Condo & HOA Law, Naples Daily News

Naples Daily News Q&A | May 8, 2022 | Biggest avoidable mistake Boards make on a regular basis

Fort Myers Attorney Richard D. DeBoest, II | Florida Attorneys Goede, DeBoest & Cross

By Attorney Richard D. DeBoest


Q. I participated in the “How to Run a Board Meeting Effectively” seminar several weeks ago, that you put on and I had a quick question. A statement was made that any time there is a quorum of the board, that the formalities of a board meeting must be adhered too. However, my question is, if the formalities of the board are established, could there still be restrictions set forth based on the quorum being titled as a “workshop”? Meaning, the “meeting” was titled as a “workshop”, but there is a quorum. Are there restrictions as to what the board can do? Can the quorum of the board still set motions and vote, or no because it’s a “workshop”? I would tend to think that formalities of the board works both ways, with the latter being a “good faith” objective rather than hard requirement (i.e. no motions/voting during workshops).

A. Thank you for attending the seminar. You pose an excellent question. The statutes do not address what you can or cannot do at a “workshop” and the point of my discussion was regardless of what you call the meeting if a quorum of the Board is in attendance it must be noticed like a Board meeting with owners allowed to attend except under two limited exceptions. However, I believe that if it is titled a workshop that implies that no Board decisions will be made, and I believe that is the correct position to take. The Board decisions should be made at properly noticed meeting called a “Board Meeting” and generally require a published agenda for the action items.

Q. I would be interested to know what you think is the biggest avoidable mistake Board’s make on a regular basis?

A. That is an easy one. The biggest and most common easily avoidable mistake is for the Association to enter into a contract before allowing the Association’s legal counsel to review the contract and suggest changes. Then when a problem arises, and the Association wants to get of the contract or promises are not being met by the vendor the Board finally seeks the advice of the Association attorney. I promise you that reviewing contracts with the attorney and making changes before the contract is signed costs much less money than having the attorney try to resolve the problems of a bad contract. It is the classic penny wise and pound-foolish scenario. Most standard vendor contracts can be reviewed and revised in a couple of hours or less which is far less time than it typically takes to resolve issues with a bad contract.

Q.  I have been told by some people that any vendor contract can be cancelled by a community Association with 30 day’s notice. Is this true?

A.  No but for some reason this is a common misconception I run across from time to time. I think it may arise from the right to cancel laws or “cooling off period” some of the consumer protection laws provide for. These do not apply to community associations and their contracts with their common vendors. So, unless the particular contract itself specifically provides for a right to cancel with 30 days notice, no such right exists in the law. This is an important provision that lawyers look for when reviewing a vendor contract. Also, the language of the right to cancel clause is very particular so what may appear to you to be a 30 day right to cancel for any reason or no reason at all may not actually be just that. There is a big difference in a right to cancel “without cause” versus a right to cancel “with cause”. You should discuss this and other aspects of all vendor contracts with your Association legal counsel before signing the contract.

Q.  Can an owner install a security camera to monitor his or her Unit front door entrance area in a condo complex and can the board approve this as an agenda item?

A.  It depends on the governing documents for the condominium. Typically, the exterior of the front door and entrance area is Common Element as opposed to be part of the Unit. Generally, an owner has no right to modify the Common Elements without the approval of the Board. Most governing documents have a provision that does allow such improvements with Board approval and providing that the Owner is responsible for the maintenance of the item. If the documents contain such authority, then the answer is yes, the Board could allow this. However, allowing owners to make improvements to the Common Elements is generally not a good idea. Video doorbells are becoming so popular I generally recommend the Board adopt a policy allowing them with certain type, size and location restrictions rather than try to swim against the tide of their popularity.

Q. Our Association has an owner in the community that lists himself as a “consultant” and the Association pays him a consulting fee. For the fee the person does things such as prepares meeting notices, prepares the budget, writes violation letters, prepares liens, prepares estoppel letters, files the corporate annual report, makes bank deposits and interfaces and hires other vendors who do work on the common areas. I checked with the State and the person does not have community association management license. The person says he does not need a license as he is homeowner that lives in the community, and we are “self-managing.” Is this legal?

A. No. Section 468.431(2), Florida Statutes defines “community association management as any of the following practices . . . when done for remuneration and when the association or associations served contain more than 10 units or have an annual budget or budgets in excess of $100,000.” The Statute goes on to list the following activities as constituting management: controlling or disbursing funds of a community association, preparing budgets or other financial documents for a community association, assisting in the noticing or conduct of community association meetings, determining the number of days required for statutory notices, determining amounts due to the association, collecting amounts due to the association before the filing of a civil action, calculating the votes required for a quorum or to approve a proposition or amendment, completing forms related to the management of a community association, drafting meeting notices and agendas, calculating and preparing certificates of assessment and estoppel certificates, negotiating monetary or performance terms of a contract subject to approval by an association, drafting prearbitration demands, coordinating or performing maintenance for real or personal property and other related routine services involved in the operation of a community association.  Section 468.432, Florida Statutes provides that a person shall not manage an association without a license.  So, if your community contains more than 10 lots or units or has a budget in excess of $100,000 then based on your description of his activities and because he is being paid he must have a community association management license. If the consultant was not being paid then he would not need a license. The fact that he claims to be self-managing does not change the fact that he is being paid to perform management services and therefore needs a license. Also, as an aside the preparation of a lien for the Association is considered the practice of law so unless the consultant is a currently licensed Florida attorney, he is practicing law without a license.