Editor’s note: Attorneys at Goede, DeBoest & Cross, PLLC respond to questions about Florida community association law. The firm represents community associations throughout Florida and focuses on condominium and homeowner association law, real estate law, litigation, estate planning and business law.
Q: Many of our residents have been spending more time at home due to COVID-19 and the result has been an increase in violations and tempers. We have seen an increase in architectural violations without application, noise disturbances, smoking violations, and complaints by neighbors against neighbors. We have never fined an owner before but want to implement a process. Can the Board levy a fine at a regular Board meeting?
R.T., Marco Island
A: The short answer to your question is that Board action is required at some point in the process, but a Board vote at a regular meeting is not enough, by itself, to properly levy a fine.
Both the condominium and homeowners associations statutes provide little guidance on how to levy and enforce a fine. The few procedural requirements in the statutes have changed over the years and although there are some helpful judicial decisions on fining, there are still many uncertainties.
The biggest issue is due process. Neither the rules of civil procedure nor the rules of evidence apply to condominium or homeowners association fines, so the question is whether your process provides the owner with due process in light of the limited statutory framework and any specific requirements in your governing documents.
At a broad level, the statute provides that fines and suspensions may not be imposed without providing at least 14 days’ notice and an opportunity for hearing before an independent committee. This phrase has been debated in the legal community for a long time. We believe the statute first requires the Board to conduct a vote at a Board meeting with normal notice (48 hours under the statute) and the Board must vote to impose a fine. At this meeting, the Board should vote to determine the amount of the fine per day and the number of separate violations or the number of days of a continuing violation.
Then, the Association should provide the offending owner with a specific notice of the date, time and location of the hearing with the independent committee. The condominium statute provides that the committee must consist of “at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee.” At the hearing, the committee considers all of the evidence, allows the owner to present and challenge evidence, and the committee then votes to approve or reject the fine or suspension approved by the Board. If approved, the fine is due and payable within 5 days.
There is simply not enough space in this article to fully discuss the process, so the discussion should not end here. Your covenants may impose specific notice requirements. Your community may simply not be able to find volunteers to serve on the committee. Your community may want to find a way to streamline the process so that the Board does not need to vote on every single fine and there are some ways to accomplish this. Your community should also discuss how the hearing itself is conducted and whether the process provides an owner with an adequate opportunity to defend himself or herself.
At the end of the day, a fine should not be imposed without providing due process and there is no playbook for how to provide “minimum” or “full” due process in this context. When you discuss your process, you should also consider that your attorney may need to file suit to collect an unpaid fine or enforce a suspension, and thus any shortcomings in due process may be scrutinized. As a result, you should work with your legal counsel to discuss your governing documents, the statutory framework, any previously adopted procedures or resolutions, and how to best pursue fines and suspensions in light of the virus epidemic.
Q: Our Board met with our attorney to discuss a pending lawsuit and the meeting was closed to owners. As a result, we did not think it necessary to post a notice but we are being challenged by a resident on this point. Is notice required even though owners may not attend?
A: Section 718.112 of the Condominium Act provides: “notwithstanding any other law, the requirement that board meetings and committee meetings be open to the unit owners does not apply to a) meetings between the board or a committee and the association’s attorney, with respect to proposed or pending litigation, if the meeting is held for the purpose of seeking or rendering legal advice; or b) Board meetings held for the purpose of discussing personnel matters.
The above statute provides that these two types of Board meetings can be closed (executive session) meetings and not open to the unit owners. This makes sense because the attorney-client privilege extends to the Board, officers and other necessary individuals involved in the litigation process and the attorney cannot effectively explain the strengths and weaknesses of litigation in a non-privileged setting. It is also important to note that the adverse party may be a unit owner and theses sensitive discussions cannot be held in the presence of the party suing you.
The statute does not, however, state that other notice requirements do not apply to these meetings. As a result, we believe that closed Board meetings must still be noticed and this generally requires 48 hours’ posted notice and you must follow any specific notice requirements to individual directors. The agenda should state that the meeting is closed to unit owners, but should nevertheless disclose the date, time and location of the Board meeting.
The follow up question here typically concerns the minutes. Yes, you must still keep minutes of Board meetings that are closed meetings. Those meetings should include motions and votes and other information you believe necessary. For example, if the Board votes to authorize settlement within a specific range of dollar amounts, the individual signing the settlement agreement should certainly want to rely on written minutes reflecting that the settlement amount falls within the Board-approved limits. Those minutes, however, are confidential and exempt from owner access for the pendency of the litigation.
John C. Goede Esq. is co-founder and shareholder of the Law Firm of Goede, DeBoest & Cross, PLLC. Visit our website at www.gadclaw.com, or to ask questions about your issues for future columns, send your inquiry to: firstname.lastname@example.org. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.