FLNA MAGAZINE - SPRING 2012

SPRING 2012

F l o r i d a L e a g u e o f N e i g h b o r h o o d A s s o c i a t i o n s

SPRING 2012

F l o r i d a L e a g u e o f N e i g h b o r h o o d A s s o c i a t i o n s

The Many JourneysOf Dr. Ron PetersonThe Many JourneysOf Dr. Ron Peterson

Attorney Michael ImberOn Dispute ResolutionAttorney Michael ImberOn Dispute Resolution

Visiting With Denmark’sNorth Sea Mariners

Visiting With Denmark’sNorth Sea Mariners

A MESSAGE FROM THE PRESIDENT

Spring 2012 • FLNA Magazine • Page 3

Now is the time when most Neighborhood As-sociations have either held or are soon going tohold their annual membership meetings and elec-tions. In this issue, Randall Roger provides someinteresting insight into what is needed to proper-ly conduct an election. After all, it is always bet-ter to “do it right the first time!”

Whether you are a member of your Board ofDirectors, newly elected or staying on to eithercomplete your term or start new one — or per-haps you’re just an interested member of yourcommunity — you should understand whatNeighborhood Associations are all about. We allpay our assessments and have a vested interest inhow our communities are run and what protec-

tions are afforded in the state statutes. In this issue:• We continue our coverage of the foreclosure/bankruptcy collection minefield

with an article by Mitch Drimmer on collections.• Michael Imber discusses a less costly approach to resolving disputes: Alterna-

tive Dispute Resolution.• Regular columnists John Spillane and Riaz Singh discuss Accounting and In-

surance issues.• We profile active community leader and educator Dr. Ron Peterson — a fasci-

nating man to say the least.• Finally, Features Editor Tony Consalvi travels to Jutland on the North Sea

coast of Denmark.

As we were going to press, we received alerts from two organizations interestedin the current legislative activity in Tallahassee. They have different viewpointsand concerns, and it would be worthwhile for all Association leaders and mem-bers to look into the current proposed legislation and draw their own conclusions.While FLNA does not endorse any political positions, we encourage everyone toreview all the information and draw their own conclusions. Legislation is beingconsidered as we speak. While there are more websites than the ones we list, youcan start with:

The Community Association Member Party (CAMP): www.camp2012.netKathy Mears’ Page Regarding HB319: www.hb319.com

The Community Association Leadership Lobby (CALL): www.callbp.com

FLNA and FLNA Magazine are dedicated to creating the means for an opendialogue and a learning experience for all the Associations and Individuals whoparticipate and encourage you to communicate with us and our fellow readers.Send Letters to the Editor at [email protected] or drop me a note at [email protected]. Drop Tony a note on places you find interesting at [email protected]. You can also visit us on our website at www.FLNA.org and learnmore about the activities and services we offer. You can also call us or write to usat the phone number and address listed on this page. Become part of FLNA andparticipate in our activities!

Joseph Boyle, PresidentFlorida League of Neighborhood Associations

Spring 2012FLNA Magazine is published

by the Florida League ofNeighborhood Associations Inc.

Publisher & PresidentJoseph Boyle

Director, Member RelationsJ. Andrew Boyle

Features EditorTony Consalvi

PhotographerJim Bongiovanni

ContributorsChris Felker

Jessica Gregoire

FLNA Magazine157 Monterey Way

Royal Palm Beach, FL 33411Phone: (561) 758-1618

Fax: (561) 258-0689www.FLNA.org

FLNA Magazine is published six times a year. Copy-right 2012, all rights reserved by Florida League ofNeighborhood Associations Inc. Contents may not bereproduced in any form without the written consentof the publisher. The publisher reserves the right torefuse advertising. The publisher accepts no respon-sibility for advertisement errors beyond the cost ofthe portion of the advertisement occupied by the er-ror within the advertisement itself. The publisher ac-cepts no responsibility for submitted materials. Allsubmitted materials are subject to editing.

Welcome To The SpringIssue Of FLNA Magazine

ON THE COVERIt’s springtime in Florida, when localresidents, such as the blue heron, arejoined by visitors from all over theworld.

PHOTO BY JIM BONGIOVANNI

THE HOA ATTORNEY BY RANDALL K. ROGER, ESQ.

Page 4 • FLNA Magazine • Spring 2012

Preparation Suggestions For AnAssociation’s Annual Meeting

The end of the holiday season nor-mally signals an upswing in Associa-tion activity. While most of us are re-turning decorations to their boxes,Boards of Directors are making plansfor the coming year. If the Associationhas not done so already, its most im-portant event — the Annual Meetingand Election of Officers — is mostlikely on the immediate horizon. For aHomeowners Association, the mannerin which the meeting is run is governedpursuant to the requirements foundwithin the Association’s governingdocuments and Chapter 720, FloridaStatutes. Accordingly, we offer gener-al guidance and direction as to issues,concerns and preparation suggestionsfor addressing Homeowners Associa-tions’ Annual Meetings.

First, it is essential that the Associa-tion identify the time and date calledfor the Annual Meeting. Customarily,such date will be referenced within theAssociation’s Bylaws. If the date is notreferenced within the Association’sgoverning documents, the Board hassome degree of discretion in selectingthe date for the meeting. Such discre-tion should take into account the dateof the previous Annual Meeting, thedate when the Association customari-ly holds its meetings and the necessityto have a meeting within a calendaryear succeeding the last Annual Meet-ing.

