The Smart Board & Property Manager Legal Guide: Successfully Operating A Community Association...It Takes A Team

Thank you. Good morning everybody. Thank you for joining us. I'm Jon Lemole, I'm a partner at Tannenbaum Lemole & Hill. I'm here with partners, Alan Tannenbaum, Cindy Hill and our associates, Jim Turffs and Jennifer Hicks. For those of you who may not know our firm, we are a full-service community association law firm and we represent many condo associations and homeowners associations in Southwest Florida. We also are adept at handling construction issues, whether it be major repair project consulting, contract review, and we'll talk a little bit about this during this presentation. Contractor disputes and turnover claims for those of you who may be involved with communities coming out of developer, being handed off a community out from developer control. So our course today is about successfully operating a community association, it takes a team. And not to pat myself on the back, but I was the one that came up with this idea because as we came through 2024 and frankly the 2023 as well, what we saw was a literal explosion of new legislation, new requirements that the Florida legislature has put on community association boards and managers.

And it dawned on me that operating a condo association or a homeowners association today is a very sophisticated business. Gone are the days when you had a volunteer board and a manager, and it was pretty fairly straightforward, fairly, I don't want to say simple, I don't think it was ever simple, but you certainly did not have all of the different types of requirements involving different types of professionals and different types of vendors needed to support the types of reporting and websites and official records and engineering inspections and reserve requirements that all got handed down within the last two years. And so, we decided that it would be a good idea to put together a course to go through the various types of people, types of professionals, types of vendors that a typical condo association or homeowners association should rely upon and should have... For those of us who've been around a while, the names that you need to have in your Rolodex, we all hopefully remember Rolodexes, in order to help a volunteer board successfully manage their community.

So again, when we talk about the legislation that was passed down, let's just recap some of the things that came out of the Florida legislature in particular this year. New requirements about meeting notices, new requirements about official record keeping and dealing with official records requests and records retention. Websites. Suddenly websites have now become front and center because HOAs need to have them and the universe of condos that need to have them was substantially increased. Electronic voting issues and requirements and issues around sending notices to members and unit owners. For condos, I know a lot of you, the clock has been ticking and so many of you have been dealing with structural inspections, milestone inspections, structural integrity reserve studies. And even if you're not dealing with structural integrity reserve studies, the regular reserve requirements, it's been a lot of confusion like, do we have to fully fund? Does our condo have to fully fund if we don't have to do a CSRS report? When do these funding decisions have to be made?

How much longer can we reduce funding or waive funding? What's the deadline for that? We've just come out of a exceptionally busy hurricane season, and so you've all been faced with very daunting hurricane issues and remediation projects, and who's responsible for what? You're already dealing with significant insurance questions and issues and high deductibles. And so, how are you going to manage that process? And then you also have the question of what are we going to do when we need to renew our policies because insurance has become so expensive? How do we manage that process? How do we ensure that we can get insurance at the most competitive rates that we can get, and how do we deal with these large increases in premiums? And then lastly on the list, and I realize that I didn't advance our slide, so let me do that.

We've all had to deal with an increasing lack of civility in our communities. We've had very contentious meetings. You have owners posting on online forums and Facebook and other places, and this has all been a source of issues and concern for boards and for managers, and how do you control that and what do you do about it? And so, all of these things have created a perfect storm for communities in making the operation of a community something that requires a heck of a lot more support than you may have customarily been used to in years past. So we're going to talk about those folks today, the different types of people that you need to rely upon and should be able to call upon. And as I said, should have ready to go in your Rolodex. And if you look at the slide, we've listed who we're going to talk about here. So you've got a variety of different folks that need to be involved in this support group, I'll call it.

So first and foremost, you have to have a good property management teams, and we're going to talk about what the task is going forward for property managers. It goes without saying community association lawyers. That's something near and dear to my heart and everybody else that's in our firm near and dear to our hearts. What do we do on a day-to-day basis? What is our bread and butter in terms of our practice? And what are the types of things that a good community association law firm can deliver and assist its clients with? You need to know about engineers and reserve specialists, and how they come into play in successfully operating your community and why you need these folks. Where does their expertise come into play? You need to know CPAs and you need to have a relationship with a CPA because we've seen new financial reporting requirements that the legislature has passed on to you folks both in condo and HOA land.

And then you have to have a deep well of vendors, trusted and reliable vendors that you can call on to serve a variety of different needs of your community efficiently, effectively, speedily, and you have to build those relationships. So, that's the outline. And with that, I'm going to pass this over to Alan. Alan is going to talk about why it's so important, and what are the interests that are served when a board and management relies on this deep bench of expert support in managing the operations of the community association. So with that, I'll hand it off to Alan.

