Donations to the Association: To Give or Not to Give

While donations are usually very much appreciated, the old adage “no good deed goes unpunished” may apply, especially when it comes to associations in Florida!

First, it should be known that there is no statute or regulation that precludes an association from accepting donations, but it is preferable that the donations be monetary. If an owner decides to donate their time instead, and performs repairs, modifications or alterations to common elements, they need to understand that they will be held to the same standard as a contractor, meaning that they must perform the work in a professional and workmanlike manner and that they may be held responsible should they fail to complete the work or should they cause damage to the property. If the donating owner is not a licensed and insured professional with regard to the work they undertake, and something goes awry, the board may also be held responsible for allowing unqualified individuals to perform such work. These concerns should certainly be considered before allowing an owner to donate their time.

It is also important to remember that most associations have restrictions on changes to the aesthetics of the community so if someone does give a monetary donation, they need to understand that such generosity does not allow them the right to make material changes on which they get to unilaterally decide. While it may be that a donating member believes that they are improving the community’s aesthetics, other members may see such changes as an unacceptable departure from the aesthetics of the community that they expected to be kept intact when they bought their property. Actions such as painting a room a certain color or modifying landscaping could be deemed a material alteration if they are a departure from what was originally in place and such action would require a vote of the membership.

While donations are certainly rare and may indeed be beneficial for the community, it is important that the association and the owner consider the preceding information before making a decision.

Look for this article to be published in an upcoming edition of the South Florida Cooperator publication!

Daniel Wasserstein

E-mail: danw@wassersteinpa.com

561-288-3999

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Is Your Association Down with OPP?

During the current economic crisis, associations across Florida have searched for novel and alternative ways to combat their mounting assessment delinquencies.  Taking control of OPP, also know as “other people’s property,” has become a common way for associations to recoup their losses, but this may prove to be naughty, by nature.

The most traditional and legally sanitary way for associations to take control of delinquent properties in the community is through the foreclosure process.  Once a property becomes delinquent, an association can file their lien (after complying with all statutory pre-conditions) and then foreclose on a property through the court system.  If the resulting foreclosure sale does not yield a third party buyer, then title is vested in the name of the association.  The association is then free to sell the property, or, as more commonly occurs, rent it out until such time as the mortgage lender forecloses their superior lien and takes title.  The association can take such actions because, of course, the association legally owns the property.

But what about the situation where the association has not obtained title to a particular property in the community, but believes it to have been abandoned by its owner?  This is not such an uncommon occurrence, especially where many properties in Florida were purchased during the real estate boom as second homes or investments.  When the economy went sour, the owner may have simply decided to walk away because they either could no longer afford the property or because they were upside down on their mortgage, or both.  From this situation, emerged a new strategy whereby associations began renting out these abandoned properties without actually taking title to them or obtaining consent of the owner (come to think of it, my friend owes me $100, maybe I should rent out the treadmill in his garage–I know for a fact he abandoned that piece of equipment long ago!).

While the renting of abandoned properties may derive well-needed income for the association and the actual owner may never know, or for that matter, care, this author does not recommend the practice.  Renting a property is one element of the “bundle of rights” that only an owner has with respect to their property.  Such rights can only be conveyed to third parties, such as the association, if provided for by Florida law.  While the Florida Statutes were indeed amended in 2010 to allow an association the right to collect rental payments from the tenant of a delinquent owner, they do not allow for an association to change the locks and actually place a tenant in a property owned by a delinquent owner–a key distinction.

The bottom line is that while the businessman sitting on one shoulder is telling me that this is a great way to score some needed cash for associations with the motto “it isn’t wrong unless you get caught” the lawyer sitting on my other shoulder is reminding me of all the ponzi schemers, robo-signers, etc. that lived by that same mantra and we all know how they have fared over the last few years.

Daniel Wasserstein

E-mail: danw@wassersteinpa.com

561-288-3999