Becker & Poliakoff

Article

Category: Article

“Let’s Have A Talk About Depositions” – NEFL CAI Chapter Community Connection

Posted on by Gracie Kaplan-Stein

Whether you are a property manager, board member, or homeowner, the likelihood of being involved in litigation is ever-increasing. The COVID19 pandemic has brought a wave of litigation throughout the country, with homeowners’ association related issues being a hotbed. One inherent aspect of that litigation involves the litigants taking depositions.

A deposition serves as a tool for the parties of a lawsuit to take the sworn statements of persons with information relevant to the suit. These serve as the basis of evidence and fact for any given case. For example, in a construction defect case by the Association against a developer, board members can expect to be deposed by the developer’s counsel, along with any other defendant parties to the lawsuit. However, for as much as they are useful to litigation, they can be equally stressful for deponents. To help reduce the stress and anxiety associated with depositions, allow this to serve as a guide for what to expect.

It’s not like the movies (typically)
As portrayed in movies, depositions appear highly contentious, full of surprises, and emotionally charged. While that can certainly happen, it is an exception rather than the rule. Parties attending the deposition are typically Plaintiff’s attorneys, Defendant’s attorneys, and the court reporter. Plaintiff’s counsel and Defendant’s counsel usually have exchanged all of the information they have, which means surprises are unlikely. Moreover, the objections in depositions are limited to “form” objections as opposed to speaking objections. That means if counsel has an objection to a question being asked, they are supposed to simply state that they have a form objection for the record. So, you are unlikely to hear words like “hearsay” or “speculative” during a deposition objection.

Yes, you have to answer the question
The scope of depositions can be incredibly broad, sometimes eliciting information that seems borderline irrelevant. Unfortunately, if you are asked a question during a deposition, you are obligated to answer, unless counsel instructs you not to. Remember, you are under oath! Think carefully about your answer and take time to formulate a response, but you must be truthful. I often ask my clients to take ten seconds before they answer a question. That not only gives me time to object if necessary, but also forces the deponent to slow down and think before answering.

Show up to the deposition
All too often, folks fail to show up for their depositions. Perhaps out of anxiety or a belief that they do not know enough about the subject matter to offer any testimony. Regardless of the reason, failure to show up for a deposition could result in sanctions as severe as being held in contempt of court.

Right to counsel
You are entitled to counsel. Even if you are not a party to the lawsuit, you are entitled to have your own counsel present. Depending on the subject matter of your testimony, obtaining counsel may very well be worth the expense.

Reprinted from the February 2023 issue of the CAI-NE Florida Chapter’s Community Connection.

Kaylin Martinelli is an attorney in Becker’s Construction Law & Litigation Practice with a focus in construction defect litigation. She has a broad background in insurance defense and understands how insurance companies handle and defend against construction defect claims. Ms. Martinelli also has extensive experience conducting necessary discovery including taking depositions, attending inspections, and drafting discovery documents.

“Mixed Messaging on Solar Panels Penalizes Florida Homeowners Seeking to Save Energy” – Miami Herald

Posted on by Nadiya Pershad

In this op-ed for the Miami Herald, Becker Shareholder Donna DiMaggio Berger, dissects the conflict that solar panels can cause between insurers and homeowners. While homeowners do have a right, insurers often cite risk of injury, the use of the building for commercial purposes, and the risk of roof uplift during heavy winds. Until Florida’s legislature acts, environmentally minded homeowners could find themselves stuck in the middle.

Donna DiMaggio Berger is board-certified specialist in condominium and planned-development law. To read the full Miami Herald article, click here.

“Why In-House Corporate Counsel Should Hire a Board-Certified Lawyer” – ABA Business Law Today

Posted on by John Eischeid

Corporate counsel is often tasked with hiring outside counsel to handle important matters for the company. Finding highly specialized and talented lawyers to match up to the issues in a given case, on short notice, can be a challenge, especially when the corporation’s “go-to counsel” may not have the level of expertise required for a given matter. In narrowing down choices, corporate counsel should consider hiring a board-certified lawyer who has already been vetted for expertise and professionalism in a specialty area.

