Flat Rate Services

For the benefit and protection of your Association and our law firm, Clayton & McCulloh requires our clients to enter into a written Attorney Representation Agreement.  This Agreement sets forth various terms and conditions of our engagement and provides that we are to be compensated for our time and services at our standard hourly rates for the type of legal work we are rendering.  As an exception to that hourly rate system, we have established various services that we provide on a fixed fee basis.  With the exception of manufactured home parks, Clayton & McCulloh does not require our clients to pay a mandatory retainer as a condition to hire our law firm.    These fixed fee services as introduced below have been designed to address some of the legal services most frequently needed by Community Associations. 

Collection of Delinquent Assessments

If an Association was a human body, assessments would be its life blood.  When there is good “circulation,” the body is fed and can maintain itself well.  However, like the body, the Association ails when owners in the community fail to timely fulfill their financial obligations to the Association.  When an owner does not meet his financial obligation, the Association may seek relief by placing a lien on the property, filing suit against the owner and even foreclosing on the property.

Phase I - Pre-Litigation

We feature a fixed deferred fee service (plus costs) for our pre-litigation collection efforts.  It is during this pre-litigation stage that a title search will be conducted, the statutory notice requirements will be fulfilled and a Claim of Lien will be prepared and recorded in the Public Records.  It is also during this period that we are commonly contacted by the owner to discuss their delinquency and resolve the account.  The fees for Phase I of our legal services are deferred until we complete the pre-litigation stage and the case is ready to proceed to foreclosure against the delinquent owner.  It is at that time that fees and costs for Phase I are billed to the Association. Of course, if the delinquent owner does bring the account current while we are handling Phase I of the Collection process, then we will collect our fees and costs directly from the owner. 

Phase II – Lien Foreclosure

After Phase I is completed, we will seek approval from the Association to proceed to the next stage with collection of an account.  Upon receiving payment of our cost retainer and Phase I pre-litigation fees, Clayton & McCulloh will file a foreclosure suit against the delinquent owner. There are additional fixed fees (plus costs) for an uncontested foreclosure proceeding.  Our fee for the litigation stage is also deferred until completion of certain stages of the litigation.  This fixed fee is billed in two installments – first, when the suit is filed, and second, when the Motion for Summary Judgment is filed.  If a collection/lien foreclosure matter becomes contested at any time, then the fees will no longer be fixed or deferred, and  will be based on our standard hourly rates for contested collection matters.

Bankruptcy

From time to time, owners in your community may find themselves in such financial straits that they find it necessary to file for bankruptcy.  Many of these owners file a petition in Chapter 7.  Chapter 7 bankruptcies – often called a Consumer Bankruptcy – allow a debtor to shed personal liability for various debts such as credit cards or retail installment loans. Sometimes owners abandon or surrender assets they no longer can afford, such as a car or a home.  Rarely are debts, such as delinquent Association assessments, discharged or rendered uncollectable due to the bankruptcy.  Other owners may file a petition in Chapter 13.  Chapter 13 bankruptcies can result in the debtor surrendering or abandoning assets they cannot afford, but they nearly always include a payment plan that allows the debtor to retain those assets while repaying their delinquencies and debts over a period of time – up to 60 months.  Associations want to assure that these laws provide not only for payment of delinquent assessments, but also for future assessments. Again, rarely are debts such as delinquent Association assessments discharged or avoided.  Typically, the debt and the future assessment obligations need to be calculated into the plan payments.  At the end of a Chapter 7 and Chapter 13 bankruptcy, the debtor may receive a discharge of their personal liability, but their property is not discharged from the Associations claim.  Clayton & McCulloh handles both of these types of bankruptcies on behalf of our Association clients on a fixed fee basis.

Mortgage Foreclosure Defense Service

Often, when an owner is delinquent in paying their Association assessments, the owner is also not paying their mortgage payments. The mortgage holder will start foreclosure proceedings against the delinquent owner and will include the Association as a lienholder.  We represent the Association in these proceedings to preserve the best legal position for the Association to collect all monies to which the Association is entitled.  Our fees in this circumstance include an upfront retainer.  All other fees and costs thereafter are deferred and recovered from whoever becomes the eventual owner of the property. In some cases, we will recover the safe harbour sums provided by statute.  In other cases, we will be able to recover enough to make your Association whole.

