Tuesday, May 30, 2017
Wednesday, August 3, 2016
I get this question more than I like. The association board wants to have a meeting and either not notify the owners about it or keep owners from attending (i.e. “closed-door”). Most of the time it comes up when a board has a controversial or unpopular decision to make and, frankly, does not want to discuss it in front of the ownership. Unfortunately, neither the Condominium Act nor the Homeowners Association Act has a provision for closed-door meetings in these situations.
One of the fundamental concepts of association living is that everything is done in the full view of the ownership. Almost every decision and document, for better or worse, needs to be open to scrutiny from the ownership. After all, it is the owners’ money and property that the board decisions are impacting!
There are two exceptions to the open meeting policy. The first is when the board is discussing personnel (a/k/a employee) issues. See Fla. Stat. § 718.112(2)(c)3.b. In this situation, the legislature decided the privacy rights of a worker trump the owners’ rights to transparency from the association. This section covers discussions regarding in house employees. However, this does not include decisions regarding the management company contract. The concept gets gray when dealing with managers that work for a management company but basically function as an employee of the association. In those cases the language in the management company contact could provide some insight. If in doubt contact your legal counsel for an opinion.
The second exception is a meeting to discuss proposed or pending litigation where the attorney is present. See Fla. Stat. § 718.112(2)(c)3.a. Basically, this is meeting covered by the “attorney-client privilege.” There are two prongs to this situation. First, there has to be litigation proposed or present. The board cannot have a closed meeting to get a legal opinion from legal counsel a topic for which litigation is not proposed or pending. Whether litigation is pending or not is self-explanatory but when litigation is “proposed” can be a grey area. If this is a question, one of the directors should reach out to the attorney individually and ask whether a conversation on a given topic would qualify under this statute for a closed-door meeting. Second, the attorney for the association must be present. The board cannot have an “attorney-client” meeting, with out the attorney present (in person or by phone).
So what can the board do to mitigate the awkwardness of these meetings? First, as long as there isn’t a quorum of directors present, directors can discuss association business. The president can call each director individually to get an idea of where they stand on an issue. This gives the directors the ability to flush out some of their differences behind the scenes. But this does not negate the requirement that the issue the board is trying to avoid must be brought up at an open meeting where owners can comment to the directors and the ultimate decision is made in the open.
Friday, July 29, 2016
Can a condominium association require that unit owners provide the association with a key to access a unit? The short answer to the question is yes.
Most associations and owners are aware of Fla. Stat. § 718.111(5)(a) that states “The association has the irrevocable right of access to each unit during reasonable hours, when necessary for the maintenance, repair or replacement of any common elements or any portion of a unit to be maintained by the association pursuant to the declaration or as necessary to prevent damage to the common elements or to a unit or units.”
In the case of Harbour Royale Condominium Association vs. George Mitchell, Case No. 13-02-8797, (Brevard County, September 17th 2013), the Association established a rule requiring owners to deliver a key to their unit to the association. Specifically, their rule stated that “It is required that keys to the unit be provided to the Association Office. They are to be used for emergency purposes and for periodic spray controls. The Association has the right to authorize entrance to the owner's unit by any means necessary in case of an emergency at the expense of the owner.”
Despite the association’s rule, one particular owner refused to provide a key on the grounds that he previously provided a key to the association and the keys were misplaced. He was also afraid that the association would make copies and give the copies to unauthorized maintenance personnel.
The Arbitrator ordered the owner to permanently provide the Association with a key and stated that ““The right of access granted by [Fla. Stat. § 718.1255] is broad enough to support a requirement that unit owners must provide key access to their unit to the Association.” The Arbitrator went on to say “Even if the Association lost the copy of the key [the owner] allegedly gave to the Association, [the owner’s] remedy is not to refuse to provide another copy of the key to the Association.”
If your community is interested in implementing a policy requiring owners to deliver keys or key access codes to the association, we recommend the following:
- The association must adopt a formal rule implementing the new key access policy.
- The rule should describe the requirement to deliver keys or codes to the association, how those keys and codes will be handled and safeguarded, the instances in which those keys and codes will be used for access to the unit, etc.
- Give written notice to all the owners that the new policy is in place.
As always, check your particular association’s governing documents for specific restrictions regarding entry to units, adoption of rules, etc.
If you have any questions on this topic or any other Homeowner or Condo Association issues, please contact me and I will be happy to help.
Tuesday, July 26, 2016
Below are five key points that will prove invaluable for both potential board members and for those already serving their term.
Becoming elected or appointed to serve on a Homeowner’s Association or Condominium Association’s board of directors can be an exciting, rewarding and enriching experience. It can be an opportunity to give back and contribute to the success and future of a community. However you should also realize the responsibilities that come with the posting, especially with some of the larger associations where you will be at the helm of a potentially multi-million dollar company. You could be accountable to several hundred homeowners, be responsible for large budgets, and you may oversee the complexities that come along with high-rise and/or multi-structure complexes.
1. Know What You Don’t Know.
You are not required to have all the necessary information memorized. The Florida Statutes are constantly being amended and your own association rules and regulations will be ever evolving. While you are not expected to know everything, you are expected to engage the right people to advise you. The most effective way to stay current and meticulously proficient is to engage the appropriate experts – a specialized attorney, a qualified CPA, an efficient manager, and a reputable insurance agent will ensure you have access to the information and advice you need.
2. Be Consistent and Abide by the Documents.
A director on an association board must be consistent and enforce the rules/restrictions as written. Admittedly, this is tough when the restrictions for the community seem obsolete or misguided. Keep in mind though that as a director, the restrictions are provided TO you to enforce. If you feel any part of the restrictions no longer best serves the community, do not just ignore the issue or pick and choose what you’re going to follow and ignore. If the association does not want to follow a rule or restriction, then meet with your attorney to figure out the process and language to change it. Otherwise, consistently follow the rules as written.
3. Be Transparent.
An obligation of being a director is to promote transparency within the association. The owners have a right to information and you’re making decisions affecting their finances and property rights. Therefore, they have a right to know what’s going on with the association. Ways to promote transparency include ensuring the owners are receiving the correct notices, having regularly scheduled board meetings, and making official records and financial statements available. If your association does not have a user friendly, updated website then this is great way to improve association/owner communication.
4. Have a Plan for the Future.
There are two reasons to have future plans for the Association: 1) it defines what you want to accomplish, and 2) it makes for better meetings. First, you likely ran for the board to have an impact on the community. However, how can you have an impact if you don’t have a plan for what that impact is going to be? Anytime you can define discrete goals you’re more likely to accomplish them. Second, I have found that associations that don’t have a plan for the future tend to focus on the past. This means discussions over past events dominate the meetings. If you give your owners an outlook for the future and define the priorities of the community over the next 1, 3, & 5 years, you will be pleasantly surprised how much support you get from the owners, plus how much more efficiently your meetings will run.
5. Understand the Financials.
Association financials can be extremely complex. Although you don’t need to be able to translate every single document, we do recommend you form a basic understanding of the balance sheet, the income statement, the annual budget and the accounts receivable. You should also have a clear picture of the reserves – are you adequately funded? If you can understand these documents you’ll get a baseline picture of the financial health of your community. Then, engage a specialized community association accountant or CPA who can answer any questions that you might have.
If you do those 5 things you will be a key asset to your association, improve your community, and also likely enjoy your experience as a director.
For more information on this issue or other association questions contact bburg@HSMcLaw.com.