THE ASSOCIATION MANUAL

THE ASSOCIATION CORPORATION

Volume

1

 

THE REALTY EXPERTS, INC.

P.O. Box 223352,  West Palm Beach , FL 33422

Tel:  561-471-9940, Fax:  561-471-2737

Email:  exp0749@bellsouth.net

FORMING THE ASSOCIATION CORPORATION

CHAPTER

1

 

T

he Homeowner and Condominium Associations in Florida are currently under the aegis of either  For Profit or Not-For-Profit Corporations (CH 607 and CH 617 F.S.).

Both of these regulated corporate styles are operated by boards of directors for the benefit of shareholders. When one is a shareholder in either CH 607 or CH 617 one can sell one’s shares and become disassociated with the corporation.  In the common interest realty association one is not a “shareholder” and is permanently a “member” of the association until one is able to sell the real property to which the membership is irrevocable tied.  Therefore, neither of the aforementioned corporate styles is applicable to common interest realty not-for-profit association corporations.

INDIVIDUAL  OWNERS’  INVESTMENTS

People purchase in condominiums and planned unit developments to enjoy the freedom from property maintenance.  They entrust their largest investment and their personal funds to total strangers to manage.

Membership in not-for-profit associations, such as the Elks Lodge, are not mandatory.  One may choose to decline membership at will.
    The common interest realty corporation is a different
     type of entity than that which currently exists.

FORMING THE CH 617-1 F.S. ENTITY

To ensure that adequate safeguards are in place, another corporate statute needs to be developed. At present, conflicts exist between existing 607 and 617 F.S. with respect to governing condominium and planned unit associations. These conflicts have led to attorneys interpreting boards’ decisions against homeowners/unit owners by specifically referencing the corporate statutes.  By side-stepping the governing documents the contracts (governing documents) are effectively amended by stating the statutes’ priority.

BEGIN THE RE-STRUCTURING PROCESS.

 

In order to create meaningful change to the way in which associations are governed we must begin with the entity which was formed to operate the association concept.

Given the fact that there is only one reason for the existence of condominium and planned unit association corporations, that reason must be clearly stated and all regulatory legislation follows.

For example:  a homeowner and condominium corporate statute should contain definitions and the role of the individual in the governing process. The mere proclamation that “If the board of directors is not doing their job then kick the bums out” is unrealistic.  Changing board members by holding expensive membership meetings for the purpose does not occur in the majority of associations, for many reasons.

While both CH 718 and CH 720 can be amended each year, and forever, these amendments do not address the foundation (CH 617) on which these statutes is based and from which they originally sprouted.

Recognize that association membership does not bestow shares of stock in the corporation upon unit/home owners.  While they have an equity interest in the association, it is not redeemable and is therefore, for all intents and purposes, just a number on the balance sheet.

Enforcement of the condominium and HOA acts needs to be revisited.  By creating a corporation act for association corporations only, enforcement provisions may be revised. We must provide an agency, separate and distinct from the DBPR which is clearly overburdened with licensing, registration, regulation and enforcement of all  professions and businesses under their jurisdiction.

Preferably, Ombudspersons need to be established in various Counties.  The purpose is to hear unit owner complaints.  This office must not be manned by attorneys, but may be handled by persons who have proven experience and expertise in addition to passing an on-line exam. Funding for this office is by annual fees collected from homeowner associations.

Finally, as it stands now those living in over 55 and over 62 communities are being abused every day.  They do not understand their documents, they do not have copies of the statutes and as the most vulnerable of our unit/home owners should have the benefit of redress without the expense of hiring legal counsel.

As a statement of fact (not vilification), be advised that Mediation does not work. Association attorneys, in the main, do not Mediate. They have no interest in conflict resolution.

Therefore, more cost effective methods must be initiated. Funding the Ombudspersons at the rate of $20.00 per unit per year would be a place to start.

FAILURE TO RECOGNIZE 

THE INHERENT FLAWS IN THE SYSTEM RESULTS IN MISCONCEPT

IONS

This Manual will not discuss the details of forming an Association Corporate Act.  We merely point out the need for a foundation before the building can be built.. This plan may encompass a two-three year legislative time span but will prove to perfect current laws affecting associations.

Fining authority can be included in the Association Corporation Act. Collection of fines can be in County Court. The F.A.C. can list each infraction with specific fine amounts for each offense.

WHO IS THE AVERAGE BOARD MEMBER?

How does an owner learn to become a board member?  Suddenly they are voted or appointed to the Board of Directors without benefit of ever having owned a corporation, been a COO or a CEO and never been otherwise self-employed and responsible for the employment of others.  This frightening situation needs remediation.

Understanding that inexperienced persons absolutely cannot operate a multi-million dollar corporation which is responsible for the health, safety and welfare of hundreds of residents and their property, the time has come for a serious over-haul of the system. At present, due to lack of constraints, board members shift their responsibilities to managers or the association legal counsel.  This does not promote the will to read, research and generally learn corporate governance.

