FCAP Community

Published December 2023

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     Florida Community Association Professionals’ (FCAP) training is offered on two levels. Level one consists of courses meeting Florida’s continuing education requirements for CAMs, and level two is the Florida Advanced CAM Studies (FACS) course. For further information about the more than 38 online continuing education classes available or to pursue the Certified Florida Community Association Manager (CFCAM) designation, please visit https://www.fcapgroup.com/managers-2/.   

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Because You Asked
By Betsy Barbieux, CAM, CFCAM, CMCA

Betsy,

Can we use the interest earned on the reserve CDs to reduce the money out of operating to fund the reserves?

– Steve

Steve,

Interest stays with each reserve line item; it doesn’t matter whether those funds are invested in a money market or a CD. So, at the end of each year, the fund balance on your reserve schedule is adjusted, which would account for the interest that line item earned. So, in a sense, yes, interest is being used to reduce the contribution for the next year.

– Betsy

Betsy,

Would you please answer two more questions?

If our bylaws specifically say that our annual meeting is to be held on December 1, must we have shareholder approval to change the date or hold the meeting on a different date?

Can an annual meeting be held by Zoom only?

I am sincerely grateful for the information and recent referral received from you.

– Helen

Helen,

If the bylaws state a specific date for the annual meeting with no allowance for the board to change it, changing it would require an amendment to the bylaws, which requires a membership vote.

The statutes do not address annual meetings being held by Zoom. Many boards used that method for their annual meetings during COVID-19, and many are still using a hybrid of both in person and Zoom. There’s no law against it, but the same quorum, election ballots/envelopes, and proxy requirements would still apply.

If the board is going to use a hybrid or Zoom-only model, the board could vote on a procedure so that everyone is clear on how the annual meeting will be conducted.

– Betsy

Betsy,

One of our HOA board members abstained from voting at a recent meeting without any conflict-of-interest reason. I recalled that as per your direction during your director’s certification course, a board member may only abstain if there is a direct conflict of interest, not just because he or she wants to “sit on the fence.” I mentioned this in the meeting. He has since challenged it, so our president sought advice from our current CAM.

Her response was that a board member may abstain from voting, and it must be stated in the minutes, but that the law now states that it is counted as a yes vote. Can you confirm and advise where in the statute this is covered?

– Linda

Linda,

Because of their fiduciary duty, board members should not abstain except for a stated, known conflict of interest. That board member is to abstain at the beginning of the agenda item discussion, and that specific conflict of interest is written into the minutes. That board member should not engage in any discussion about that item and may even temporarily leave the board table.

Remember, our board members are held to a higher standard than any other board member of any other type of corporation. I wrote about it in the Journal article, “A Layman’s Look at Fiduciary Duty”, which can be read at www.fcapgroup.com/flcaj/flcaj-articles/a-laymans-look-at-fiduciary-duty/.

As a CAM, I stop board members from abstaining and say to them, “If you don’t tell me ’no,’ then I’ll record your vote as a ‘yes.’” And I always have in my contracts that I take the minutes because I want them done correctly and quickly.

Here are all the relevant statutes. With “fiduciary” in the background, I use my powers of deduction to justify what I just said.

720.303(1)  The officers and directors of an association have a fiduciary relationship to the members who are served by the association. (This same language is in the condominium and cooperative statutes.)

720.303(3) MINUTES.—Minutes of all meetings of the members of an association and of the board of directors of an association must be maintained in written form or in another form that can be converted into written form within a reasonable time. A vote or abstention from voting on each matter voted upon for each director present at a board meeting must be recorded in the minutes.

718.111(1)(b) A director of the association who is present at a meeting of its board at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless he or she votes against such action or abstains from voting…. A vote or abstention for each member present shall be recorded in the minutes.

719.104(9)(b) A director of the association who is present at a meeting of its board at which action on any corporate matter is taken is presumed to have assented to the action taken unless the director votes against such action or abstains from voting in respect thereto because of an asserted conflict of interest…. A vote or abstention for each member present shall be recorded in the minutes.