Board certification is administered by eight national private organizations with eighteen certification programs accredited by the American Bar Association. These private certification programs include specialty areas in bankruptcy, criminal trial advocacy, patent litigation, and complex litigation. Many state bar associations also administer board certification programs. For example, Florida has the largest number of certification specialty areas, at 27, which range from marital and family law to criminal law, construction, real estate, and workers’ compensation. Texas, California, North Carolina, and other states also have robust programs. There are approximately 28,000 lawyers in the United States who are board-certified specialists.

Selecting a board-certified lawyer provides an assurance of the lawyer’s expertise. Generally, all certifying programs require a lawyer to have practiced with substantial involvement in a specialty area for at least five years and to pass a rigorous examination testing their knowledge of the law in the specialty area. A board-certified lawyer must also be vetted by their peers for professionalism and ethics through a confidential peer review process. In addition, most candidates must satisfy a continuing education requirement in a designated specialty area. Typically, board-certified lawyers must apply to be recertified every five years and through that process, must demonstrate compliance with all board certification requirements.

Board-certified lawyers pride themselves on being up-to-date on current developments and legislation that impacts their legal specialties. For example, with constantly evolving business technologies and systems, lawyers who are board certified in Privacy Law by the International Association of Privacy Professionals (IAPP) are on top of emerging privacy legislation on state and global levels. In a legal landscape where, fewer cases are actually tried to verdict, lawyers board certified in Complex Litigation by the National Board of Trial Advocacy (NBTA) have, at a minimum, actively participated in one hundred contested matters, and NBTA lawyers board certified in Criminal Law have extensive jury trial experience and significant experience dealing with expert witnesses. Lawyers board certified in Business Bankruptcy Law by the American Board of Certification (ABC) must participate in at least thirty adversary proceedings or contested matters across a range of business areas. Thus, board-certified lawyers have focused legal acumen that is demonstrated and tested on a regular basis.

Selecting a board-certified lawyer has appeal for a number of other reasons beyond proven competency. First, board-certified lawyers have extensive experience in their jurisdiction and are familiar with local practices, the jury pool, and judges. Second, because these lawyers practice in a specific specialty area, they tend to know their colleagues on the opposing side. This type of knowledge and familiarity can be of assistance in amicably resolving disputes that could otherwise wind up in drawn-out, expensive litigation. Third, as board-certified specialists, these lawyers understand how to effectively manage the cost of litigation and can provide accurate budgets for use by in-house counsel when advising management. Finally, when faced with “bet the company” litigation, qualifications matter, and in-house counsel can sleep better at night knowing that board-certified counsel is capably acting in the best interest of the company.

At the very least, corporate counsel can use the board certification designation to narrow down the list of qualified candidates for consideration. On this point, corporate counsel should also consider consulting the American Bar Association Standing Committee on Specialization’s website for more information on board certification, specialty areas, and links to the national private organizations with ABA-accredited certification programs and states that run their own certification programs throughout the country. The ABA has been involved with board certification of lawyers for almost thirty years, and ABA accreditation is widely recognized as a valuable seal of approval for organizations conferring board certification. Additionally, the ABA has worked with states on incorporating ABA Model Rule 7.2 (formerly 7.4) into state ethics codes, and many states permit certified specialists to publicly disclose certification without any limitation if they are certified by a program that is accredited by the ABA.

Steven B. Lesser is a Shareholder at Becker & Poliakoff and Chair of the Firm’s Construction Law & Litigation Practice. Mr. Lesser is Florida Bar Board Certified in Construction Law and Chair of the American Bar Association Standing Committee on Specialization.

This article originally appeared in Business Law Today, a publication of the American Bar Association Business Law Section.

GONE GLOBAL: Ned Bassen & Catelyn Stark Co-Author 2022 Employment Law Chapter for Global Legal Insights

Posted on by John Eischeid

Labor and employment attorneys Ned Bassen and Catelyn Stark provide practical insight into the latest developments of U.S. law safeguarding both employers and employees. The chapter addresses general trends, business protection and restrictive covenants, discrimination protection, employee privacy, and includes information regarding:

  • Union protections and the right to organize,
  • Trends in unemployment claims,
  • A ban on restrictive covenants,
  • The CROWN Act, and
  • The usage of AI systems in employment.

