Condominium Associations – Setnor Byer Insurance & Risk

Condominium Associations Cannot Afford to Mishandle Service Animals

Condominium associations are often approached by unit owners or tenants requesting an accommodation to have a service animal, even though the animal itself, either because of its species or size, violates an association’s pet policy. Though it’s not always easy to tell the difference between a service animal and a pet, condominium associations cannot afford to make this kind of mistake. Since the law does not treat service animals like pets, neither can condominium associations.

The rights of an individual with disability to use a service animal is protected by federal and Florida law. For example, Florida’s Fair Housing Act prohibits discrimination in the sale, rental or availability of a dwelling, including any associated services or facilities, because of a person’s disability. Discrimination includes the refusal to make reasonable accommodations to rules, policies, practices or services that may be necessary to give a disabled person equal opportunity to use and enjoy a dwelling. Cases involving service animals typical allege a failure to provide a reasonable accommodation.

However, Florida has another law that specifically protects the use of service animals in housing accommodations. Florida’s service animal law, which was amended on July 1, 2015, states that an individual with a disability who has or obtains a service animal is entitled to full and equal access to all housing accommodations. Though this law prohibits charging extra compensation for a service animal, owners are liable for any damage caused by their service animal.

Florida’s service animal law protects individuals with physical or mental impairments that substantially limit a major life activity. Recognized mental or psychological disorders, including posttraumatic stress disorder (PTSD) and emotional or mental illnesses, are generally considered mental impairments under the law.

The law defines a service animal as an animal trained to do work or perform tasks for an individual with a disability. The work done or tasks performed must be directly related to an individual’s disability, and may include:

Guiding a person who is blind or visually impaired;

Alerting a person who is deaf or hard of hearing;

Assisting with mobility or balance;

Alerting and protecting a person who is having a seizure;

Helping a person with a psychiatric or neurological disability by preventing or interrupting impulsive or destructive behaviors;

Reminding a person with mental illness to take prescribed medications; and

Calming a person with PTSD during an anxiety attack.

Florida’s service animal law makes it a second degree misdemeanor for a housing accommodation to discriminate against an individual with a disability. However, as of July 1, 2015, a person using a service animal who knowingly and willfully misrepresents herself or himself as being qualified to use a service animal is also committing a second degree misdemeanor. If found guilty, this person must perform 30 hours of community service for an organization that serves individuals with disabilities or another organization determined by the court.

The consequences of mishandling a request for a service animal can be severe. Board members must recognize that service animal requests must be treated differently than other requests, and proceed cautiously to avoid unlawful conduct on the part of the association, seeking guidance or counsel, if necessary.

Setnor Byer Insurance & Risk is available to discuss ways to identify, manage and insure the risks facing condominium associations and their board members.

Additionally, clients of Setnor Byer’s Condominium Program enjoy access to various risk management services, such as Setnor Byer’s Risk Management Group and Unit Owners’ Report Line, as well as our affiliate’s Condominium Board Member Education Certification, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

You can also receive additional information by subscribing to our weekly Risk Management Newsletters.

Finding the Right Manager for Your Condominium Association

Condominium boards often hire community association managers to help manage and oversee their association’s affairs. However, since community association managers often handle critical and complex matters, it’s important to choose the right one. The first step to confirming the qualifications and experience of a community association manager is to make sure they are properly licensed.

In Florida, community association managers must be licensed to perform specific functions for condominium associations with more than 10 units or with an annual budget of over $100,000. Importantly, a 2014 statutory amendment expanded the types of functions that can only be provided by a licensed community association manager. In addition to controlling or disbursing association funds, preparing financial documents and assisting in the meeting process, a license is required if a community association manager:

Determines the number of days required for statutory notices
Determines and collects amounts due to the association before the filing of a lawsuit
Calculates the votes required for a quorum or to approve a proposition or amendment
Completes forms that have been created by statute or by a state agency
Drafts meeting notices and agendas
Calculates, prepares and responds to requests for assessment and estoppel certificates
Negotiates contracts
Drafts pre-arbitration demands
Coordinates or performs maintenance and other related routine association services
Oversees compliance with the association’s governing documents and the requirements of law

New professional standards were placed upon Florida community association managers in 2014. For example, community association managers cannot charge unreasonable or excessive fees and must account for all funds. Community association managers, acting as an agent on behalf of the association, must also discharge their duties:

Loyally
Skillfully
Diligently
Honestly
Fairly
In good faith
With care and full disclosure to the association.

