Q: There has been confusion in my homeowners’ association regarding the vote required to approve amendments. We understand that the law states that the quorum for a members’ meeting cannot exceed 30% of the membership. However, our documents state that two-thirds of all owners must vote to approve amendments to our declaration. Is that legal? (B.V., via e-mail)
A: Your question raises two different issues. The first relates to the quorum requirement for your association to hold meetings of the membership (the homeowners), such as your annual meeting or a special meeting.
Section 720.306(1)(a) of the Florida Homeowners’ Association Act was amended in 1995 to say that unless a lower number is provided in the bylaws, the percentage of voting interests required to constitute a quorum at a meeting of the members shall be 30% of the total voting interests. There is usually one “voting interest” assigned to each lot/home. Therefore, if your community has 100 homes, you would need 30 of their owners to come to a meeting or send in a proxy for a quorum to be established and for a meeting to be lawfully conducted.
Many homeowners’ association documents which were written before 1995 have higher quorum percentages such as one-third or a majority of the total voting interests. In the event of a conflict, it would be advisable to amend your documents to comply with the law. While there are differences of opinion on whether the current quorum requirement of 30% can be applied to a pre-1995 association whose bylaws contain a higher number, and no case decisions on point, I believe most practitioners take the position that this is a procedural rule and that the 30% maximum in the statute applies to all homeowners’ associations.
Your second question involves the membership vote required to amend your declaration of covenants. Here, the wording of the document itself is key. Since the declaration is an important property rights document, most require some super-majority level of approval to amend. In my experience, two- thirds of the voting interests is probably the most common threshold.
There are major differences in how that voting requirement can be applied. For example, if your declaration says that amendments require “at least two thirds of the voting interests” to amend, you would need 67 votes in our hypothetical 100 lot HOA. You would only need 30 votes to call the meeting to order and conduct it, but the amendment could not pass even if everyone voted for it because 67 votes would be required.
On the other hand, if your declaration states that it can be amended by a vote of “not less than two thirds of the voting interests present, in person or by proxy, and voting at a duly notice meeting of the association at which a quorum has been established,” you have an entirely different situation. Here, you would need to establish your quorum as explained earlier, and then take the vote on the amendments. For example, if 60 owners attended the meeting in person or by proxy, with 50 voting in favor of the amendment and 10 opposed, the amendment would fail in the first scenario and pass in the second. Amendments to your declaration should be prepared by legal counsel, who should also explain the required vote to amend regarding any proposal.
Q: If I own 4 units in my condominium and there are multiple people running for the board of directors (5 candidates for 3 seats), how many times can I vote for each person or is there a limit in Florida law? (J.A., via e-mail).
A: You should receive 4 separate ballots and can vote for up to 3 candidates of your choice on each ballot. You can cast all 4 ballots for the same 3 candidates or vote each ballot differently.
There are two recent cases of which community association boards should be particularly aware of. Both cases involved residents who were injured by third parties but who filed suit against their association claiming that the association was also partly responsible for their damages because of their failure to enforce the rules and restrictions in the governing documents.
One of the cases involved a resident couple who were rear-ended by another vehicle while they waited for other vehicles to pass between two cars which had parked on the street. The association’s documents required that owners and their guests park only in their driveways, garages, or designated common area spaces. However, over time, the lack of available parking space within the community became a serious issue and the board eventually permitted overnight street parking. Although a jury found the association to be 30% at fault for failing to enforce the on-street parking restriction, an appellate court reversed the ruling against the association and held that a rear-end accident was not a reasonably foreseeable or expected consequence of the association’s failure to enforce its restrictions against street parking.
The other case involved a tenant who was stabbed multiple times by a fellow resident despite previous reports to the management company by other residents who had also been threatened and assaulted by the same individual. Fortunately, the victim survived the assault but sued the association and their management company for failing to evict the problem tenant and for not properly securing the condominium property by hiring more security personnel or installing security cameras in the common areas. Both the association and management company settled the lawsuit with the tenant to the tune of $1 million each.
Although extreme, these cases demonstrate what can happen when an association has certain restrictions and rules contained in its governing documents which the association has not enforced, for one reason or another. Depending on the length of time since the association has enforced a particular restriction, a Court may find that the association has “waived” its enforcement rights as to that rule. Of course, almost all boards will do their best to enforce all of the association’s rules while remaining aware and sensitive to the changing needs and demands of their community. To that end, it is important for your board to do the following:
Closely EXAMINE the current restrictions, covenants, rules, and regulations of your association.
ENFORCE those restrictions or EDIT (through the proper amendment process) outdated restrictions to ensure they comply with the current law and meet the evolving needs of your community.