Please click here to read the full chapter.

The Global Legal Insights series provides essential insights into current legal issues, providing readers with expert legal analysis of legal, economic, and policy developments through the eyes of the world’s leading lawyers.

Becker’s Employment Law Team has experience in dealing with virtually every type of employment issue. We collaborate with our clients to achieve a competitive edge in the full range of employment and personnel law issues that can affect a company’s future.

“Stablecoins and Central Bank Digital Currencies (CBDCs): The Future of Money” – Financier Worldwide

Posted on by John Eischeid

Like the rest of the world, money is going digital. Credit and debit cards, electronic fund transfers, online services like PayPal, and peer-to-peer services got a boost during the COVID pandemic. Cryptocurrencies did as well, along with decentralized finance (DeFi) and smart contracts. In the latest issue of Financier Worldwide, Becker Shareholder Robert C. Brighton, Jr. expounds upon what might be next in this expanding sector of finance. Governments have taken note of central bank digital currency, or “CBDC” for short, and that could foreshadow a shift just as significant as the abandonment of the gold standard after World War II.

Click here for the full article.

Robert C. Brighton Jr. is a shareholder at Becker & Poliakoff and currently serves as the Co-Chairman of the Subcommittee on Florida Securities Laws (Corporations, Securities & Financial Services Committee of The Florida Bar’s Business Law Section). To learn more about Rob, please click here.

“The New Fannie Mae and Freddie Mac Lender Questionnaire: To Answer, or Not to Answer, That is the Question!” – CAI-NJ Community Trends

Posted on by John Eischeid

Prompted by the Champlain Towers Condominium collapse in Surfside, Florida, the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) recently issued new temporary requirements as an attempt to mitigate risk in community association loan underwriting. Many other industries within the community association world, such as insurance, have adjusted costs and guidelines in an effort to mitigate risk due to the unprecedented tragedy.

The new requirements have created significant murmurings, considering that as of 2020 Fannie Mae and Freddie Mac own approximately sixty-two (62%) of conforming loans in the United States. According to Dawn Bauman, CAI’s senior vice president of government and public affairs, “70% of all condo loans in the U.S. are [backed by] Fannie Mae or Freddie Mac. 60% to 70% of all condo complexes are more than 30 years old.” Both Freddie and Fannie do not lend money directly, but are guarantors of third-party loans and purchasers of loans in the secondary mortgage market. Unfortunately, the new requirements are exceedingly difficult to meet as now articulated.

Before discussing the requirements, a brief outline of Fannie Mae’s and Freddie Mac’s importance to the residential mortgage market may be helpful. Chartered by Congress, and now under the conservatorship of the Federal Housing Finance Agency (“FHFA”), Fannie Mae and Freddie Mac are government-sponsored enterprises (“GSE”), quasi-governmental entities with the purpose of enhancing the flow of credit to mortgage lenders, providing liquidity, stability and affordability to the U.S. housing market.

The primary difference between Fannie Mae and Freddie Mac, is that Fannie Mae buys mortgages from larger commercial banks, while Freddie Mac buys from smaller banks. When a potential unit owner either purchases a unit within a community association, or decides to refinance, a lender will originate and fund the loan, but typically with the intent of selling the loan to either Fannie Mae or Freddie Mac and therefore must meet their underwriting requirements in order for the loan to be deemed eligible. Many homeowners are unaware of these types of transactions on the secondary mortgage market since the bank which originated the loan remains what is deemed the “loan servicer”.

Community association property managers and attorneys have come to know the lender questionnaires that associations are asked to complete so a lender has sufficient documentation to sell the loan to Fannie Mae or Freddie Mac. There are, of course, other guarantors of loans, such as the Federal Housing Administration (“FHA”), which requires a project certification every three years, in order to qualify.

Opposed to the FHA practice of maintaining an Internet accessible list of eligible projects, the new Fannie Mae and Freddie Mac requirements create a private database, which is only available to lenders, of community associations that are deemed ineligible. Among other things, disqualification from Fannie Mae and Freddie Mac can be due to community associations with significant maintenance or unsafe conditions, special assessments, insufficient reserve funding, or no reserve study.