Alan Tannenbaum, Esq.:

Yeah, I'm going to quickly cover the why, why have this team supporting you? Well, for the most part, directors come in. They may have experience in different fields, even in property management. But the range of issues that need to be faced that John has gone through, it is daunting for any voluntary board member to take on. So the burden of gathering the information, making the tough decisions, knowing what the parameters are in undertaking a particular determination, this team of experts starting with your management, lawyers, engineers and so forth, they help you navigate those really tough decisions and really take the burden off of the board. And the board's obviously, ultimately responsible for the final decision, but there's a lot of information gathering advice and support that the team provides.

There's a really an important issue with communication. So one example is that the current reserve requirements for condos walk into a meeting of a condo that's 40 years old and tell the owners that there's going to be a special assessment of $75,000 a unit to cover a reserve requirement that may have been neglected for some time. Well, if the board goes in there without an appropriate explanation, it's very easy to get shot down and say, "Well, why are you spending our money this way? We can't afford the assessment and so forth." But one of the things that the team does is assist the board the explanation. And at that particular meeting as an example, imagine that you go in there with your lawyer or your reserve specialist and have them be part of the explanation or have your lawyer reserve specialist, help prepare a writing that gets to the owners in advance to explain why this is occurring, really takes the burden off the board as far as communication is concerned.
And finally, the issue of personal responsibility and liability. One of the aspects of the board business judgment rule is if the board properly investigates an issue and gets proper support on an issue, then that decreases the possibility of individual liability. So we're relying on the team of experts in formulating board policy and making board decisions. Having that group of experts supporting you is also a buffer against potential personal liability. So, a lot of reasons to gather this team of experts in order to navigate the minefields that you're going to face. So with that, Jon, next section, Cindy.

Cindy Hill, Esq.:

All right. Thanks, Alan. All your property manager, they really are to the extent we talk about a team, your property manager is integral to your team. Board volunteers are again volunteers. You're not required to be experts, there's no... Even though you have some continuing education now, there's no education required priority to becoming a board member. So your property manager is really going to be your go-to for getting the advice you need to run the community and also pointing you in the right direction when a property manager is not the appropriate person to do the work or to consult with on certain issues. So first of all, property managers do have to be trained and licensed. This is a licensed profession.

People just can't get up on one side of the bed in the morning, decide to become a property manager. You do have to go through a course, take a test, and become licensed. They also bring historical experience that should not, and by the way, I'm going to continue with the licensing on the next slide, but I'll go ahead and bring up some of the other peripheral issues that the management involves. They bring historical experience from the management of other communities, and that can be even when if you have a manager who's a new manager, if they're part of a company, they're part of a team. And those teams share with each other successful practices that they've implemented in a community to help you get ideas as a board for what can work for projects or as Alan was mentioning, maybe some bad news you're going to share with the community and you want some assistance with how to best communicate.

They can also help with some of the best ideas, don't really work out the way that you might plan. Managers can offer some logistical feedback for boards who have an idea, want to start a certain committee or certain process, and what some of the pitfalls might be and what some of the best practices are. So that before you, as a board, get your information out to the community or start a process, you've already got some insight from your manager based on their experience and again, the experience of the other managers they may work with at their management firm. They also have knowledge of vendors and resources. They will have worked or their company, other managers will have worked with vendors who have done projects on other properties and can advise as to how that work played out, the success, the happiness, the timeliness, any sort of issues that came up that were good or bad.

They can also advise as to how long vendors have been working in the area. This is particularly important and it will come up, I'm sure, and part of the rest of the discussion in this presentation that we are an area that gets targeted when hurricanes come through. For people to come out of state and seek business from associations who have some large checkbooks and maybe aren't going to be the best vendors for your project. So again, managers can help with apprising us to vendors who have been in the area for a long time, what their reputation is and the experience with other communities, and as well resources. So where you might think, what are the resources? Well, one that is particularly a strong resource for condominiums is the Department of Business and Professional Regulations Division of Condominiums, timeshare, and mobile homes. Isn't that a mouthful?

It's commonly called the DBPR, and the DBPR has some excellent resources for condominiums. It is a source of forms for some of the condominium practices. It is a place you can call and ask questions. They will not give you legal advice. Don't be writing it down thinking suddenly you found a free lawyer. That's not the case, but they have a lot of good information, publications, and information on their website. Managers know this. The managers are also familiar with that the University of Florida has local per county, IFAS extension offices. What those are is Institute of Food and Agricultural Science Services offices, and you might think, "Well, how does that help us?" Well, they've got some really good advice on gardening, landscaping, and Florida friendly landscaping in particular. These are some of the just examples of where management can point you. Local resources for education and networking for board members.

