CAI-New Jersey Legislative Action Committee Receives National LAC of the Year Award

The Community Association Institute of New Jersey’s Legislative Action Committee has received the Legislative Action Committee of the Year award. The award recognizes “a state legislative action committee for demonstrated organizational excellence, strong member support, and successfully raising the visibility and effectiveness of CAI.”

Becker Shareholder David Ramsey, who also received the CAI’s “Excellence in Government and Public Affairs” award, served on the Legislative Action Committee and was heavily involved in its legislative efforts. Last year, the CAI New Jersey Legislative Action Committee tracked and advocated on several major bills, including the uniform common interest ownership act, elective vehicle charging stations, authority to collect assessments, and priority lien. Additionally, the committee passed monumental legislation expanding the number of months of assessments a community association could recover through priority lien foreclosure from six to 12 months.

In 2019, David and Ronald Perl of Hill Wallack LLP, both members of the CAI New Jersey Chapter, spent countless hours drafting CAI’s public policies on the Government and Public Affairs Committee. They continually support CAI’s Advocacy Summit, and both are members of CAI’s Federal Legislative Action Committee.

Read more here.

“Don’t Forget Reserves!,” FLCAJ

As budgeting season approaches, community associations must once again grapple with the continuing issues of reserves. Under ordinary circumstances, reserve funding increases the amount owners need to contribute to the association every month, since reserves are required above and beyond the association’s operating expenses. In light of the recent economic changes, reserves may be something some associations view as a luxury and possibly dispensable in order to reduce the load on their owners. They are not, however.

Florida community association law requires condominiums and homeowners associations to establish and collect reserves as part of their annual budgets. This means that an association must create a separate budget that will ensure it collects enough money every year so that when the estimated useful life of the component is expired, the association will have saved the amount necessary to replace the component without the need for a special assessment. Condominium associations are required by law to collect reserve amounts for roof, building painting, and pavement resurfacing, regardless of the amount of the replacement costs of these, and for any item for which replacement or deferred maintenance will exceed $10,000. Homeowner associations’ reserve funding is mandatory only if the developer of the community established reserve funding or if the owners at some point voted to establish statutory reserve accounts. In either of those cases, then the homeowners associations are required to continue to fund such reserves.

Of course, even the best laid plans can go awry, and associations may find themselves in situations where they need money immediately for some unexpected reason. If the association has healthy reserve accounts, the average owner may believe the board can simply use the money in those accounts to solve the problem instead of levying a special assessment or borrowing the money. However, the statutes state that in order to use reserve monies for any reason other than that for which they were reserved, the owners must vote to approve the move. The condominium statutes even require that the voting documents for such alternative use have special language warning owners of the risk that may arise in using reserve funds for other purposes. Similarly, while the associations must include full funding of statutory reserve accounts in each year’s budget, the statutes allow the owners to vote to waive full funding of reserves. The warning language must still be in place in condominium voting documents, but this allows associations to give their owners the option to pay a little less into the reserve accounts or skip reserve funding altogether in any given year.

In terms of how much money to put into reserves, professionals must usually be engaged to assist in the analysis and valuation of the components’ deferred maintenance and/or replacement costs and their estimated remaining useful life. The statutes state, “The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance.”

Another consideration related to reserve funding is what funding method is currently being used. Component funding requires reserves to be collected and kept separate for each component. For example, the reserve account for building painting would be calculated and kept separately from the reserve account for pavement resurfacing. Under this component system, the money for each separate reserve item can only be used for that reserve item unless a vote of the owners allows an alternative use. The other type of reserve method is the pooled method of reserve funding, sometimes called the cash flow method. This system allows the collection of monies for replacements and/or repairs of a group of components to be put into one account. Under the pooled method, all of the money in the pooled account is still restricted such that it could not be used for anything other than the components in the pool, but it could be used for any of the components in the pool.

There are at least two benefits of pooled reserve funding. First, because of the way that pooled method of funding is calculated, the contributions required by law each year as a whole are usually less than with the component method, while still allowing an association to maintain adequate monies on hand to
address major replacements as they become necessary.

Additionally, the pooled funding method gives boards more latitude in how to utilize funds which have been collected for any reserve item that requires attention, perhaps sooner than expected. Under the component method, if roof work became necessary before it was anticipated, and there was not enough money in the roof reserve account at the time, the board would be required to obtain a vote of the owners to use money from another reserve item or specially assess or seek a loan for the needed money. Under the pooled method, if the roof required repairs or replacement sooner than expected, the association could use the money reserved for the other components in the pool along with the roof component. Since all the monies would be in the pool together, an owner vote would not be necessary.

