By Attorney Richard D. DeBoest
Q: Can a domestic partner of an owner, run for the HOA Board of Directors? The partner is not listed on the property title itself, nor named in a trust, so would not be covered by those co-ownership statutes.
A: Chapters 718 for condominium, 719 for cooperatives, 720 for homeowner associations and 617 for not-for-profit corporations do not require a person to own a Lot or Unit in the community to serve on the Board of Directors. However, most governing documents do. So, you need to check the governing documents to determine the eligibility requirements to serve as a Director. If the documents are silent then the domestic partner could serve on the Board as long as he or she is 18 years old, not a convicted felon without his or her civil rights restored for at least 5 years and is not indebted to the Association for any monetary amount. However, if the governing documents require Directors to be owners or the spouse of an owner if the domestic partner is not named on the deed and is not legally married to the owner then he or she would not be eligible.
Q: I live in a condominium community. At a Board meeting, the treasurer, on her own, and no record in the BOD minutes, gave a cash gift to outgoing Board Members who served 8 years. Even her husband who served for 7 years but left the BOD a year ago, received the same amount.
Is this a violation of Trustees fiduciary responsibility? What can we do to have our money restored to our treasury? Can penalties be imposed? We owners want to do something to protect our assets. By the way, not one member of the BOD objected.
A: Yes, this is improper for several reasons. First the condominium act prohibits directors or officers from being paid for their service unless the members have voted to approve the payment. Second, the treasurer would not typically have the authority to make a unilateral decision like this without a vote of the Board. Third, the treasurer has a conflict of interest by giving association funds to her spouse and finally this is an improper use of Association funds because making cash gifts to others is not a common expense. The money should be returned by those who received it.
Q: Our HOA has five board directors, routinely two of the board directors meet privately to discuss HOA business in preparation for the formal board meeting. Is this meeting of the two members legal and/or proper?
A: The law provides that when a quorum of the Board meets and discusses association business it constitutes a Board meeting and must be properly noticed. The Owners also have the right attend all Board meetings with the exception of Board meetings with legal counsel to discuss proposed or pending litigation or personnel matters. In this case you indicate the Board has five Directors. So, two Directors does not constitute a quorum. Therefore, the meetings are not considered Board meetings and not notice would be required.
Q: Our HOA board directors voted via email not to publish HOA monthly financials on our website. Is this legal they made this decision via email?
A: The Condominium Act and HOA Act both prohibit Board members from voting by e-mail. So, no the vote was not legal. The Board should ratify and affirm this decision at a properly noticed Board meeting
Q: I live in a small condominium community that has always had a no smoking policy at the pool, however, it was never put in writing and the new Board has decided that smoking is allowed. Are there any laws that would make it nonsmoking?
A: First, you need to check the governing documents and determine if the Board has rule making authority at all. Most documents do provide for it but some do not. Others provide for it but still require the Members to approve the rule. If the Board does have such authority then it could impose a no smoking rule at the pool and later another Board could rescind the rule.
There are no laws that prohibit smoking at a pool as long as it is outdoors. If the pool was an indoor pool then the Clean Indoor Air Act would prevent smoking.
Q: I recently attended your 2021 legal update webinar. You mentioned a new law about a courtesy reminder letter before an assessment account can be sent to the attorney for collections. Can you explain that law?
A: As of July 1, per the new law for Condominiums, Cooperatives and Homeowner Associations the Manager/Association needs to send a letter to all persons who are late in paying their assessments before sending any person to collections with the attorney. If the letter is not sent, then NO Attorney fees can be incurred later. The notice must be sent by first class mail (but does not have to be sent certified). It must be sent to the Owner’s chosen mailing address as listed in the file and IF the mailing address is NOT the Unit, then the letter must also be sent to the Unit. The sender MAY complete an affidavit attesting to the fact that they sent the letter. If they do the affidavit creates a rebuttable legal presumption that the sender did everything right which would be important later if the collection matter is contested in Court.
This should not be too difficult since most associations already send a “Friendly Reminder” late notice before a file is sent to collections. But now they get 30 days to pay which may be longer than some Association’s presently allow.
The Statutes contain a form letter for this purpose, and you should use that letter.
An area of uncertainty is can the CAM or Association add a fee for sending this letter to the debtor? Many already do but the issue is since this Statutory Form does not list such a charge does that mean they cannot add it on? The Statute only says attorney fees can’t be incurred if the letter is not sent it does not say “costs” can’t be incurred so thus the debate.