Community Association Law
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Straley & Otto, P.A., counsels and advises community associations in various areas and matters, and it guides, helps, and offers its opinions upon request in an easily understandable, practical approach.
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Straley & Otto, P.A., provides assessment collections for our clients, with state-of-the-art technology. We provide status reports on all active collection files, which are available online with a secure password. Assessment collection is a primary focus in our law firm, as we understand that our client’s finances are the lifeblood of the community. Upon receipt of a unit history and client request, we will, within 24 hours, prepare and send the statutorily-required demand letter to a delinquent owner. At the deadline for payment, if payment is not received, we automatically proceed, preparing and recording a claim of lien and sending the second statutorily-required demand letter. We recommend that our clients allow payment agreements with delinquent unit owners (which can improve a community’s cash flow), but should the owner default on these agreements, or fail to otherwise pay the delinquent sums due, we move forward to the next step which is, generally, foreclosure. We notify our clients and obtain approval prior to filing a foreclosure action, but because we do not generally invoice our clients for legal fees and costs for demand letters and claims of lien, we request a quick approval of the foreclosure action, when appropriate, to improve the potential of collecting funds from the delinquent unit owner.
With banking institutions having become a large focus in all aspects of community association representation, including assessment collection, Straley & Otto, P.A., feels it is of the utmost importance that collection matters move rapidly toward conclusion for the greatest protection of the client’s rights. We have several creative approaches to banks involved in REO sales, and clients are not always limited to the presumed statutorily-reduced liability of banks (the lesser of 1% of the original, principal loan amount or one year’s assessments). We also, with client approval, set hearings in a bank’s foreclosure action, to push the action forward toward a final judgment, because, often, the sooner the bank’s foreclosure case is concluded on a unit, the sooner assessment income will recommence from that unit. In other instances, however, where a client owns and is renting a unit on which it had foreclosed, we can assert the client’s rights in the bank’s foreclosure action, which may extend the time that the association will be able to lease the unit, and thereby assist the client in maximizing the rental income from that unit. We have also, in appropriate circumstances, had success for clients in actions to “quiet title” on units which they obtained through foreclosure. In these actions, we have eliminated mortgages clouding a client’s title to its unit, allowing our client to own the unit free-and-clear of the first mortgage and sell the unit without payment to the first mortgage holder.
In addition to the foregoing, Straley & Otto, P.A., recognizes that there are other methods, which are better suited given the right circumstances, of securing payments from delinquent unit owners. At times, a delinquent unit owner may have a tenant in his or her unit from whom the owner is collecting monthly rent without the payment of any sums to our client. In such situations, we assist our clients in securing the payment of rent directly from the tenants of the delinquent owners. Further, where the situation is appropriate, we can assist our clients in obtaining the Court-appointment of a receiver to collect rent from a number of delinquent unit owners in the community and, at times, even rent vacant units of delinquent owners.
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Violation and Covenant Enforcement
Straley & Otto, P.A., believes that rule violation and covenant enforcement, must first start with a proper interpretation of the governing documents, in conjunction with Florida law. After reviewing the client’s governing documents, we offer practical advice as to approaches available to address and, hopefully, resolve the situation. Often, approaches other than lengthy law suits, arbitrations, or other legal proceedings are appropriate and lead to positive results. Where these other approaches do not resolve a violation, though, we are fully prepared to immediately pursue appropriate legal action. Most importantly, we encourage a well-thought-out, consistent approach to enforcement, often with the assistance of the Board of Directors or the community’s manager.
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Document Amendments, Revisions, and Preservation
Often after a developer turns over control of a community which it had developed, or simply because of the age of the community and its governing documents, Straley & Otto, P.A., is asked by its clients to review and draft amendments to their governing documents. Such amendments can be particularly important to a community to ensure that provisions of and rights afforded to community associations by current Florida law will apply to the community. Additionally, and of particular concern to homeowners’ associations, we assist clients with ensuring the preservation of their covenants, rules and restrictions which can, thirty (30) years after their original recording, begin to expire and become unenforceable.
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If requested, Straley & Otto, P.A., will work closely with and assist a client’s Board of Directors or community manager in preparing for a client’s annual meeting of its membership. We can prepare a part or all of the annual meeting notice documents and/or attend the client’s annual meeting. We also work with ad hoc unit owner committees and groups and assist them in the turnover of communities from their developers to non-developer, unit owner control. We can attend meetings, act as a liaison between the unit owners and the developer or their legal counsel, and assist in a smooth transition of a community to non-developer, unit owner control.
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Contracts and Agreements
Straley & Otto, P.A., reviews, negotiates, and/or drafts contracts and agreements for products and services provided to our clients. Some examples would include cable and satellite television contracts, management contracts, roof contracts, painting contracts, and construction contracts. We believe that all contracts should be reviewed to protect our client’s interests, particularly with regard to construction contracts to ensure appropriate schedules of payment to a contractor, the establishment of final completion dates, and the inclusion of “liquidated damages” clauses which assess contractors for work-completion delays. In this way, our clients have a better opportunity to maintain a measure of control of a project and avoid contractor delays. We take a similar, practical business approach in the review of all client contracts and offer legal advice which may ultimately save the client money, avoid lawsuits, and strongly encourage vendor compliance with contractual terms.
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In recent years, with the increasing issues involving bank foreclosures in our Community Association practice, Straley & Otto, P.A., has recognized the increased transactional needs of our clients. Some clients have considered and utilized deeds-in-lieu of foreclosure, whereby a client transfers title to a unit, which it has acquired through its own foreclosure, to the unit’s first mortgage holder because the unit is not in rentable condition or cannot otherwise provide a cash flow to the client. Once a bank becomes the owner of the unit, the bank will be obligated to begin payment maintenance fees and assessments to the client. We have also assisted clients in the re-sale of units which our clients have acquired through their own foreclosures and have had the opportunity to sell, whether through a straight sale of the unit or through a “short sale”. We also assist clients in the buy-out of land leases or recreational leases which may encumber their clubhouses or other recreational areas. Additionally, upon request, we prepare leases for clients which wish to rent units which they have acquired through their own foreclosures. Also, we assist clients in loan transactions in which a client will borrow funds from a bank (usually for a large project), and we review loan documents, review the client’s governing documents regarding the appropriate action necessary for the approval of a loan and its repayment, and provide the bank with the required legal opinion indicating that the client has authority to secure a loan and has taken all action necessary to exercise this authority. These are just some of the many examples of transactional work with which we assist our clients in the modern Community Association practice.
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Florida Law Updates
Community Association Law is an evolving and ever changing area of law, particularly in recent years. Straley & Otto, P.A., of course, keeps abreast of changes to and trends in the law, and we inform our clients of changes in the Florida law, whether they be changes in statutes, rules of the Florida Division of Condominiums, et al., or court or arbitrator interpretation of the law. Our instant review of changes to the law is crucial in order to provide proper counseling and advice to our clients, and this information is critical to clients so that they may implement policies and procedures which comply with the requirements of law.