Many may wonder why this a big deal, especially if they believe their association is maintained properly. While that may be the case, the new guidelines now require lenders to obtain written answers to questions concerning building safety, soundness, structural integrity, and habitability, which were never part of previous lender questionnaires. Most of these questions cannot be answered by the association since the board and its manager are simply not qualified to give such an opinion, meaning they lack the requisite legal and engineering expertise.

While many states have legislation pending to require scheduled structural inspections, many associations have not undertaken structural reviews of its properties, particularly on a property-wide basis. A typical reserve study does not undertake structural review or analysis. Even if it has, the questionnaire further asks the association to summarize its findings and make representations about the structure of the building, which can usually only be answered by a professional engineer or architect.

The new lender questionnaire, as contained in Fannie Mae Form 1076 or Freddie Mac Form 476, requires, among other things, that associations make representations concerning structural inspections and deficiencies, anticipated municipal building violations, funding plan for “deferred maintenance” items, current assessments, and future assessments. Indeed, the definition of deferred maintenance, as it is known to Fannie Mae and Freddie Mac, departs significantly from what the industry has come to know as that term. For example, Fannie Mae and Freddie Mac generally defines deferred maintenance as the, “postponement of normal maintenance, which cannot reasonably be resolved by normal operations or routine maintenance, which may result in advanced physical deterioration, lack of full operational efficiency, increased operating costs, and decline in property value.”

On the other hand, in the community association industry, the presumption is that “deferred maintenance” refers only to non-capital maintenance that occurs less frequently than annually and is not funded for through the capital reserves.   And, such funding of deferred maintenance projects can come from a specially partitioned fund.  Fannie Mae and Freddie Mac do not consider routine maintenance, non-capital improvement projects, or repairs isolated to a few units significant deferred maintenance.  Generally speaking, the vagueness and misunderstanding of the questionnaire’s definitions could lead to a host of issues.

Asking an unqualified board or manager to make representations about the structural integrity of the property, combined with further misunderstandings between the community association and lending industry may incur unnecessary and inadvertent legal liability, regardless of the condition of the building. A myriad of potential legal issues could arise due to an unqualified or inaccurate representation concerning the structural integrity of the building. An inaccurate or misunderstood statement from the questionnaire could be used against the community association in a variety of ways in differing types of legal actions, such as a personal injury matters, negligence suits that could be brought against the particular association, and even suits between buyers and sellers of units.

Likewise, asking a board or manager to make representations concerning anticipated building violations or assessments requires the proverbial crystal ball. Board members and property managers can likely recall times when its’ board spent years speculating about a particular project, whether they thought they may receive a violation, and engaging in grueling debate as to the best way to fund it, only to have it not move forward due to lack of approval or otherwise. The issue therefore arises as to when something “anticipated” should be disclosed to a lender. Given the legal structure and requirements of how community association boards operate, to speak in terms of anticipated matters in this context is nonsensical.  A board has either approved, or not approved, a project or assessment. A municipality has either issued, or it has not issued, a violation.

The end-goals of what Fannie Mae and Freddie Mac are trying to accomplish is welcomed. The community association industry, including CAI, strives to make our community associations a safer and more comfortable place to live. Volunteer boards, managers, and engineers work tirelessly to improve their buildings and community with the noblest of fiduciary principles in hand. However, it is questionable whether the new requirements align with industry best practices and customs. CAI national has made the following statement: “CAI supports the intent of the new requirements from Fannie Mae and Freddie Mac and understands the need to assess and mitigate risks associated with their respective condominium unit and cooperative share mortgage portfolios but is recommending a delay in implementation. This will allow associations, their managing agents, and service providers to produce documentation materials more efficiently and account for state and local government regulations for project safety and financial solvency standards.”

Until these challenges are resolved, many community associations are caught in a quagmire of how to move forward with the new requirements. Refusing to answer the questionnaire may result in the denial of future loans for a community, but on the other hand, answering the questionnaire may expose the association to considerable liability. There is not a one-size fits all approach and all community associations are unique in this regard.  Careful consultation with an association’s legal counsel and engineer is crucial to figure out the best manner in which to move forward with these considerations.