Going back to, I mentioned that managers benefit from working maybe with another management team and the experienced managers can advise the less experienced managers, and they can share experiences with one another. As board directors, you can also get out and get educated and network with other volunteer board directors. There's the Community Association Institute, which is a nationwide organization that has a local chapter. There's other local organizations for board volunteers such as ad hoc vendor groups who have put together lunches, breakfasts, panels, seminars such as our firm is doing now. Other education, the four-hour course that's now required, the initial education course now after the new legislation, these are all resources your manager will have access to, will be able to assist you with. They are a wealth of information beyond what they actually do, but they have limitations. I often tell associations when this comes up, "Don't ask your manager to practice law."

They are not lawyers. They have not gone through that process, that is candidly unfair to ask them to give legal advice. And also you are losing the benefit alan mentioned that when you ask professionals for advice, as board volunteers, you get a level of protection for having sought out advice from a professional. If you're getting legal advice from your manager, they are not qualified to give you legal advice. If it becomes an issue going forward or it's challenged, you're not going to be able to say, "Well, the manager told me this was okay." The manager isn't authorized to give you legal advice, so don't be tempted to ask them to do so. They may be able to point you to a statute they're familiar with and that statute is something that may be useful, but they cannot give you legal advice. Managers are also not engineers, accountants, or other professionals, so do not ask them to opine on engineering.

Don't ask them whether if you need to file taxes or not. These are all questions you need to take to the right professionals, and again, it's because you're going to get the right answers from the professionals. Don't ask your manager to take on those roles. Next slide, please. Okay, so I had mentioned earlier that the managers are licensed professionals, so they're regulated by part of the Florida statutes Chapter 468, part eight, and here is actually the statutory list of what the Florida legislature considers community association management. Now, this doesn't mean your manager's doing all these things. What this means is these are roles that the statutes have listed out as roles that can be done by community association managers. So it's a little tedious, but I'm going to go through it because it's a reminder that this is what they're being asked to do, not other peripheral... Again, practicing law or engineering or other things that step out of their wheelhouse, but this is their wheelhouse.

Controlling or disbursing funds of a community association. Preparing budgets or other financial documents for a community association. And by the way, I have to say, budget preparing, thank your manager all day every day for that tedious, onerous, at this point in our current economy, thankless role. That's a lot of work even when they work with volunteer, board directors or committee members, that's a lot of work. Assisting in the noticing or conduct of community association meetings. Conduct. Some of the conduct of some these meetings is not ideal, but this part what management should be assisting with, is reminding people to stay on point and meeting protocol. Determining the number of days required for statutory notices. Determining amounts due to the association. Collecting amounts due to the association before the filing of a civil action. Calculating the votes required for a quorum or to approve a proposition or amendment.

This one is actually can be a bit challenging when documents aren't well written. So even though this one is part of the role of the management, if management's telling you your documents aren't well written, this is one I would definitely get legal advice for. Completing forms related to the management of a committee association's been created by statute or state agency. Drafting meeting notices and agendas, calculating and preparing certificates of assessment, estoppel certificates. Responding to requests for certificates of assessment and estoppel certificates. Negotiating monetary or performance terms of contracts subject to approval by an association. 

Drafting pre-arbitration demands. That's a system up in the division of what the DBPR mentioned earlier. Coordinating or performing maintenance for real or personal property and other related routine services involved in the operation of a community association. And finally, complying with the association's governing documents and the requirements of law as necessary to perform such practices. This last one again is a reminder that managers know enough about the roles that condominium boards have and the statutes, and the same with homeowner associations to be able to guide you in the right direction, but they cannot give legal advice. So I believe that... Well, I think-

Jon Lemole, Esq.:

Thank you, Cindy. We're going to pass it to Alan. Alan's going to start the conversation on the next group of professionals and that conversation is regarding what can a well-rounded community association law firm, how can they help in a variety of ways in your communities?

Alan Tannenbaum, Esq.:

The need for a lawyer in communities basically changes based upon the age of the community. What I'm going to cover first are newer communities coming through turnover. So what support can a community association lawyer do for a new board coming through turnover? So one is to assure that the developers complied with their turnover obligations in both the HOA Act and the Condo Act, there's a pretty lengthy set of obligations that developers have upon turnover as far as documentation that needs to be provided. For condos, there's an engineering report that has to be prepared for both condos and HOAs.

