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Florida’s governor has declared a state of emergency due to novel coronavirus. This has triggered the availability of statutory emergency powers to condominium associations and homeowners’ associations. Although the applicable statutory sections were clearly written with natural disasters in mind, the majority view of association law practitioners appears to be that emergency powers are now available. However, because condominium associations and homeowners’ associations are unaccustomed to utilizing emergency powers and, in many cases, are unfamiliar with them, many communities have been slow to avail themselves of benefits of the use of such powers. Nevertheless, emergency powers are expressly limited to times when the use of such powers are “reasonably necessary to protect the health, safety, and welfare” of residents and may not be abused. If an association has any questions about the use of emergency powers, it is recommended to contact legal counsel and obtain advice. As the state of emergency is likely to continue for some time, associations will likely have ample opportunity to familiarize themselves with available emergency powers and to make use of them.

Business interruption insurance, like all coverage, is technical in nature. It is intended to cover interruption from certain perils and in most instances, it addresses physical damage to a property or business which locks you out or makes it impossible for you conduct the business. Unfortunately, the SARS outbreak from 2002/2003 put the insurance companies on notice about the possibility of an interruption to business based on a pandemic and infectious disease outbreaks as a cause were often exempted from coverage in most generally offered business insurance policies. However, all may not be lost. You will have to examine your policy carefully to see if there is coverage for interruption by civil or military authority. Thus, you would argue that it was not the coronavirus that caused the interruption, but the federal or state executive order to close your business. However, there is nothing you can take to the bank concerning your policy’s coverage on quick review. The policy must be studied. It may have limits on the length of coverage, sometimes as little as 14 days. It will undoubtedly have limits as to a Dollar amount. There may be waiting periods before a claim can be made. It is time to take out your insurance policies and have them carefully considered. If you believe you have a claim, and need some assistance with the highly technical language, please feel free to contact us.

By Jeffrey Wolfe, Esq., Attorney at Sachs Sax Caplan, P.L. As the impact of the coronavirus (COVID-19) pandemic expands, we are receiving an increasing number of calls from clients as to whether COVID-19 provides an excuse for nonperformance under a contract (mostly in the context of purchase agreement, leases and business contracts). As is the case of most legal questions, there is no general answer, it depends upon the facts. Some contracts have a “force majeure” clause which excuses a party’s performance for certain events that are not within a party’s control, such as Acts of God, terrorism, and war. Whether COID-19 qualifies as a force majeure event will depend on the wording in the agreement, as well as the surrounding facts. Parties need to be careful not to declare force majeure if their agreement does not contractually entitle them to do so as such action could constitute a breach of contract. Please contact our firm with any questions or concerns. We would be happy to assist you in determining whether COIVD-19 qualifies as a force majeure event under your agreement.

New 4th DCA decision discussing the proper application of the “Business Judgment Rule” in community associations, and involving our client, Homeland Property Owners Association, Inc.

By: Lindsay E. Raphael, Esq., Senior Counsel, Sachs Sax Caplan, P.L. The heart of hurricane season is quickly approaching---the full season runs from June 1 to November 30th. Year after year we all hear news reports about how this hurricane season is going to be the most active yet and then if we are lucky, we have a relatively quiet season and if we are really lucky, South Florida is temporarily spared. The problem is people become immune to hearing about how important it is to be prepared and then they are annoyed because after preparing for a hurricane, the hurricane may turn and not hit our area. Complacency is dangerous. It is better to be prepared and spared then to be unprepared and hit with a hurricane (or a tropical storm). The association’s board of directors is responsible for making sure the association’s property is prepared for a hurricane, owners have the responsibility to make sure their own property is prepared and that no loose objects are left outside. While every association has some exposure to a hurricane, disaster planning has the potential and probability of saving lives and minimizing damage. Below are 8 tips to help you prepare for a hurricane: Insurance Policies: Make sure the association’s insurance policies (including windstorm and flood insurance) are in place prior to the start of hurricane season. Secure copies of all current insurance policies along with the contact information of the association’s insurance companies and agents so that in the event the building sustains damage the association has access to this important paperwork.Disaster Plan: The association should have a disaster plan that is ready to be implemented if necessary.Safeguarding Important Documents; Make Copies of your Business Records: The documents that should be safeguarded and copied include, without limitation, the governing documents, insurance policies, bank account numbers, statements, checks, assessment payment history, minutes, approvals, unit owner roster, emergency contact information, vendor information lists, etc. This information should be kept in a place the association can retrieve after the storm.Backup Computer Files: Be sure that computer files essential to running the HOA or condominium...

Published in the July 10 issue of the New York Law Journal, board certified attorney Daniel Kaskel's article "If You Love Me Let Me Go: Tips on Establishing Florida Domicile," highlights challenges, rewards and nuances of establishing residency in the state of Florida for high net worth clients who currently reside in high-taxed states. Mr. Kaskel chairs the Real Estate, Corporate, Land Use & Financial Services Group and holds board certifications in Real Estate Law and Condominium & Planned Development Law. Please visit Mr. Kaskel's bio page for more information on his legal career.

Three SSC attorneys are among the first in the state to become board certified by the Florida Bar in Condominium and Planned Development Law. This new field was established by the Florida Bar in 2016 and the first certifications were issued this summer. Earning the new designation are Founding Partner and Chairman Emeritus, Peter S. Sachs, Managing Partner Spencer M. Sax and Principal Edward S. Hammel. Board certification is the Florida Bar’s highest evaluation of competency and cognized attorneys with special knowledge, skills and proficiency in a specific type of law.

Lou Caplan and Steve Rappaport taught the 2018 Legal Update for managers, in West Palm Beach on Tuesday afternoon. They were invited speakers at an Association related trade show. The firm always appreciates these opportunities as it allows our attorneys to connect with managers, many of whom they work with assisting association clients with their needs. Sachs Sax Caplan, P.L. offers many approved courses for managers and board members alike.

