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Pending New Laws

     The 2024 Florida Legislative Session ended Friday, March 8th, and it was one of the busiest sessions in memory in terms of producing new community association legislation. Please remember that these bills do not become law until they have been sent to the Governor who then has fifteen (15) days to sign a bill, veto a bill, or allow a bill to pass into law without his signature.  As such, we may not know the final outcome for some bills until later this May or June.

HB 1021 is known colloquially as the Condo 3.0 bill but it goes well beyond the scope of its predecessors, SB4D and SB 154, by, among other items, expanding the enforcement jurisdiction of the Division of Condominiums; creating new standards for CAMS; imposing new funding and notice requirements related to structural integrity reserve studies (SIRS); imposing mandatory board member educational requirements; imposing new penalties for voting fraud; and requiring associations who manage 25 or more units to maintain an association website where specific association documents must be posted.

     HB 1029 creates the “My Safe Florida Condominium Pilot Program” within the Department of Financial Services (DFS). This legislation will create a state-funded inspection program to determine mitigation measures that hopefully will reduce a property’s vulnerability to hurricane damage and provide for mitigation grants to retrofit the condominium property.

     HB 293 requires HOAs to adopt specifications for hurricane protection and prohibits HOAs from denying an owner’s installation or replacement of certain hurricane protections including storm shutters, metal roofs, erosion controls, and other forms of hurricane protection.

     HB 59 amends Section 720.303, F.S. to require an HOA to provide digital copies of the governing documents and rules to every new member of the association and provide all members with amendments to the covenants and rules.

      HB 1203 was passed as a response to the massive Hammocks HOA fraud case in Miami-Dade County. Among its many provisions, this bill imposes mandatory educational requirements for HOA directors; limits an HOA’s ability to regulate parking and commercial vehicles, limits the function of an HOA’s architectural control committee, imposes stiff penalties for the denial of records access to owners; requires websites for associations with 100 parcels or more and further revises the fining process in a less than helpful manner.  

     HB 1645 provides that HOA covenants may not prohibit the types of fuel sources that serve customers in the community, including natural gas utilities and liquefied petroleum gas (aka propane) dispensers, and also provides that the HOA covenants may not preclude appliances using those energy sources. It is troubling to note that HOA residents must now be allowed to install EV charging stations and propane gas/natural gas; let’s hope installers for each take proper safety precautions. 

     SB 1420 modifies the language in Section 720.406, F.S. regarding the meeting procedures when homeowners’ association covenants are being revitalized. 

     SB 280 limits the ability of local government to regulate short-term vacation rentals but does permit occupancy limitations. The legislation provides for the DBPR’s Division of Hotels & Restaurants to regulate vacation rental platforms. The good news is that the legislation specifically does not preempt or supersede community covenants. 

     Remember, none of the above bills go into law until they have been sent to the Governor who then has fifteen (15) days to sign a bill, veto a bill, or allow a bill to pass into law without his signature.  We expect many, if not all, of these new bills to be approved by the Governor or he will allow to pass into law.  

     Of course, you will need to consult with your association attorney for information on how these new bills, once they go into law, will affect your association. 

 

Howard J. Perl, Esq. 

Shareholder, Becker
Ft. Lauderdale | bio

 

 

Difficulty with Community Participation?

In many communities, voter apathy can be a real issue with members not turning in proxies and not attending meetings.  This does not only impact elections, but also other membership votes, such as amending the governing documents and voting on material alterations.  Simplifying the voting process for owners can go a long way in remedying this problem.  One way to simplify the voting process for members is for the board of directors to authorize and set up electronic voting. This is especially true for communities with a lot of seasonal or part-time residents.  Many communities, however, have not taken advantage of this option even though electronic voting is a beneficial tool to encourage participation by members. 

In authorizing electronic voting, the Legislature set forth several statutory requirements for setting up such a system, which are discussed below.  As always with statutory requirements, it is important to discuss with association counsel to ensure that your community correctly implements its online voting system.  First, the board must approve electronic voting as discussed further below.  Next, a unit owner must consent in writing to online voting.  This consent is distinct from a unit owner’s consent to receiving certain notices by electronic transmission.  However, for administrative ease and efficiency, association counsel can prepare a form for your community on which owners have the option to consent to either or to both receiving notices by e-mail and to online voting together.  An owner whose consent to electronic voting may also opt out later.     

In addition to the consent form, the association should have association counsel prepare the board resolution authorizing the online voting system as the statute contains several requirements for this resolution.  The board resolution must provide that unit owners receive notice of the opportunity to vote through an online voting system, must establish reasonable procedures and deadlines for unit owners to consent, in writing, to online voting, and must establish reasonable procedures and deadlines for unit owners to opt out of online voting after giving consent. Written notice of a meeting at which the resolution will be considered must be mailed, delivered, or electronically transmitted to the unit owners and posted conspicuously on the condominium property or association property at least 14 days before the meeting. Evidence of compliance with the 14-day notice requirement must be made by an affidavit executed by the person providing the notice and filed with the official records of the association.