Further information can be found in “Determining Condo or Coop Eligibility for Mortgages Backed by Fannie Mae and Freddie Mac, a Guide for Navigating the New Temporary Requirements for Condominiums and Housing Cooperatives,” February 17, 2022, Community Associations Institute.

Reprinted from the May 2022 issue of the CAI-NJ’s Community Trends®.

 

“Tolling the Statute of Limitations for Community Association Construction Defect Claims” – CAI NJ Community Trends

Posted on by John Eischeid

On January 11, 2022, New Jersey Governor Phil Murphy signed into law a statute that amends the Statute of Limitations (SOL) for the filing of a lawsuit against a developer, its design professional and subcontractors for construction defects. While it was common interpretation of applicable case law that an owner-controlled board had at least six years from the date owners assumed a majority of the seats on an association board of trustees, the New Jersey Supreme Court turned that understanding upside down in the 2017 case of The Palisades at Fort Lee Condo Ass’n, Inc. v. 100 Old Palisade, LLC, 230 N.J. 427 (2017). Under the unique circumstances of that case, the court held that the six-year SOL period started to run when the developer-controlled board learned of a defect in the association’s common elements. Application of that ruling meant that, in some instances, by the time the owners took control of the board, the SOL could have already run, precluding the ability to file suit. Further, since the developer-appointees to the board would be unlikely to ever tell the owner members of the board when they learned of a defective condition, the owner-controlled board would not know when the six-year SOL had started to run.

Soon after the Palisades decision, community association attorneys brought the case to the attention of the CAI Legislative Action Committee (LAC) and urged it to seek an amendment to the SOL law to toll the running of the SOL until owners gained control of the board. The LAC worked over three years to bring this amendment about. Ultimately, the New Jersey legislature understood the plight of associations under developer control and overwhelmingly passed the bill late in 2021. The SOL now contains the following specific exception, which tolls such claims for community associations: “c. The period of time for the filing of a claim by a condominium association, cooperative corporation, or other planned real estate development association against a developer or any person acting through, on behalf of or at the behest of the developer…shall be tolled until an election is held and the owners comprise a majority of the board…N.J.S.A. 2A:14-1(c).”

This law also applies to claims associations filed prior to its passing, as long as such claims have not been subject to final judgment (meaning that there are no trial or appellate court proceedings pending). Only when a community association’s board is controlled by its owners does the period of time the association has to file a claim against a developer start to run.

It is important to note, however, that New Jersey’s ten-year Statute of Repose remains in effect. That law provides that no one may sue a developer, subcontractor, or design professional more than ten-years after “substantial completion” of an improvement. Hence, in a matter where the owners took control of the board seven years after substantial completion of at least some of the components of a community association project, the board would have only three years to file a claim concerning those components, not the full six years provided by the SOL.

If your community is going through the process of transition, or if you have any questions about the Statutes of Limitations or the Statute of Repose, you should immediately consult with your legal counsel to ensure that your construction defect claims are appropriately preserved.

Reprinted from the May 2022 issue of the CAI-NJ’s Community Trends®.

 

The Real Housewives Meet the Internal Revenue Service

Posted on by John Eischeid

The Maserati was leased, but never reported. Forty thousand dollars a month was paid to a glam squad to “perfect a look” for housewives dining out on an ordinary Tuesday evening. The ostentatious spending—and the outsized personalities that that it accompanies—attracted an audience that very few want: the IRS. In all its variations, The Real Housewives have had some serious legal trouble behind the scenes, but in an ironic plot twist that even the producers would envy, one of the best lines of legal defense to the stars’ tax woes calls into question the very realness and “reality” that is the show’s premise.

Real Housewives in the Crosshairs

In 2013, a grand jury indicted Joe and Teresa Giudice from The Real Housewives of New Jersey for mortgage and bankruptcy fraud. While the couple was in the middle of a Chapter 7 bankruptcy, Teresa listed herself as unemployed and failed to report her income from the show. This is also the couple who failed to report the leased Maserati. Eventually, the couple admitted to mail and wire fraud, loan application fraud, and bank fraud. They entered into a plea agreement that not only required both spouses to serve jail time, but also required them to pay $200,000 and forfeit the money they received through the conspiracy.