Hurricane Irma swept the State of Florida from Key West to Jacksonville. With offices in both Boca Raton, Florida and Tallahassee, Florida, we felt the brunt of the storm in both parts of the State. For our clients, we know that the laws surrounding natural disasters and their aftermaths will become of increasing importance to Floridians. As a firm with many residential association clients, we have been fielding questions in the wake of the hurricane about repair responsibilities in multi-family dwellings. Note that the Condominium Act provides that any portion of the condominium property which must be insured by the association and which is damaged by an insurable event is to be reconstructed, repaired, or replaced as necessary by the association as a common expense. In contrast, in the absence of an insurable event, either the association or unit owners shall be responsible for reconstruction, repair, or replacement as determined by the maintenance provisions of the declaration or bylaws. Accordingly, when determining who is responsible for making what repairs, there is a subtle but very important legal distinction between ordinary maintenance (or lack thereof) and damage arising from casualty. Condominium associations and condominium unit owners are encouraged to obtain legal advice if they have any questions before making repair commitments. Feel free to call us should the need arise so we can help you discern what your obligations may be in connection with needed repairs.

Now that Hurricane Irma has passed, interrupting commerce from Key West, Florida to Jacksonville, Florida, it is now time to truly read and concentrate on “boilerplate” in your contracts. Yes, ‘boilerplate,” that is, all those provisions where the instructions are to just “get it off the computer.” Truly, when you work with a knowledgeable attorney, he knows that it is more important than that. The importance of “boilerplate” is now front and center because of this major storm. Within “boilerplate” is a clause often referred to as an “Acts of God” clause, or for the agnostics among you, the “Force Majeure” clause. “Acts of God” and “Force Majeure” clauses pop up for the most part in two situations, construction contracts and leases. In construction contracts, it is most frequently litigated in connection with the “2 year completion of construction” rule which is a part of the Interstate Land Sales Full Disclosure Act ("ILSA"), 15 U.S.C. § 1701 et seq. Developers are looking to extend the period of completion as a result of an event beyond their control. In leases, the clause gives the landlord the ability to kick a tenant out of a lengthy lease term that may have benefited the tenant because the property is rendered un-tenantable. But, also, closings are often extended by such clauses and contract performance excused in numerous other types of scenarios. Here is the point, if you allow a good draftsman some time to discuss “boilerplate” with you, we can draft a clause favoring one party of over the other. For example, we can change that clause that allows the landlord to escape his obligation to rebuild the premises following a casualty. In drawing leases, we have two completely different clauses: (i) one favoring the tenant (landlord MUST rebuild and do it quickly) , and (ii) one favoring the landlord (landlord may or may not rebuild and may ask the tenant to leave). It can be the difference between financial survival or financial death for either party. Do not wait for the next storm. Let us go over your lease or contract with you or...

Legislative Update 2017

House Bill 7109 permanently lowers the sales tax charged on commercial leases from 6 percent to 5.8 percent. The state currently levies the tax on the total rent or license fee charged for renting any real property. Residences are exempt from this tax. Florida is the only state in the country to impose this type of tax on businesses. Therefore, it unfairly disadvantages Florida business owners. Although this is a small reduction it is the step in the right direction. Earlier this session, the Senate Committee on Finance and Tax passed Senate Bill 378, by Senate President Pro Tempore Anitere Flores, R-Miami, Monroe, to lower the business rent tax.

BOD Certification Boynton Beach General

Steven G. Rappaport Board Member at Fair Housing/Equal Employment Board of Palm Beach County EDUCATION: Georgetown University (Washington, DC)Steven G. Rappaport has been appointed to the board of directors of the Fair Housing/Equal Employment Board of Palm Beach County. The at-large appointment was made by Commissioner Mary Lou Berger made the at-large appointment, which is effective through September 2019.

Located within most associations’ governing documents are provisions that benefit mortgage holders including, typically, provisions that make association liens inferior to first mortgage liens. Often these provisions state that foreclosure sale purchasers are not responsible for paying assessments that came due before such purchasers obtain title. In contrast, the Florida Statutes affecting both homeowners’ associations and condominium associations contain provisions that can be interpreted to hold foreclosure sale purchasers—including foreclosing lenders that obtain title—responsible for the payment of at least a portion of assessments which were not paid by a home’s previous owner. Ordinarily, when an association’s governing documents conflict with the state statutes, the statutes should be followed. However, an exception to this general rule applies when the governing documents have provided contractual rights which would be impaired if later-enacted statutes are followed. In such cases, the governing documents control and the statutes are not applied. In order to make sure that your association will be able to take advantage of statutory changes making purchasers responsible for the payment of assessments that were not paid by a home’s previous owner, associations are encouraged to review their governing documents with their legal counsel and to, where necessary, amend them to incorporate the assessment collection and lien rights found within Florida Statutes. Doing so is more important for homeowners’ associations than for condominium associations because, while the condominium statute (Chapter 718) has contained purchaser assessment liability provisions for decades, the homeowners’ association statute (Chapter 720) was silent on purchaser assessment liability until July 1, 2007. Accordingly, purchasers at mortgage foreclosure sales arising from mortgages given in homeowners’ associations before this date, including foreclosing lenders, have successfully argued that, in the absence of an amendment incorporating the statute, they are not responsible for paying assessment balances left over from a home’s previous owner. Several recent appellate cases have reviewed foreclosure purchaser liability issues in homeowners’ associations, and, notably, many of these cases have turned on whether or not the homeowners’ association involved had amended its governing documents to incorporate the assessment liability statutes that it was attempting to enforce. In contrast, condominium associations...