The statute dictates several requirements for the association to set up online voting.  The association must provide each unit owner for a method to authenticate the unit owner’s identity to the online voting system and a method to confirm that the unit owner’s electronic device can successfully communicate with the online voting system.  The method to confirm that the unit owner’s device will be able to communicate with the system must be available at least fourteen days before the voting deadline.  The online system must also be able to authenticate the unit owner’s identity and to authenticate the validity of each electronic vote to ensure that the vote is not altered in transit.  The system needs to also be able to transmit a receipt to each unit owner who casts his or her electronic vote. 

In addition to the above, for elections of the board of directors of the association, the association must also provide a method to transmit the electronic ballot to the online voting system that ensures the secrecy and integrity of the ballot.  They system must also be able to permanently separate any authentication or identifying information from the electronic election ballot.  This is so that it is impossible to tie an election ballot to a specific unit owner.  The system needs to be able to store and keep electronic votes as accessible to election officials in the event that a recount, inspection, and/or review is required. 

Prior to any membership vote taken at a meeting, except for the election of board directors, a specific quorum must be reached.  The statute provides that a unit owner voting electronically is counted as being in attendance at the meeting for purposes of determining a quorum.  Thus, setting up electronic voting and having owners consent to using electronic voting helps the association achieve quorum and required approvals by making it easier for owners to be “present” and to vote.

Another option for participation issues is to amend the governing documents to lower the voting threshold required for approvals.  One way that is particularly effective is to change the threshold required from a percentage of the entire membership of the community to a percentage of those who vote.  Otherwise, all members who do not vote are essentially casting a “no” vote.  Lowering the quorum requirement can also be effective.  Association counsel can review your current requirements and discuss where improvements might be made that would make membership approvals easier to obtain. 

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

 

 

What To Do If Your Association Is Served With A Complaint or Is Subject To A Subpoena

If your community association is served with a complaint or subpoena, you must promptly forward it to the community association’s legal counsel. As explained in this article, receipt of a complaint or subpoena triggers time sensitive legal obligations that can expose your community association to serious liability.

With respect to complaints, Florida Courts generally deem their filing the start of litigation. Depending on what rules apply to the complaint in question, your community association may only have 20 days to prepare and serve a response or an answer to the complaint. Moreover, if your community association fails to timely serve a response or answer to a complaint, it may have a “default” entered against it in the related court case. A default not only severely limits the ability of the community association to defend itself in court, but it also empowers a court to rule that all well-pled factual allegations have been “admitted” by the community association.

In most instances, you will turn over the complaint to your insurance agent, asking him or her to immediately forward to all your insurance carriers for evaluation and providing of insurance defense counsel and coverage in accordance with your insurance documents.  Failing to provide timely notice to your insurance carriers of a claim or lawsuit may result in denial of coverage, regarding of your insurance policy, for failure to inform the carrier of a claim in a timely manner. 

Moreover, even when insurance counsel is assigned, you may need your association counsel to file a motion for extension of time to respond to the complaint, if your carriers or their assigned defense counsel are slow in responding to the complaint or filing a response.  You should work closely with you association counsel to make sure all required responses are timely filed or extensions requested.

In the event your community association was only served with a subpoena, you still must act quickly, as service of a subpoena also triggers multiple deadlines and obligations. For example, some subpoenas may not only require your community association to prepare and serve an objection within a few days, but it may also require the community association to prepare to attend a hearing to resolve that objection. If no objection is served, a subpoena may require the community association to produce certain materials or an employee for examination by a certain deadline. Some subpoenas may even require the community association to designate a corporate representative and prepare them for an examination as to certain topics, wherein their testimony is considered binding on the community association.  If your community association fails to timely object or adhere to a subpoena, it may result in a waiver of rights or objections. And, in some cases, failure to timely object or adhere to a subpoena may even result in a court order finding your community association in contempt of court and requiring the community association to pay attorneys’ fees and costs to the party that issued the subpoena.

Ultimately, while complaints and subpoenas can vary in content and form, they all generally require quick and calculated action. Accordingly, you should always consult your legal counsel with respect to a complaint or subpoena as soon as possible so as to ensure compliance with Florida law and that your community association’s interest are well served.