Associations considering moving to the pooled method should consult with their professionals to determine how this switch would affect their reserve collections and what approvals are required. It may also consider moving money currently being held in straight line or component funding methods to the pool. Keep in mind that since moving money in this way would allow the funds to be used for items other than what they were reserved for, a unit owner vote is required.

The bottom line is, don’t forget about reserves. Reserve funding should be part of the budgeting process. Though the law allows flexibility on how, whether, and how much to fund reserve accounts, associations should not leave these decisions to the last minute because reports, calculations, potential owner votes, and time-sensitive coordination of these will ultimately be needed in order to fund them properly.

“Community Association Boards Completely Overlook the Significance of Who Is Serving as the Association’s Registered Agent.,” SFPMA

Far too many community association boards completely overlook the significance of who is serving as the association’s registered agent. I’ve found associations whose registered agent is a former board member who is either deceased or who has moved away or a former law firm or lawyer who no longer represents the association.

Pursuant to Section 607.0501,F.S, the duties of a registered agent are to forward to the corporation at its official address any process, notice, or demand which is served on or received by the registered agent. If the registered agent fails in this regard, the association may miss crucial litigation deadlines as well as Code compliance hearings which can result in substantial damage to the association. Current board members and managers should also seriously consider whether they are up to the task of serving as Registered Agent as that role does come with potential liability.


Becker Lobbyists Excited to Begin Working with Newest Client – the Virginia Port Authority

Washington, DC, August 4, 2020 — Becker, a multi-practice commercial law firm with attorneys, lobbyists, and other professionals at offices throughout the East Coast, announced that it will be providing comprehensive federal government relations and legislative liaison services on behalf of their newest client, the Virginia Port Authority (VPA) in support of their strategic expansion plan.

Becker’s Government Relations team will be led by long-time Virginians Anthony Bedell and Alfonso Lopez.

The VPA has experienced significant growth for almost two decades and is currently the third largest port on the East Coast of the United States. The VPA has made major investments in infrastructure and capacity with the expansion of primary cargo terminals, expanded capabilities of port facilities, and dredging to make Virginia one of the deepest seaports on the east coast of the United States.

Government Law and Lobbying has been a core practice for Becker since its founding in 1973. The firm’s team of lawyers and lobbyists includes several who have served in high-level government positions and distinguished themselves in the political and legislative arenas in state, local, and federal government.

The federal practice began in 2011 with the addition of two Capitol Hill Chiefs of Staff and the Legislative Director of a US Senator. The bipartisan powerhouse team quickly grew the practice to ten lobbyists, including Virginians Anthony Bedell, former Deputy Assistant Secretary for Congressional Affairs at the US Department of Transportation (USDOT) and Alfonso Lopez, a long-time Federal Relations professional who handled Congressional & Federal Relations for then-Governor Tim Kaine.

About Becker
Becker, with headquarters in Fort Lauderdale, Fla., is a multi-practice commercial law firm with attorneys, lobbyists, and other professionals at offices throughout the East Coast. More information is available at www.beckerlawyers.com.

Becker’s Washington Weekly: Week of August 3, 2020

Following a weekend of discussions, the four main players in the latest round of coronavirus relief negotiations – Speaker of the House Nancy Pelosi, Senate Democratic Leader Chuck Schumer, White House Chief of Staff Mark Meadows, and Treasury Secretary Steve Mnuchin – met again this afternoon in the Capitol. Despite meeting for two hours, it does not appear significant progress towards a deal has been made, though Pelosi described the meeting as “productive.”

With the expiration of the expanded federal unemployment benefits at the end of July, it was thought that the parties may agree to a short-term extension but that has not been the case thus far. Democrats are now firmly entrenched and united in their position that they will not accept anything less than the $600 per week enhanced unemployment benefit. While Pelosi stated the Democrats’ position in clear terms on CNN this morning, Republicans have multiple competing proposals on the table to address unemployment insurance. Last week, Senate Majority Leader Mitch McConnell advanced a shell vehicle to potentially force votes on various short-term unemployment insurance bills. Though none are likely to advance, they may force some Democrats into difficult votes that will be used against them in re-election campaigns.

After leaving the meeting with Pelosi and Schumer, Meadows and Mnuchin were seen entering McConnell’s office. McConnell’s absence from the negotiating table to this point is likely the strongest indication thus far that the two sides remain far apart on a potential deal. In fact, just this afternoon McConnell slammed Schumer’s attempt to include a repeal of the cap on state and local tax deductions in the next relief bill. The veteran Senate Majority Leader’s movements will be watched closely in the coming days and weeks, as any deal is unlikely to be reached until McConnell takes a more active role in the negotiations.