To satisfy their fiduciary obligation, condominium boards must make an effort to hire a qualified community association manager. Beyond confirming that a community association manager is properly licensed, board members must make sure that the individual has a thorough command of all the administrative and financial tasks associated with the job, strong communication skills and absolute integrity. Multiple candidates should be interviewed and references should be checked.

Setnor Byer Insurance & Risk’s Condominium Program provides clients with access to various risk management services, such as Setnor Byer’s Risk Management Group and Unit Owners’ Report Line, as well as our affiliate’s online Board Member Education, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes to satisfy Florida’s new board member education training.

If you would like to discuss how Setnor Byer Insurance & Risk can serve you and your condominium association, please contact us.

A New Right of Access for Condominium Associations

Sometimes a condominium association needs to enter an owner’s unit, which is why Florida’s Condominium Act gives associations an irrevocable right of access. This right of access may only be used during reasonable hours to perform needed maintenance and repairs or to prevent damage to the common elements or to other units. However, Florida’s Condominium Act was amended on July 1, 2014 to expand an association’s right to access units that have been abandoned.

Under the new law, an association may enter an abandoned unit to:

Inspect a unit and adjoining common elements;
Make necessary repairs to a unit or to the common elements serving the unit;
Repair a unit if there is mold or deterioration;
Turn on utilities for a unit; or
Otherwise maintain, preserve or protect a unit and adjoining common elements.

When is a unit considered abandoned? Unless a unit owner provides the association with written notice to the contrary, a unit is presumed to be abandoned if:

The unit is the subject of a foreclosure action and no tenant appears to have resided in the unit for at least 4 continuous weeks; or
No tenant appears to have resided in the unit for 2 consecutive months, and the association is unable to contact or determine the whereabouts of the owner after reasonable inquiry.

Except in cases of emergency, an association must wait 2 days after giving the owner notice of its intent to enter the abandoned unit. This notice must be mailed or hand-delivered to the owner’s address of record and may be given electronically if the unit owner previously consented to receive electronic notices from the association.

Any expenses incurred by the association can be charged to the unit owner, and if a unit owner fails to pay, the association may use its lien authority to collect. An association may also ask a court to appoint a receiver to lease out an abandoned unit so that the rental income can be used to offset the association’s costs and expenses of maintaining, preserving and protecting the unit and the adjoining common elements, which can include:

The costs of receivership
Unpaid assessments
Interest
Administrative late fees and costs
Reasonable attorney fees

This expanded right of access to abandoned units applies even if the condominium documents, such as the bylaws or declaration, do not provide the authority to do so. Under the new law, the decision to enter an abandoned unit is at the association’s sole discretion. Nevertheless, associations should proceed cautiously to make sure all formalities are observed and to minimize the risk of a lawsuit by the unit owner.

If you would like to discuss how Setnor Byer Insurance & Risk can serve you and your association, please contact us.

Preparing an Association’s Financial Reports

For many condominiums and homeowners’ associations, the end of the calendar year is also the end of the fiscal year. This means that associations should be well on their way to completing their statutorily required financial reports.

Unless a different date is specified in the bylaws, Florida condominium and homeowners’ associations have 90 days after the end of their fiscal year to prepare and complete or hire someone else to prepare and complete the association’s financial report for the preceding fiscal year. Once completed, associations have 21 days to either provide a copy of the financial report to unit owners and members or notify them that they can request a copy free of charge. This entire process must be completed no later than 120 days after the end of the fiscal year.

Though all financial reports must be prepared in accordance with generally accepted accounting principles (GAAP), the manner in which a financial report is prepared usually depends on the association’s total annual revenues. Financial reporting requirements are determined by statutory revenue thresholds, which were changed in 2013. These thresholds are the same for both condominium and homeowners’ associations.

Associations with total annual revenues of less than $150,000 must prepare a report of cash receipts and expenditures
Associations with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements
Associations with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements
Associations with total annual revenues of $ 500,000 or more must prepare audited financial statements

Condominium associations with fewer than 50 units and homeowners’ associations with fewer than 50 parcels must prepare a report of cash receipts and expenditures, regardless of their total annual revenues.

Though associations may vote to change their financial reporting requirements, the process is technical and strict requirements must be followed.

To learn more about your obligations as a board member, take our affiliate’s recently updated online course Condominium Operations: A Primer for Board Members, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

If you would like to discuss how Setnor Byer Insurance & Risk can serve you and your association, please contact us. Clients of Setnor Byer’s Condominium Program enjoy access to various risk management services, such as Setnor Byer’s Risk Management Group and Unit Owners’ Report Line, as well as our affiliate’s Board Member Education Certification.

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