 

Nico Jimenez

Attorney at Law, Becker
Miami | bio

 

 

Effective Community Association Governance

Your community association functions as a democratic subsociety, which works most effectively with an active and informed membership.  This requires a level of knowledge and understanding about the community’s operations from both the Board and the membership at large.  We continue to hear that unprecedented changes are coming down the pipeline in the ways that community associations operate.  Part of getting ahead of these coming changes is to ensure that the basics of a well-functioning community association are already in place.  As this new year rolls on, make it a goal to assist where you can in making your community the best it can be. 

Let’s start with the Governing Documents.  The Governing Documents are legally binding on all members.  In addition to legal liability for noncompliance, understanding and adhering to the Governing Documents and policies of your community constitutes being a good neighbor. For example, being familiar with architectural restrictions and maintenance standards allows the community to maintain a certain level of cohesion that helps maintain property values.   Community willingness to actively comply goes a long way and saves the community money and time by avoiding enforcement actions.  Board members should be particularly familiar with the Governing Documents as members of the body charged with upholding these documents to the best of their ability.  Understanding and complying with the Governing Documents is much simpler when the Documents are clear and cohesive.  Are there outdated provisions in the Governing Documents that no longer serve the needs of the community?  Having legal counsel perform a thorough review of the Governing Documents is a first step.  Outdated provisions can be removed, and legal counsel can advise whether provisions are also not in line with current law and recommended best practices.  Clear and effective documents are an important line of defense in a well-functioning association.   

Your community association operations also largely depend on dedicated volunteers and guidance from experts.  Serving on the Board is one way to assist in the direction of your community.  It is no small task.  If you do not have the time to dedicate to effectively serving on the Board, the community may have committees that are also looking for volunteers.  Serving on a committee is another way to effect positive change, whether that is a budget or finance committee, an enforcement committee, an architectural review committee, or social committee.  In addition to dedicated volunteers, reliance on experts where needed can avoid the community serious (and potentially expensive) headaches down the line.  Legal counsel experienced in community association law should guide the Board in navigating the numerous requirements stemming from Florida statute and the association’s Governing Documents.  The association should also seek guidance from other experts, including but not limited to accountants, engineers, and architects, when the situation calls for such guidance.    

Effective outreach and communication are also vital.  A certain level of communication is required by law.  Proper and timely notices of membership meetings and board meetings are required.  All agenda items to be discussed at the meeting are to be set forth in the notices.  If the Board is unsure about the required notice for special types of meetings, association counsel should be consulted.  One way members can assist the Board with effective communication is to ensure that the Board has the correct designated mailing address, especially if the owner has a primary address outside of the community.  If you have consented to receiving notices via e-mail, does the Board have your most recent email address? And are you checking this e-mail address consistently and have made sure that the e-mails from the Board or manager are not going to your spam folder?

Last but not least, showing up.  Sending and receiving notices is all well and good, but is of little effect if members do not attend meetings.  This can be done in person, or online if the option is available, or by submitting a proxy when permissible.  Membership meetings cannot move forward without a quorum of the membership.  As such, it is imperative that enough members attend, or submit a proxy, so that operations can move forward.  Encourage your neighbors to attend and participate as well.  At the meeting, the agenda needs to be adhered to.  The agenda should not serve simply as guidance for discussion but rather should be used as the basis for an effective meeting that does not devolve into unproductive tangents.  Discourse should be kept civil.  Not every member will agree but talking over one another and not letting others talk is unproductive.  The law allows the Board to adopt reasonable rules and regulations for participation at meetings.  Useful minutes should be kept for each and every board and membership meeting.  This is not a complete transcript of the meeting.  However, enough detail needs to be included so that the minutes may serve as a useful reference point in the future. 

Good governance starts with effective governing documents and volunteers.  Participation and effort by the Board and membership go a long way in the smooth and efficient operation of the community.  Effective communication helps maintain community morale.  Association counsel can help in navigating the legal requirements for your community as 2024 moves forward.   

 

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

 

 

Implementing Condominium Restrictions

Couple preparing to sign a contract. (iStock)

When faced with a reoccurring issue in a condominium, the Board of the Directors may want to consider implementing a restriction as a long term solution to the problem. For example, after increasing complaints of loud music at late hours, the Board of Directors may consider a restriction as to when and to what extent music can be played at the condominium. Or, perhaps unit owners have complained of the increase in short term rentals in the condominium, prompting the Board of Directors to consider a restriction on the amount of times a unit may be rented throughout the year. How are such restrictions implemented?

Condominiums are primarily governed by Florida Statutes, the condominium’s governing documents (declaration, by-laws, articles of incorporation), and their rules and regulations. Generally, declarations supersede all other governing documents. Thus, when considering restrictions, the Board of Directors are often faced with the choice of either implementing restrictions via either an amendment to the declaration requiring a unit owner vote,  or revising the rules and regulations, which generally can be accomplished by the Board of Directors. But which is the right choice? As always, it depends.