ENGAGE with the association’s members and management team so that all parties remain aware and responsive to the needs and concerns of the community.
Most community association governing documents as well as applicable corporate statutes grant the board the right to appoint and remove officers. This is important when an officer proves to be prone to bad/rude behavior. The board likely has the right to vote to remove this individual as an officer (president, vice president, treasurer, secretary) at a properly noticed board meeting. Note that even if removed as an officer, the person remains a director on the Board. Having this person removed as a director is a more difficult task. If he or she is more than 90 days delinquent in the payment of any fee, fine, or other monetary obligation the Homeowners Association Act and Condominium Act state that he is “deemed to have abandoned” his seat on the board. The only other alternative (assuming this individual is current in all monetary obligations) is to pursue a recall. In both condominiums and homeowners associations, recall of any member of the board, members of the board, or even the entire board, may be accomplished by a majority vote of the entire voting interests of the association.
A “material alteration or addition” is one that “palpably or perceptively var[ies] or change[s] the form, shape, elements, or specifications of a building in such a manner as to appreciably affect or influence its function, use, or appearance.” Sterling Village Condominium, Inc. v. Breitenbach, 251 So. 2d 685, 687 (Fla. 4th DCA 1971). If any proposed change would affect function, use, and/or appearance, then the change would likely be considered a material alteration. Whenever there is a “close call” regarding whether a change is a material alteration, the case law typically finds that the change is a material alteration.
Section 718.113(2) (a), regarding material alterations by condominium associations, provides as follows:
(2)(a) Except as otherwise provided in this section, there shall be no material alteration or substantial additions to the common elements or to real property which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions before the material alterations or substantial additions are commenced. This paragraph is intended to clarify existing law and applies to associations existing on July 1, 2018.
Accordingly, unless the condominium declaration provides otherwise, an association will need to obtain the approval of 75% of its members before the project starts. Now, some projects which would otherwise be considered material alterations or substantial additions to the common elements are deemed maintenance and are solely within the board’s power to perform. Maintenance to the common elements, regardless of the cost, is solely within the board’s power and discretion to perform.
That being said, arbitrations decisions regarding whether an alteration is necessary maintenance versus a material alteration are usually unpredictable. Accordingly, it is usually better to err on the side of caution and obtain membership approval, if required. This conservative course of action demands more consideration now, as the statute changed on July 1, 2018. Before the change in the statute, some cases stated that if membership approval was required, the association could obtain the approval after the alteration was made. However, as of July 1, 2018, the law requires the approval before the alteration or addition is commenced. While the law fails to address what will occur if approval is not obtained, it is possible that a court or arbitrator would require removal of the alteration or addition. Accordingly, it is best to obtain any necessary approval before the start of any project that alters or adds to the common elements or association property.
Continuamos con el tema de animales para apoyo emocional. Como todos ustedes saben, siempre existirán personas que intentan aprovecharse del sistema. Por ejemplo, una persona hace una petición para traer un animal para apoyo emocional y presenta una “nota del médico” o una “receta médica” que dice mi paciente sufre de depresión y requiere la presencia de un animal para usar como apoyo emocional en su vivienda. Determinando que la nota o receta está falta de la información necesaria para conducir una investigación significativa, la junta directiva de la asociación hace su tarea y descubre que la persona que está haciendo la petición, es la madre del médico y el médico es un reumatólogo que está declarando que “su paciente” sufre de depresión y requiere un animal para apoyo emocional. Peticiones como este ejemplo se ven más frecuente de lo que uno se imagina.
Es extremadamente importante que las asociaciones estén conscientes del requisito de que una asociación tiene que participar en el ‘proceso interactivo”. Esto significa que una vez que se recibe una solicitud para un animal para apoyo emocional, la asociación deberá solicitar la información adecuada que le permita investigar de la solicitud. Con algunas excepciones, si el solicitante puede establecer una discapacidad que requiere la modificación solicitada, dicha modificación debe concederse.
En el próximo mes hablaremos sobre las excepciones.
With the plethora of reality TV shows involving home renovations and real estate searches, your association may be asked to sign an agreement to allow a production company to film your community.
Since most governing documents grant the owners the right of ingress and egress over the common areas for access to the unit, an association may not be able to prohibit the film crew from filming in the owner’s unit. However, without an agreement, the film crew may be limited in its ability to feature the recreational facilities, or the common areas, or use the name of the association. As you can expect, most of these agreements are one-sided in favor of the production company. Therefore, you will want to have your association attorney review any such agreement before signing.