Second, the Bylaws dictate the ex-tent of the notice required for the meet-ing. If the Bylaws are silent, referenceto Chapter 720.306(5), F.S., requiresnotice not less than 14 days in advanceof the meeting. The means and man-ner of a notice is likely addressed inthe Association’s Bylaws. The personproviding the notice should execute anaffidavit evidencing the giving of suchnotice, which affidavit should be filed

in the Association’s official records.Notice should be sent to the mem-

bers as identified in the governing doc-uments. Members are, generally, therecord title holder of the residence. Thenotice should be sent to the addressesthat the members have filed with theBoard of Directors. The Board shouldbe aware of changes in address, as wellas new owners, to ensure that the no-tice is sent to the proper location. Inaddition, the Association should re-view the governing documents to de-termine whether there is a cutoff datefor new owners. Some governing doc-uments provide language indicatingthat the member roster should be as itexists a certain number of days priorto the Annual Meeting, so as to avoidthe inconvenience and problem to theBoard in tracking changes in owner-ship and/or address just prior to thedate of the Annual Meeting.

Third, the election process, custom-arily taking place at the Annual Meet-ing, is further governed by the Associ-ation’s governing documents. Carefulattention to the language of the gov-erning documents is essential to ensureconformity with the Association’s re-quirements. Communities differ in themanner in which elections are conduct-ed. Some communities permit a voteby secret ballot, and such process isnow recognized under Chapter720.306(8)(b), F.S, in limited instanc-es. Many Associations permit votingby proxy. Determination, however, asto whether a general and/or limitedproxy is acceptable for voting must bedetermined prior to the meeting, toavoid confusion. Finally, in limitedinstances, governing documents mayprovide for a vote exclusively in per-son, prohibiting the use of proxies foran election. Please note, however, thateven in such instances a proxy may still

be valid for the purpose of establish-ing a quorum.

At the Annual Meeting, the first or-der of business is to confirm propernotice, followed by determining theexistence of a quorum. Section720.306(1), F.S., provides a quorumshall be 30 percent of the membersunless a lower number is provided inthe Bylaws. Consequently, review ofthe Association’s Bylaws is essentialto determine the number of memberswho have to appear either in person orby proxy to establish a quorum. If aquorum is not established, the meet-ing cannot convene, and an election ofDirectors may not be held.

Presuming the Association has se-cured a quorum, the meeting may becalled to order and should be conduct-ed in accordance with the agenda, cus-tomarily found within the Associa-tion’s Bylaws. If there is no set agen-da, then it is recommended that theAssociation operate pursuant to Rob-ert’s Rules of Order.

At such time as the election is to beconducted, Florida law requires that,in addition to any potential nomina-tions made in advance of the meeting,nominations be permitted to be takenfrom the floor. The Board should care-fully review the candidates to deter-mine that they are qualified to serveon the Board. A review of the govern-ing documents, in advance, shall iden-tify basis for disqualification of can-didates, if any. Section 720.306 (9)(b),F.S., provides that any person who isdelinquent in the payments of any fee,fine or other monetary obligation toAssociation for more than 90 days isnot eligible for the Board membership.Additionally, any person who has beenconvicted of any felony is not eligiblefor Board membership unless such fel-on’s civil rights have been restored for


at least five years as to the date onwhich such person seeks election to theBoard.

Once the nominations have beencompleted, a motion should be present-ed to the members to close the floor tonominations, seconded and the floorclosed. Thereafter, no additional nom-inations should be accepted. At suchpoint in time, the members should votefor the candidates of their choosing.Once all votes have been cast, it is rec-ommended that a committee composedof individuals with no connection tothe candidates tabulate the votes. Theseindividuals, it is recommended, be nei-ther spouses nor family members of thecandidates. Further, while obvious,such individuals should have basicmathematical skills in order to success-fully tabulate the votes.

The election results, prior to an-nouncement, should be checked andrechecked. In the instance where thereis a particularly close election, it is rec-

ommended that all ballots be recount-ed to ensure a valid election tabulation.All of the election committee membersshould sign off on the final tally con-firming their representation that theresults are correct.

Upon completion of the tally andconfirmation of the results by the elec-tion committee, the results should beannounced to the membership and anyadditional business remaining ad-dressed. Thereafter, after the meetinghas been adjourned, the election ma-terials should be properly bundled andsafeguarded to ensure that, should arecount be requested and conducted,the election materials have, at all times,been maintained under appropriate andsecure conditions. Moreover, the par-ties conducting the recount, if any,should be observed during such pro-cess so as to ensure that no tamperingwith the election materials may occur,the effect of which would be to throwinto contention the results originally

announced at the Annual Meeting.With proper preparation, anticipation

of problems and accommodation forsame, the Annual Meeting should be asuccessful event, allowing the mem-bership to address issues before thecommunity and adhere to the demo-cratic process of selecting its govern-ing Directors.