While the DBPR made a limited attempt in the past to provide board member education it failed because (a) the DBPR is overwhelmed with other responsibilities and (2) there is no sub-agency that can provide the necessary education cost effectively.

The answer is twofold:  (1) Create an additional corporate act which includes the requirements for board membership.  (2) Within that context, provide a program requiring a test/exam similar to the Driver Licensing and Insurance reduction courses offered on-line.

Education

To expect that unit owners will suddenly become corporate executives overnight is patently unrealistic.  Board members coming to the responsibility are usually well meaning, reasonable persons.  However, given the first one or two board meetings and their personas change.  Remarkably, they become ego driven to control and the exercise of their power.  In many associations, counsel advises the newly seated board that they have the power and authority to do whatever they wish because they are insulated from sanctions due to their “volunteer” status and application of the “business judgment rule”.  The President is advised that he/she is the “CEO” and as such can make unilateral decisions without benefit of board input. This is a fascinating phenomenon to observe.

In point of fact, the President of a common interest realty association should not be considered a CEO because this person rarely has the knowledge, training, experience or education to automatically become a CEO of a multi-million dollar corporation.

The lack of education and training results in fraud, kickbacks, executing poorly drafted contracts, promulgating rules and regulations inconsistent with the governing documents, hiring unlicensed persons to perform work on the common areas which requires licensing and otherwise operating the association as their own private, personal kingdom.

The problems associated with common interest communities are a direct result of lack of education, training and established rules for board members.  We can continuously amend the governing statutes and provide for Mediation, Arbitration and any number of other modes of redress, but until we correct the board member education problem contemporaneously with providing an additional not-for-profit corporate act, there will be no perceptible change.

Is the answer to eliminate volunteer boards?  Perhaps we can consider “professional” board members.  These would be persons who qualify through experience, training and education to manage corporations.  Call them CEO or COO if you will, but perhaps these paid persons will more effectively operate our common interest communities.  At least if they do not perform, based on periodic 

performance reviews by an Ad Hoc Owners’ Committee established for the purpose, they can be fired.

After all, the legislative intent is to provide a corporation as the vehicle for managing common interest communities.  Therefore, accepting the premise that no corporation managed by persons having no management skills, no training, no education and no experience can survive, perhaps it is time to re-think corporate management as it relates to the common interest community.

At a minimum, if managers are properly educated and trained they can assist the board of directors in corporate governance.

Currently, basic educational constructs for managers are missing and need to be revised.

See Chapter 2 for management and board educational requirements.

11111111111111

MANAGEMENT AND THE MANAGER’S ROLE

THE BOARD OF DIRECTORS’ RESPONSIBILITIES

There are two types of community association management companies:  those that want to assist the board in management of the association while they provide the day to day, hands-on services, and those that resent the board’s involvement in operations.

CHAPTER

2

REALISTIC 

MANAGEMENT ?

As “For-Profit” companies, the management company is always concerned about the bottom line.  In order to ensure that they can profitably handle their responsibilities, they hire managers (CAMs) who are willing to “manage” seven to ten associations.  This results in an approximate two thousand to four thousand units per manager.

It is impossible to properly care for thousands of units in a month.  Particularly in the over 55 and over 62 communities where the owners do not understand the documents, the financial statements, and the relevance to state law. 

CH 468 v. CH 475 Florida Statutes

Perhaps the term “Community Association Manager” is a misnomer.  Actually, two disciplines are co-existing without clear delineation of education and responsibilities

  

The Community Association Manager (CAM) is licensed to perform “property management” which is one of the services of real estate licensees under CH 475.  In fact, most CAM companies and managers call themselves “property managers”.

Property Management requires a different set of rules, a different knowledge base and is unrelated to “corporate management”.  This is why 468 needs to be re-written to acknowledge the differences and require additional educational requirements and operating limitations

LICENSING AND REGISTRATION REQUIREMENTS

1.      There should be two levels of licensure for those entering the profession of corporate association management.

2.      The first level:  Educational requirements, both classroom and online, designed solely to teach corporate structure and business management.  This level must include all aspects of corporate definitions, the role of board members and officers and the role of the business manager.  Additional  requirements  include the definition of “contract” and what constitutes a legally enforceable contract, legal definitions and their application in the HOA concept;  the RFP, preparation of specifications, the bidding process, how to govern the corporation and all aspects of corporate management. The person qualifying for this level must be employed by a Management company, under the direct supervision of a Level 2 licensee, for a period of two years prior to becoming eligible to take additional courses and the Level 2 exam.

  

Unless and until persons are properly educated in all aspects of corporate and real property management they cannot possibly assist board members in their responsibilities.

3.      The second level:  Educational requirements include the physical plant, building components, how to read and understand Plat maps, how to read legal descriptions (including metes and bounds), definitions (including Easements v..“walking path”), how to research property lines, surveys, types of construction and how each is repaired/maintained as originally built.  This level must also include all aspects of financial planning, including but not limited to accounting terms (cash v. accrual, etc.), how to prepare financial statements, operating statements, reserves schedules, and their relationship to the annual budget. Preparing the annual budget by both methods (historical data & potential future trends) to avoid fee targeting.  Successful completion of this level’s exam qualifies the manager to be able to manage a community as an employee of an association.

