning [B]oard to prepare a redevelopment plan targeting 199 ‘underwater’ mortgages held by private investment groups, with the goal of acquiring them and offering better deals to the borrowers,” as reported by Joseph Tyrrell in the NJ Spotlight.

According to The Star Ledger, “Irvington would pay the mortgage holders’ fair market value and then restructure mortgages into lower principal payments that are more favorable for homeowners.” While the Township of Irvington has not yet actually begun condemning underwater mortgages, it has taken a small step in that direction with its resolution.

Stay tuned to our blog for further updates!

Residential Property Disclosures: Seller Beware!

Posted in Due Diligence, Real Estate

contract flickr MarkMoz12Lawsuits regarding nondisclosure of a home’s problems are becoming more prevalent. Historically, the rule of “caveat emptor” or “buyer beware” was the prevailing standard in residential transactions. However, the law has evolved and Florida now requires sellers of residential property to make certain disclosures to buyers about the property’s condition and history. An increasing number of sellers and sometimes their real estate agents are finding themselves on the hook for nondisclosure. Therefore, it is important for both home sellers and real estate agents to be familiar with the disclosures required.

Florida law provides that, with some exceptions, a home seller must disclose any facts or conditions about the property that have a substantial impact on its value or desirability, and that are not easily observable to a buyer. This has been the standard since the Florida Supreme Court decided the case of Johnson v. Davis, 480 So.2d 625 in 1985.

Although not required by Florida law, it is well advised that property disclosures be made in writing together with proof of delivery to the buyer. Although some required disclosures are included in the prevailing residential real estate contract forms, disclosures relating to the specific property are normally made by separate disclosure form. Types of issues or property conditions required to be disclosed include:

  • whether improvements have been made without building permits;
  • whether the property contains any environmental hazards such as asbestos, lead, mold, Chinese drywall;
  • whether any infestations or damage have occurred from wood-destroying organisms such as termites and carpenter ants;
  • whether there are any problems with essential components of the home, such as the roof, plumbing, electrical wiring, major appliances, HVAC;
  • whether any actual or potential claims, complaints or court proceedings affect the property;
  • whether the property is subject to the rules of a condominium or condominium association; and,
  • whether any disputes have arisen regarding the property’s boundaries.

The good news for sellers in Florida, home sellers are not responsible for defects they “should have known” about. Rather, Florida sellers are required to disclose only those property defects of which they have actual knowledge. This standard was determined in the case of Jensen v. Bailey, 76 So.3d 980 (Fla. 2nd DCA 2011). In this case, the Court recognized that sellers should not be expected to guarantee to buyers that their properties are free of all defects. Instead, to make a claim against a seller, the buyer must be able to demonstrate that:

  • the seller knew about the property defect;
  • the defect has a substantial impact on the value of the property;
  • the buyer did not know about the defect at the time of purchase;
  • the defect was not readily observable or easy for the buyer to detect; and,
  • the seller did not disclose the defect to the buyer.

It is important to note that selling a home in “As-Is” condition, does not relieve a seller from the disclosure duties under Florida law. The “As Is” condition means only that the buyer agrees to take the property in its existing condition without the seller having to make any repairs.

Bottom line: Sellers are well advised to carefully review their property disclosures to any prospective purchaser. A little extra caution at this stage of any potential transaction can limit a seller’s liability exposure and help avoid a lawsuit post closing.

Image Credit http://blog.pallspera.com/

What’s Going on with State Road 29?

Posted in Eminent Domain

8293998585_d02b699ef7_q.jpgThe Florida Department of Transportation is studying State Road 29 in order to determine the need for transportation improvements in Immokalee. FDOT is taking a look at State Road 29 from Oil Well Road in Collier County to State Road 82 and considering four alternatives designed to reduce truck traffic in downtown Immokalee, improve regional connections, improve emergency evacuation capabilities, support future population growth, improve safety, and improve the economy.

One alternative that FDOT is considering involves widening State Road 29. Two other alternatives FDOT is considering are by-pass corridors to avoid impacting downtown Immokalee. The fourth alternative that FDOT is considering is a “no build” alternative.

As shown in FDOT’s March 2014 Project Development & Environment Study newsletter, FDOT will host a public workshop from 5:00 pm to 7:00 pm on Thursday, April 3, 2014 at Immokalee One-Stop Career Center, 750 South 5th Street, Immokalee, Florida. Members of the public are welcome to attend to review project information, aerial photographs, and a video.  In addition, the public will have an opportunity to ask questions and discuss the project with FDOT representatives.

Stay turned to our blog for further developments!

How Much is that Doggy in the Window (of My Condominium)? Are pet restrictions becoming a thing of the past?

Posted in Condominium, HOA

dog in windowMany condominium and homeowner’s associations have pet restrictions, ranging from prohibiting all pets to allowing only pets of a certain size and/or breed. These restrictions are increasingly being challenged and associations are finding it harder to enforce them and subjecting themselves to liability if they attempt to enforce them.

Exceptions Mandated By Federal Law

There are Federal laws that require associations to make exceptions, in certain circumstances, to their pet restrictions. The two main laws relied upon are the Fair Housing Act and the Americans with Disabilities Act.

The Fair Housing Act

The Fair Housing Act requires associations to make reasonable accommodations in its rules when necessary to afford a person equal opportunity to use and enjoy their home. Failure to do so can result in a discrimination claim under that Act. To require an association to make accommodations:

  • a person needs to show that he/she is handicapped, as defined in the Act
  • that the association knew or should have known of the handicap
  • that the association knew that an accommodation was needed to allow the person to enjoy their home
  • that making the accommodation is reasonable
  • and that the association refused.

An association may ask the person to provide proof of the handicap and that the person needs an assistance animal as a result, but associations need to be careful of the type of proof asked for. The need does not have to be a physical need, such as a visually impaired person needing a seeing eye dog. The need can be emotionally based, and those animals are commonly referred to as emotional support animals. Documentation from a doctor, psychiatrist, or mental health worker may be sufficient to require the association to make the accommodation.

Americans with Disabilities Act

In order for a person to claim an exception to an association’s pet restrictions under the Americans with Disabilities, that Act requires that the pet, which is called a service animal, be trained. However, the Fair Housing Act does not have that requirement and some courts and the U.S. Department of Housing and Urban Development have stated that emotional support animals do not have to be trained. As a result, most people trying to escape an association’s pet restrictions rely on the Fair Housing Act.

The typical animal for which owners and tenants seek exception to pet restrictions are dogs, but the Fair Housing Act does not limit the type of animal which qualifies as an assistance animal or emotional support animal.

Bottom line: Associations need to be more careful when enforcing their pet restrictions, especially when someone is asking the association to allow his or her animal based on physical or mental disabilities. The number of persons claiming the need for these types of animals is growing and many associations believe that the laws are being abused. However, refusal of an association to properly handle a person’s request to have an assistance animal, emotional support animal, or service animal, or to make accommodations to allow the animal when someone meets the tests under law, can expose an association to financial liability.

Photo Courtesy of mjhagen on Flickr
.