The 2021 legislative session brought some significant changes to the Condominium Act, the Cooperative Act, and the Homeowners Association Act. These changes went into effect on July 1, 2021, and many of them impacted the collections and foreclosure process for community associations.

At the outset, we always recommend that community associations work with their association’s attorney to craft a written collections procedure. When an association has written policies and procedures regarding collections, it has a greater likelihood of success in its collections for a number of reasons. Among these reasons, written policies and procedures help ensure that the association’s collections are all pursued in the same manner. This cuts down on allegations of selective enforcement and/or preferential treatment. Also, written policies and procedures help in the smooth transition in management of the collections practices through board and management changes. Further, having set procedures helps owners understand the process and manage expectations as to what will happen if they do not keep up with timely payments. There are other reasons, but suffice it to say, it is a good idea to have these policies and procedures.

If yours is an association that already has these policies and procedures in place, note that several of the legislative changes will require these to be updated in a few ways.

DELIVERY OF STATEMENTS OF ACCOUNTS
The changes in the 2021 laws prescribes a new method of delivery of statements of account or invoices for assessments.

If an association sends out regular statements of account or invoices for assessments, this change affects how those statements of account or invoices for assessments are delivered to members. Please note that these changes do not REQUIRE an association to send invoices for assessments or statements of account. Further, unless the association’s documents provide otherwise (and they shouldn’t) sending out assessment “coupons” or billing statements is not a condition to collecting properly levied assessments.

If an association sends out invoices for assessments or a statement of the account, the invoice or statement must be sent by first-class U.S. mail or by email to the owner’s email address, as reflected in the association’s official records. This addition to the statute is of some concern because it does not clarify whether email may be used when the owner has not consented to receive other official notices by email. In an abundance of caution, if an owner has not previously consented to receive email notification, the invoice or statement should be sent via first-class U.S. mail.

Also, before an association can change the method of delivery for invoices for assessments or a statement of account, the association must deliver written notice of the change to each owner, at least 30 days before the association sends the invoice for assessments or statement of account by the new delivery method. The notice must be sent by first-class U.S. mail to the owner at the owner’s last address as reflected in the association’s records, and if the last address is not the property address, the notice must also be sent to the property address by first-class U.S. mail.

In addition, a unit owner must affirmatively acknowledge by email or in writing his or her understanding that that the association will change its method of delivery for the invoice for assessments or the statement of account before the association can change the method of delivery for that owner. The law offers no guidance on what to do if an owner fails or refuses to acknowledge.

30-DAY NOTICE OF DELINQUENCY
Another change in the laws requires the association to send a 30-day notice of delinquency prior to turning an account over to an attorney for collections.

The change requires associations to provide delinquent owners with a 30-day notice of delinquency prior to turning the account over to the association’s attorney for collections. Failure to provide the delinquent owner with this 30-day notice of delinquency will preclude the association from recovering its legal fees related to a past due assessment, i.e., any fees incurred in a collection/foreclosure action.

The 30-day notice must be sent via first-class U.S. mail to the owner’s last address as reflected in the association’s official records, and if the last address is not the property address, the notice must also be sent to the property address by first-class U.S. mail. The notice is deemed delivered upon mailing and a rebuttable presumption that the notice was mailed as required can be established by a sworn affidavit executed by a board member, officer or agent of the association, or by a licensed manager.

Subsection (5) also provides a form for the 30-day notice, titled “Notice of Late Assessment,” and requires the association to list the delinquent assessments, interest, and late fees that are owed.

CHANGE IN TIMEFRAMES FOR PRE-FORECLOSURE DEMAND LETTERS
Finally, there is a change to the timeframes that an association has to notify an owner of its intent to proceed with collections and foreclosure and the timeframes that an owner has to pay the amounts detailed in the pre-foreclosure demand letters sent by the association’s attorney. There are actually two changes that were enacted, one of which affects both condominium associations and cooperative associations and the other which only affects condominium associations.

One of the enacted changes increases the minimum timeframe for a condominium association or cooperative association to notify an owner of the association’s intent to record a claim of lien from 30 days to 45 days. This change provides the owner with an additional 15 days to remit payment for the amounts demanded in the notice of intent to lien letter. The Homeowners Association Act already required this 45 day timeframe.

The second change increased the timeframe for a condominium association to notify an owner of the association’s intent to foreclose it’s claim of lien from 30 days to 45 days. This change provides the owner with an additional 15 days to remit payment for the amount detailed in the notice of intent to foreclose letter.

These changes will require associations to make significant changes to their current collections policies and procedures, especially if the board has a written collection policy in place. Failure to do so could result in serious legal ramifications for the association if the new statutory requirements are not properly followed.

If your association does not currently have written collections policies and procedures, it may be a good time to work with your association attorney to draft these. While the statute sets out minimum notice and other timeframes, the associations may be more lenient and allow even more time.

However, you should keep in mind that the longer the association delays in starting the collection process, the longer it will take for the association to collect the funds necessary to operate the community. As with all things, balance is important and perhaps the simplest way to manage this is to stick to the timelines set out in the now more lenient statutes.

To read the original FLCAJ Magazine article, please click here.