“Law Change for “55 and Over” Communities,” News-Press

Q: We heard a rumor that our “55+ Park” is no longer required to register with the state. Is this true? (D.R., via e-mail) A: Yes. Effective July 1, 2020, Section 760.29(4) of Florida Statutes was amended to delete the requirement that “housing for older persons communities,” often called “55 and over communities” register with the Florida Commission on Human Relations. The previous law required registration to be updated every two years.

“Sit Back and Enjoy the Ride,” FCAP Managers Report

“Sit Back and Enjoy the Ride:

Practical Considerations for Condominium Boards Regulating Electric Vehicle Charging Stations”

On July 10, 2020, Governor Ron DeSantis announced over $8 million of the state’s budget this year will be dedicated to strengthening Florida’s electric vehicle infrastructure. The intent of what Gov. DeSantis described as a “long-term investment” is to “promote reduced emissions and better air quality” and to “improve mobility and safety for the ever-increasing number of Floridians that drive electric cars.” Undoubtedly, many of these electrically mobile Floridians also reside in one of the thousands of condominium associations located throughout the state. And while many Tesla enthusiasts await with bated breath the latest and greatest in electric powered vehicles, many condominium boards are fearful of how their condominium property may be negatively impacted by this latest Jetson-inspired craze.

What Your Association CANNOT Do.

In sum, s. 718.113(8)(a), F.S., prohibits any declaration or Board-rule or policy from prohibiting a unit owner from installing an electric vehicle charging station within the boundaries of the unit owner’s limited common element parking area. Importantly, unit owners do not have a unilateral, unrestricted right to install EV stations anywhere they please. The right is specifically limited to the owner’s limited common element (LCE) parking area. In other words, owners do not have the right to install EV stations on the Common Elements, within their units, or anywhere outside of the boundaries of their designated limited common element parking areas as outlined in the Association’s Declaration.

What Your Association CAN Do.

Where the Declaration does provide an LCE parking space for units, the Association can do the following:

  1. The Association can obligate the installing owner to pay for the costs of installation, operation, maintenance, and repair, including the costs to obtain hazard and liability insurance to cover the charging station.Because the EV station will be located on limited common elements, the Association can also require the Owner to provide to the Association proof that it is named as an additional insured on the Owner’s policy within 14 days of Association approval for the EV installation.
  2. The Association can also require the Owner to:
    1. Comply with bona fide safety requirements, consistent with applicable building codes or recognized safety standards, for the protection of persons and property.
    2. Comply with reasonable architectural standards adopted by the association that govern the dimensions, placement, or external appearance of the electric vehicle charging station, provided that such standards may not prohibit the installation of such charging station or substantially increase the cost thereof.
    3. Engage the services of a licensed and registered electrical contractor or engineer familiar with the installation and core requirements of an electric vehicle charging station.
    4. Reimburse the association for the actual cost of any increased insurance premium amount attributable to the electric vehicle charging station within 14 days after receiving the association’s insurance premium invoice.
  3. The Association can place a lien on the Unit in order to enforce payment of costs associated with the Owner’s installation and use of the EV station.The language of s. 718.113(8)(d), F.S. allows the Association to enforce payment of EV costs using the lien collection provisions provided in s. 718.116, F.S.. What is not clear is whether the Association is required to specially or individually assess the owner for the EV costs prior to filing a lien for the same. It is best to consult your Association’s Governing Documents and your Association attorney for further guidance on this process.
  4. The Association can deny an EV installation, if there is proof that it will cause irreparable harm to the Association property.This is best determined by an electrical engineer or other expert who can assess the Association property’s optimal electrical capacity and usage.

What Your Association SHOULD do.