We wish you all the best of luck.Randall K. Roger Esq. is an attor-

ney with Randall K. Roger & Associ-ates, P.A. The information offered inthis column is presented for general in-formation purposes only. The informa-tion presented here does not constitute,nor is it intended to be, legal advice.The transmission of the information isnot intended to create, and receipt ofthe information does not constitute, anattorney-client relationship of any kindor nature. Readers should not act uponor rely upon any information present-ed here without seeking the advice ofa licensed attorney.

DISPUTE RESOLUTION BY MICHAEL H. IMBER, ESQ.


Part Of An Association Dispute?Consider The Benefits Of ADR

There are all sorts of disputes thatmay arise among the different groupswho are involved in a NeighborhoodAssociation, whether they be the as-sociation’s Board of Directors (oftenrepresented by their property manag-er) or the unit owners. Sometimes, dis-putes between neighbors also fall intothis mix. Examples of disputes rangefrom collection and enforcement is-sues, elections or the lack thereof, orselective enforcement of the docu-ments (covenants) to procedural issues.

These problems have a potentiallydevastating effect on the peace of mindof all concerned, whether they be themembers of the Board (normally well-meaning unpaid volunteers with mini-mal experience in the complexities ofassociation law) or the unit ownerswho also lack the experience to legal-ly protect their interests in a commu-nity in which they have vested theirlives and families. Looming over it allare the costs, both to the Associationmembership as a whole as well as theindividual unit owners involved, thatwill be incurred to resolve such dis-putes.

Left unaddressed, these disputescould spiral out of control and ulti-mately become a legal matter, and,once a matter becomes legal, one thingis assured — costs will skyrocket. At-torneys’ fees and court costs continueto rise. According to an article pub-lished in the Daily Business Review onDec. 27, 2011, the average hourly ratefor law firm billable hours in 2011 was$407. Is there another alternative?

Abraham Lincoln said: “Discouragelitigation. Persuade your neighbors tocompromise whenever you can. Pointout to them how the nominal winner isoften a real loser — in fees, expensesand waste of time.”

Alternative Dispute Resolution

(ADR) is the term used for a broadspectrum of approaches to disputes thathave been embraced by the courts,large and small businesses, and privateindividuals as a means to resolve dis-putes in a fair and cost-effective man-ner. At one end of this spectrum ismediation, probably the least expen-sive and yet the most flexible alterna-tive. Mediation is generally done on avoluntary basis but in certain instanc-es may be required. The mediator actsas a neutral party and has no power tomake a decision about the dispute. Themediator, using his or her skills, helpsthe parties understand the strengths andweaknesses of their case. The proceed-ings are confidential, so, if no resolu-tion is reached, any matters discussedin an attempt to resolve the dispute maynot be discussed outside of the media-tion room. If the parties are able to re-solve their differences, the mediatormay assist in helping the parties draftthe agreed terms into a binding docu-ment (stipulation) for them to sign.With the proper language, this stipu-lation may be enforceable in a courtof law, should one party fail to live upto the terms of the settlement.

At the other end is arbitration, wherethe arbitrator listens to both sides ofthe dispute and then makes a decisionor compromise. In non-binding arbi-tration, all parties havethe option of acceptingor rejecting the arbitra-tor’s decision. If bindingarbitration is chosen, thearbitrator will stand inthe place of a judge andmake the final decision.

Our courts have over-whelmingly embracedthe ADR concept. Infact, most judges willorder the parties to me-

diate their case before even setting atrial date. So, even if one or more ofthe parties chooses to file a lawsuitwithout first giving mediation achance, there is a strong likelihoodthey’ll end up at a mediation anyway.

Homeowners and condominiummatters are governed by Florida Stat-utes. Section 720.311 of the Home-owners Statute encourages mediationof disputes. Section 718.1255 of theCondominium Statute is even stronger,actually mandating ADRs in certaincircumstances. Mediators and arbitra-tors vary widely in terms of their edu-cation, training, areas of expertise, li-censes and certifications. Just like en-gaging the services of any other pro-fessional, parties would be well ad-vised to learn about the qualificationsof their mediator or arbitrator beforeengaging him or her. NeighborhoodAssociation Boards of Directors,whether or not they employ a proper-ty management company, may want toconsider the implementation of a pro-active ADR program to address, at theleast, violation and collection issues.Structured correctly, this can becomea very powerful tool to reduce time andexpenses and enable the boards andmanagers to better focus their energiesfor the good of their neighborhood.

Michael H. Imber, Esq., has beenpracticing law in Flori-da for 21 years and hasbeen rated AV preemi-nent by Martindale-Hubbell, the highest rat-ing for trial lawyers. Heis a Florida SupremeCourt Certified Media-tor for County Court andCircuit-Civil Matters.Call him at (561) 818-1055 with any questionsabout mediation.



Sitting at his desk in his office atSouth University, Dr. Ron Petersonreminisces on a life filled with uniqueexperiences. Peterson has most certain-ly led an exciting life, from his child-hood growing up on the small Carib-bean island of Trinidad to his recentappointment as director of the physi-cal therapy assisting program at SouthUniversity.

As a published author of two books,Baa Baa Black Sheep and Journeys ofMy Life, he has written stories abouthis life experiences, from his travelsin the British Royal Army to living inNorthern Ireland.

Peterson’s journey began when heleft his homeland for the internationalcity of London. “As Trinidad is aformer British colony, after highschool, I went off to London to pursuemy studies,” Peterson said. “Whilethere, I was attracted by the militaryand joined the British army.”

