By Attorney Steven J. Adamczyk
Q: As hurricane season approaches, we are cognizant that our Board of Directors and most of our residents are scattered between multiple states. If a hurricane approached Naples, we are obviously not able to make sure the property is safe. Do you have any recommendations for addressing this problem?
A: This is a great question and there are many recommendations on hurricane preparedness, and we will be addressing more throughout the summer months. On a practical level, many communities will engage priority vendor agreements so that they receive first priority for service after a disaster such as debris cleanup after a hurricane. Others will create a program where owners bring in their patio furniture and outside fixtures to mitigate the potential damage from those items. Others will pursue a program to replace all of the glass in the building with code complaint hurricane glass to seal the building envelope.
On a legal level, one of the greatest concerns is premises liability in the event of a hurricane. If a hurricane knocks out the power, how are Board members supposed to make sure people are not in the elevator? If a window is broken and there is glass and water on the lobby floor, what if nobody is available to immediately clean it up or place a sign? Ultimately, Directors are volunteers that may be evacuating with their family and they should be free to do so.
One recommendation is to have a standing resolution to facilitate evacuations and to limit liability. Specifically, section 718.1265 of the Florida Statutes providing for emergency powers provides (as of the date of drafting this response) that a condominium may “require the evacuation of the condominium property in the event of a mandatory evacuation order in the locale in which the condominium is located. Should any unit owner or other occupant of a condominium fail or refuse to evacuate the condominium property where the Board has required evacuation, the association shall be immune from liability or injury to persons or property arising from such failure or refusal.” This means that if there is an evacuation order from local government, the Board may likewise issue an evacuation order and the Association is immune from liability against those who stay and are injured. This is important because Directors do not have police power to force an owner to evacuate (and they should not try either) and therefore this statute provides civil protection for those who do not evacuate.
We recommend condominium clients have a resolution and notice to owners ready in the event a hurricane is approaching the area. This is because you may not have access to attorneys or professionals in the immediate hours leading up to a hurricane and having the resolution and notification drafted in advance would facilitate a quick approval when necessary. You should consult your association counsel if you have questions or seek assistance in drafting the resolution and notice to utilize the provisions of the statute referenced above.
Q: We recently discovered that the replacement costs for some of our common elements is much higher due to material shortages and labor costs. Now that we know the reserves are not correct, can the Board notify the owners and increase the reserve assessment to account for the increases?
P.M., Bonita Springs
A: Sort of. The Condominium Act provides that “the association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance.” Thus, part of the answer to your question is that the association may adjust the replacement cost to account for anticipated replacement costs as end of the component’s useful life.
That being said, the Board may not just make an announcement and change the reserve schedule because this would require a modification to the budget, which means you must have a duly noticed meeting of the Board to consider an amended budget in the middle of the fiscal year. If the budget is adopted by the Board, the difference would be made up in the remaining payments for that fiscal year.
Ultimately, note that the statute provides that the association may “annually” take changes into account. The Board is not required to amend the budget every few months based on futures projections and labor reports and so you can most likely wait until your next normal budget cycle, but you can update the budget in the middle of the fiscal year if the Board believes it is appropriate.
Q: The condominium facilities committee has recommended some major changes to our common areas, including new flooring, furniture and wallpaper. The total cost is roughly $100,000. Do the owners need to vote on each change, or can all changes be approved with a single vote?
R.R., Marco Island
A: The default rule in Florida is that material alterations in a condominium must first be approved by the unit owners. Specifically, Section 718.113 provides that at least 75% of the total voting interest must approve a material alteration unless the condominium documents provide for a different threshold. The term “material alteration” is also very important and is generally defined as a palpable or perceptive change in the use, function or appearance of the common elements or association property. This means that the default rule is that changing the wallpaper in the lobby must first be approved by at least 75% of the entire voting interest.
The good news (for many of you) is that most of your condominium documents provide a different procedure. Most condominium associations and developers now realize that it is impractical and expensive to pursue a vote of the owners for small or insubstantial changes. As a result, the first part of this answer is that you first need to determine whether your condominium documents require a vote in the first place for the changes referenced in your question.
Some documents focus on the cost of the entire project, and others focus on the cost of specific components and changes. Thus, depending on the language in your particular condominium documents, the analysis could shift from the total project cost to whether the furniture, or the wallpaper, or the flooring, independently exceed a minimum threshold triggering prior approval by the members.
Next, assuming that a vote is required, you could choose to either pursue a single vote for all alterations, or you could choose to pursue separate votes for each item. The advantage of the latter is obviously that you can theoretically obtain approval for most of the alterations if there is one controversial alteration that could jeopardize the entire alteration project.
Either way, I typically recommend including language that also provides some discretion to the Board. Sometimes this means including a graphical depiction from the designer and seeking a vote to authorize the Board to substantially comply with the graphical depiction and authorizing the Board to exercise limited discretion with respect to materials, location, and decor. You can imagine that it would be easy to include wallpaper and flooring specifications in a vote, but you may not have the exact armchair or throw pillow selected at the time of the vote, meaning that the Board typically needs some discretion for minor decisions and that discretion should be included in the vote. In addition, if there is a shortage of materials, you would want to provide the Board with some discretion to pick a very similar material or color to avoid the project being delayed due to material availability.
Ultimately, we highly recommend you consult with a Florida licensed attorney to review your specific condominium documents, the specific changes the Board wants to pursue, and making a recommendation which is specific to your condominium. This may include first pursuing an amendment to your documents to clarify whether a vote is required or to change the threshold to approve a material alteration project, or it could mean obtaining opinions from licensed contractors to determine whether a proposed alteration is also an exception to the statute or covenant requiring owner approval such as alterations which are necessary for the preservation or protection of the condominium.