Fast forward to 2020, Erika Girardi, (a/k/a/ Erika Jayne) and her soon to be ex-husband, Tom Girardi from The Real Housewives of Beverly Hills, were accused of embezzling money to fund their extravagant lifestyle. In her song, “Xxpens$ve,” Erika sang, “It’s expensive to be me/ looking this good don’t come for free.” Believe it or not, according to E! News, in 2018, Erika spent about “$40,000 a month to maintain her ‘look.’”

Mr. Girardi, a lawyer who represented Erin Brockovich and the victims and families in the Lion Air Flight 610 crash, allegedly embezzled the proceeds of his clients’ settlements to fund Erika’s lavish lifestyle. While Jayne was dismissed from this suit, Mr. Girardi was not. (In a separate case filed in February 2022, the two now also face another embezzlement charge for not distributing the funds in a case regarding the death of NFL player Chuck Osborne.)

In March 2021, Jennifer Shah from The Real Housewives of Salt Lake City and her assistant were charged with conspiracy to conduct a telemarketing scam and money laundering. Her defense team’s strategy is to demonstrate somehow and someway, that the “real” lives of these “housewives” are manipulated to a point where the “housewife” becomes a separate exaggerated character and in turn, it becomes unreal.

Through the Looking Glass

In February 2022, responding to the government’s notice of its intention to offer specific evidence at trial, Mrs. Shah’s attorneys opposed the admission of any clips from the show into evidence by arguing that the clips were hearsay. These clips may potentially fall within the “admissions against interest” exception to the hearsay rule, but there must be some degree of reliability in order for the clips to be introduced into evidence.

Next, Shah’s attorneys have sought to exclude from evidence, any and all of Mrs. Shah’s “luxury items” from the show, arguing that without evidence that the luxury items: (i) were real, (ii) that they actually belonged to Mrs. Shah, and (iii) that she, herself, paid for them, there was a real risk that the government would present the show’s fake reality and portray it as real to a jury.

Reality or Illusion?

The game of Housewives is similar to that of dominos. The stars must act rich and appear to have loads of money in order to be cast on the show; but the lingering question that remains is: how do they actually make this money? Moreover, how much of these women’s lives are real and how much of their lives are embellished, produced, and fake?

The Housewives format is a constant, and at times, a confusing back-and-forth between “real” footage and then “confessionals” or “testimony” by a housewife.

The show’s editors also use “frankenbites,” a term of art in the industry that is used to describe splicing words someone said from different sources to make a sentence that the person never actually said. So much raw footage is edited into short episodes that many statements take on a meaning that is far removed from what was intended. It is this editing process and use of frankenbites that make these clips particularly unsuitable as evidence in a court of law. The Housewives are characters and their statements are embellished and edited to be dramatic.

Additionally, the show’s infamous taglines are manipulated to shock and hold the viewers’ attention. For example, and hoisted by her own petard, Erika Jayne’s taglines have included “I’m an enigma wrapped in a riddle…and cash” and “Being broke sucks, being rich is a lot better.”

Are Reality TV Testimonials Good Evidence?

How much footage from reality shows can be relied on as admissible evidence in a court case and can it be excluded from the hearsay rule?

Hearsay evidence is an out-of-court oral statement offered to prove the truth of the matter asserted, and it is usually considered to be inadmissible, absent an exclusion or exception. Certain exceptions to the hearsay rule exist to allow some statements to be introduced into evidence, and this is where things get tricky with reality television. Typically, if someone were to confess to a crime on camera it would be admissible. For example, if someone were to admit to robbing a bank on video, it would be admissible evidence to show guilt of the robbery. However, reality television is different.

Through the lens of television, reality is warped by the compensation received by the stars, the context of their actions on the series, and the editing process that produces clips cobbled together out of disparate parts. These three factors jeopardize the trustworthiness of statements that would otherwise be an “admission against interest,” and fall within the exception to the hearsay rule.

To add another dimension to this hall of mirrors, reality television is the exception to the exception when it comes to determining what is and what is not admissible in a court of law. In fact, it calls into question the very realness that the show’s title promises.