One of the issues with these types of agreements is that they typically require that the agreement remain confidential. That is a problem for community associations because the agreement would be considered an official record and subject to inspection by any owner. Also, the agreement would have to be approved at a board meeting, and there would be no legal reason for such a meeting to be closed. Therefore, the confidentiality provision should be closely reviewed. Other important provisions to review (as with all contracts entered into by an association) are the insurance and indemnification provisions. It is also not uncommon for these agreements to require that any litigation be in California, rather than Florida.
While the association may believe that the publicity of being featured on such a show would be favorable, the board will need to weigh the benefits with the liability that may arise and the unfavorable nature of the production agreements.
Q: After the unit owners in a condominium association vote to approve an amendment, is there a time limit or deadline by which the amendment must be recorded with the county? (M.A. via e-mail)
A: Chapter 718 of the Florida Statutes, known as the Florida Condominium Act, extensively regulates amendments to condominium documents. However, the Act does not contain a specific deadline for when properly adopted amendments to the condominium documents must be recorded.
Section 718.110(3) of the Act states that amendments to the declaration are effective when properly recorded in the public records of the county where the declaration is recorded. Similarly, Section 718.112(1)(b) of the Act states that amendments to the articles of incorporation or bylaws are not valid unless recorded in the public records of the county where the declaration of condominium is recorded. Further, Chapter 617, the Florida Not For Profit Corporation Act, provides that amendments to the articles of incorporation must be filed in the office of the Department of State.
In my opinion, the recording of such amendments is a ministerial act that the board would be required to undertake within a reasonable time of the approval of the amendment. While there is room debate what is reasonable, I would say absent unusual circumstances (such as an intervening legal challenge or some after-discovered error), 30 days from approval would be a reasonable time frame.
However, there is also no specific prohibition in the statute preventing an association from recording an amendment long after the owner vote. I occasionally see situations where an association failed to record an amendment due to changes in the board or management or other circumstances, and records an amendment a year or longer after its approval. This is obviously not an ideal situation since you might have new owners who did not get a chance to vote on the amendment and who could claim that they bought there unit based on what was in the public records.
Q: Can you explain what a “material alteration” is? We have a constant argument in our condominium association, usually driven by one particular owner, over what the board can and cannot do. (J.F., via e-mail)
A: This is one of the most common areas of disputes in condominiums. As you probably know, Section 718.113(2) of the Florida Condominium Act provides that there can be no material alterations or substantial additions to the common elements except as authorized by the declaration of condominium. If the declaration is silent, then 75 percent of all voting interests must approve the alteration or addition (there is usually one voting interest per unit).
The standard still used by the courts today comes from a decision from a Florida appeals court rendered almost 50 years ago. In ruling that a unit owner’s closing in a screened lanai with windows was a material alteration, the court stated that the term means “to palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design, or current condition, in such a manner as to appreciably affect or influence its function, use or appearance.” Using this test, appellate courts have ruled that changing the exterior color scheme of condominium buildings is a material alteration, as is changing mansard roof shingles made of cedar to tile type shingles.
As with most rules, there are exceptions, one being the so-called “necessary maintenance exception,” which originates from a series of appellate court cases from the Second District Court of Appeals (which includes southwest Florida). These cases basically say that certain changes can be made without and owner vote when necessary to comply with law or when necessary for the proper maintenance and preservation of the condominium property.
Q: The board of my homeowners’ association wants to hire a management company. They say it is too much work. We are a small development with very little common property, and we have always been self-managed. A number of us feel that if the board is going to saddle us with this extra expense, it needs to be put up to a vote. What do you think? (J.S. via e-mail)
A: Board members have a fiduciary duty to see that the community is operated in a proper manner. That is no easy task, even for small associations.
The duties of an association include making provision for the maintenance of common areas, maintaining proper insurance, keeping official records available for member inspection as required by law, adoption of a budget, production of year-end financial statements, filing tax returns, and ensuring that the provisions of the governing documents are enforced.
While many communities are self-managed, I personally would never serve on a board where proper outside assistance was not supported by the community. Board members are volunteers and rarely conversant in the myriad of issues required to operate a community. The primary function of a board is to set the policies and actions of the association, not execute them.
All of that said, the decision on whether to hire a management company or not typically lies with the board. While I have seen the rare set of bylaws that require membership approval for this action, most bylaws specifically grant the authority to hire managers to the board, or do so through a general grant of powers. However, some bylaws do place limits on a board’s authority to increase budget expenditures (though most do not), so that could also serve as a practical restraint (the board needs to be able to pay for it).
Of course, the members of an HOA always have the ultimate veto power over the board’s decisions through the statutory right of recall. Board members can be removed by a majority of all voters, with or without cause, if certain procedures are followed. I do not encourage recalls, they are usually quite divisive, but it is an option.