Audit has to be turned over of association operation during developer control, so making sure that those areas are complied with. Groups coming through transition generally get for building a forensic study, if it's an HOA, an infrastructure study, also have their account and review the financials, and there may be a period of a claims notice and claims resolution. That's part of what the attorney will do during that process, and then supporting the association and the claims process. But I'm going to turn over to Jim, who is going to talk about the general operation of a lawyer as a general counsel.

James "Jim" Turffs, Esq.:

Yeah. I mean, Alan's sort of told you what your general counsel can do for you when your association's in its infancy, when it's coming from the developer and being turned over, but what can we do for you now. And this is maybe one of the easier parts of this presentation for us because we are general counsel lawyers, and so all we have to do is talk about ourselves. And as you know, lawyers, we do love to do that. So what can we do for you after turnover? Well, pretty much everything. We're general counsel attorneys, and it's just like it sounds, we provide general counsel. We tap into all of the portions and elements of running an association, and we can help you with almost anything that comes up on a day-to-day basis.

When it comes to amending your governing documents, we can help you identify the threshold required to approve those amendments. We can help you draft the proxies, the notices of meetings, the actual amendment language themselves. We ensure they get recorded in the county where you're located. So document amendment, enacting rules if you have the authority and you're going to enact some rules beyond what's just required in your governing documents, we can help you through that process and make sure that your rules are confined to what you're allowed to do.

We also serve your ongoing sort of corporate needs. We try to keep you updated as far as when the statutes change, and anybody in here should know that the statutes changed a lot and especially this last year have changed rather significantly. And so, a good general counsel firm will be able to step in there and provide smart board presentations like this or blog articles or statutory updates in an attempt to keep their clients informed and make sure our associations know what's going on and make sure you're not running a foul of these changes as they come up.

We also can help with your other probably more common day-to-day issues like covenant enforcement where you have an owner who hasn't kept up their lawn or if you're in a condo, you have somebody who's been blaring loud music all night and disturbing their neighbors. Those are covenant violations, and those are things where we can help you with that process. They require notices. At the end of the day, they may require legal action or mediation. And so to help with all of that, you probably want to get your general counsel attorney involved early on so that they can make sure your notices are proper, that you've satisfied all the statutory requirements. So that in the event it does end up in litigation, that case is set up the way it is, the evidence we're certain is proper, and we can help you navigate all of those issues and determine the best course of action, and hopefully get the association what it needs out of that.

Similarly with collections actions, you have an owner who hasn't paid their assessments. Your general counsel attorney should be able to help you navigate. Now, it's a very convoluted pre-suit process. I mean, there are three notices now that are required by statute as far as what it takes for an association to foreclose a lien for unpaid assessments. Your CAMS can help you there to some degree, but at the end of the day, your lawyer's going to be the one who has to take that to court. So the theme today is teams and making sure that the board, the CAM and your general counsel attorney are all communicating, knowing their responsibilities in the event of a covenant enforcement action or a debt collection action to make sure that the notices are sent at the proper times, that they contain the proper information. And so that at the end of the day, we're not wasting your time or money having to redo something or having to go back because a step was skipped.

Your general counsel attorney is a general font of knowledge for all of these day-to-day things. Beyond the sort of adversarial things like covenant enforcement and debt collection, your general counsel attorney can also step in and help you with day-to-day management issues. We can help you review contracts. Let's say, a hurricane has come through. I know that may sound like a bizarre and uncommon event, but let's pretend it's happened. A hurricane has come through and damaged your roof. We can help you navigate your relationship with your insurance broker, your insurance agent. We can help you review those contracts that come in from repair vendors. Your roof is gone. You're looking for a roofing vendor. Send that repair contract to your attorney before you sign anything. I have never in my career seen a contract that I have just said, "Go ahead and sign." There's always something that needs to be negotiated, addressed, deleted, something along those lines.

And so the sooner you can get that information to your attorney, the sooner they can help review those contracts to protect the association's interests. A vendor contract often becomes a battle of two parties trying to get the most they can with the least responsibility they can. And it's our job to step in and help an association, make sure those contracts are negotiated in a way that the association's protected at least to a certain degree as much as possible, and make sure that you're not in a situation where you're being overcharged or all of a sudden you find out you have to sue your contractor in Tallahassee because you didn't negotiate the contract properly. While these are all things that you may have some grasp of, your CAMS may have some ideas on how to help you with, don't be afraid to call in your attorney because at the end of the day, our quick emails trying to address these issues are going to be so much cheaper than the lawsuit that's bound to come from some sort of contractual error or dispute with your vendors.

