“Association Security Liability Questioned” – News-Press
Q: My condominium association recently hired a security service to post guards at our gated community’s entrance and patrol the grounds. The board’s goal in hiring them was to address owners’ concerns about the rising number of crimes in our area and to reduce the likelihood of crimes happening in our community by having a constant security presence. What obligations does this security service have for the association and its members, and what happens if crimes still occur on the premises despite their presence? (J.D., via e-mail)
A: This is a complicated and liability-laden issue, and one for which competent legal consultation is recommended. In general, one party does not owe another party a duty to protect against the criminal acts of third parties. However, the courts have carved out broad exceptions in the association context, focusing on “foreseeability” of criminal activity, the existence of a “special relationship” as defined in the law, and whether there is an “undertaking” to protect persons or property.
The obligations and liabilities of the security service to the condominium association are outlined in the contract between the parties. Negotiation of the key terms of this contract is a critical element of risk management. The boilerplate contract form provided by the security service will likely not favor the association.
For example, in 2005, Florida’s Fourth District Court of Appeal examined whether a security company enlisted by a condominium association could be held liable to a third party injured by an assailant on the premises. The key question in that case was whether an independent contractor, hired to provide some security services, could be liable for failing to deliver more than was agreed upon. The court concluded that the security company was not liable for not providing additional protection.
The most important protection for the association is liability insurance protection. These cases often involve horrific facts (assaults, murders, etc.) and generate high dollar lawsuits. The association should confirm with its insurance agent both that such claims are covered, as well as confirming that there are adequate limits of coverage.
While I am aware of no cases where the issue has been squarely addressed by the appellate courts, a common approach I see taken by associations and their counsel is to try to limit the “undertaking” aspect by describing the services offered as “access control” or “privacy” services, rather than “security.” Liability limitation provisions and disclaimers of protection against third party criminality are also routinely written into many condominium documents that I have seen, the legal limits of which have likewise not been addressed by the courts, to my knowledge.
Q: Our association recently prepared the requested documents for closing, but the sale fell through. Are we entitled to keep the estoppel certificate fee? (P.H., via e-mail)
A: Estoppel certificates are used in sales and refinances primarily for title insurance purposes, and to make sure accrued assessments are correctly allocated between a buyer and seller.
The Florida Condominium Act, the Florida Cooperative Act, and the Florida Homeowners’ Association Act all regulate the amount the associations can charge for “estoppel certificates.” Each statute includes a provision allowing the Department of Business and Professional Regulation (“DBPR”) to adjust fees every five years based on the Consumer Price Index.
In 2022, the DBPR increased the fees to $299.00 for preparing an estoppel certificate, an additional $119.00 for expedited requests, and an additional fee not to exceed $179.00 for delinquency fees.
All three statutes provide that if an estoppel certificate is requested in conjunction with the sale or mortgage of a unit or parcel, but the closing does not occur, and no later than 30 days after the closing date for which the certificate was sought the preparer receives a written request, accompanied by reasonable documentation, that the sale did not occur from a payor that is not the unit owner, the fee shall be refunded to that payor within 30 days after receipt of the request.
The refund is the obligation of the Unit Owner, and the Association may collect it from that Owner in the same manner as an assessment.
Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions to Joe Adams by e-mail to jadams@beckerlawyers.com. Past editions may be viewed at floridacondohoalawblog.com.