Collections of Rents and Evictions

Both the Condominium Act and the Homeowners Association Act provide that an Association may demand payment of rents by the tenant of a property if the owner of that property is delinquent in the payment of assessments to the Association.  This “interception of rents” can allow the Association to avoid the time and expense of more involved Collection efforts. We will assist the Association in receiving rents directly from the tenant and applying those rents to the owner’s delinquency.  Once the delinquency is paid off, the flow of rents returns to the owner. If the tenant refuses to pay the rents to the Association, then Clayton & McCulloh, can pursue legal proceedings to evict the tenant. These collection of rents and tenant eviction services are charged as a fixed rate service, however, if the owner contests the tenant eviction lawsuit, then the fees will thereafter be charged at an hourly rate.

Receivership for Associations

Sometimes Associations have so many delinquencies it seems that standard Collections processes will be both difficult and cost prohibitive.  If a tenant occupies the property, Appointment of a Global Receiver for the collections of debts owed to the Association by delinquent investor owners can be a highly effective method of collection.  Clayton & McCulloh, at the direction of the Association, files a petition with the Court to appoint a Receiver of rents.  This fixed fee service will also require a non-refundable filing fee and cost retainer.  Clayton & McCulloh does not act as your Receiver.  Instead, we prefer the appointment of a neutral, third-party professional Receiver who will review the Association’s delinquency report and identify delinquent properties which the Receiver determines are appropriate for this collection method. Then under the authority of the Court order, the Receiver will be empowered to demand information from the occupant of a property that appears to not be owner-occupied.  All properties with existing tenants would be legally required to pay rents to the Receiver.  Failure to pay means the Receiver would seek evictions of those tenants.  Properties which are neither owner nor tenant occupied, but have an occupant, may receive demands to pay market rate rents.  Failure to pay the rent means the Receiver would be entitled to seek evictions of those occupants.  Vacant properties would be entered, inspected and if prudent, rehabilitated to be leased.  All empty properties which are delinquent could be leased by the Receiver and the rents collected applied to an owner’s delinquent account. When the Association is paid in full, the future rents shall be returned to the owner.  The Receiver will collect its fee from the rents collected.  After the initial attorneys’ fees to seek the appointment of the Receiver, the Association would only be responsible for rehabilitation costs for vacant or damaged properties, which amounts could also be recovered via collected rents.

Covenant Enforcement Packages

Does your Association have an owner who refuses to comply with the covenants and restrictions set forth in your Governing Documents?  Then one of our Covenant Enforcement fixed fee packages may be the answer to your problem.   For example, your community may have an owner who paints their front door a color that is not permitted by your Association, or perhaps an owner moves a tenant into their property without obtaining the prior Association approval required by your Association Governing Documents.  Unfortunately, most Associations will eventually encounter an owner who refuses to abide by the rules of their community.  To deal with those violators, we offer two fixed services:   The “Mini-Pounder” and the “Pounder.”

The Mini-Pounder Covenant Enforcement Letter Package

Our “Mini-Pounder", Covenant Enforcement Letter is a less aggressive and more economical approach to advise an owner that they are violating the Community’s covenants and restrictions.  We are proud to offer our Mini- Pounder for a fixed fee, plus costs. Any fees for the time associated with the initial intake of one of these matters are additional.  If a compliance letter is also needed to be sent to a tenant, then there will be an additional fixed fee for that second letter.

If the owner or tenant refuses to comply with the Association’s rules or covenants after the Mini-Pounder letter is sent, then the Association has the option to continue with enforcement of its legal remedies, including proceeding with statutorily required mediation/arbitration, followed by a lawsuit, typically seeking an injunction.  If the Association has selected the Pounder demand letter, we also feature a flat fee to draft the Complaint following an unsuccessful attempt at mediation/arbitration.