Peterson joined the Royal ArmyMedical Corps as a dispenser. DuringPeterson’s time in the army, he spenttime in Germany, Malaysia and Sin-gapore, but he was not satisfied as adispenser and wanted a more hands-on profession. “So I went back toschool in London and trained as aphysiotherapist,” Peterson recalled.“After graduation, I had to give thearmy back some service, so I went toBelfast, Northern Ireland.”

After his service, Peterson obtainedhis teaching degree from Ewell Tech-nical College in Surrey, England.Armed with his degree and extensivetraining from a top English physicaltherapist, he moved to Jamaica, wherehe became the head of the physicaltherapy training program at the Uni-versity of the West Indies. “Back in

years of experience in physical thera-py,” he said. “I realized that I had somuch to offer in terms of experience,knowledge and teaching.”

To share his knowledge with others,he decided to apply for a teaching job.Luckily, in January 2011, Peterson re-ceived his opportunity to teach, as thenew program director for the physicaltherapy assisting program at SouthUniversity. “The university opened itsnew campus in Royal Palm Beach, andas fate would have it, there was a va-cancy for program director,” he said.“So I applied for the position and wasaccepted.”

South University is a multi-campusuniversity with nine campuses acrossthe nation and classes online. The uni-versity offers master’s, bachelor’s andassociate’s degree programs in fieldsfrom physical therapy to informationtechnology.

Peterson is excited to be working atSouth University and is confidentabout its future. “We have just gonethrough our 10-year accreditation vis-it, and I feel very optimistic that wewill have no problems in reaccredita-tion,” he said. “We offer a very highquality of physical therapy teaching.”

Peterson wants to bring the school’sphysical therapy program to the nextlevel of excellence and is looking for-ward to helping students succeed intheir careers. “The program has beenongoing now for over 10 years, and Ihave just taken over the reins, and I’mhopefully leading it in a good direc-tion,” he said.

Peterson said his top goal is to bringout the best in South University’s stu-dents. “I think that I inspire them anddemand very high standards, and theyare excited by the challenge,” he said.

Author, Doctor, Teacher & Traveler:Dr. Ron Peterson’s Many Journeys

1975, I graduated the first physicaltherapy training program in the Carib-bean,” he said.

After years of teaching in Jamaica,Peterson returned to his native Trin-idad and opened a private practice, buthe didn’t stay put for long. “The min-ister of health for Trinidad asked me ifI could go to Tobago to start the first-ever physical therapy service for theisland,” he said.

Peterson spent eight years in Toba-go, where he met his wife of 30 years,Carmen, and started his family. But theneed for new experiences called onceagain. “The lure of professional life gotme up and running, so I put my résuméout there,” he said. “The next thing youknow, I’m in Louisiana.”

Peterson became the head of reha-bilitation services at Slidell MemorialHospital in Slidell, La. “That was a tre-mendous position because I was incharge of eight different departments,”he explained.

For Peterson, the job was a dreamcome true, but life in Louisiana left abit to be desired. “It didn’t have thebeaches and casual lifestyle that ap-pealed to us,” he said. “My wife want-ed us to move to Florida, so we did.”

Peterson and his family left Louisi-ana for sunny South Florida, where hebecame the director of rehabilitationat the Royal Manor nursing home andskilled nursing facility in Royal PalmBeach. “I spent three years there be-fore opening my own private practice,”he said.

Peterson is now owner of PetersonRehabilitation, at 5912 OkeechobeeBlvd. in West Palm Beach across fromCentury Village, and has become awell-respected expert in the field ofphysical therapy. “I’ve had close to 40

BY JESSICA GREGOIRE

FLNA PROFILE


A lifetime of travels aroundthe world under his belt,Dr. Ron Peterson is nowdirector of the physicaltherapy assisting programat South University.

PHOTO BY JESSICA GREGOIRE


FLNA PROFILE“Since I have come onboard, I have revised ouradmissions standards so that

only the top students can getinto this very intense pro-gram where in 15 months

they graduate with a degreein physical therapy assist-ing.”

Peterson enjoys teaching,and he believes his studentscan sense his passion for thefield of physical therapy. “Idon’t just stand there andlecture; I try to capture thestudents’ attention by keep-ing them engaged,” he said.“Nowadays, teaching is nolonger talking at students,it’s more of an interactiveprocess.”

Students themselves areable to identify areas wherethey need further instructionand concentration. The in-structor then assists them indeveloping and understand-ing those particular areas. “Ilook at myself not as a teach-er but as a facilitator of stu-

dent education,” Petersonsaid. “It’s a long way fromteaching physical therapy inthe Caribbean. In those daysI taught it, and now I facili-tate it.”

Peterson has been teach-ing since 1974 and has seenmany dramatic changes inthe area of education. “Thewhole process of educationhas shifted almost 180 de-grees,” he said. “I’ve had along history of education,and this is why I wanted tobe teaching full-time.”

Although Peterson hasbeen on a long, eventfuljourney throughout his life,he ultimately enjoys the lit-tle things that make livingworthwhile. He spends freetime writing books, garden-ing and playing music.

Dr. Ron Peterson with one ofthe skeletal models he useswith his students.