One the one hand, if there is a high risk of a unit owner challenging a restriction, the Board of Directors may want to consider implementing a restriction via an amendment to the declaration,  as Florida courts are more likely to enforce such restrictions. Indeed, such restrictions are presumed to be valid and enforceable unless and until they are shown to be “arbitrary” or “capricious”. Some Florida courts have even opined that “unreasonable” restrictions in a declaration may be enforced, so long as they are not “arbitrary” or “capricious”.

On the other hand, if a restriction is implemented via an amendment to the rules and regulations of the condominium, it is subject to much more scrutiny if challenged. To be enforceable in the face of challenge, the rule must not contradict any express right or reasonably inferred right conferred to owners in  the declaration of condominium. Second, the rule must be shown to be reasonable, which means the rule must be reasonably related to the promoting the health, safety, and welfare of the unit owners, as well as be applied and enforced uniformly.

With that said, amendments to the declaration are often much more difficult and costly to pursue than amendments to the rules and regulations. While every condominium’s governing documents are different, amendments to a declaration generally require at least a majority vote of unit owners in favor of the amendment. Some governing documents may even require a vote by a super majority of unit owners. Thus, implementing a restriction via amendment to the declaration will likely require considerable efforts to galvanize support among unit owners. Furthermore, once a restriction is incorporated into your declaration via an amendment, it will be just as difficult and costly to amend the restriction in the future. As such,  restrictions that deal with issues that require flexibility, such as the operating hours of a pool, may be better suited for a rule, which generally only requires a vote by the Board of Directors.

But that is not the end of the matter. The Board of Director’s decision to either amend the declaration or the rules and regulations might be also influenced by Florida Statutes.

For example, Fla. Stat. § 718.110(13) expressly limits amendments relating to rentals as follows:

In addition, per Fla. Stat. 718.112(2)(a)(1), changes to rules, or implementing rules that affect unit use, require a 14 days’ notice to the owners of the Board meeting where such rule will be considered and put to a Board member vote.

(13) An amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment.

Ultimately, regardless of whether the Board of Directors is leaning towards amending the declaration or the rules of regulations, you should always consult legal counsel, as the decision is a complex one that requires the consideration of multiple factors and issues.

Nico Jimenez

Attorney at Law, BeckerMiami | bio

So, You Received a Written Inquiry

Written inquiry

So, your community association received correspondence that requests answers to certain questions. You may have just received what is also referred to as a “written inquiry.” What to do?

First and foremost, you should always ensure that the Board of Directors and legal counsel of your community association are promptly advised of the receipt of a written inquiry. As explained in this article, receipt of a written inquiry can trigger time sensitive legal obligations that can expose the community association to penalties.

If your community association is a condominium association, you should refer to Chapter 718 of Florida Statutes, which is also known as the “Condominium Act” and which governs condominium associations in Florida. Specifically, Fla. Stat. § 718.112(2)(a)(2) provides as follows:

2. When a unit owner of a residential condominium files a written inquiry by certified mail with the board of administration, the board shall respond in writing to the unit owner within 30 days after receipt of the inquiry. The board’s response shall either give a substantive response to the inquirer, notify the inquirer that a legal opinion has been requested, or notify the inquirer that advice has been requested from the division. If the board requests advice from the division, the board shall, within 10 days after its receipt of the advice, provide in writing a substantive response to the inquirer. If a legal opinion is requested, the board shall, within 60 days after the receipt of the inquiry, provide in writing a substantive response to the inquiry. The failure to provide a substantive response to the inquiry as provided herein precludes the board from recovering attorney fees and costs in any subsequent litigation, administrative proceeding, or arbitration arising out of the inquiry. The association may through its board of administration adopt reasonable rules and regulations regarding the frequency and manner of responding to unit owner inquiries, one of which may be that the association is only obligated to respond to one written inquiry per unit in any given 30-day period. In such a case, any additional inquiry or inquiries must be responded to in the subsequent 30-day period, or periods, as applicable.

Based on the foregoing, the applicability of Fla. Stat. § 718.112(2)(a)(2) and your statutory obligation to respond to a written inquiry in accordance with the procedures therein may depend on a number of factors such as, whether the recipient of the written inquiry is a residential condominium, whether the written inquiry was sent by a unit owner, and whether the written inquiry was sent “by certified mail”. If you answered “yes” to all of the foregoing, Fla. Stat. § 718.112(2)(a)(2) may apply to your written inquiry and you may be statutorily obligated to respond to same in accordance with said statute.