 

“Waiting for the Revolution: Opportunities and Obstacles Presented by the Blockchain, Cryptocurrency, and Web3” – Financier Worldwide

Posted on by John Eischeid

The next digital revolution will be based on blockchain, a system by which independent computers verify transactions with no central authority, as described by Becker Shareholder Robert C. Brighton, Jr. in the latest issue of Financier Worldwide. In these systems, security and reliability are maintained through consensus. For public blockchains, any change in the ledger is transmitted to every member on the network. These form the basis of cryptocurrencies, such as Bitcoin. Another is ether, which also allows for the execution of functions or agreements and is used in many Web3 transactions.

While these new currencies have experienced a great amount of growth, one drawback is that as more transactions occur, and the more cryptocurrency or tokens created, the record grows and requires more processing power to maintain. This appetite is one of the impediments to the arrival of the next digital revolution. On the other hand, there are a number of factors pushing it forward: institutional distrust, untapped capital, innovative businesses, the surge in public equities, and governmental regulation. Overall, there is a common belief that decentralized technologies will serve some sectors better than discredited financial institutions have in the past. Another blockchain technology lies in non-fungible tokens, or NFTs, which attach a record of ownership to a digital asset, such as a digital artwork.

In 2022, there will be a few trends to watch: growth in NFTs to include real estate and consumer goods, along with social-media apps; a transition from intense “proof of work” to “proof of stake,” which is a system based on a pledge of ownership; the use of cryptocurrencies tied to other currencies and tangible assets; and the growth of some system to regulate it all.

Click here for the full article.

Robert C. Brighton Jr. is a shareholder at Becker & Poliakoff and currently serves as the Co-Chairman of the Subcommittee on Florida Securities Laws (Corporations, Securities & Financial Services Committee of The Florida Bar’s Business Law Section). To learn more about Rob, please click here.

“Sunshine Laws” for Condominium Associations

Posted on by Karyan San Martano

Florida’s Sunshine in the Government Act, (“Sunshine Laws”) requires transparency and disclosure in government and business. Although the Sunshine Laws do not apply to condominium associations, the Florida Condominium Act (“Act”) found in Chapter 718, Florida Statutes, contains its own set of “sunshine” requirements for these communities, with transparency being the key to compliance. Issues generally arise in condominiums when there is or appears to be a lack of transparency between the board of directors and the association members.

“Is Your HOA Gate Opening To Increased Liability?” – CAI South Gulf Coast Magazine

Posted on by Stephanie Maher

Exterior of a gated community gate opened up.When a community has an entrance gate, it is almost inevitable that the association will at some point deal with the issue of whether it is responsible for damage to a vehicle which occurred when someone was entering or exiting the gate. The primary question to resolve in assessing liability in such a circumstance is determining the cause of the damage. The answer, however, may not always be clear-cut, and the association needs to make sure that it is prepared for such an incident.

In the case where the gate closes on a vehicle which has piggy-backed behind another vehicle entering or exiting the community, the driver would most likely be responsible for damage to his/her vehicle. If the gate malfunctions, however, and the association is responsible for the operation, maintenance and repair of the gate, generally speaking, the association would be responsible for damages absent mitigating circumstances such as tampering, faulty maintenance, or other factors beyond the association’s control.

If an association is not having its gate regularly checked and maintained, this is something it should highly consider doing. This is particularly the case if it has received reports of the gate malfunctioning. By ensuring that the gate is regularly maintained and in good working order, an association not only be complies with its maintenance responsibilities likely set forth in the governing documents, but also lowers the chances of the gate malfunctioning in the first place, and potentially decreases its liability risks should an accident involving the gate to occur.

Though not a guarantee, having a camera pointed at the gate entrance/exit may also be helpful in determining whether damage to a vehicle was the fault of the driver or a gate malfunction. In the case of a car piggy-backing another vehicle, this could be easily viewed on a camera, assuming the camera was operational and that the footage was still available once the incident was reported to the association.

Placing warning signs on the entrance and exit gates can also play a part in decreasing the potential liability risks of the association. Such signs, for instance, may warn that a gate is automatic and timed for only one vehicle. They may also warn that moving gates can cause serious injury or even death. Many of these signs are pre-made and are easily obtainable.

In the end, an association should discuss options with its insurance carrier and community association attorney to determine the most appropriate measures based upon the maintenance responsibilities of the association and the specific configuration and characteristics of the entrance/exit gates of the community.