Joy Mattingly is a Shareholder with Becker and the supervising attorney for the firm’s collection and foreclosure practice. She counsels condominium associations, homeowner’s associations and cooperatives on the development of comprehensive collections strategies, including collection and foreclosure actions, and regularly provides representation in mortgage foreclosure actions, surplus funds recovery and receiverships. To learn more about Joy, please click here.

With the all-electric Ford Mustang Mach-E currently arriving at car dealers, and the Ford F-150 Lightning arriving next spring, as well as Toyota, Nissan, GM, Audi, and so many others car makers already producing all-electric versions of their vehicles, it seems that what used to be considered a niche for adventurous Tesla explorers may become far more commonplace far sooner than many people thought. This is especially the case, given that the advertised MSRP for electric models of many of these vehicles appears to be comparable to their traditional gas-powered counterparts.

While the development in this new technology is exciting for many, it has also led to unexpected issues for some condominiums.

The 2021 amendments to the Florida Condominium Act made changes to the provisions that were adopted a few years ago regarding electric vehicle charging stations. The 2018 amendments to the Florida Condominium Act stated that declarations or restrictive covenants in condominiums could not prohibit any unit owner from installing an electric vehicle charging station within the boundaries of the unit owner’s limited common element parking space or the unit owner’s exclusive designated parking area. The statute set forth several parameters that needed to be followed in order for a unit owner to take advantage of the allowance. These included safety precautions, requirements that the unit owner bear associated costs, and similar issues.

The new changes to the Florida Condominium Act regarding electric vehicle charging station installation expands the unit owners’ rights further, by including in this section the installation of natural gas fuel stations. Like the prior allowance for electric vehicle charging stations, the new natural gas station allowance requires owners to use licensed and registered firms familiar with the installation or removal and core requirements of an electric vehicle charging station or a natural gas fuel station. Unit owners are also required to provide a certificate of insurance naming the association as an additional insured on the owner’s insurance policy for claims related to the installation, maintenance, or use of these, as well as reimbursing the association for increased association insurance costs resulting from any such installation.

As with most new community association laws, their consequential effects and other related issues they may raise take some time to crop up. When the laws on this topic were newly enacted, the idea that a great many owners would be interested in this installation did not seem likely. However, even in buildings where there was not a huge interest in the issue, concerns arose particularly with the older buildings. These buildings had electrical systems that were several decades old. Concerns regarding overloading the system, interference with the electrical system, and/or lack of capacity were not really addressed in the statute. Thus, associations were left wondering how to handle “too many” requests for installation of personal charging stations, if the statute required the association to allow their installation.

Unfortunately, this issue was not really addressed in the 2021 revisions either. Finding an equitable way to manage the potential issues can be difficult. For example, suppose a condominium’s electrical systems are capable of adding X number of charging stations without incident. Then suppose one more installation would require a significant upgrade to the electrical system. If the requesting owner is responsible for all associated costs, should the next owner seeking to install a station bear all of the cost of the upgrade? What if he/she is the only person that wants this additional station? The statute does not answer this question or how best to handle it.

Fortunately, the idea of community charging stations has also become a little more popular. These community charging stations are typically installed in non-assigned spaces or parking areas by a third party on behalf of the association for use by any person in the parking area. The vehicle owners charging their vehicles at these charging stations usually pay the third-party provider for the use of the station using a credit card or a smart card or similar format.

Of course, because these community charging stations would be installed in the common element parking areas, where no such thing existed before, these installations raised questions of material alterations and whether the approval of the unit owners was required for such an installation, whether the association had the authority to participate in the “selling” of the charge/electricity, and other related issues.

The 2021 amendments did address this point. The statute now expressly clarifies that the board of directors may install or operate an electric vehicle charging station or a natural gas fuel station on the common elements or association property, it may establish the charges or the manner of payments for the users, and that such installation would not constitute a material alteration or substantial addition to the common elements or association property.

While this is helpful, there are remaining issues, of course. The installation of a community charging station would not allow the association to prohibit personal charging station installations upon request by a unit owner, so the potential issue regarding overloaded electrical system persists. Also, associations still need to determine how to handle a fair opportunity of use of these stations by owners and how to enforce any rules and regulations they may adopt to do so, whether to involve valet services with this, how and where to best install these stations to avoid collisions or traffic obstructions, and a whole host of other issues.

In the end, the legal development in these areas is encouraging in that the legislature is aware of and taking steps to address existing and future needs of unit owners relating to this new technology that is likely to become more and more popular. However, boards of directors and managers will still need to give much thought to how best to begin implementing changes to meet the needs of their individual communities. This might involve a survey of the building to gauge interest, followed by a discussion with an electrical engineer to assess capacity and options, ending with a meeting with the community’s attorney to discuss the proper procedures needed to protect the unit owners, the association, and the residents.

To read the original FLCAJ Magazine article, please click here.

Lilliana Farinas-Sabogal is a Board Certified Specialist in Condominium and Planned Development Law and a shareholder in Becker’s Community Association and Business Litigation practice groups. In addition to her experience assisting community associations with day-to-day management and operation of governing their communities, she advises Boards of Directors, unit owners, and community association managers on how best to resolve their contractual and transactional disputes and issues. To learn more about Lilliana, please click here.