GUEST FEATURE


If You Don’t Ask, You’ll Never Get!WHY AND HOW TO PURSUEASSOCIATION WRITE-OFFS

By Mitch Drimmer, CAMSo there you are at another board

meeting, and your community associ-ation manager is sharing some goodnews and some bad news. The goodnews is that after three years, the bankhas finally foreclosed and taken titleto Unit 101, and since the mortgagewas $150,000, the association has re-covered $1,500 in assessments (thelesser of 12 months’ maintenance or 1percent of the total due, frequently re-ferred to as the statutory cap).

The bad news is that the unit owed$10,400, including $1,500 in attorneyfees. After paying the attorney, the to-tal net recovery for the association waszero, and the shortfall to the associa-tion was $8,900. The treasurer asks,“What now?” and the manager re-sponds with, “Our lawyer says that wehave to take a write-off.” Is this reallythe end of this receivable?

Few ask why there is a write-off, andif they do, they are quickly told thatthe money is lost forever and becomesanother budget entry for the bad debtline item. Time is short, and the meet-ing agenda must continue onward toother pressing matters.

Hold on a minute … put on thebrakes … let’s go over what just hap-pened. The board needs to take a care-ful look at this “write-off” and not behasty about letting it all go. This re-mains an opportunity to recover moremoney for the association. Did anyone

ask why the former owner of Unit 101gets a free pass and can walk awayfrom the association without payingwhat he or she owes? Did that own-er’s foreclosure extinguish the debtowed to the association by theindividual(s)? In most cases, the an-swer is a very definite no. Does theassociation want to recover any of the$8,900 that it was instructed to writeoff? Does it need or want that money?Of course it does.

Can an association get back any ofthe money it is owed after a bank fore-closes and sails into the “safe harbor”of the statutory cap? The answer is yes,but only if the association knows it canand then makes the effort to collect it.It is money being left on the floor. Allthe association has to do is reach topick it up.

This real-estate meltdown has soconfounded everyone in the commu-nity association industry that opportu-nities are being missed and moneysquandered. We have lost our businesscompass and are drifting listlessly in asea of misinformation and confusion.The fact of the matter is that it doesnot have to be that way. So let’s startwith the problem and see what can bedone.

In 1833, the federal governmentabolished imprisonment for unpaiddebts. That does not mean, however,that people are allowed to walk awayfrom what they owe. Even Florida,

which has been labeled a “debtor’sstate,” allows businesses and individ-uals to pursue and collect debts throughlegally compliant procedures.

So why has the community associa-tion industry been slow to realize thatthere is money being left on the floor?Because what we are facing is a newdynamic and there are lots of issuesthat nobody has even considered.

Associations are ultimately run byvolunteer boards of directors who di-rect community association managersto keep the community runningsmoothly. Bookkeeping is just one ofa manager’s countless responsibilities,but they are by no means collectionsexperts.

The board also depends on its asso-ciation attorney to advise about legalissues concerning the community.Most of these attorneys are not bytraining or vocation specialists in theart and science of collections. Law, likemedicine, is a specialized field, andcommunity association attorneys haveenough on their plates without havingto pursue collections of write-offs.

What boards need to know is thatwhen a bank forecloses, takes title andleaves the association with an unpaiddebt, the money is still owed to theassociation and may be attempted tobe recovered. The recovery is not al-ways easy. It may not always be fruit-ful. My father always told me, howev-er, that “if you don’t ask, you will nev-

‘What boards need to know is that when a bank forecloses, takes title andleaves the association with an unpaid debt, the money is still owed to the

association and may be attempted to be recovered. The recovery is not alwayseasy. It may not always be fruitful. However, if you don’t ask, you’ll never get.’


er get.” Boards of directors need to askthis simple question: “Is there any waythat we can go after the former ownerand get back the money that is owedto us?” My advice to associationboards is to take nothing for grantedand treat this lost money as if it were adebt personally owed to you. Wouldyou walk away from it? Instead of get-ting angry, do something to recoveryour money.

So now that we know that this mon-ey can be recovered, how do we goabout reclaiming it? Community asso-ciations have many avenues at theirdisposal for the recovery of this mon-ey. For amounts less than $5,000, oneoption is small claims court. The pro-cess may cost some money and requireassociation time.

Engaging a collection agency is sec-ond option. Most collection agenciesoperate as agents of creditors (like anassociation) and collect debts for apercentage of the total amount owed.

So if you are collecting zero, any per-centage recovered looks pretty good atthis point. Businesses in the UnitedStates placed more than $150 billionworth of debt with collection agenciesin 2010 and recovered $40 billion ofthat debt. There are in excess of 4,100debt collection companies working torecover debts for businesses and indi-viduals in the United States today. It’sa big industry, and thereshould be no reason yourassociation has not ex-plored hiring one. Consid-er this: Debt collectionagencies employ morethan 400,000 people in theUnited States. In Florida,there are debt collectionagencies that have focusedon the community associ-ation industry and are ac-tively working to collectcommunity associationdebt owed on exclusively

a contingency basis. If you are a mem-ber of a board of directors, it’s timethat you considered what is owed andhow you can get it back. I’m sure thatthere is a debt collection agency thatwould be glad to speak at your nextboard meeting. And if the board givesthem the green light, they will be hap-py to contact that former owner of Unit101 and pursue recovery of the asso-

ciation’s money. If youdon’t ask, you won’t get.

