By Attorney Richard D. DeBoest
Q: Is it improper or illegal to name a delinquent owner and the amount owed in the minutes of a meeting where the board votes to suspend an owner’s voting rights?
A: No, the minutes should reflect enough information to identify the property or unit and owner in question. Such as a motion stating, “I move that the voting rights of the owner of Lot # be suspended due to the owner being delinquent in the payment of assessments owed to the association for more than 90 days.” So, while it is not illegal to name the person, we generally recommend you do so in the manner indicated above.
Q: In the absence of a unanimous board vote (on any matter), are the names of the directors voting Aye and Nay to be recorded in the minutes?
A: Whether the vote is unanimous or not, the vote of each director should always be recorded in the minutes per the law. See applicable Statutes below. This is commonly overlooked and the votes are recorded as unanimous or for example, two in favor—one against, but this is not proper.
718.111(1)(b) A director of the association who is present at a meeting of its board at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless he or she votes against such action or abstains from voting. A director of the association who abstains from voting on any action taken on any corporate matter shall be presumed to have taken no position with regard to the action. Directors may not vote by proxy or by secret ballot at board meetings, except that officers may be elected by secret ballot. A vote or abstention for each member present shall be recorded in the minutes.
720.303(3) MINUTES – Minutes of all meetings of the members of an association and of the board of directors of an association must be maintained in written form or in another form that can be converted into written form within a reasonable time. A vote or abstention from voting on each matter voted upon for each director present at a board meeting must be recorded in the minutes.
Q: What constitutes a conflict of interest regarding a homeowner’s association board member? I have issues with our landscape contractor not performing according to his contract. I’ve brought this to the attention of the president of our board on more than one occasion. He indicates he’ll look into the matter, but to date nothing has changed. I’ve suggested we initiate bids for a new contractor, which also would allow the current contractor to bid as well. The current contractor has had his contract renewed now for several years. The response I got, and I quote, from the president was: “He does a great job and does a lot at no charge. I can say as long as I am president, we will not be changing landscapers. I have a great relationship with him, and I have no reason to change.” In my opinion these statements alone constitute a conflict of interest. Can the president be advised to recuse himself from making any decisions regarding this contractor?
A: The president expressing his support for the landscaper and his lack of desire to change is not a conflict of interest and does not disqualify the president from voting on matters involving the landscaper. A conflict of interest would need to involve the president or a member of his or her family being related to or working for the landscaper or owning part of the landscaping company. That is not the case here. If the landscape contract exceeds 10 percent of the total annual budget including reserves, then it needs to be competitively bid. The renewal of the same contract does not need to be competitively bid, but only if the contract contains a 30-day cancellation for any reason clause. If the contract does not contain the 30-day cancel clause then it does need to be competitively bid before it is renewed. See the applicable law below. Note the same law is found in Florida Statute 718 for condominiums but the threshold for requiring bidding is 5 percent. Also note that the board is not required to accept the lowest bid.
Florida Statute 720.3055 Contracts for products and services; in writing; bids; exceptions.
(1) All contracts as further described in this section or any contract that is not to be fully performed within 1 year after the making thereof for the purchase, lease, or renting of materials or equipment to be used by the association in accomplishing its purposes under this chapter or the governing documents, and all contracts for the provision of services, shall be in writing. If a contract for the purchase, lease, or renting of materials or equipment, or for the provision of services, requires payment by the association that exceeds 10 percent of the total annual budget of the association, including reserves, the association must obtain competitive bids for the materials, equipment, or services. Nothing contained in this section shall be construed to require the association to accept the lowest bid.
(2)(a)1. Notwithstanding the foregoing, contracts with employees of the association, and contracts for attorney, accountant, architect, community association manager, engineering, and landscape architect services are not subject to the provisions of this section.
2. A contract executed before October 1, 2004, and any renewal thereof, is not subject to the competitive bid requirements of this section. If a contract was awarded under the competitive bid procedures of this section, any renewal of that contract is not subject to such competitive bid requirements if the contract contains a provision that allows the board to cancel the contract on 30 days’ notice. Materials, equipment, or services provided to an association under a local government franchise agreement by a franchise holder are not subject to the competitive bid requirements of this section. A contract with a manager, if made by a competitive bid, may be made for up to 3 years. An association whose declaration or bylaws provide for competitive bidding for services may operate under the provisions of that declaration or bylaws in lieu of this section if those provisions are not less stringent than the requirements of this section.
(b) Nothing contained in this section is intended to limit the ability of an association to obtain needed products and services in an emergency.
(c) This section does not apply if the business entity with which the association desires to enter into a contract is the only source of supply within the county serving the association.
(d) Nothing contained in this section shall excuse a party contracting to provide maintenance or management services from compliance with s. 720.309.