The Pounder Covenant Enforcement Letter Package

When an Association prefers to take a more serious approach to bring enforcement of the community’s covenants and restrictions, a “Pounder” letter is our recommendation. The Pounder is an aggressive, detailed demand letter sent to the owner (and tenant, if applicable) outlining the violations.  The Pounder is aptly named because the letter literally weighs approximately one (1) pound to mail.  The fixed fee for the Pounder Package includes any fees associated with the initial intake of the covenant enforcement matter, copy charges, and postage.  Additionally, we will send a “risk letter” to the Association explaining the risks involved in pursuing the covenant enforcement matter.  The “risk letter” is part of the Pounder Package.  If an additional letter is required due to a tenant being involved, a separate letter will be addressed to the tenant at an additional fee.  This letter to the tenant is usually sent at the same time as we mail the letter to the owner.

Architectural Control (ARC) Template

The Architectural Control Template (the “ARC template”) delineates numerous provisions which your Association can consider adopting as part of its covenants.  The clarity of the ARC Template will greatly assist the Association with the regulation of the appearance of Lots and the improvements thereon.  The ARC Template is usually an excellent starting point for the Association that wants to modify and enhance the clarity and enforceability of the architectural criteria.  Clayton & McCulloh has drafted the ARC template to assist our clients in curtailing the costs associated with substantially revising an Association’s architectural control provisions. For more information about the issues/topics specifically addressed in the ARC Template, please contact us.

Annual Meeting Package Service

Holding an annual meeting of the membership for the purpose of electing directors and officers is an important requirement of your Governing Documents, as well as a statutory requirement of Florida Law for all Associations. Our Annual Meeting Package Service provides the Board with prepared necessary documents for your Association’s Annual Meeting.  Properly prepared documents, coupled with legal advice of the correct procedures and time frames that must be followed by your Association, can avoid election and Annual Meeting challenges against your Association.

Governing Document Amendments Service

Amending Governing Documents is a fairly frequent legal assignment from client given to Clayton & McCulloh.  Most amendment work is performed on an hourly basis for our Association clients; however, there are two foundational amendments which are very beneficial to the Association: the Quorum Requirement, and amending the Amendment Provision.  Both of these, because they are so fundamental to your Governing Documents are offered as Flat Fee services. Please note that sometimes the desired Amendment needs to comply with more than one set of Governing Documents.  Our fixed fee is per each set of Documents as needed (Declaration, Articles of Incorporation, and By-Laws). 

Registered Agent

A Registered Agent is a designated person or entity who is legally responsible under Florida law to be available at a designated address Monday through Friday during normal business hours, to accept legal service of process (such as lawsuits) on behalf of a corporation, such as, an Association.  The designation and acceptance of the position and responsibility of a Registered Agent is a legal requirement for all corporations in the State of Florida.  Clayton & McCulloh discourages an Association officer or director be designated the Registered Agent for their Association in part because of the turnover for these volunteer positions. Rather, due to its legal significance, we suggest that you appoint a professional to serve in this position, such as your management company, an accountant, or your attorney.   Clayton & McCulloh is, in most cases, available to serve as the Registered Agent for our Association clients.  One core benefit of having us serve as your Association’s Registered Agent is that as your attorney we will be immediately aware of any court summons or other legal documents served on the Association.  As being served often includes a limited time for response, it is best for your counsel to have as much advance time as possible to review and advise the Board.  This cost deposit is intended to offset potential state charges imposed upon the conclusion of our serving as Registered Agent, and, if unused by the end of service, is returned to the Association. 

Rehabilitation Letter Service

Associations may find that covenant enforcement has been inconsistently applied.  As a result, the Board’s pursuit of current or future enforcement may not be left open to legal challenge.  However, this may be cured.  A Rehabilitation Letter can reset the Association by eliminating encumbrances from its past faulty enforcement, and allow the Association to go forward and once again maintain community compliance with their covenants.  Additionally, we find that the Rehabilitation Letter also assists with another one of our recommendations, which is to always attempt to build and foster the credibility of the Association. 

All of our fixed rate services have been designed for Community Associations such as yours.  If you would like more information on any of our flat fee services, please contact Client Services.