Mitch Drimmer is a li-censed community associ-ation manager and is vicepresident of AssociationFinancial Services, a spe-cialty finance, businessprocess outsourcing andaccredited collectionagency specializing incommunity associations.For more information,visit www.associationfinancial.com.

GUEST FEATURE


The Foreclosure Crisis:Is There An End In Sight?

By Leonard F. BaerWe heard the news, read the stories,

but never believed it could happen tous or our neighbors. Now a questionarises: Could home foreclosures de-stroy a way of life? Since the “GreatRecession” began in 2008, Florida inparticular has experienced a steadyhemorrhage of jobs. The magnitude ofjob loss has resulted in an even great-er number of filings of home foreclo-sures and begs the question, when willit end? Lawmakers in Florida and else-where in the country are asking them-selves the same question.

Many factors played into the currentcrisis, including a combination of theFederal Reserve Board keeping inter-est rates far too low, the failure of elect-ed officials to recognize the problemand consumers’ lack of fiscal respon-sibility. Lenders’ tactics were question-able as they initially enticed consum-ers with all-time-low interest rates andthen stood by unable to help when in-terest rates increased. Also, when ahomeowner had no job or ability topay, or the house was “underwater,”the lenders’ hands were tied by regu-lators not allowing modifications orrefinancing.

Overuse of credit to help pay forbasic expenses became a major con-tributor to this issue. There are manyexplanations for substantial unsecureddebt, such as unemployment andhealthcare costs. Upon reviewing theconsumer bankruptcy filings, it be-came evident the unsecured debt came

at a monthly cost so high, it threatenedthe consumer’s ability to pay their mostimportant bill each month, their mort-gage. Difficulty meeting monthly ex-penses outside the most basic require-ments, stressed an already overbur-dened household, which then set thestage for failure. In many instances,when payments were missed, foreclo-sure was the result.

The blame for the crisis cannot beplaced squarely on one institution orperson alone, but rather, a more col-lective view must be considered if weare to learn anything. What continuesto be revealed by the unwinding of thebank crisis, corporate malfeasance,unemployment and consumer bank-ruptcies is the ever-present excess andgreed of various individuals and theirinstitutions. The crash was inevitable,leaving some no choice but to file per-sonal bankruptcy in an effort to try toavoid foreclosure. The problem is thatoften bankruptcy did not prevent fore-closure but merely stalled the process.In some cases, any saved resourcessuch as 401(k) plans orother retirement invest-ments were tapped or de-pleted by consumers in aneffort to hold on to ahouse, already underwa-ter.

The Florida court sys-tem is feeling the impactin unprecedented ways, aspending foreclosure cas-es currently number at

least 368,000. Although a foreclosureaction can take as long as 180 days orlonger to finalize, media reports con-tinue to blast consumers across the In-ternet, and print media assert that “helpfor distressed homeowners is on itsway from Washington,” and yet, un-fortunately, many families are simplybeyond the point of no return.

Many families with school-age chil-dren are now homeless due to unem-ployment and foreclosures. Those par-ents will tell you it was not the life theyplanned, or the hardships they wantedtheir children to endure. Perhaps thelessons and observations learned bythese children will produce the “NextGreat Generation.” We can only hopechildren growing up in the aftermathof this financial crisis will no doubt bemore resourceful and perhaps under-stand the value of money better thantheir parents. Will this crisis end? Yes,of course, but will we learn from ourmistakes? Be Educated! Be Proactive!

Attorney Leonard Baer is licensed inthe states of Florida, North Carolina,

Georgia and New York,and in the District of Co-lumbia. He has been se-lected for inclusion in theBar Register of Preemi-nent Lawyers and is aCertified Court Mediator.His offices are in Welling-ton, Florida, and in High-lands, North Carolina.Visit him on the web atwww.legalbaer.com.

‘The blame for the crisis cannot be placed squarely on one institution or personalone, but rather, a more collective view must be considered if we are to learnanything. What continues to be revealed by the unwinding of the bank crisis,

corporate malfeasance, unemployment and consumer bankruptcies is theever-present excess and greed of various individuals and their institutions.’


Question: What insurance do Ineed to buy as an individual unit own-er to round out the condo or home-owners’ association’s coverage?

Answer: First and foremost whilewe are all confident in our HOAs’ di-rectors to obtain proper insurance cov-erage, you must take adequate steps toprotect your own property. HOA poli-cies will generally cover “commonground” issues. Any claim arising fromanything other than common groundwill be your responsibility in the in-surance carrier’s eyes.

Condo insurance that bridges the gapin coverage between your condo asso-ciation’s master insurance policy andyour property/personal liability protec-tion is known as a H06 condo insur-ance policy. Every condominium de-velopment has a master insurance pol-icy that covers items such as the actu-al building in which you reside and all

of the common area elements. How-ever, these policies typically stop at thefour exterior walls of your condo. Thismeans that not only are your personalcontents not insured by that policy,neither are any of the items within thefour walls of your condo. An H06 pol-icy will cover your contents. Also, itis very important that your H06 poli-cy cover your complete liability basedupon what your condo association by-laws and rules state.

