We have recently seen an increase of owners demanding a reduction of periodic (“regular”) assessments, due to Coronavirus/COVID-19-related closures or limited use of common areas/amenities (e.g., pools, gyms, clubhouses, etc.). These requests imply that the association should not seek the amounts needed to cover the year’s anticipated expenses as determined in the Board’s best business judgment (and in some cases, that of the members). Ostensibly, these owners ignore the purpose of assessments stated in the Declaration, and simply presume that assessments are compensation paid for use of these amenities. Use rights in common areas do generally accompany ownership and/or tenancy (rather than resulting from payment to the association); these rights are, however, subject to reasonable restrictions. Such a reasonable restriction could be, for example, limited use of amenities during a deadly pandemic, while social distancing is recommended by Florida and federal governments and the Centers for Disease Control. In short, reasonable restrictions on use rights in common areas do not affect the amount of regular assessments which were levied, or which are thus due to the association, for several reasons.

As most of you are probably aware, the Governor has issued a new Executive Order implementing the Phase 1 Plan to Re-Open Florida. We are extremely concerned that numerous individuals and various associations may believe that this constitutes a carte-blanche to open up their common property despite the number of people who may congregate there. Ultimately, we are very concerned that such course of action may in many instances, jeopardize the health, safety and welfare of the community’s owners, residents and guests.

Given that our Governor has decreed a State of Emergency for the State of Florida and given the devastating economic impact this virus has caused, many Associations may feel compelled to try to help their Members by ceasing or delaying their collection efforts. As you know, collections are the lifeblood of Associations as Associations need funds with which to operate. Unfortunately, when Owners cease paying their Assessments, this does not decrease an Association’s expenses. To the contrary, the Association’s expenses generally remain constant, if not increase as the number of delinquencies increase. Because of this, to the extent the Association forgoes collections; the rest of the Owners may have to make up the difference between what the Association should have received vs. that which the Association has received.

Orange County has issued an Emergency Order mandating that all “non-essential service” businesses be closed and the workers stay at home due to the COVID-19 virus. Clayton and McCulloh is concerned that this Order will cause some confusion and misunderstanding among our Clients regarding whether or how this Order affects our law firm. Although many businesses and professions are affected by this Order which goes into effect on Thursday, March 26, 2020, @ 11:00 p.m. (EST), legal services are specifically designated as an “essential service,” that is excluded from the application of the Order.

While there is a lot of discussion about associations endeavoring to postpone meetings so as to preserve social distancing and not potentially expose people to COVID19, also known as the coronavirus, ultimately, a limited number of meetings may not be able to be postponed. These include some Board meetings, Committee meetings, etc. As such, what precautions, if any, should your Association undertake in the event it needs to proceed with a meeting?

I am frequently asked to explain in layman’s terms what legal terms mean. Here’s a fun little list of fancy words with a no-nonsense take.

So you’ve been served with a lawsuit or petition for arbitration. The question is what to do with the documents? Do you get nervous and concerned, and simply respond? No – a response without understanding the law could hurt your defense more than helping. Moreover, except in small claims court, a corporate entity defendant (including LLC’s and the like, and our community association clients) can only represent itself through counsel in Florida. A response filed by a representative - even a director or officer - may be stricken or simply disregarded by the Court or arbitrator, as thought it was never filed.