ADVISING THE BOARD AND OFFICERS

Assuming that the board members and officers are elderly and/or inexperienced in corporate governance, the licensee must be prepared to offer educational programs designed to provide them with the tools to make decisions.  After all, it is the primary responsibility of the board of directors to set policy.  Explaining the goal setting process which requires planning and setting policy is a primary function of the corporate manager while being mindful of the prohibitions against the Unlicensed Practice of Law (UPL) as set forth by the Florida Supreme Court.

Another aspect of management education is the theory of “authority”.  Prior to making any decision affecting the membership, including but not limited to common area maintenance and maintenance of privately owned property is the board’s “authority” to do or refrain from doing a thing.  Directing board members to the governing documents and state law may be under the guidance of the licensee.  Prior to executing any contract in excess of $50,000.00 the board members should be required to provide supporting documentation in the form of the applicable portions of the statute(s) and the governing documents. Too often board members flex their muscles and make decisions which are not allowed resulting in unit/home owners’ contract rights being abridged, or worse.

Board meetings are often recommended by the CAM who also prepares the notices.  It is crucial that all meetings of the board of directors and committees be transparent.  At this time, these meetings are clandestine in that the board members meet and pre-determine their votes via email prior to the actual meeting.  Decisions of the board, while reduced to writing in the form of “minutes” are not made public (published to the membership) unless the member files a written request for copies of the minutes.  This is not proper governance of a common interest realty association wherein all board decisions affect the individual property owner either personally, financially, or in the market value of the property.  

RESPONSIBILITIES OF THE BOARD AND OFFICERS

Communication is the foundation of a properly governed association.  Given the fact that many owners cannot, for physical or job reasons, or other, attend board meetings they never know board decisions affecting their interests.  Therefore, communication is vital.  The statute should require that all associations provide monthly communication to the membership.  Communication may be in the form of closed circuit TV, a website or Newsletter.  The communication must contain all of the monthly activities of the manager and the board and issues coming to the board for consideration in the coming months.

Promulgating rules by board members is a misunderstood activity.  As previously noted, many board members’ reasons for becoming a member of the board include self-aggrandizement.  This results in personal agendas becoming “rules”.  We need to provide a process for amending existing rules and/or promulgating a set of Rules and Regulations where none previously existed.  Any proposed “rule” or “regulation” must be supported by a copy of the statute or portion of the governing documents permitting the proposed rule or regulation.  For example, many governing documents specifically allow the board to promulgate and enforce rules for the “use of the common areas” only.  No other rule making or amending authority is stated in the governing documents.  However, all boards practice rule amendments regularly creating all manner of unusual rules which can, currently, only be challenged through Mediation and costly litigation.  This means that they are not challenged and remain a part of the governing documents as properties change ownership. Some attorneys even record these “rules” in the public records of the specific County, by the title of “Resolution” causing additional problems.

We need a specific format for documents amendments, and the attesting certificate. A review of some of the recorded amendments in Palm Beach County , reveals ambiguity and failure to state whether the recordation actually amends a portion, or all, of the subject document.  Further, some just state the amendment itself without providing the complete paragraph, Article, or Section to be amended.

With respect to accumulating the required number of “votes” to amend:  some boards and involved managers merely have the owner (or the purported owner) execute a paper with a “For or Against” to be checked.  I believe that if challenged this would not stand the test of actual votes; i.e., to record “votes” an association must have a duly noticed meeting at which the proposed amendment is to be discussed and voted upon by ballot.  Of course another method is by “joinder” wherein the unit owners execute a voting affidavit which is notarized.  The acknowledgement ensures that the person voting is (a) The owner of record (b) Is not the owner’s uncle Joe or aunt Mame.  Any other method of obtaining consents for amendments must be deemed illegal.

Attempts to amend the Declaration or By-Laws is a favorite activity of board members.  An example in an over 55 community in Palm Beach County:  the board wants to (1)  Make hoteliers out of unit owners by requiring that they can only rent their units for six (6) months or less, one time in a 12 month period, and (2)  Require that all purchasers after the effective date may not obtain mortgages for less than 80% of the purchase price. 

These “amendments” were written by either the property manager or a unit owner. The language is insufficient, the structure is incorrect and the words “hyphened through” are meaningless and not applicable to anything. The renting of a condominium unit for a period of six (6) months or less is subject to taxation at the rate of 6% of the amount of the rent collected (CH 212 F.S.).  Since the unit owners’ ages, generally, exceed 60 they do not understand proposed amendments and the potential impact upon their heirs at inheritance. I am of the opinion that a board does not have the authority to regulate mortgages including, but not limited to the down payment requirements which may not be consistent with the lender’s determination of the credit worthiness of the purchaser. In point of fact, anyone can have financial problems, resulting in default, subsequent to obtaining a mortgage whether they put 20% down, less or more.