There are several typesof home insurance policies,which have different levelsof coverage. The most pop-ular is known as an HO3policy. This type of cover-age is provided for one- ortwo-family units. Theproperty must be owner-occupied. HO3 insurancegenerally protects against

INSURING YOUR ASSOCIATION BY RIAZ SINGH

What Other Coverage Do We Need?

THE ASSOCIATION ACCOUNTANT BY JOHN SPILLANE

How Associations Are TaxedQuestion: Since most HOAs are

non-profit entities, do they have to filecorporation tax returns? Are we taxedon any surplus funds we have leftoverat the end of each year?

Answer: HOAs can elect to be taxedunder IRC Section 528 and file U.S.Form 1120-H, U.S. Income Tax Returnfor Homeowners Associations.

Some Associations elect to file asregular corporations and file U.S. Form1120, U.S. Corporation Income TaxReturn. In this case, a Florida corpo-ration must file a Florida CorporationIncome Tax as well as the federal re-turn. In the latter case, there are sometax advantages to filing a regular cor-porate tax return, such as the ability tocarry back or forward any losses thatoccur as a corporation. Most Associa-tions each year choose to elect themethod that yields the lowest tax.

However, the decision whether to fileForm 1120 or 1120-H is very complex,and requires a full understanding of thetax treatments of the components of theAssociation’s income and expenses.

If an Association elects to file underIRC Section 528 on Form 1120-H, itmust allocate its income and expensesbetween “exempt function activities”and “non-exempt function activities.”An Association is not taxed at all onits “exempt function activ-ities,” but taxed at a flat 30percent on all of its “non-exempt function activities.”An example of exempt in-come would be memberoperating assessments,whereas interest and invest-ment income are considerednon-exempt.

It should also be noted

that if an Association provides for re-placement reserves each month, shownas expenses on the financial state-ments, these expenses are not deduct-ible as such on the federal tax return.They are only deductible when paid.Also, it is not true that an Associationis taxed only on any surplus funds ithas on hand at the end of each year.Hopefully, this brief explanation willhelp you better understand just how

complex the tax laws are indealing with Associations.

J.P. Spillane is a certifiedpublic accountant with manyyears of experience in work-ing with HOAs. He lives inthe western communities,and his office is in Welling-ton. For more information,call (561) 790-1488 or visitwww.jpspillanecpa.com.

direct losses due to the following: ex-plosions, fire, hail, lighting, theft, tor-nadoes, vandalism and wind storms.Flood is not covered and has to be pur-chased separately. Comprehensive per-sonal liability is also covered, shouldsomeone injure themselves on yourproperty. This type of policy will dowell to round out the coverages underyour HOA.

Riaz Singh is with Tradewinds Insur-ance Consultants LLC. Forinformation on associationprotection, call (561) 578-5758 or visit www.floridatradewinds.com.

Answers provided in thisarticle are for information-al purposes only. Youshould always contact a li-censed insurance agent orsurplus line professionalfor advice.

FLNA FEATURE


By Tony ConsalviDenmark’s Jutland peninsula is re-

ally the northernmost part of mainlandEurope, while the rest of the countryis a collection of islands separating theNorth Sea and the Baltic Sea and lead-ing to the southernmost point of theScandinavian peninsula in Sweden, allconnected by ferries and some veryextraordinary bridges. The passagewest across the Storebaelt, the inlandsea separating Zealand, the island onwhich Copenhagen is located, from thenext largest island, Funen, is 13 kilo-meters long, beginning with an extraor-dinarily beautiful suspension bridgewhose far end is anchored to an islandsituated in the middle of the water andfollowed by an equally astoundingcauseway which carries both motor ve-hicles and train traffic the rest of thedistance.

We crossed Funen, went over anoth-er suspension bridge and entered therolling hills and farmland of Jutland,with its small churches and yellowfields of mustard plants. Leaving themain highway, we drove casuallyalong back country roads through pic-turesque small villages before turning

north along the coast, where we weresoon greeted with a wondrous expanseof windswept dunes.

At the north end of the RingkobingFjord is the town of Ringkobing,whose inhabitants have always livedby the sea and made their living fromfishing and salvage. They are proba-bly descendants of the Vikings, theNorsemen who plied the sea more thana thousand years ago and ventured asfar south as North Africa, east intowhat is now Russia, and west possiblyeven to North America. Many of thepeople, however, tell a different story— how sailors from other parts of Eu-rope who had been shipwrecked dur-ing the winter storms off the nearbycoast were saved by the local towns-people and put up in the local farm-houses, where they huddled togetherwith the locals to ward off the coldNorth Sea winds. These sailors made“friends” with many a local girl, andtoday, many families claim ancestryfrom many nations. Look around, theytell you. Not everyone’s hair is blond.Many have dark eyes, not blue, andmany are not very tall. How else cansuch a phenomenon be explained?

Their real story is one of a constantwar with the North Sea, which relent-lessly pounds the coastline. While theDutch protected themselves by build-ing dikes to keep the sea out, thesehardy Danes faced a different chal-lenge. For many years their harbor wasprotected by the dunes, with an outletat the south end of the fjord where agreat lighthouse stood to guide the fish-ing boats to safe passage. About 200years ago, the sea began to push thesand up along the length of the fjord,creating more and more dunes, finallyclosing off the fjord and Ringkobingfrom the sea. Without such an outlet,Ringkobing, at one time the most im-portant fishing village on Jutland’swest coast, fell rapidly into decline.