  1. Amend Governing Documents to provide express easement and obligations for Unit Owners related to the installation and maintenance of EV stations.Because most condominium declarations recorded prior to the statute change will not reference an owner’s statutory right to install an electric vehicle charging station, the language of Section 718.113(8)(g), F.S. provides a statutory “implied easement” across the condominium’s common elements for this purpose regardless of the easement language contained in the Association’s governing documents.If the Association is able to obtain the necessary votes to amend the Declaration, it should do so to specifically include an express easement to Unit Owner’s for the installation, maintenance and repair of electric vehicle charging stations. The amendment should also outline the costs and liability responsibility of Unit Owners for their stations.
  2. Amend Governing Documents to address subsequent Unit Owner obligations and responsibilities for charging station maintenance and removal.Section 718.113(8)(d), F.S. makes the “unit owner who is installing” the station responsible for the costs of installation as well as removal and repair. This language, as it is currently written, can be interpreted to impose this responsibility only on the installing owner and does not specifically impose any continuing maintenance responsibility on any subsequent owners who may purchase the unit (and the appurtenant charging station) from the installing owner.Any amendment to the Declaration or Board policy related to EV stations should make sure to specifically impose maintenance and costs responsibility upon the installing owner and any subsequent owners.
  3. Engage an engineer or professional to assess the Association’s electric capacity prior to an influx of EV installation requests.Although every Unit Owner is technically entitled by the Condo Act to install an electric vehicle charging station within their LCE parking area, it is practically impossible for any condominium association to grant every owner’s request given the energy constraints of the condominium property. The Association should consult with an electrical engineer or other professional to conduct an independent assessment of the Association’s capacity to safely accommodate EV stations at the condominium property.

Eight Tips to Help Get Your Business Ready for a Hurricane

Getting your business ready for a hurricane involves much more than just stocking up on bottled water and supplies.  Every business should have a written disaster recovery plan in place that includes knowing how to assess damage, detailing how to file an insurance claim, and perform the necessary repairs to get back to work as quickly as possible. Taking the wrong approach, or simply mishandling your potential insurance claim, could cost your business thousands of dollars.

In an effort to aid your hurricane season preparation, here are some suggestions that could assist you in preparing your disaster recovery plan.

• Make sure to safely store your pertinent documents. For instance, make sure you have a copy of your insurance policy as well as a contact list of all of the key members of your organization. You should maintain hard copies of these documents in the event of a long-term power outage, but you should also store these documents digitally in an off-site and electronically safe environment for easy access when power and internet service is restored. You should also safely store these documents in a manner that will allow you to gain quick access to them in the event of an extended power and/or internet outages.

• You should safely make arrangements to have copies of your last four years of income tax returns, and the last six months of your profit and loss statements safely secured. You’ll need that financial data in the event that you have to make a business interruption claim, and you will need physical copies of these documents should you be unable to gain access to them electronically.

• Keep an updated account of your inventory, and print that out as well. Be sure to inventory all of your office supplies such as computers, desks, chairs, and even paper since you should be able to recover those losses. You should photograph and/or video your entire workspace, including your inventory and office supplies.

• If you rent space, then it is imperative that you keep a copy of your lease agreement.

• Communication is vital to any recovery. You should anticipate disruptions in communications services for an extended period of time.  Make sure you have a plan for proper communication. You should therefore collect emergency contact information for all of your employees, suppliers, and vendors.  Don’t just collect this information, but routinely perform spot checks to ensure that you have the most current information for these individuals.

• Work with your senior staff to prepare a plan for a storm, fire, flood or other emergency. What are the contingencies that will allow you to get back to work quickly, and what are the variables that will prompt a long term shut down. Who will be in charge of getting your network back up? Who will be in charge of contacting your major clients? Who will be in charge of handling your insurance claim? Assigning these responsibilities in a calm environment prior to a storm striking will help you with the transition to get back to work after a storm strikes.

• If you own the property, hire a licensed inspector or contractor to examine the roof, interior and other structural components in advance to the store. You do not want the insurance company to deny your claim by stating that your property had pre-existing damage. The best way to combat that argument is to conduct the appropriate inspection today.

• Prepare a list of preferred contractors that you can call on for all necessary repairs. Don’t wait for the insurance company to find someone. If the storm was a catastrophe, then that aid will be difficult to come by. Indeed, it will be incumbent upon you to mitigate your damages, and the best way to do that is to contact a contractor today and make arrangements to ensure prompt repairs after a storm strikes.

You should take the necessary steps to safeguard your property and business now. Hurricanes are a fact of life living in South Florida. Although inevitable, they are not surprises like earthquakes or tsunamis. You do have time to prepare and to be ready for a hurricane.

Please visit hurricane-recovery.com to help you and your business prepare for hurricane season.

Martin Cabalar Appears in Part Two of ,“You Have the Building, We Have the Solution”

Becker Shareholder Martin Cabalar participated as an expert panelist in part two of “You Have the Building, We Have the Solution,” a weekly series hosted by Planned Companies. In this interactive webinar, attendees ask live questions to the panelists. Martin shared his insights on collections, subsidizing, and budgeting for the year ahead as residents navigate the COVID-19 pandemic.