In order to stop enforcement of illegally approved amendments unit owners must file for an injunction, and subsequent judicial ruling, in Circuit Court, which requires the hiring of an attorney and many months of waiting during which time the terms of the amendment(s) could have unfortunate affects upon the affected unit owners.

 

                           Enforcement

 

Currently, enforcement of the governing statutes is by and through either the DBPR or Pre-Suit Mediation, depending on the cause to be litigated.  Due to the sheer numbers of complaints it is virtually impossible for the DBPR to respond to each and every complaint timely.  Even if this agency hires additional employees and attorneys to review the merits of the complaints, it is not feasible to expect this agency to provide prompt responses.  

CHAPTER

3

Before determining the role of the DBPR in enforcement one must ask “why are the complaints escalating?”  One reason of course is that more and more condominiums and planned unit developments have come on line in the past five years.  Particularly in the past two years the conversions from multi-family residential properties to condominiums has created a glut of problems.  Multi-family apartment buildings, generally, are not always the best qualified for conversions given the fact that their original construction did not comport with more rigid condominium design.

Regardless of the foregoing, continuing to put out the fires, legislatively, year after year obviously is not solving the problems So, without changes to the foundation/structure of the common interest realty association in Florida enforcement of existing laws will be difficult and costly for the average unit or homeowner.

However, assuming that the intent of the legislature is to reform the structure to provide for proper educational requirements of board members, officers and managers then reformed enforcement can occur as well.

Recognizing that it is only the funds of the unit owners and homeowners that provide the funds to operate the association corporation, it is important to conserve the costs of litigation and legal fees for matters that can be best settled by other means.  In other words, too much reliance on attorneys by boards results in excessive annual fees.  Remembering that the association corporation will cease to exist were it not funded by the property/unit owners , it is prudent now to restructure the association corporation with a view to acknowledging that the association corporation is not an entity operated by professionals for the benefit of shareholders.

With respect to covenants and/or statutory violations, all complaints should be directed to the Ombudsperson; finalized with binding Arbitration  should the parties disagree with the findings of the Ombudsperson, as follows.:

(i)         A clear and complete statement of the violation and the parties together with     the association name, address, and document number.
(ii)        Copies of the applicable portion of the statute or governing documents must be attached in order to be considered.
(iii)       The Ombudsperson reviews the documents to determine whether a violation has occurred and responds to the unit owner accordingly.
(iv)       For a finding of fault against the association the Ombudsperson is authorized to provide his/her findings supported by statute or case law with a recommendation that the association shall cure the problem.
(v)        In the event that the association shall refuse to accept the determination, then in that event the association shall pay all of its attorney fees and costs as well as the attorney fees and costs of the Defendant incurred in Binding Arbitration.
(vi)       Where the association has a complaint against the unit owner the foregoing procedures shall be followed.
(vii)      If the Ombudsperson determines that the unit owner is at fault in the matter then in that event the unit owner shall have the option of complying with the order of the Ombudsperson or proceeding to Binding Arbitration.
(viii)      In the event that the unit owner shall decide to proceed with Binding Arbitration then in that event each party shall bear it own costs and fees equally.
(ix)       The foregoing does not apply to any action brought by the association
against the unit owner involving any financial matter.
(x)        Mediation either pre-suit or with the DBPR is deleted.

It is clear that the original concept of an entity to operate the common interest community was established by attorneys.  As we continue to grow the statutes become more and more convoluted.  The average person needs legal counsel just to understand the statute.  Governing the association, which consists of  the residences of the elderly as well as the younger person, is not as difficult as it now has become due to the convoluted  statutes surrounding the concept.

In addition to the requirements of the statutes the average homeowner has to read and comprehend at least 96 pages of the contract they have with the association:  the “governing documents”. Clearly, governing real property to ensure that it is maintained, safe and secure to the best of the abilities of  the layperson should never have grown to unmanageable proportions. 

The differences between the condominium and the planned unit development concepts are minor.  The condominium can be in any shape and size.  The common areas are owned by each unit owner in his proportionate share while in the planned unit development governed by the HOA, the common areas are owned by the association corporation. Basically, those differences are not worthy of pages and pages of legalese which, in the final analysis, serves no useful purpose other than providing a source of income for certain service providers.  

  

     

                   Revising Current Law

   

In the interim, until a restructuring can occur, following are amendments to CH 720 which need to be made to more closely comport with actual operations as well as the concerns of unit/home owners

 

CHAPTER

4

  1. Email (electronic) discussions and meeting preparation considerations between a quorum of the board constitutes a meeting and must be noticed. Notices of board meetings shall include the Agenda items for each meeting. All email communications between board members shall be part of the Official Records.

  2. The Official Records shall be maintained in the County, or in the City, whichever is the taxing authority, in which the development is located.

  3. All contracts for goods and services shall contain a thirty (30) day cancellation clause wherein the contract may be canceled by either party without cause.

  4. All meetings of the board of directors shall be noticed with the date, time, place, purpose, and agenda and shall be posted in conspicuous places in the community at least 48 hours prior to the meeting.  Conspicuous shall be defined as a place or places between, contiguous or proximate to a group of not more than eight (8) units in a buildings or a group of two (2) buildings having five (5) or more floors.

