Courtesy of The Sun Sentinel
August 11, 2013
just made the job of a homeowner's association board member a lot tougher
— and that's a good thing.
A new law that took effect this month requires more transparency,
accountability and professionalism from the state's 14,000-plus HOA
communities. And it holds to a higher standard those volunteers who serve
on boards of directors — owners who can wield a lot of power over their
Board members set monthly fees, dole out fines and control community
budgets. At their whim are other owners who have spent a lot of money to
buy into a neighborhood and invest in a community's common areas, such as
roadways and golf courses.
Requiring more from board members puts HOA law more in line with those
that govern condominium associations and better protects homeowners.
Transparency: The new law requires HOA directors to submit the
association's financial information to the Department of Business and
Professional Regulation, which collects similar data from condo
associations. Critics complain that making their financial ledgers
publicly available will compromise their negotiating power with vendors.
"People do not need to know the wealth of any community or lack of
wealth," Patti Lynn, president of the Broward Coalition, a non-profit
roundtable of homeowner and condo boards, told Sun Sentinel reporter Scott
Travis. But condo associations have made it work. Some condos already post
their budgets in clubhouses.
Accountability: The state now bars any board member from serving if
he or she has been charged with felony theft or embezzlement from an
association. Who can argue with keeping a fox from the hen house? Besides,
a wrongly accused board member may return to office upon acquittal or
after charges are dropped.
Professionalism: Practically any owner can serve on an HOA board
with a winning number of votes. No experience is necessary. But the new
law forces volunteers to get educated and attend certification courses.
Classes help directors become familiar with laws that govern community
elections, director meetings, competitive bid processes and more.
Serving on an HOA board should be encouraged, and congratulated. But there
are good reasons to keep a tight leash on those who accept this duty.
Consider that in 2007, a Hallandale Beach condo community lost $3 million
in a vendor kick-back scheme, pulled off by the association president and
three cohorts. Last month, a condo president was caught using more than
$148,000 in community cash to gamble at the Seminole Hard Rock Hotel &
Casino in Hollywood. And earlier this year, an HOA president near Orlando
resigned after it came to light he faced charges of fraud, grand larceny
and theft. He left before he would have been forced out by HOA reforms
that took effect this month.
Still, the new regulations are meeting some resistance. Critics fear they
will lead to other changes, including an annual $4-per-year fee like that
paid by condo owners to fund regulation and the office of an ombudsman.
Frankly, paying a few dollars a year for such protection is a bargain.
However, legislators should refrain from raiding condo state funds to
cover budget gaps, as has happened in recent years.
The truth is there is room for further reform in HOA law. The state's
Community Association Living Study Council, created by lawmakers five
years ago, recommends limiting a board's ability to borrow funds or set up
a line of credit without approval of members. The group also suggests
expanding the jurisdiction of small claims courts to cover HOA disputes,
sparing costly lawsuits. Others call for allowing unpaid fines to turn
into liens for homeowners, as state law allows for condo owners. All are
worthy of consideration.
Florida's HOA boards have long operated outside sensible regulation to the
detriment of owners,
Now homeowners in shared communities have more protections, and more
reasons to keep investing.