Occasionally the Board is faced with the problem of owner’s non-participation. The lack of interest of serving on the Board can cause a deficit of Board members sufficient to constitute a quorum.

Depending on the governing documents, the Board should have a minimum of three (3) directors and up to nine (9). In order to decrease the chance of an equal vote, the board should always consist of odd numbers. 

There are many reasons why a Board may fail to fill board vacancies: If a director sales their home and moves away, the board members are too busy to appoint another director, lack of interest by the community or the board simply can’t find a suitable member.

Although required by Florida State Statute, someone in the community would have to actually enforce the law by taking appropriate action. Conversely, in a community where a lack of Board interest is present, the likelihood of enforcements may be nonexistent. 

For related articles simply click, “Alternative Dispute Resolution for both Condominium & Homeowner Associations“. Read the rest of this entry »

For some reasons, this word “commingle” cracks me up. Mix or share money with different accounts is the first thing that comes to mind, after chuckling. The State legislation must have had the same concept on their mind, when writing the commingling law.

Commingling of funds is prohibited and it’s pretty obvious why. However, the State of Florida allows for commingling of funds if the sole purpose is for investment reasons only. This means, as long as intended for an investment, an association can commingle both operating and reserves accounts together.

Currently we don’t know of any community banks offering a checking service with a higher annual percentage yield (APY) than standard certificate of deposit (CD) or savings accounts. But if keeping both operating and reserve accounts together somehow earns a higher return, then commingling association accounts would be prudent.

There are only two rules that apply regarding commingling. First, accounting is recorded separately, indicating the actual amount of reserves verses operating. Secondly, the reserve portion can never be lower than the operating amounts.

The second rule is pretty obvious, because if the operating account dropped lower than the reserve amount, then the reserve portion would be use to support the operating account. Therefore, it would be hard to explain how commingled funds were solely used and intended for investment purposes only.

For other posts not directly related, simply click, “Ten (10) Reasons that make Property Managers go Hymn”. To review supporting documents, click here. Read the rest of this entry »

In the event of a sale in a planned community, the mortgage company is required to collect an approval from the association as part of their escrow process. However, approval of a sale is not required if the community declaration, articles or bylaws do not provide for. Along with the sale approval, a current updated commonly asked question & answer form is required which should be attached to the rules & regulations and documents.

If the authority to do so appears in the declaration or bylaws, the association should also approve leases. Security deposits up to one months rent can be collected to protect against damages to the common property. Again, check the applicable documents.

For processing and administrative fees, the association can charge for sale/lease forms, up to the amount stated in the community documents. However, if the lease is a renewal from the same party, then no charge can be applied. 

If any of these provisions are not stated, then it is time to update those rusty old community documents. See, “How to Amend Community Documents”.  For supporting documents, click here. Read the rest of this entry »

Amending condominium or cooperative bylaws can only be executed after a membership vote. If not provided for in the community documents, the State of Florida requires a minimum 2/3% of the voting interest.

The amendment must contain the full text. Occasionally during minutes taking, we would refer to a title or number of a section for reference. A proposed amendment however, should always consist of the original full text. In this way the text can be added with an underline. And conversely, any words can easily be deleted from the text with a hyphen.

See example of a standard proposed change:

“No unit may be leased for a period of less than two weeks.”

                                       to

“Individual units may be leased for a period of less than one month and no more than four (4) times per fiscal year.”

Individual no units may be leased for a period of less than two weeks one month and no more than four (4) times per fiscal year.

Simple changes can be proposed and should always be approved by the association attorney. If a change by use of underlines and hyphens would hinder rather than assist, then a more substantial change can be written. However, a notation must be inserted immediately preceding the proposed amendment. The association attorney should always make these extensive proposed amendments, or at least give his written approval.

For supporting documents, click here. Read the rest of this entry »

Every association has a chronic complainer. Usually it’s the person out of one hundred (100) that always have to complain about something or another. A common nickname is condo commando, bellyacher or squawker. This person rarely has a resolution to a problem, only complaints. Condo commandos are always the first to attend Board meetings. In public some are quiet, while others are vocal and disruptive.  So what is the Board to do?

Avoid and ignore bellyachers whenever possible is highly recommended.  But if the squawker goes as far as to complain by certify letter, directed to the association, only then, the Board is obligated to respond. The failure to respond in writing could prevent the association from recovering attorney fees and other costs, which could lead to arbitration.

In an attempt to not forfeit recovering attorney’s fees and costs of any future litigation, due to failure to respond, there’re three (3) acceptable responses:

1. Within thirty (30) day, give a substantive response.

2. Notify the queries that advice has been requested from the division.

3. Notify the queries that a legal opinion has been requested.

Basically a substantive response is a response with substance and/or legal fact. Whoever can measure a substantive response is beyond us, so if in doubt, consult with the association attorney.

If the inquirer involves the Department of Business and Professional Regulation (DBPR), then the board shall, within 10 days of its receipt of the advice from the DBPR, provide in writing a substantive response to the inquirer, or simply forward the divisions direction.

For supporting documents, click here. Read the rest of this entry »