Q: Our community turned over from developer control roughly six months ago and the Board is still trying to wrap up loose ends. Shouldn’t this be done by now?
A: The same developer will actually develop each community differently, with different documents, different products, different management teams, different subcontractors, different accountants, and different attorneys. There is no such thing as a standard playbook or standard timeline for turnover. At a minimum, the statute provides that the developer has ninety (90) days from turnover to deliver various documents and studies, and most importantly an engineering study and certified audit (note that the specific documents required to be delivered may vary depending on the age of your community). So, if the Board wants to have the developer’s financial audit reviewed by its own accountant, it may not be able to even start the process until months after the owners take control of the Board. Additionally, if the Board engages its own engineer to review aspects of construction, it may take weeks or months to complete the study, analyze the study, and begin negotiations or legal action with the developer. On top of that, if you do have a defective construction problem, there is a statute which requires the association to provide a rather long window of time for the developer to respond after you make a written demand for repairs.
In other words, if there is a contested situation, six months is certainly not unreasonable and, depending on the complexity and whether litigation is necessary, it could take years to resolve all issues. The critical part is that the Board seeks counsel from licensed accountants, attorneys and construction professionals when appropriate. Every turnover has a unique set of circumstances and personalities, and therefore it is critical that the Board is relying on professional advice when navigating the turnover process.
Q: Our Board is dealing with a difficult tenant that is routinely breaking the rules and verbally attacking the manager and gate attendant on a daily basis. Our governing documents are about 20 years old and barely discuss tenants. What are our remedies to compel the tenant to comply with the rules or remove the tenant?
-T.D., Marco Island
A: This is a very common question and the answer is very fact specific to your governing documents. The first question is whether your documents provide the Board with the ability to approve or deny leases and whether the association has a definition of good cause for a denial. It is generally considered good cause to deny a lease where the tenant has previously demonstrated disdain for the rules in your community. Thus, if the tenant is nearing the end of the lease, one option may simply be to deny any future lease application. If this remedy is an option, it is usually the most cost effective solution and avoids having to pursue eviction or other remedies.
In addition or as an alternative, remember that the owner is generally responsible for the acts of the owner’s tenant. Thus, if the tenant is violating the rules, the owner can be fined for the violations of the tenant. Florida law provides that you can fine up to $100 per day per violation and landlords are generally not happy with losing lease revenue. If the owner places pressure on the tenant to comply with the rules, that can be helpful.
The association may also be able to evict the tenant. This can be tricky and you should certainly consult a licensed Florida attorney to review your governing documents and advise the Board. For example, Chapter 83 of the Florida Statutes governs residential tenancies and evictions and can require written notices and cure opportunities before you can evict. It is also important that the governing documents include a statement that the Association is deemed an agent of the owner with the ability to evict a tenant in the event of a tenant’s violation. Missing a critical step in the eviction process can be expensive for the Association.
Q: Our Bylaws provide that the size of the Board of Directors shall be five, but the Board recently announced that it will be adding two new members. The rumors are that the majority is trying to stack the Board more in its favor. Can the Board do this?
A: Probably not, but the answer depends on your specific governing documents. The first part of the analysis requires a very detailed reading of the governing documents. This is a common question and the Bylaws generally dictate the size of the Board, and often dictate how to increase or decrease the size of the Board, and more importantly whether a membership vote is required. It is also important to review the Articles of Incorporation which may also address this issue. If the Bylaws do not expressly provide a mechanism for the Board alone to increase or decrease the size of the Board, the general rule is that a membership vote is required to amend the Bylaws.
Second, assuming the Board did have the authority to fill vacancies or add Directors, I should note that it is not unlawful for the Board to appoint members that agree with a majority of the Board on various issues. If the candidates are eligible under Florida law, they may serve.
Q: Our homeowners association relies very heavily on its manager. There is a perception that the Board relies too much on the manager and is mostly disinterested. Can the Board hide behind the manager in this way?
-B.D., Bonita Springs
A: There is a saying that you can delegate authority, but you can’t delegate responsibility. The Board has the fiduciary obligation to carry out the covenants in the governing documents, not the manager. The manager often plays a crucial role in the day to day operations and is often invaluable to the success and vitality of a community association, but the Board should not ignore its responsibilities just because it has contracted with a manager, or hired a manager, to handle the day to day operations. To the extent the Board has delegated authority to its manager to operate the association, the Board must still exercise reasonable oversight.