So, come back and talk to your general counsel attorney for stuff like that. We can also help you and we'll talk about it a bit more as far as vendor identification. When you're dealing with your landscaping vendor, let's assume that this is just something you deal with on a daily basis. You've probably engaged in several landscaping contracts over your tenure as a director and may feel comfortable with that, but you'd be surprised at how often there are things in there that you just don't identify as being potential problems. So, rely on your general counsel for almost anything. If you have a question about the operation of your association, about contracts that you're signing, about really anything. And you're not certain, you have any shadow of a doubt, contact your counsel attorney because we'll be able to step in. And if we can't answer those questions, we can put you in touch with people who can.

Because we deal with the vendors, we deal with insurance agents, we are involved in all these situations, so we also have the contacts to help identify things that may even go beyond our typical legal knowledge. And one way or another, we're going to be the ones who can help you navigate your day-to-day operations and make sure everything's running smoothly.


Jon Lemole, Esq.:

Yeah, so it would be a wonderful world if you never had a dispute with a vendor. And I know that is not true, and I would venture to say that all of you who either serve on boards or our managers here at some point have had to deal with a relationship that has not gone the way you had hoped it would go. It's just a fact of life in operating an organization. Jim touched upon the role of general counsel in contract review, and that is vitally critical in terms of the unraveling of a relationship if that relationship somehow goes sour after the performance of the work or the performance of the services has started. And I can't tell you how many times we've been called in to deal with a dispute with a vendor, and we get the contract and it's clear to us that the contract was not reviewed by legal counsel.

And sometimes those contracts make it very difficult to deal with the dispute when the dispute arises. When you get those contracts and if you're going to create some sort of significant financial obligation to a vendor or some long-term relationship with a vendor of some sort, so like your security folks, maybe your landscaping companies, you really need to look at those contracts and have them reviewed. Because at some point there is going to be a dispute, and what that contract says is going to determine how able you are to extricate yourself from that relationship, extricate yourself from that relationship without any financial obligation.

So, as a preface to what I'm going to talk a little bit about quickly here is a thing that our firm does and other community association law firms do a very good job of is dealing with those disputes when they arise. Yeah. We've been really busy lately for a lot of reasons, but I'll tell you that as insurance carriers have been more proactive about requiring folks to replace their roofs more often, you've got hurricane remediation work that's being done. Inevitably, there is a dispute. And so, one of the services that a good community association lawyer provides is guiding you through that, guiding you through what your rights and obligations are, what you can expect, how to deal with that vendor to resolve the problem. Sometimes it can't be resolved. Sometimes it's going to involve some sort of litigation and it's unfortunate when that happens, but there come times when that is necessary. And anticipating that and being prepared for it. Documentation, understanding what your obligations are in terms of mitigating any damage that may be caused because you had a roof replacement done and it's now leaking.

What should you do in order to mitigate your losses so that you don't face a mitigation defense from the roof or if you have to get to that point of litigation around it? What are your obligations to your unit owners and your members if you're an HOA in terms of litigation? What kind of approval do you need to get in order to do that? It's different for condos than it is for HOAs under the statute. Your documents may also provide some different perspectives on that.

Pre-suit notices. This is a huge thing, a very important thing. There's a Florida statute Chapter 5 58. If it's not complied with, it can be very difficult to take your case to court. And so having those notices out there if it's a construction defects issue, making sure that you've gotten those pre-suit notices prepared and served and you've covered your bases there. It's a necessary precondition to bringing a lawsuit against the contractor or design professional. Claim investigation. If you're in a dispute and particularly in the construction area, if you've done a major repair project and it's not gone how you want it to go, and there's some issues there. Good community association lawyers can call upon the right forensic people to come in and document and investigate the areas that are problematic in the way that is going to be most advantageous for the association in resolving that dispute or if you have to go to court making sure that you've put your best foot forward. Hurricane claims. 


Jon Lemole, Esq.:

Okay. So hurricane claims, there's a huge issue about how that contractor gets paid and making sure that the association is protected, vis-a-vis both the contractor's payment and what you may be expecting to get from your insurance carrier. And then this is probably pretty obvious, but there's always this push and pull between whether the damage to the roof is caused by the hurricane or whether the damage is caused because the roof should have withstood the hurricane but it didn't because there was some sort of defective work that was done when the roof was installed. We happen to be dealing with those issues a lot right now. So, those are all the ways that your community association lawyer can help you deal with problems that arise after you've already created the relationship with a vendor. We're going to turn now to the subject of engineers, in the advance the slide, and reserve specialists.