If your community association is a Cooperative, you should refer to Chapter 719 of Florida Statutes, which is also known as the “Cooperative Act” and which governs the cooperatives of Florida. The Cooperative Act contains a similar provision to that of the Condominium Act, Fla. Stat. § 719.106(1)(a)(3), which provides as follows:

3. When a unit owner files a written inquiry by certified mail with the board of administration, the board shall respond in writing to the unit owner within 30 days of receipt of the inquiry. The board’s response shall either give a substantive response to the inquirer, notify the inquirer that a legal opinion has been requested, or notify the inquirer that advice has been requested from the division. If the board requests advice from the division, the board shall, within 10 days of its receipt of the advice, provide in writing a substantive response to the inquirer. If a legal opinion is requested, the board shall, within 60 days after the receipt of the inquiry, provide in writing a substantive response to the inquirer. The failure to provide a substantive response to the inquirer as provided herein precludes the board from recovering attorney’s fees and costs in any subsequent litigation, administrative proceeding, or arbitration arising out of the inquiry. The association may, through its board of administration, adopt reasonable rules and regulations regarding the frequency and manner of responding to the unit owners’ inquiries, one of which may be that the association is obligated to respond to only one written inquiry per unit in any given 30-day period. In such case, any additional inquiry or inquiries must be responded to in the subsequent 30-day period, or periods, as applicable.

The same analysis for condominiums above would apply to the analysis for a written inquiry received by a cooperative.

On the other hand, if your community association is a homeowners’ association, unlike condominium associations and cooperatives, you cannot depend on the applicable statutes for guidance. Chapter 720 of Florida Statutes, which is also known as the “Homeowners’ Association Act” and which governs Florida homeowners’ associations, contains no provisions regarding written inquiries. So, you may conclude that you are not required to respond to the written inquiry you received.

However, that is not the end of the matter. Regardless of whether you are a condominium association, a cooperative, or a homeowners’ association, you should always consult the Governing Documents of your community association regarding written inquiries. Governing Documents may contain their own requirements and procedures regarding the receipt of written inquiries, even in a homeowners’ association that is not statutorily required to respond to same.

Furthermore, your community association should consider responding to a written inquiry even if not legally required. Written inquiries may be a chance for the association to proactively respond to and address a unit owner issue at an early stage and before any sort of escalation.

You should always consult legal counsel with respect to a written inquiry so as to ensure compliance with Florida law and that your community association’s interests are well served. Written inquiries addressed to a community association may contain requests that may fall within the scope of statutes not addressed in this article or which otherwise may require attention, such as requests to inspect records or a demand for pre-suit mediation.

As always, if you have any questions regarding the above, please consult with your legal counsel.

 

Nico Jimenez

Attorney at Law, Becker
Miami | bio

 

 

Simplifying Official Records Inspections for both the Association and the Owners

official records inspections

Condominium associations, cooperatives, and homeowners’ associations are all required to maintain and make available to owners official records of the association. The respective statutes governing each type of association contain a list of records that must be maintained by the association, as well as a catch-all provision for “all other written records of the association.” Association counsel should be consulted if the Board has any doubt about whether something constitutes an official written record of the association that needs to be maintained and/or be subject to inspection. Although the requirement may seem simple enough, issues arise, for example, distinguishing between association emails and those that belong to a director as an individual.

Association records must be kept either for one year, seven years, or permanently, which is also set forth in the respective statutes for each type of association. For example, a copy of the developer’s plans, permits, warranties, other items; a copy of the recorded declaration of condominium and all amendments; a copy of the recorded bylaws and all amendments; a certified copy of the articles of incorporation and each amendment; a copy of the current rules; and a book contains all meeting minutes, both board and member meetings, must all be kept permanently. Meanwhile, bids for work to be performed or for materials, equipment or services, as well as all records from an elections (e.g., ballots, sign-in sheets, proxies, etc.) must be maintained for one year. Everything else that is considered an official record of the association must be maintained for at least seven years.

Good record keeping is important of any corporation. For associations, it is also important because the official records are open to inspection by any association member or their authorized representative and must be made available within ten working days after receipt of a written request. Finding minutes from ten years ago is much easier if the records are well-organized. There are a number of ways the association may make the records available for inspection. The association may have the records available to the owner on site by having the owner come to the association office or a conference room. The records can be in physical printed form, however, if the association has digitalized its official records, the owner has the option, at their discretion, to review the records in electronic format on a computer screen. If the association so chooses, it may e-mail them. However, a common misconception is that the association is required to send or e-mail records to the requesting owner. The association is not obligated to send the records, only to make them available for inspection. The association may be more liberal with its policy and send out records, but it is not a statutory obligation. The right to inspect the records also includes the right to make or obtain copies, at the owner’s reasonable expense. A unit owner may make a photocopy with his or her cellphone. In such an instance, the association could not charge for the copies.