  5. Meetings of the board of directors where Special Assessments shall be considered shall be noticed by U.S. Postal Service Regular mail not less than fourteen (14) days prior to the meeting.  The notice shall contain the date, time and place of the meeting and will disclose, with specificity, the following:
          (i)      The purpose of the Special Assessment.
          (ii)     A list of the bids submitted for the project stating the name of the bidder, the               date and amounts of each bid and the selected bidder’s information.
          (iii)    The amount of the Assessment, the interest rate, the type of interest (add on, amortized, rule of 78s, etc.), the term of repayment, a clause that states that there is no penalty for pre-payment in whole or in part, and a clause that states the default interest rate.
         (iv)     For Special Assessments to be levied for repairs (emergency or otherwise) for which there have been no bids, the minimum anticipated amount, based on verbal, projected estimated costs of like kind materials and labor, shall be levied. In addition to the requirements in (iii) herein, a statement may be included that after the work has commenced and/or bids for the work have been received and it is clear that a shortfall has or will occur, then in that event an
    additional Special Assessment may be levied.                                                   (v)    Included in the assessment disclosure shall be a statement that in the event that the anticipated costs at the conclusion of the project shall be less than the amount of the levy then in that event any overage shall be returned to the unit owner of record on the day of refund.

  6. The funds collected on account of Special Assessments shall not be co-mingled with any other funds of the association. Deposits to the Operating Fund Account(s) must be transferred to a separate account on, or before, the thirtieth (30) day of each month prior to the close of banking business.

  7. The use of Special Assessment funds and Reserve funds for any purpose other than that for which the funds have been collected shall be fraud and subject to prosecution. 

  8. Procedures before filing a Lien for defaulted assessments:

            (i)         The manager or a duly designated board member shall contact the unit/home owner to discuss the member’s reason(s) for default, including but not limited to obtaining a current Financial Statement for the purposes of determining the repayment amount(s). The financial information of any member shall be destroyed after either failure to perform under the terms of the agreement, sale of the property, or completion of all payments. 
     (ii)         A reasonably constructed “Repayment Agreement” shall be reviewed by the full board and if approved shall be proffered to the member. In the context of this Agreement the term “reasonable” shall be defined as that which is clearly within the financial resources of the member.
     (iii)        Repayment agreements shall also include an amount which shall be posted to current, monthly assessments.  Recognizing that it serves no useful purpose for an association to attempt to collect more than is available (the blood from stone concept) repayment of past due assessments and current  assessments, and special assessments, if applicable, shall be structured to total no more than one-fourth (1/4) of the total monthly income from all sources of the member.
     (iv)        The board of directors shall make every effort to conserve association funds by having the association’s counsel prepare a template (form) for the board’s use in preparing Repayment Agreements prior to incurring any legal collection fees.

  1. All persons or companies that employ Community Association Managers shall be registered with the DBPR in the same way that Real Estate Brokerage firms are registered.  Both the main office and any branch office at which the licensees work shall be registered together with the names, addresses, and license numbers of all licensees working at the company.  Change of employing company shall be reported to the DBPR within ten (10) days by both the employing company and the licensee. The DBPR shall determine the fees pertaining to company registration.

  2. Individual Level 2 Licensees employed by associations shall at all times and within ten (10) days of changing employers report the changes to the DBPR on a form promulgated for that purpose.

  3. Minutes of all meetings of the board of directors, the membership, the annual membership meetings and meetings of committee members shall be published to the membership within twenty (20) days of the meeting.  Copies of the minutes may be made available, at no charge, to the member in the association’s clubhouse, meeting room, or other specifically designated area within the community.  Posting a complete copy on a community bulletin board is acceptable provided that copies shall be made available, at no charge, to the member on request.  Minutes of meetings where assessments were considered, discussed and approved shall be included in the mailings. If the association has a closed circuit TV or website, the minutes may be included in these venues.

  4. The association shall initiate and maintain a consistent form of communication to the membership.  The method may be by closed circuit TV, a website or Newsletter.  The communication shall contain all information known to the board at the time of dissemination.  Policy, procedures, goals, both long term and strategic, should be the basis of the communication. Governing documents, including all amendments and rules and regulations shall be a part of any website.

  5. All proposed amendments to the governing documents, including the Rules and Regulations shall first be proposed to the membership at a duly noticed meeting where a quorum has been attained.  The complete form of the amendment shall be prepared and delivered to the membership together with a Limited Proxy which shall either contain the complete text of the proposed amendment(s) or, if the amendments are lengthy they may be attached in which case the Limited Proxy shall clearly state that the amendment(s) is attached to and a part of the Limited Proxy.  Voting on amendments to the governing documents and rules shall be by ballot contained within a sealed envelope which shall be placed in a mailing envelope for return to the association; or for the members’ use in placing the sealed ballot envelope in a ballot box at the meeting.