I get asked a lot, why do we need an engineer? Because when I get presented with a major repair or maintenance project by one of our community association lawyers, one of the first things I always recommend is, "Look, let's bring in the right design professional. I really recommend that you do that so that you're providing to the vendor, the contractor, an exact correct roadmap for what work needs to be done. And so that if it's not done properly, you have something to hang your hat on." Because every contract is going to require a contractor or should require a contractor to not only do the work professionally in a workman-like manner, but consistent with all industry standards, manufacturer specifications to Florida building code and any design specifications for the project. That extra layer of protection in design specifications gives you something else to hang your hat on as well as engineers and architects are very good in the construction phase of the project in helping manage that, inspect it, review contractor pay applications. Groups coming out of turnover.

Remember you have a now shorter period of time to seek redress against the developer and the contractors who built your buildings in your community. It's now seven years from completion. And so if you're coming out of turnover, it is a vitally important thing to have an engineer, the proper engineer come in and do a study and an inspection of your community. And that's both of the buildings. But even a single family HOA community has a significant amount of infrastructure that they're responsible for. Drainage systems, roads, sidewalks, things of that nature. And those should be studied because when they go bad or when they go wrong or when things aren't done right, like you have repeated problems with your lift station and sewer backing up into your streets, that is a huge problem. So engineers, civil engineers, structural engineers, they wear a lot of different hats, play a lot of different roles, and you need to know those folks.

For those folks in condo land and especially for buildings, three stories or higher, you have all kinds of new regulations that are imposed upon you in regards to milestone safety inspections and structural integrity reserve studies. Not every engineer does that work. You need to know who they are and you need to get on their calendar as early as possible if you're facing a deadline because those folks are pretty busy. Reserve specialists, obviously goes without saying. They are very helpful in helping groups define what reserves need to be collected. And now under the new regime regarding structural integrity, reserve studies, certain condos, three stories or higher have all these new burdens imposed upon them. You have to get these studies done.

You need a really good reserve specialist who is also certified, has the proper certifications to do the visual inspection portion of that study and come up with reserve assumptions and calculations that will by the way, be required to be fully funded. And so, who you choose and how they do that may have a significant impact on what reserves you need to collect going forward in the future. I'm going to now turn it over to Jen, Jennifer Hicks, and she's going to talk a little bit about CPAs.

Jennifer Hicks, Esq.:

Thanks, Jon. So as we said, your community is run as a team and we've been asked in chat about why can't our CAM do the accounting? We're not saying your CAM can't do some of the accounting, but your best practices is going to be using a CPA that specializes in community association work. You have a lot of different twists and turns as communities that not all corporations have. Your CPA is going to need to review and audit your turnover report financials. Those are done by the developer. You don't know the parameters the developer gave their CPA. We've seen developers get a little creative with how they've labeled things or information they've provided. HOAs that goes for you too. You have a developer as well. They do a turnover as well. That's not something that only states with condos anymore.

Now, your new financial reportings, the majority of your financial reporting at the end of the year, if you're required to do reviewed audit or reviewed financials or audited financials, those are required to be done by a Florida licensed accountant. Those are where your CPA is coming in. Your annual tax filings, the question of rolling over any remaining assessment amounts that you have. The other issues with the IRS, your tax ramifications of a potential insurance payout. Those are questions for a CPA and your attorney in some cases, but those are not questions for your managers. Those are outside their specialty. So you need to work with the specialists and the licensed experts for the correct topic.
There are so many questions regarding taxes and the IRS and different things because you are operating a corporation, you're not individuals in this matter. So these are why we suggest strongly using a certified public accountant when it comes to these issues. Your managers can help you. They can help guide you to good ones, but you really need to have a CPA.

Jon Lemole, Esq.:

All right. Thanks, Jennifer. The last category here is just more or less a catch-all general discussion of the types of other vendors that routinely get called to assist community associations. So I believe Cindy is going to start off that discussion and talk about some of the various different other folks that you need to have in your Rolodex.

James "Jim" Turffs, Esq.:

So I'll be brief. My point to talk about right now is about vetting vendors and making sure that you're hiring the right people to come in and do the work for you. We've talked about vendors in a lot of capacities today. Sometimes that's your landscaping vendor. Sometimes it's somebody who's an engineer or a roofing contractor or somebody specifically needs to be licensed to do a specific task like a repair like that. So again, you can do these sort of tasks. Your attorney can help you do this. If you have a project manager or an owner's rep of some kind, they can also assist with some of these steps, but you need to make sure your vendors are properly licensed, that they have an established business. This isn't somebody who's just popped up overnight and all of a sudden they're doing a hundred roofs on your block.