Another issue with disorganized records is that certain records are not accessible to unit owners and need to be excluded from the inspection. For example, records protected by the lawyer-client privilege and personnel records of association or management company employees are two types of records that unit owners cannot access. If the association is allowing an owner to come to the office to inspect requested records by sifting through a file cabinet or boxes, an association representative needs to ensure that those excluded records are removed from the file or box. Again, a well-maintained record keeping system makes this much easier.

In addition to a good record-keeping system, the association should consult with counsel to set up a written policy for the handling of inspection requests. The statute specifies that the association may adopt reasonable rules regarding the frequency, time, location, notice, and manner of record inspections and copying. The association, however, cannot require a member to demonstrate a purpose or state a reason for requesting to inspect certain records. Setting forth a written policy allows the association to fulfill the requests in the statutorily required time frame without such requests disrupting the operation of the association office or interfering with the other duties of association staff or the board itself. Such a policy can address the many issues that arise during these inspection requests. For example, does the association have a rule as to how owners need to request records? If not, is an e-mail sufficient? Is a verbal request sufficient? Or, for those requests that consist of a significant number of records, the association may want to include a rule for a reasonable amount of time per day the owner can spend inspecting the records. Without a written formal policy, the association cannot enforce restrictions regarding access to records.

Consulting with counsel to put together a written policy for official records inspection can significantly simplify this statutory obligation for the Board, management and/or association employees, as well as protect the Association from owner claims of non-compliance. Owners are also better served by having a clear written policy of how to make their inspection requests and how their requests will be fulfilled.

 

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

 

 

Can the Directors and Members of Your Community Association Meet and Vote Remotely?

During the COVID-19 pandemic, people and businesses alike struggled to meet, organize, and otherwise conduct business in person due to quarantine measures and social distancing policies. In light of these challenges, in 2021, the Florida Legislature enacted laws to make clear that, during a state of emergency, condominium, cooperatives, and homeowners’ associations are authorized to conduct board meetings, committee meetings, elections, and members meetings, in whole or in part, by telephone, real-time videoconferencing, or similar real-time electronic or video communication. As a result, many community associations have become accustomed to remote functionality and utilizing popular real-time video conferencing software such as “Zoom” for the purposes of organizing meetings of members and Directors alike. However, now that the pandemic state of emergency has come and gone, can the Directors and members of your community association continue to meet and vote via Zoom or similar remote methods?

In today’s internet age, there are countless reasons that your community association may benefit from authorizing remote access to the meetings of Directors and members. In fact, the availability of remote access alone tends to lead to, at the very least, a positive feeling of increased transparency among the community, due to the ease in which the ongoings of the association can be broadcast and discussed. For the same reason, remote access may also benefit communities that often struggle to obtain the participation of “snowbirds,” or unit owners that only reside in Florida part time. In addition, access software such as Zoom can aid property managers and Directors to control the presentation and flow of a meeting. Furthermore, remote access may reduce traditional expenses associated with in-person meetings, such as travel time for attorneys.

Florida Statutes do provide ways in which Directors and members of a community association may meet and vote remotely in the course of ordinary business. The primary laws that govern condominium, cooperatives, and homeowners’ associations, Chapters 718, 719, and 720 of Florida Statutes, expressly provide that Directors attending a meeting remotely not only count towards a quorum, but may also vote as if physically present, subject to a few requirements in regard to their remote attendance.

Specifically, Fla. Stat. § 718.112(2)(B)(5), governing condominium associations, provides as follows:

5. A board or committee member’s participation in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication counts toward a quorum, and such member may vote as if physically present. A speaker must be used so that the conversation of such members may be heard by the board or committee members attending in person as well as by any unit owners present at a meeting.

Likewise, Fla. Stat. § 719.106(b)(5), governing Cooperatives, provides that:

5. A board member or committee member participating in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication counts toward a quorum, and such member may vote as if physically present. A speaker must be used so that the conversation of such members may be heard by the board or committee members attending in person, as well as by any unit owners present at a meeting.

Similarly, Fla. Stat. § 617.0820(4), governing Homeowners’ associations, provides that:

(4) Unless the articles of incorporation or the bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

The foregoing provisions do not apply to the members of the community associations; they only apply to association board members. Nevertheless, Chapter 617, Florida Statutes, the Florida Not For Profit Corporation Act, which includes condominiums, cooperatives, and homeowners’ associations, provides that members attending meetings remotely may be counted for quorum and voting purposes, subject to certain requirements. Specifically, Fla. Stat. § 617.0721(3) provides as follows:

(3) If authorized by the board of directors, and subject to such guidelines and procedures as the board of directors may adopt, members and proxy holders who are not physically present at a meeting may, by means of remote communication:

(a) Participate in the meeting.