To read the original CAI Community Voice article, please click here.

Sara K. Wilson is an experienced attorney with Becker & Poliakoff and has spent the last 15 years advising condominium, homeowners’, cooperative and timeshare associations throughout the state of Florida. She is a former Assistant State Attorney with the Fifth Judicial Circuit State Attorney’s Office in Lake County and Trial Court Staff Attorney for the Fifth Judicial Circuit. To learn more about Sara, please click here.

Omnibus Bill (SB 630) Brings Changes for Florida Condos, Cooperatives and HOAs

Posted on by Stephanie Maher

Toy houses in front of more toy houses.This year’s large community association omnibus bill will likely become law. This bill, which bears an effective date of July 1, 2021, contains changes which will impact condominiums, cooperatives and HOAs. At more than 100 pages, we will discuss only some of those changes in today’s CALL Alert. This bill, along with all the others CALL has been tracking throughout the 2021 Legislative Session, will be summarized in our year-end Legislative Guidebook.

Several of the Condominium changes include:

  • If a condominium association’s insurance policy does not provide rights for subrogation against the unit owners in the association, an insurance policy issued to an individual unit owner may not provide rights of subrogation against the condominium association. This will help prevent the rash of unfounded negligence claims against associations we’ve seen filed by at least one insurance company operating in Florida but may unfortunately result in increased premiums if subrogation against the culpable party in a loss is no longer possible.

CALL ALERT: Governor DeSantis Signs COVID-19 Liability Bill

Posted on by Aldo De los Santos

Dramatic photo of the Florida Capitol Building during dusk.Yesterday Governor DeSantis signed SB 72 which gives civil immunity to not-for-profit corporations, hospitals, nursing homes, government entities, schools and churches for COVID-19 related claims as long as the alleged negligence doesn’t involve gross negligence or intentional misconduct. “COVID-19 related claim” means a civil liability claim against a person, including a natural person, a business entity, an educational institution, a governmental entity, or a religious institution, which arises from or is related to COVID-19. The term includes any such claim for damages, injury, or death.

“Weathering The Storm: A Top 10 List For Condo and HOA Boards” – Miami Herald

Posted on by Caroline Sparks

money matters

As all Floridians know, storm season can be a very hectic time. Preparation for – as well as the aftermath of – storms is stressful. Board members of community associations are hit particularly hard by the nerve-wracking days of hurricane season because not only do they have to worry about themselves, they also have to worry about common areas and the building structure itself. Vulnerable residents and funds also play into the mix. Add all these factors together and being a board member can be a tough position to be in this time of year. Shareholder Donna DiMaggio Berger recently penned a very informative article which addresses these issues. She gives her Top 10 “to do” list for communities.

Click here to read the full article in the Miami Herald

What’s Up with All This Traffic? The Impact of Neighboring Development on Community Association Roads

Posted on by Anna Cherubin

Whether you know it or not, the roads traveling through your subdivision are likely easements created for the purpose of providing ingress/egress access to public streets. And whether you know it or not, those easements may also benefit neighboring properties, giving them access through your subdivision to a point of entry on a public road.

Directors Voting – Dispelling Myths

Posted on by David G. Muller

Every director who sits on the board of a homeowners association gets a voice in the operations of the association.  The questions I receive are more about how that voice is exercised through a vote.  For instance, some directors travel quite a bit, whether for work or play is irrelevant.  The directors however are entitled to notice of the board meetings and can participate by telephone, casting their vote via phone at the time of the meeting.  But what about voting by proxy in an HOA, is that allowed? No, the Homeowners’ Association Act specifically prohibits a director from voting via proxy on matters that come before the board.  Similar prohibitions exist in the Florida Condominium Act and the Florida Cooperative Act, so it is important to keep this in mind.

Special Assessments in Condo

Posted on by Jay Roberts

Special assessments happen.  The unfortunate reality is that during the life of a condominium building some unexpected expenses are going to arise and the association must take steps to fulfill its obligations to the membership.  If the operating budget cannot handle these expenses, and there is not a funded reserve account which can dray the cost, then it is likely that a special assessment will need to be levied.