  6. Prior to preparing amendments to the governing documents or rules the board shall have researched the applicable statute(s) and, if required, case law and references to the supporting authority shall be made by the board in the Limited Proxy.  Example:  Pursuant to CH ____F.S,, Article XXX , and Article XX of the Declaration of (Condominium) or (Covenants, Conditions and Restrictions)  the board of directors has determined that in the interest of preserving the _________certain changes should be authorized by the membership/

  7. The failure of an association to provide access to the official records within ten (10) business days of the date of receipt of the written request establishes a presumption that the association refuses to comply with this sub-section.  In the event that the record requested in fact does not exist then in that event the association must provide written notice to the member, within the ten (10) business day period, stating the facts, events and/or reasons for the non-existence of the requested record(s). 

  8. A member who is denied access to the official records is entitled to damages for the association’s failure to comply with this sub-section. The minimum damages are $50.00 per calendar day, up to ten (10) calendar days, the calculation to begin on the eleventh (11th) business day after receipt of the written request.

  9. In the event that the member shall have been denied access to the requested records and the member proceeds to pre-suit Mediation (or Binding Arbitration) and the association shall subsequently agree to provide the record(s) then in that event the association shall reimburse the member for the member’s out of pocket expenses incurred in the Mediation (or Binding Arbitration).

  10. 720.305 (4):  If an association fails to fill vacancies on the board of directors sufficient to constitute a quorum in accordance with the by-laws, any member may apply to the circuit court that has having jurisdiction over the community served by the association  the subject matter, for the appointment of a r Receiver to manage the affairs  operate the association corporation.  At least 30 15 days before applying to the Circuit Court,,,,,,,,,,,…giving the association 30 15 days to fill the vacancies. All filing fees, attorney fees and costs incurred by the member in this cause shall be reimbursed to the member by the Receiver upon appointment.

  11. 720.305 (4) (a):  If ten percent (10%) of the association membership shall agree by the execution of a Joinder,  prepared for the purpose, that the seated board of directors is unable by reason of inexperience, other commitments, inability to properly operate the association corporation; or the members have determined that fraud has occurred, association funds have been misappropriated  or that the board of directors has wasted the corporate assets by virtue of their actions or inactions, and the members are unable to qualify members to serve on the board sufficient in numbers to constitute a quorum,  then in that event the members may apply to the circuit court having jurisdiction over the subject matter, for the appointment of a Receiver to operate the association corporation.  All attorney fees and costs incurred by the members bringing the action shall be reimbursed to the members by the Receiver upon appointment.
  12. All contracts for services, including leasing, purchasing, renting, professional services including legal, engineering, or other, shall contain a thirty (30) day cancellation clause whereby either party may cancel the contract without cause. 
  13. Proxy Voting:  No association’s by-laws may prohibit a member from voting by Limited Proxy at a meeting duly noticed and where a quorum has been attained. The members may vote, by Limited Proxy, all matters coming to the membership for a vote. The Limited Proxy shall list each item requiring a vote together with a line or box wherein the member may cast his vote for the matter.
  14. 720.306 (9):  No association’s by-laws may prohibit a non-resident, or incapacitated member from voting for the election of board members by limiting the members’ right to vote to only those members voting in person. (All elections of directors must be conducted as prescribed in 61B-23.0021).
  15. 61B-_________: The first notice of the date of the election, which is required to be mailed, electronically transmitted, or delivered not less than 60 days before a scheduled election, must contain the name and correct mailing address of the association. Failure to follow the procedures for giving the first notice of the date of the election shall require the association to conduct a new election, if the election has been conducted.  Where the election has not occurred, the association shall mail, transmit, or deliver an amended first notice to the eligible voters, which shall explain the need for the amended notice, not less than 60 days before the scheduled election.  If an amended notice cannot be mailed, transmitted or delivered not less than 60 days before the election, then the association must re-notice and reschedule the election.

    (1) A unit owner or other eligible person desiring to be a candidate for the board of administration shall give written notice to the association not less than 40 days before a scheduled election. Written notice shall be effective when received by the association. Written notice shall be accomplished in accordance with one or more of the following methods:

    (a) By certified mail, return receipt requested, directed to the association; or

    (b) By personal delivery to the association; or

    (c) By regular U.S. mail, facsimile, telegram, or other method of delivery to the association.

    (2) Upon receipt by the association of any timely submitted written notice by personal delivery that a unit owner or other eligible person desires to be a candidate for the board of administration, the association shall issue a written receipt acknowledging delivery of the written notice. Candidates who timely submit a written notice by mail may wish to send the written notice by certified mail in order to obtain a written receipt.

    (3) Upon the timely request of a candidate as set forth in this paragraph, the association shall include, with the second notice of election described in subsection (4), a copy of an information sheet which may describe the candidate's background, education, and qualifications as well as other factors deemed relevant by the candidate. The information contained therein shall not exceed one side of the sheet which shall be no larger than 8 1/2 inches by 11 inches. Any candidate desiring the association to mail or personally deliver copies of an information sheet to the eligible voters must furnish the information sheet to the association not less than 35 days before the election. If two or more candidates consent in writing, the association may consolidate into a single side of a page the candidate information sheets submitted by those candidates. The failure of an association to mail, transmit or personally deliver a copy of a timely delivered information sheet of each eligible candidate to the eligible voters shall require the association to mail, transmit, or deliver an amended second notice, which shall explain the need for the amended notice and include the information within the time required by this rule.  If an amended second notice cannot be timely mailed, transmitted or delivered, the association must re-notice and reschedule the election.  If the election has already been conducted, the association shall conduct a new election. No association shall edit, alter, or otherwise modify the content of the information sheet. The original copy provided by the candidate shall become part of the official records of the association.