(b) Be deemed to be present in person and vote at the meeting if:

1. The corporation implements reasonable means to verify that each person deemed present and authorized to vote by means of remote communication is a member or proxy holder; and

2. The corporation implements reasonable measures to provide such members or proxy holders with a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members, including an opportunity to communicate and to read or hear the proceedings of the meeting substantially concurrent with the proceedings.

If any member or proxy holder votes or takes other action by means of remote communication, a record of that member’s participation in the meeting must be maintained by the corporation in accordance with s. 617.1601.

Notwithstanding the above, community associations should be aware that the forgoing provisions do not authorize remote only meetings in all instances. Community associations should always try to provide a physical location for meetings so that those individuals who are unable to attend meetings remotely, or otherwise wish to attend in person, can do so. Florida law is clear that, absent a few narrow exceptions, the meetings of Directors and members must be open to all members.

Furthermore, the foregoing provisions do not apply to all meetings or instances where business of the community will be conducted. For example, election of Condominium and Cooperative Directors cannot be processed remotely. Among other reasons, Florida law is clear that the votes submitted for such Directors must be processed and counted by an “impartial committee” in the “presence” of unit owners during the annual meeting and elections of the community association. While these same requirements are not found in Chapter 720, Florida Statutes, in regard to election of homeowner association Directors, from a practical point of view it is very difficult, if not impossible, to conduct elections with nominations from the floor and the counting of physical ballots.

Lastly, because community associations are also governed by their respective Governing Documents, always consult with your attorney to determine if, and to what extent, the community association’s Governing Documents allow remote participation in meetings. Governing Documents that were drafted fifty years ago may not even address the issue. On the other hand, Governing Documents may expressly require that members or Directors may only participate and vote in meetings via proxy or in person. To the extent that Governing Documents conflict with the foregoing Florida Statutes, your community association may need to amend its Governing Documents, or take other actions, to ensure that remote meetings can be held in full compliance with Florida law.

As always, if you have any questions regarding the above, the Association should consult with its legal counsel.

 

Nicolas M. Jimenez

Attorney at Law, Becker
Miami | bio

 

 

Community Association Budgeting in the “Sunshine”

Community Association Budgeting in the “Sunshine”

“Sunshine” laws require transparency and disclosure in government and business. Community associations have their own of “sunshine” requirements. Are there any “sunshine” requirements for the budgeting process? In other words, what parts of the budget process must community boards ensure to make open, available, or transparent to community members?

What notice is required?

Board meetings at which the budget is being considered must be open to all members. In condominium associations and cooperatives, meetings of committees that make recommendations to the board regarding the association budget must be open to all members. For homeowners’ associations, the requirement is for meetings of any committee when a final decision will be made regarding the expenditure of the association funds. Because these meetings must be open to the members, there are certainly notice requirements.

In condominium associations and cooperatives, the board must notify members of any meeting at which the proposed budget will be considered at least fourteen days prior to the meeting by hand delivery, mail, or electronic transmission. The notice must include the date, time, and location of the budget meeting, and last, but definitely not least, a copy of the proposed budget must be sent with the notice. This includes electronic transmission of the notice of the budget meeting, which shall only be effective if a copy of the proposed annual budget accompanies the notice of budget meeting. The notice must also be posted in a conspicuous location on the condominium or cooperative property for at least forty-eight hours prior to the meeting. Condominium associations with 150 or more units have additional notice requirements. Specifically, the notice of the budget meeting and the proposed budget must also be posted on the association’s website or be made available on an application that may be downloaded on a mobile device.

There are lesser restrictions in homeowners’ associations as to notice. Boards are required to post notice of the meeting at least forty-eight hours in advance of the budget meeting. There is no requirement that the notice be sent to the owners, and there is no general website posting requirement for homeowners’ associations in Florida. There is also no requirement for homeowners’ associations to send the members the proposed budget in advance of the budget meeting. It is actually the opposite of condominium associations in that the board must provide each member with a copy of the budget or a written notice that a copy of the budget is available within ten days after the meeting at which the board adopted the budget.

In either case, the governing documents of the community may impose stricter notice requirements than the minimum statutory requirements. For example, if your association bylaws require a longer notice period for the budget meeting, such as thirty days’ notice, the board needs to verify and adhere to the bylaw requirement when setting up the budget meeting.

In addition to the ability to attend budget meetings, what other involvement do community members have in the budget process?

Generally, in community associations, the board alone has the authority to adopt the budget without a vote of the membership. You may consider having association counsel verify that the governing documents do not require membership approval of the budget if you are unsure that the board has the authority to do so.

