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Can condo associations regulate and restrict rentals?

Q. My condo association held a meeting and conveniently our invitation was lost in the mail. They met and voted to no longer allow renters in the complex. At the time, we were the only owners who were leasing our condo because we had to relocate for a job. Can they really force us to either sell our home or leave it empty? — M.D.

A. The issue of renters in condominium associations is one of those” hot button” issues we most frequently encounter.

There is a lot of confusion and mistakes are made in this area by condo boards that wish to regulate and restrict rentals. It is first critical to look at your condominium documents.

Even if there are issues with unruly tenants in your community, the board of directors, on its own, has no legal authority to pass a rule that prohibits or materially restricts rentals if the recorded condominium documents permit unit owners to freely rent their units. An amendment to the condominium documents by the membership, however, is different.

The members of a condo or homeowners association are generally free to change the covenants and restrictions of their community by a voting process authorized in the community documents. Rental restrictions approved by the membership will likely be enforceable if they are not completely arbitrary and do not result in violation of fair housing and discrimination laws.

However, rental restrictions that become part of the condominium documents by an amendment are enforceable against only certain owners.

The Florida Condominium Act protects unit owners who owned their unit before the amendment was passed and who did not specifically consent to the amendment. [See Fla. Statutes section 718.110(13)]. Regardless of whether you actually received notice of the meeting, the fact that you did not attend and vote in favor of the amendment is a huge factor in your favor.

If you choose not to pursue legal action against your association, at the minimum you should be able to negotiate a “grandfather” exception for your current lease since you did not consent to the amendment and because the new rule is so detrimental to your property rights. The fact that you never actually received notice of the meeting may be a moot point since you did not consent to the amendment.

For informational purposes, however, the association is required to send written notice of a membership meeting (typically 14 days in advance) to your official address on file with the association. You have the right under Florida law to inspect the association’s official records to confirm that 1) notice of the meeting was in fact sent to your correct address and that 2) the association completed the affidavit required by statute certifying that the meeting was properly noticed.

You should consult with a community association attorney should you wish to challenge the amendment and for guidance on how to obtain all records that might help your case.

Q. Our overly-aggressive and wealthy board leadership decided to renovate the clubhouse to the tune of $300,000 and sent all of the homeowners a special assessment to share the costs. The board of director’s wife hired an interior designer, who in turn took their lead from the wife’s color palette and other recommendations. When spending to renovate the clubhouse, they depleted our cash reserves, so now everything moving forward is requiring special assessments. Many of the owners wonder how they were able to push this through so quickly without even conducting a membership or “town hall” meeting. Now, we have foreclosures, which are dragging down the value of the community, when something less expensive could have been achieved. Do we have any ability to challenge the actions taken by our board, especially since we rarely even use the clubhouse? — D. K.

A. Clubhouse renovations and other material alterations to the association’s common areas need to pass very strict legal standards.

Generally, the association’s board of directors has the authority to pass a special assessment to raise money for projects, without a vote of the membership, if the funds are necessary to repair, replace and/or protect the association’s common areas.

For example, if the clubhouse was constructed with defective “Chinese” drywall or if the condominium buildings needed concrete restoration work to ensure safety, the board would have the authority to pass a special assessment to make the necessary repairs.

However, other alterations and projects that are merely desirable or aesthetic in nature (and not critical for the protection of common areas or safety of residents) must be approved by the membership before association funds can be used for the project.

Florida law will require a vote of at least 75 percent of the entire membership unless the community documents state a different voting requirement. Regardless of whether a membership vote was required, written notice to the membership (at least 14 days in advance) was certainly required for the meeting at which the special assessment was passed.

Further, the financial interest of the president and his wife should have been discussed and approved by a majority of non-interested board members at the board meeting at which the project was approved. Any director(s) who willfully ignored these important notice and disclosure requirements could face personal liability for improper expenditure of association funds.

The fact that you rarely use the clubhouse is not relevant since all members have equal financial responsibility for maintaining and repairing the common areas.

However, for reasons discussed above, there could be some fatal legal flaws with the procedure followed by your board of administration.

We strongly recommend that you consult with a community association attorney if you are considering legal action against the association.