    (4) In accordance with the requirements of (Section 718.112(2)(d)), Florida Statutes, the association shall mail or deliver to the eligible voters at the addresses listed in the official records a second notice of the election, together with a ballot and any information sheets timely submitted by the candidates. The association shall mail or deliver the second notice no less than 14 days and no more than 34 days prior to the election. The second notice and accompanying documents shall not contain any communication by the board that endorses, disapproves, or otherwise comments on any candidate. Accompanying the ballot shall be an outer envelope addressed to the person or entity authorized to receive the ballots and a smaller inner envelope in which the ballot shall be placed. The exterior of the outer envelope shall indicate the name of the voter, and the unit or unit numbers being voted, and shall contain a signature space for the voter. Once the ballot is filled out, the voter shall place the completed ballot in the inner smaller envelope and seal the envelope. The inner envelope shall be placed within the outer larger envelope, and the outer envelope shall then be sealed. Each inner envelope shall contain only one ballot, but if a person is entitled to cast more than one ballot, the separate inner envelopes required may be enclosed within a single outer envelope. The voter shall sign the exterior of the outer envelope in the space provided for such signature. The envelope shall either be mailed or hand delivered to the association. Upon receipt by the association, no ballot may be rescinded or changed.

    (5) The written ballot shall indicate in alphabetical order by surname, each and every unit owner or other eligible person who desires to be a candidate for the board of administration and who gave written notice to the association not less than 40 days before a scheduled election, unless such person has, prior to the mailing of the ballot, withdrawn his candidacy in writing. The failure of the written ballot to indicate the name of each eligible person shall require the association to mail, transmit, or deliver an amended second notice, which shall explain the need for the amended notice and include a revised ballot with the names of all eligible persons within the time required by this rule.  If an amended second notice cannot be timely mailed, transmitted or delivered, then the association must re-notice and reschedule the election.  If the election has already been held, under these circumstances the association shall conduct a new election.  No ballot shall indicate which candidates are incumbents on the board. No write-in candidates shall be permitted. No ballot shall provide a space for the signature of or any other means of identifying a voter. Except where all voting interests in a condominium are not entitled to one whole vote (fractional voting), or where all voting interests are not entitled to vote for every candidate (class voting), all ballot forms utilized by a condominium association, whether those mailed to voters or those cast at a meeting, shall be uniform in color and appearance. In the case of fractional voting, all ballot forms utilized for each fractional vote shall be uniform in color and appearance. And in class voting situations, within each separate class of voting interests all ballot forms shall be uniform in color and appearance.

    (6) Envelopes containing ballots received by the association shall be retained and collected by the association and shall not be opened except in the manner and at the time provided herein.

    (a) Any envelopes containing ballots shall be collected by the association and shall be transported to the location of the duly called meeting of the unit owners. The association shall have available at the meeting additional blank ballots for distribution to the eligible voters who have not cast their votes. Each ballot distributed at the meeting shall be placed in an inner and outer envelope in the manner provided in subsection (8) of this rule. Each envelope and ballot shall be handled in the following manner. As the first order of business, ballots not yet cast shall be collected. The ballots and envelopes shall then be handled as stated below by an impartial committee as defined in paragraph (b) below appointed by the board. The business of the meeting may continue during this process. The signature and unit identification on the outer envelope shall be checked against a list of qualified voters, unless previously validated as provided in paragraph (b) below. Any exterior envelope not signed by the eligible voter shall be marked “Disregarded” or with words of similar import, and any ballots contained therein shall not be counted. The voters shall be checked off on the list as having voted. Then, in the presence of any unit owners in attendance, and regardless of whether a quorum is present, all inner envelopes shall be first removed from the outer envelopes and shall be placed into a receptacle. Upon the commencement of the opening of the outer envelopes, the polls shall be closed, and no more ballots shall be accepted. The inner envelopes shall then be opened and the ballots shall be removed and counted in the presence of the unit owners. Any inner envelope containing more than one ballot shall be marked “Disregarded”, or with words of similar import, and any ballots contained therein shall not be counted. All envelopes and ballots, whether disregarded or not, shall be retained with the official records of the association.

    (b) Any association desiring to verify outer envelope information in advance of the meeting may do so as provided herein. An impartial committee designated by the board may, at a meeting noticed in the manner required for the noticing of board meetings, which shall be open to all unit owners and which shall be held on the date of the election, proceed as follows. For purposes of this rule, “impartial” shall mean a committee whose members do not include any of the following or their spouses:

    1. Current board members;

    2. Officers; and

    3. Candidates for the board.

    At the committee meeting, the signature and unit identification on the outer envelope shall be checked against the list of qualified voters. The voters shall be checked off on the list as having voted. Any exterior envelope not signed by the eligible voter shall be marked “Disregarded” or with words of similar import, and any ballots contained therein shall not be counted.