In the years before World War II, thelocal mayor, a man of great vision andan even greater sense of duty and pur-pose, persuaded the government to re-open the fjord by building a canal nearwhat is now Hvide Sande, a small vil-lage situated on the dunes. It took manyyears and a great engineering effort tocomplete. More than once, the winterstorms pounded the construction siteand flooded the town, but the mayor

The seaside townof Hvide Sande.

NOT ON THE GRAND TOURNOT ON THE GRAND TOURJutland’s North Sea Mariners...

Hospitality In An Inhospitable Place


rallied the people and they persevered.Soon Hvide Sande and Ringkobingagain took their places in the fishingindustry of Denmark. The old light-house now sits a few kilometers fromthe new inlet but is still in use to warnthe sailors on the treacherous NorthSea, while another watchtower looksover the canal. In the winter of 1951, aDutch ship, being pounded about asmany ships are in those unforgivingwaters, called for help, and the localpeople of Hvide Sande sent their brandnew rescue boat to their aid, but amighty wave washed most of the res-cuers overboard to their death. Eventhe king came to Hvide Sande to hon-or those brave but ill-fated mariners,who were laid to rest in the localchurchyard where theirs are the onlygraves that are guaranteed perpetualcare. One of the names engraved onthe memorial marker is that of AageIverson, the mayor’s son. The relent-less sea never forgets, nor forgives.

One narrow road snakes its waythrough the dunes from Nymindegabon the southern end of the fjord to theturnoff at the north end to Ringkob-ing. On one side, lolling peacefully,small waves driven by the wind gen-tly touching the shore, its level pro-tected by the sluice at Hvide Sande, isthe fjord. On the other side, across thebarren, high grass holding the sandysoil intact and running along as far asthe eye can see, are the towering dunesthat protect this artificial tranquilityfrom the fearsome power of the NorthSea. Only at Hvide Sande, where thecanal cuts through and the harbor hasbeen cleared, can you see the proxim-ity of the two bodies of water and thebalance created by the natural protec-tion of the dunes. Along the dunes, thetrees, unprotected from the fury of thewind, have grown sideways, leaningfutilely toward the protection of thefjord, while the houses show their re-spect for the sea, or maybe you mightthink their defiance, by turning theirbacks, allowing the wind and sand to

blow over their roofs as they open upand look the other way through theirbig picture windows and over theirlarge outdoor decks toward the fjord’scalmness and beauty. Even in mid-spring, the hardy locals bundle up inwinter coats when they ride their bi-cycles along the road to town. The or-derly balance seems in place, but thereis always the threat of the sea on theother side of the dunes.

We had come to Hvide Sande to cel-ebrate a friend’s birthday party, and onthat special day we watched from thewarmth of her house and through thepicture window as the family parkedtheir cars in the churchyard on the oth-er side of the road, crossed over andtraversed a small path in the dunes tothe house. We were a bit apprehensive,all these people coming to congratu-late our friend while we, visitors whodid not speak the language and who

had met only one of them in the past30 years, were obvious outsiders. Ittook only moments to allay our fears.An interesting custom, one rarely seenanymore in our country, took place.Every person who entered the houseexcept, of course, the infants, from theyoungest child to the most senior adult,made it a point to walk over and intro-duce himself or herself, and, most sig-nificantly, shake our hands. While theaction was informal, we were witness-ing a custom of hospitality and respectthat immediately made us feel part ofthe group.

After the meal, we all boarded a busand visited Abeline’s Gaard, a localfarmhouse which was located in thedunes just south of Hvide Sande andhad been turned into a museum. Thefarmhouse, typical for the area, wasactually a self-sustaining compoundbuilt in a square to ward off the wind,

(Above) Dunes rise along the shore of the North Sea.(Below) Seafarers Church with Aage’s Memorial Cross at the right.

FLNA FEATURE


with the sides facing the dunes usedfor workshops and stables and thoseon the lee side the living areas. Abeline,who had died less than 20 years be-fore, had lost her husband early in lifeand spent more than 50 years raisingher family and managing the farm. She

had been very practical. When the firsttelephone lines were being installed,the telephone company had asked herto install a telephone in her farmhouseto serve as a central telephone for thearea rather than their trying to run linesto each house. She had steadfastly re-

fused the request, citing not only herinconvenience but also her privacy.One day, the telephone company toldher they would pay her for her trou-ble. She insisted they install the tele-phone that same day.

On our last morning, we visited oneof the family members who lived in ahouseboat on the fjord. We had just satdown when the door opened and someof those whom we had met the daybefore came in. They had known wewere visiting and had come over to saygoodbye. Now understanding the lo-cal custom, we also made sure that wegreeted each person and shook eachother’s hand. As everyone sat aroundthe table drinking hot coffee or tea andnibbling on some local pastry, we feltwe were with friends and exchangedaddresses, phone numbers and, in ourmodern age, e-mail addresses, beforefinally taking our leave to drive the 200km or so back to Copenhagen airportand our flight home.The calmness of the Fjord.

Documents

FLNA MAGAZINE - SPRING 2012