It's probably somebody who's running a scam. Are they solvent? You can check local court records, you can check better Business Bureau. You can see and make sure that they haven't declared bankruptcy, that they're not have a bunch of complaints due to insufficient funding or financial misconduct. Insurance. Anytime you're about to have a vendor come into your project, again, whether that's your landscaping vendor or roofing contractor or anything in between, you need to make sure they have the proper insurance because accidents happened and a roofing tile falling off the roof of a seven-storey building and hitting an owner is going to be a problem where you're going to want somebody's insurance to step in and cover the association for that.

And finally, warranties. Warranties are another aspect. This is not an all-inclusive list. There are other things you should probably look at depending on the type of contractor, but warranties tell you that they're going to stand behind their work and that you have options in the event that either the workmanship, product, or installation have gone bad. And so you want to make sure you have the best warranties available. And now, Jen or Cindy will talk to you about types of vendors and their roles.

Cindy Hill, Esq.:

Yep, I'm up next. As you can see when we're talking about vendors, this is generally the list we're discussing. Building an infrastructure, contractors, manufacturers and suppliers, aquatic consultants particularly for those of you who are on water or have large communities that have water systems in them. Website creators. This is one that if you don't already have, you need to be thinking about with the new statutory requirements. Horticulturists and landscapers, pool contractors, electronic voting consultants, this has become a very popular option. I'm seeing some of my clients have some very positive feedback for the electronic voting, saving mailing costs and making the ballot counting for elections a lot easier if you're a very large community. Cable vendors and consultants. Cable can be pretty confusing. An owner's going to be unhappy if they don't get good service and good wifi. So, it's important to have some good people in your back pocket that can help you with that.

Not just your servicer, but also potentially a consultant who can help you when you renegotiate. Security vendors and consultants. You may not have a gate, but you may also have cameras. Are your cameras being operated correctly? Who's saving the recordings? Are they being saved? These are all issues that are your big picture depending on your community. Not in our list as insurance agents. I think we thought so much about them. We forgot to put them in here, but they are also on your list of vendors. So, I will turn the final quick recap of this issue over to Jen who has just a couple comments.

Jennifer Hicks, Esq.:

Real quick. I know we want to get to questions. Just remember, you were running a corporation at the end of the day. I know it seems sometimes like it's just your neighborhood, but it is actually a Florida corporation. You were volunteers as board members. Your job is not to clean the pool, to do the tree trimming regardless of what some of your owners may think. Use the specialists around you. You use your CAM, use your accountant, use your website designers, use your attorney. I know a lot of owners get upset when board spends money, but that's how you make sure you're doing it correctly and how you're protected as well. 

Jon Lemole, Esq.:

All right. Thank you everybody. We're going to take some questions off of the chat, so I think our lawyers have been monitoring that. So, we'll jump in and talk about some of the things that have been asked. So anybody, go ahead if you've seen something in the chat that you want to address.

James "Jim" Turffs, Esq.:

Well, I see the last question here. I was sort of in the process of typing an answer to, and John or Alan can certainly weigh in on this one too. They ask in regards to vendors, insurance of vendors, does the association need to be listed as an additional insured on those policies? And my general recommendation is yes, and not only that they be listed as an additional insured on the certificate of insurance, the COI, but it seems like recent case law has indicated they also may need to be added by endorsement to the policy to ensure that their interests are really protected. And penalty, the negative aspect of failing to be listed as an insured is that an accident happens, insurance is provided on behalf of the contractor, but to any extent, the association may still be responsible or exposed. You're not getting that insurance payout. So yeah, that's generally a recommendation.

Jon Lemole, Esq.:

There's a question. Our community has had a hard time finding an engineer to deal with developer defects because they all do some work for the developer and feel there would be a conflict of interest. It's a good question because sometimes I think the developers, they hire almost every engineer in the state to perform some sort of work for them just for that reason. But that doesn't mean that there aren't engineers who can do this work. Our firm, for example, we counsel a lot of groups coming through turnover and we have in our Rolodex various engineers that we can call upon who are perfectly comfortable doing those types of investigations and reporting on turnover issues coming out of that are addressed against the developer or the home builder and the national home builder entities. So they exist, and good... Well, construction lawyers that routinely practice in that area know who those folks are. So, I'd be happy to assist. If you have a question about that, you can call us directly and we can talk about it some more.