    (c) If two or more candidates for the same position receive the same number of votes, which would result in one or more candidates not serving or serving a lesser period of time, the association shall, unless otherwise provided in the bylaws, conduct a runoff election in accordance with the procedures set forth herein. Within 7 days of the date of the election at which the tie vote occurred, the board shall mail or personally deliver to the voters, a notice of a runoff election. The only candidates eligible for the runoff election to the board position are the runoff candidates who received the tie vote at the previous election. The notice shall inform the voters of the date scheduled for the runoff election to occur, shall include a ballot conforming to the requirements of this rule, and shall include copies of any candidate information sheets previously submitted by those candidates to the association. The runoff election must be held not less than 21 days, nor more than 30 days, after the date of the election at which the tie vote occurred.

    (7) Any voter who requires assistance to vote by reason of blindness, disability, or inability to read or write, may request the assistance of a member of the board of administration or other unit owner to assist in casting his vote. If the election is by voting machine, any such voter, before retiring to the voting booth, may have a member of the board of administration or other unit owner or representative, without suggestion or interference, identify the specific vacancy or vacancies and the candidates for each. If a voter requests the aid of any such individual, the two shall retire to the voting booth for the purpose of casting the vote according to the voter’s choice.

    (8) At a minimum, all voting machines shall meet the following requirements:

    (a) Shall secure to the voter secrecy in the act of voting;

    (b) Shall permit the voter to vote for as many persons and offices as he is lawfully entitled to vote for, but no more;

    (c) Shall correctly register or record, and accurately count all votes cast for any and all persons;

    (d) Shall be furnished with an electric light or proper substitute, which will give sufficient light to enable voters to read the ballots; and

    (e) Shall be provided with a screen, hood, or curtain which shall be made and adjusted so as to conceal the voter and his actions while voting.

    (9) Notices of election, notices of candidacy for election, information sheets, voting envelopes, written approval of budgets, written agreements for recall of board members, ballots, sign-in sheets, voting proxies, and all other papers relating to voting by unit owners shall be maintained as part of the official records of the association for a period of 1 year from the date of the election, vote, or meeting to which the document relates.

    (10) Election Monitors. As provided by (Section 718.5012(9)), Florida Statutes (2004), fifteen percent of the total voting interests entitled to vote at the annual meeting of unit owners for the election of directors, or the owners of six units entitled to vote at the annual meeting of unit owners for the election of directors, whichever number is greater, may petition the Ombudsperson for the appointment of an election monitor.  The procedures for filing a petition for the appointment of an election monitor are contained in Rule (61B-23.00215), F.A.C.

SUMMARY AND CONCLUSION

CURRENT LAW DOES NOT PROVIDE FOR THE PROTECTION OF REAL PROPERTY AND CONTRACT RIGHTS.


all common interest realty associations exist under “contracts” which define the association’s agreements to perform certain maintenance responsibilities and provide certain services in consideration of the payment of sums of non-refundable money.

Contract breaches by the board of directors occur daily.  Owners have no cost effective access to resolution.

Members of a board of directors must receive corporate/business management education.

persons becoming corporate managers who are responsible for the day to day operations of a community must be properly educated and licensed.

dispute resolution must be changed to a set pattern:  ombudsperson, binding arbitration.  mediation must be deleted due to the high costs involved with no resolution, resulting in litigation or loss of rights.

promulgated forms for documents amendments should be statutory.

meeting notices, information and posting are insufficient.  minutes must be provided, at no cost, to unit owners, or published as stated in page 13.

rational dialogue between a committee or board with an owner approaching default status, prior to lien filing, should be statutory.

registration of community association management companies should be mandatory and include all licensees under the company.

all decisions of a board of directors should be supported by the applicable portion of the governing documents, state law or case law.

access to the official records, when denied for non-existence must be supported by the association’s reasons.

access to the official records, when denied after the statutory time period presumes willful refusal (is non rebuttable).

it is understood that all funds of an association were generated by the owners of real property and that all records generated by persons in positions of authority (board members) and managers are the undisputed property of the unit/home owners.  the inalienable right to accounting for the funds and receipt of all records must be clearly stated in law.

the inclusion of clauses in by-laws which prohibit non-resident owners from voting at members’ meetings unless they physically appear to cast their vote(s) is unconstitutional and must be corrected in the statute.

a table of fines for non-compliance with the governing documents and/or state law should be promulgated.  collection of the fines shall be through County court in the applicable jurisdiction.


ALL OWNERS IN MANDATORY COMMON INTEREST REALTY COMMUNITIES ARE SIMILARLY SITUATED AND MUST THEREFORE RECEIVE COMMON CONSIDERATION AND COST EFFECTIVE REDRESS UNDER THE LAW.



NEWS PAGE HOME HOA ARTICLES