2007 Legislative Update - Part 2

2007 LEGISLATIVE UPDATE

PART 2 - HOA ARCHITECTURAL REVIEW AND PRE-SUIT MEDIATION

    In this edition of the e-Lawyer, we continue to summarize the many recent Legislative changes that affect community associations.
 
I. HOA ARCHITECTURAL REVIEW
 
    Architectural review of proposed changes to the external appearance of a lot has been a major area of contention between HOA Boards, Architectural Review Committees (ARC) and Lot Owners for decades. Historically, HOAs dealt with two (2) broad categories of architectural rules. The first category consisted of guidelines that were specified in the governing documents, such as a prohibition against chain link fences. These were the easier to enforce. The second category involved provisions which were not specific, but instead provided that no exterior changes to a lot could be made without the prior, written approval of the Board or ARC. Over the years there have been thousands of variations in what lot owners have sought to install on their property, and we have been guided by Florida case law as to the standard used for accepting or rejecting. That case law provided that a Board or ARC could not decide to accept or reject based on whether it liked or disliked the proposed change. Instead, the Board or ARC had to identify and rely upon an existing architectural scheme or pattern in the community. As an example, if a lot owner wished to install a four (4) foot statue, and there were no other statues in the community, the Board or ARC could defend that existing architectural scheme and deny the application.
 
    The situation with regard to HOAs is now dramatically different as a result of the recent Legislative Session. Senate Bill 902, effective July 1, 2007, creates Section 720.3035, Florida Statutes, which states:
The authority of an association or any architectural, construction improvement, or other such similar committee of an association to review and approve plans and specifications for the location, size, type, or appearance of any structure or other improvement on a parcel, or to enforce standards for the external appearance of any structure or improvement located on a parcel, shall be permitted only to the extent that the authority is specifically stated or reasonably inferred as to such location, size, type, or appearance in the declaration of covenants or other published guidelines and standards authorized by the declaration of covenants.

    While it is too early to determine how the courts will apply this statute, it is our opinion that any homeowners’ association which exercises architectural review powers over lots should either have detailed architectural standards and guidelines contained in its governing documents, or should adopt detailed architectural standards where authorized by its governing documents. The intent of this new Legislation appears to be to permit a particular exterior change if it is not specifically prohibited.
   
    In order to adopt architectural standards, all homeowners’ associations must have the authority to promulgate such rules. If the association’s governing documents do not permit the association to adopt such rules, the association will need to amend the governing documents. Such rules and guidelines should contain detailed architectural standards for the location, size, type and appearance of any structures, improvements, or alterations.
   
    In addition to creating the need for specific guidelines, Section 720.3035, Florida Statutes, imposes several restrictions on the standards that may be imposed. These limitations include:
  • Where the declaration of covenants or any published standards provide options for the use of material, the size, design, or location of the structure or improvement; neither the association nor any committee may restrict the right of an owner to select from the options provided. 
  • Unless otherwise specifically stated in the declaration of covenants or other published standards, each lot shall be deemed to have only one 'front' for purposes of determining the required front setback, even if the parcel is bounded by a roadway or other easement on more than one side, such as a corner lot.
  • Where the declaration or other published standards do not provide for specific setback limitations, the applicable county or municipal setback limitations shall apply, and neither the association nor any architectural, construction improvement, or other such similar committee of the association shall enforce or attempt to enforce any setback limitation that is inconsistent with the applicable county or municipal standards.
  • All published standards must be consistent with the rights and privileges set forth in the declaration of covenants.

    Section 720.3035, Florida Statutes, further provides that each lot owner is entitled to the rights and privileges set forth in the declaration of covenants or other published standards concerning the architectural use of the parcel. The construction of permitted structures and improvements on the parcel and such rights and privileges shall not be unreasonably infringed upon or impaired. Any action by a homeowner’s association which unreasonably, knowingly, and willfully infringes upon or impairs homeowners’ rights and privileges as set forth in the statute, creates a cause of action against the association by the adversely affected lot owner. They may recover damages caused by such infringement or impairment, including any costs and reasonable attorney’s fees.
 