Alan Tannenbaum, Esq.:

Jon, I see a couple questions. To what degree should HOA board of directors review the governing documents to ascertain compliance with Chapter 720? And to what extent should HOA board of directors be apprised of the Chapter 720 state statutes? Well, the legislature's requiring a lot of education now. So as far as you're being apprised of what the statute requires, that's part of the education that you're now mandated to get. As far as ascertaining whether your documents comply with Chapter 720, a lot's going to depend on the age. I mean, we and Cindy can talk about this. We reviewed documents that were created in the '70's and '80's that never have been updated. There may be certainly provisions of those documents, which under current law are no longer applicable or legal, that where the statute will override the documents. In other cases, the documentary provisions may override a newer statutory requirement. And I don't know, Cindy, if you want to do more about that.

Cindy Hill, Esq.:

Yeah, I can... Yeah. To the extent it sounds self-serving. It is worth the association's efforts to update their documents with counsel because there have been so many changes to the law, not just recently, but over the last couple of decades. And if your documents are from the '90's, '80's, '70's, you don't have useful document tools, not only for your board but also for your owners. And that's going to mean contacting counsel more frequently, potentially maybe making decisions that aren't statutorily compliant because you just don't know. So there's a lot to be said for having updated documents and the law can be... There's no black and white, I will say, in terms of when your documents control versus when the statutes control. But certain statutes specifically say, it doesn't matter what your documents say. This provision controls. For instance, some of the new hurricane shutter requirements and protection requirements for both HOAs and condos.

The legislature has said, "These restrictions apply regardless of what your documents say." And again, we can't give specific legal advice on these issues without working directly with the community's documents and the statutes on point, but that's why there's not black and white answers. Some statutes outright say, other times some lawyers think that maybe even the statute says that, maybe that the legislature didn't have authority. So these issues actually get more complex than you would think. Going back to Jen's comment earlier, it feels like a community, but it actually is a corporation and there's a lot of extra knowledge that's needed that you would not necessarily think as you just pull in the gate.

James "Jim" Turffs, Esq.:

And to the extent the question is how deep do we have to get into reviewing these things as directors and being familiar with them. And I point back that as a director, new directors I think still have to, even though there's now the continuing education requirements, swear out the certificate as they become director saying that he or she has read the declaration, the articles of incorporation, bylaws, written policies, and that they'll work to enforce them or something along those lines. I don't remember the exact language of the statute. So, when it comes to the governing documents, the bylaws articles, it's pretty important for a director to be familiar with those. Same with the statutes, obviously, the more you know the better. But when there's a difference between those questions as we've talked about all day, coming back to general counsel or maybe you can to some degree can help you understand if there's some disparity between the two or if you have statutory questions.

Jon Lemole, Esq.:

There's a question about additional insurance status. I want to address that as one of the most misunderstood, I think concepts that I routinely come across. The question is basically, should the association become an additional insured under a vendor's commercial general liability coverage? And typically, the answer to that is it depends. I think in any kind of major repair project that you're undertaking, that is a thing that should be requested or demanded if the contractor will agree to it. But what I wanted to say about additional insured status is that there's this common misperception is that as long as you get a certificate of insurance that says at the bottom "Additional insured ABC Condo Association," that you've got it. And that is not true. Additional insured status can only be conferred if the contractor's policy allows it and conferred in the way that the policy allows it to be conferred.

And I would not always rely upon the fact that the contractor says, "Sure, I'll get you a certificate of insurance that shows you as the AI on it that is consistent with what the policy requires." And if the policy does not allow the conferral of additional insured status automatically, and I say automatically, but doesn't allow it to be conferred without an endorsement from the carrier, then the only thing that will confer it is getting an endorsement from the carrier. The carrier has to give that. And so when you are negotiating these contracts, if you want AI status, you have to know that. You have to make sure it's conferred properly because simply getting the COI doesn't necessarily mean you have it. And again, that's why it's a really good thing to have your general counsel review these contracts because they know that, and they can ensure that it's done in the right way. Anybody else? I'm done with that. So if anybody else has seen another question, jump in.


Jon Lemole, Esq.:

Okay. Well, then we'll let you all go for lunch. Thank you for joining us. Your managers, Michelle Colburn will be in touch in terms of the credit. I'm not exactly sure how she handles that, but she does a great job of handling that and making sure that everybody's supposed to get the credit they're supposed to get. In about a week, maybe this presentation will be up on our website so you can re-watch it or you can have other folks in your community watch it. If you want a copy of this PowerPoint, we're happy to provide it. You can just reach out to Michelle Colburn via email and she will provide that to you. And of course, if you have any questions about anything that you've heard today and you want to discuss it with us, again, reach out to Michelle Colburn and we'll be happy to arrange that. And feel free to shoot us a question by email too if you'd like. If we can answer it, we'll answer it. Thank you.