For condominium associations and cooperatives, the statute allows the membership to get involved in the budgeting process in the event that the board adopts an annual budget which exceeds 115 percent of the assessments for the preceding year. At least ten percent of the members must submit a written request for a special meeting of the owners to consider a substitute budget. For condominium associations, this request must be made within sixty days after the adoption of the annual budget. A proper meeting notice must be sent out and a membership meeting will be held. If there is not a quorum present at the meeting, or if the substitute budget is not adopted, the previously adopted annual budget remains in effect. In cooperatives, the board must call a special meeting within thirty days of receiving such request, and upon not less than ten days’ written notice to each unit owner. At the special meeting, unit owners shall consider and enact a budget. Unless the bylaws require a larger vote, the adoption of the budget requires a vote of not less than a majority of all the voting interests. There are no such provisions in the Homeowners Act.

The board has a fiduciary duty to the members of their community associations. Following the requirements of budget meeting notices and properly adopting the budget are thus critical and association counsel should be consulted when needed.

 

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio

 

 

“Sunshine Laws” for Condominium Associations

Sunshine Laws

Issues generally arise in community associations when there is or appears to be a lack of transparency between the board of directors and the association members. The Florida’s Sunshine in the Government Act, or the “sunshine laws,” require transparency and disclosure in government and business. Although the Florida’s Sunshine in the Government Act does not apply to community associations, the Florida Condominium Act (Chapter 718 of the Florida Statutes), the Florida Homeowners’ Association (Chapter 720), and the Florida Cooperative Act (Chapter 719) contain their own set of “sunshine” requirements for boards of community associations. Transparency is the key to following the sunshine laws.

First, boards need to determine which meetings must to be open to association members. While boards may desire to avoid certain topics in open meetings, the Acts referenced above require board meetings to be open to members and owners have a right to be informed. The Homeowners’ Association Act defines a meeting of the board as “whenever a quorum of the board gathers to conduct association business.” First, a quorum of the board must be present. For example, a discussion between two directors of a five-member board would not constitute a meeting of the board. The meaning of “conducting” business is trickier. Some boards may desire to meet for planning or agenda development, but the sunshine laws do not require a binding vote to be taken for a meeting to qualify as conducting association business. The board should consider that any gathering of a quorum of the board where the development of ideas takes place constitutes a meeting. The Condominium Act and the Cooperative Act state that meetings of the board of administration at which a quorum of the members is present shall be open to all unit owners.

There are two statutory exceptions to the requirement that board meetings must be open. First, meetings with the association’s attorney to discuss proposed or pending litigation, or if the meeting is held for the purpose of seeking or rendering legal advice, may be closed. Second is when “personnel matters” are under discussion. Personnel matters should be limited to discussions of specific issues pertaining to association employees. So can individual board members meet or call one another to discuss association business as long as the meeting or phone call comprise less than a quorum of the board? Yes. However, remote meetings of a quorum of the board still constitute meetings that must be open to members.

The second important “sunshine” requirement is the noticing of meetings. The requirement that meetings be open to members is of little benefit if owners do not know when or where the meetings are taking place. Notice of all board meetings must be posted conspicuously on the community property for at least forty-eight (48) hours before the meeting. However, certain meetings, such as meetings where non-emergency special assessments or amendments to rules regarding unit or parcel use are considered, require notices to be mailed, delivered, or electronically transmitted to the unit owners AND posted conspicuously on the condominium property not less than fourteen (14) days prior to the meeting. The notices also need to clearly identify the agenda items that will be discussed at the meeting.

The “sunshine” laws also give owners certain rights at board meetings. Owners have a right to speak at all open board meetings on all designated agenda items. The right to speak does not mean that every unit owner is entitled to endlessly debate motions, but it does mean that the owners are entitled to be heard regarding matters the board intends to consider at the meeting. Thus, unit owner statements should be taken either at the beginning of the meeting, or at a set time in connection with a specific agenda item. Allowing owners to speak after the board has voted on the agenda item defeats the owners’ rights to participate. The association may adopt written reasonable rules governing the frequency, duration and manner of unit owner statements. Owners may also record or videotape such meetings.

What about committees? The sunshine laws also apply to committees that are empowered to take final action on behalf of the board, or committees that make recommendations to the board regarding the association budget. Under the Condominium and Cooperative Acts, all committees are subject to sunshine requirements unless the association bylaws specifically exempt committees from the sunshine laws. As such, members have a right to attend, speak and tape or video record at the meetings of the committees which fall in this category of what we call “statutory committees.”

Compliance with the “sunshine” laws is an important part of ensuring the association runs smoothly. When the board is transparent and members are well informed regarding association business, the board reduces the chances that discord will ensue between the board and the association members.

 

Karyan San Martano

Attorney at Law, Becker
Ft. Lauderdale | bio