    The new provisions of Section 720.3035, Florida Statutes, would apply to any pending ARC requests which were not addressed by a homeowners’ association prior to July 1, 2007 and all requests received after that date.
 
    Based upon these changes, we recommend the following inquiry:
  1. Does the Declaration specifically authorize the Board (preferred) or ARC to promulgate architectural rules or standards? 
  2. Does the Declaration contain specific and adequately detailed architectural standards?
  3. Do the rules (or guidelines/standards/criteria) contain specific and adequately detailed architectural standards? 
  4. Are the specific architectural standards contained in the rules consistent with the Declaration?
    Most homeowner’s associations will need to develop additional standards for several areas of architectural review. These would include, but not be limited to, paint colors, lawn and landscape maintenance and improvements, standards for fence installation, lawn ornaments and statues, and any other standards for exterior modifications to the lot. With regard to some items, you may wish to consider specifying what is permitted, and prohibiting anything else.
 
II. PRE-SUIT MEDIATION REQUIREMENTS
 
    Senate Bill 902 also amends Section 720.311, Florida Statutes, which governs the legal process for enforcing violations of a homeowners’ association’s covenants. The changes to Section 720.311, Florida Statutes, should simplify the process of enforcing covenant violations in homeowners’ associations. Instead of being required to file petitions with the Department of Business and Professional Regulation, a homeowners’ association is now required to send a written demand for pre-suit mediation prior to filing its claim in court. If the homeowner fails to respond or indicates that he or she will not agree to participate in the mediation process within 20 days from the date of the letter, then the association may proceed with a lawsuit. The amendment to Section 720.311, Florida Statutes, contains a lengthy model 'Statutory Offer to Participate in Presuit Mediation' that sets forth the terms that must be included in pre-suit mediation demand letters.
   
    The new covenant enforcement system requires the following pre-suit mediation demand process:
  • Service of the statutory demand letter to participate in pre-suit mediation is initiated by sending the required statutory demand to the offending homeowner’s address as it last appears in the records of the association. It must be sent by certified mail, return receipt requested, which an additional copy being sent by regular first-class mail.
  • The homeowner has 20 days from the date of the mailing of the statutory demand to serve a response to the association in writing. The response shall be served by certified mail, return receipt requested, with an additional copy being sent by regular first-class mail, to the address shown on the statutory demand. 
  • Once the parties have agreed on a mediator, the mediator will schedule the mediation for a date and time mutually convenient to the parties. However, the pre-suit mediation session must be scheduled and conducted within 90 days, unless agreed to by the parties, or an impasse will be deemed to have occurred.
    The failure of any party to timely respond to a statutory demand for pre-suit mediation, to agree upon a mediator, to make payment of fees and costs within the time established by the mediator, or to appear for a scheduled mediation session without the approval of the mediator; shall constitute the failure or refusal to participate in the mediation process and shall operate as an impasse in the pre-suit mediation by such party. The other party may then proceed to court.
 
    In the event any issue or dispute is not resolved at pre-suit mediation, or is settled at pre-suit mediation but is thereafter subject to an action seeking enforcement of the mediation settlement, the prevailing party in any subsequent arbitration or litigation proceeding is entitled to recover all costs and attorney’s fees incurred in the pre-suit mediation process.
 
    If a party fails or refuses to participate in the entire mediation process, they cannot recover attorneys’ fees or costs in any subsequent litigation relating to the dispute, even if they are the prevailing party.
 
The firm of Taylor & Carls, P.A., with offices located in Maitland, Melbourne, Tampa and Palm Coast, Florida, was founded in 1981 and has practiced in the area of community association law since that date. This edition was prepared by Harry W. Carls and Richard M. Coln of Taylor & Carls, P.A. The information contained in The Association e-Lawyer should not be acted upon without professional legal advice. The opinions expressed herein are as of the date hereof, and this law firm undertakes no obligation to advise the Association of subsequent changes in the law.

©2007 Taylor & Carls, P.A. All Rights Reserved.
The firm can be reached Toll Free at 1-800-395-6235 or locally at 407-660-1040.
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