If the association is going to hire a management company, it should interview several candidates, although the competitive bidding requirements of the statute do exempt management companies. The relationship should be documented in a written contract, reviewed or prepared by the association’s attorney. In my opinion, every management agreement should be terminable at will by either party on reasonable notice, such as 30 or 60 days.
A management agreement should also clearly set out what the duties of the manager are, set forth any extra costs beyond the monthly per-door fee, and contain appropriate provisions regarding insurance and indemnification.
Q: I own a home that is subject to a homeowners’ association. Am I entitled to review the association’s budget and other financial records? (E.L., via e-mail)
A: Yes, owners are entitled to inspect and copy the financial records of the association. Both the Florida Homeowners’ Association Act, Chapter 720 of the Florida Statutes, and the Florida Condominium Act, Chapter 718 of the Florida Statutes, grant owners broad inspection rights.
The association’s budget and other financial information are official records of the association that must be made available to an owner for inspection and copying. Section 720.303(4) of the Florida Homeowners’ Association Act provides that the association’s tax returns, financial statements, financial reports and any other records that identify, measure, record or communicate financial information are official records that must be made available on request. Also, as to the budget, Section 720.303(6) of the Act requires that after adoption of the budget by the board, the association must either send each owner a copy of the budget or a notice stating that a copy of the budget is available free of charge.
Don’t miss us at this year’s 2019 CAI Annual Conference May 15-18 in Orlando, Florida. The national conference brings together community association leaders and professionals to explore the trends and issues shaping today’s community associations, managers, and management companies.
Stop by Becker’s booth to learn more about MyCommunitySite.com, a website development service that helps streamline operations for board members and property managers alike. The service, a joint initiative between Becker and digital developer SHYFT, allows community associations to seamlessly create and maintain cutting-edge and compliant websites.
Q: My community has both single-family homes and townhouses. A question has arisen as to whether the laws that govern condominium associations or homeowners’ associations apply. Can you clarify this for us? (B.K., via e-mail)
A: The answer would depend on the language of the governing documents for your association. Condominiums are governed by Chapter 718 of the Florida Statutes, known as the Florida Condominium Act. In order for the property to be a condominium, it would have to have been created pursuant to a recorded declaration of condominium.
Homeowners’ associations are governed by Chapter 720 of the Florida Statutes, known as the Florida Homeowners’ Association Act. Property subject to this law does not have to be created in a specific statutory manner, but is usually created by a declaration of covenants. The statutory tests to determine whether a community and its association are governed by Chapter 720 are whether the association is responsible for the operation of a community where the voting membership is made up of the parcel owners or their agents, or a combination thereof, where membership in the association is a mandatory condition of ownership and where the association is authorized to impose assessments and record a claim of lien against the parcel if the assessments go unpaid.
Condominiums and communities governed by homeowners’ associations take many forms, so you cannot tell just by looking at the property. For example, some condominiums are freestanding buildings (typical single family home) where the units are actually plots of land or the footprint of the building. Conversely, some homeowners’ associations govern townhouse or villa-style dwellings where there are multiple dwellings contained in each building that “look like” condominiums.
Q: Recently, our condominium board discussed replacing our pool deck. Our pool deck is currently made up of composite decking material. The board wants to install a cement deck. Doesn’t this require a vote of our unit owners? (K.M., via e-mail)
A: Possibly. The Florida Condominium Act states that there shall be no material alteration or substantial additions to the common elements except in the manner provided in the declaration. If the declaration is silent, then such material alterations or substantial additions must be approved by a 75% vote of the total voting interest of the association.
The seminal case defining “material alterations” comes from a 1971 decision from Florida’s Fourth District Court of Appeal called Sterling Village v. Breitenbach. In Sterling Village , the court stated that if the change “palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design or plan or existing condition in such a manner as to appreciably affect or influence its functions, use or appearance,” such a change was a material alteration.
Under the test set out in Sterling Village, replacing a composite deck with a concrete deck would appear to be a material alteration and may or may not be subject to owner approval based on the language in your declaration. For example, many declarations allow a board to spend a certain amount of money on material alterations before triggering the requirement for a unit owner vote.
There is also an exception in the law. If an alteration is considered “necessary maintenance” to the condominium property, the owner vote is not required. Convenience and cost savings are not sufficient legal criteria to support changing the common elements without a unit owner vote based on the necessary maintenance exception to the material alteration rule. On the other hand, changes necessary to comply with the law are generally permitted under the necessary maintenance exception. Use of alternative materials always presents a close question. Generally speaking, decisions in this context should be predicated on both a legal opinion, as well as demonstrable evidence from a credible source (for example, an engineer) that the change is “necessary” as that term is used in the law.