By Attorney Richard D. DeBoest
Q. We had our condominium election recently. Many homeowners live out of the State and some out of the country. They did not receive their election ballots in time to return them for the election because of the slow mail. This seems unfair as many owner votes did not count. I think the election should be redone to allow time for people to vote. – S.R., Naples
A. This has always been a common complaint, but it has become more frequent due to the slow mail delivery lately. The Condominium Act and the HOA Act require that that the notice of the annual meeting and election be sent at least 14 days before the date of the annual meeting and election. Nothing prevents the Association from sending the notice with more time such as 30 days in advance, but it is not required to do so although the Condominium Act does provide that the notice cannot be sent more than 34 days before the meeting. So, in your case as long as the notice and ballot were mailed at least 14 days before the meeting there is no violation of the law or code that would require the election to be done over. In the future in addition to sending the ballots with more time to return them the Board should consider adopting electronic voting. Electronic voting eliminates the mail delay problem and saves time and money counting votes and eliminates common errors such as an owner failing to sign the outside envelope.
Q. Given the recent scandal of a local management company and their handling of condominium funds, can you outline a way to verify these property management companies? Are there membership associations to look at? Are there ways to view their competency? I reviewed a couple of state websites to no avail. – J.P., Bonita Springs
A: Excellent question. There are no management specific objective rating services such a Martindale Hubble for lawyers or AM Best for insurance companies that I know of. General business rating services such as the Better Business Bureau are in my experience not much help in truly evaluating a management company. So, when doing so I would recommend that you review the management companies and the individual manager’s license history through the Department of Business and Professional Regulation. This can be done at www.myfloridalicense.com. Both the management company and the individual manager need to have a license. You can also review the license complaint history. However, when reviewing the complaint history, it is important to determine the outcome of the complaint. Unfortunately, often times in my experience disgruntled owners will file unfounded complaints that result in a finding of no cause on behalf of the manager. So, the mere filing of a complaint is not dispositive of the manager’s quality or ability. Next, you should check references and not just the references that the manager may provide you. There are several trade organizations that mangers and other vendors that service the community association industry typically belong too. Such as the Community Associations Institute. The local chapter website is www.southgulfcoastchaptercai.com . You can also consult Condominium Owners Managers Associates at www.comaofflorida.com. Finally, ask the Directors or officers of other community associations and your other professional vendors (CPA, lawyers, insurance agents and bankers) who they recommend.
Q. The major question I have is about the use of reserve funds by an HOA. Does state regulations require a membership vote and is there a certain percentage of the membership required to do so? Or can the board do so independent of a membership vote? Our own governing documents don’t mention this subject. – A.C., Fort Myers
A: Reserves for HOA’s under Chapter 720 Florida Statutes are treated differently than Condominium or Cooperative reserves under Chapters 718 and 719 Florida Statutes. First and foremost, Chapter 720 does not mandate reserves. It provides that IF the Owners vote to establish reserves or the governing documents for the community require reserves then those reserves are controlled by the Statute. In the industry this type of HOA reserve is commonly referred to as an HOA Statutory reserve. HOA Statutory reserves, like Condominium and Cooperative reserves, must: 1. Be fully funded every year when the Board adopts the annual budget and, 2. May only be used for the purpose intended, unless the Owners by a majority vote of those present and voting at a meeting vote to waive full funding or authorize the reserve to be used for a different purpose. Alternatively, many HOA’s have non-Statutory reserves which are not controlled by the Statute and thus the Board may or may not fund them each year and may use the funds for any proper purpose without a vote of the Owners.
Q. Is there anything that a resident can do about selective enforcement of the declaration by the board of directors? My view is that it negatively impacts the community value. – C.Z., Estero
A: Your view is correct. Selective enforcement of the rules and restrictions is the death nell of effective enforcement in a community. In my opinion a Board has a duty to enforce the rules as they exist or change them if they do not want to enforce a particular rule. The Board does not have the option to simply ignore the rule or worse yet, selectively enforce the rule against some but not others. When seeking to enforce a rule in an arbitration or litigation the number one defense is selective enforcement. The two key aspects of effective rule enforcement are timely and be consistent. Being timely means addressing the rule violation in an expeditious fashion. Do not wait months and even years to begin enforcement when the Board is made aware of the violation. Consistency means do not selectively enforce the rule but enforce it against all equally. If your Board is not following these guidelines the most effective recourse is to remove or replace the Directors with others that will enforce the rules. Barring that if you are condominium or cooperative you could call the Ombudsman’s office and seek his help in convincing the Board to act appropriately. He can be reached at www.ombudsman@dbpr.state.fl.us. After that you should the advice of a Florida licensed attorney to explore other enforcement options.