– Betsy

Betsy,

I have a question that I need your help with. A resident has demanded to see the management company’s records in reference to employees’ safety practices while working on the job. Are these records protected under Section 720.303(5)(c)4?

– Mary Ann

Mary Ann,

I don’t think any management company employee records or policies, or any other company records, are available to owners. Only official records of the association are available to owners. You might double check with your attorney.

If the association employs the employees and there are written safety procedures, those records would be available. Only established, written records are available.

In other words, you are not required to create or compile any records for an owner. For instance, if an owner wants a spreadsheet of the Duke Energy invoices for the past two years and that spreadsheet doesn’t exist, you could provide copies of the Duke Energy invoices, and the owner can make his own spreadsheet.

Owners may request a copy of any association employment agreement, the management company contract, and/or the budgeted amount related to these contracts.- Betsy ⁿ

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Unveiling the Pulse of Florida Communities: CAM Monthly Reports Tell All!

By Marcy Kravit, CMCA, AMS, PCAM, CFCAM, CSM
Director of Community Association Management Hotwire Communications

  

Monthly community association management reports are essential documents that provide valuable information to the board of directors. These reports offer a comprehensive overview and summary of the association’s financial activities, operations, and overall status.

They play a vital role in ensuring accountability among the management team and board of directors, meeting fiduciary duties, fulfilling contractual obligations, providing status updates, and equipping the board with the necessary knowledge to make informed decisions.

Outlined below is an overview of the key elements you may wish to include in the monthly report for your community association:

Financial Overview

• Provide a detailed breakdown and financial summary of the association’s income, expenses, and overall financial health
• Present budgeted versus actual expenditures, outstanding maintenance dues, reserves update, and any financial discrepancies
• Enable informed decisions regarding budgeting, expenses, and future projects

Budget Monitoring

• Track the association’s budget throughout the year and compare actual expenses to the approved budget
• Identify any discrepancies or potential overspending in specific budget categories
• Highlight areas that may need adjustments or additional attention to ensure the association’s finances remain on track

Delinquency Tracking

• Provide updates on the collection of assessments and any delinquencies
• Include information on the number of delinquent accounts, the total amount outstanding, and any actions taken to address the issue
• Highlight efforts made to ensure timely collection of dues and maintain the association’s financial stability

Maintenance and Repairs

• Provide information on ongoing maintenance and repair activities within the community
• Include routine tasks, major repairs, and capital improvement projects
• Keep the board and members informed about progress, costs, and impact on the community

Rule Compliance & Violations Report

• Offer updates on violations and inspections regarding the community’s rules and regulations
• Identify recurring issues and enable appropriate enforcement actions
• Emphasize the importance of promoting a harmonious and well-maintained community environment through rule compliance

Operational Updates

• Communicate important updates, announcements, and upcoming events
• Include information about meetings, social activities, projects, and community news
• Keep the board and members well informed and engaged

Sample Monthly Report Format for a Community Association:

[Community Association Name]

Monthly Report—[Month, Year]

Introduction

Briefly summarize key points and developments during the month

Financial Update

Income breakdown for the month

Major expenses categorized by relevant areas

Comparison of actual expenses against the approved budget

Status of reserve funds

Project Updates

Ongoing projects or initiatives with progress updates, milestones, and challenges

Introduction of new projects proposed or initiated during the month

Wish List & Recommendations Review

Addressed items from the community’s and management’s wish list or suggested improvements

Current items under consideration

Staffing and Operations

Updates on staff changes or additions

Notable operational achievements or challenges from each department

Compliance and Legal Matters

Updates on compliance-related matters, aspects related to governing documents, regulations, violations, and enforcement actions

Summary of legal issues the community may be facing, pending lawsuits, or resolutions

Member Engagement

Significant communications received from community members during the month

Upcoming events, meetings, or social activities

Maintenance & Repairs

Overview of routine maintenance and repairs conducted during the month

Updates on building repairs, common area maintenance, landscaping and grounds maintenance, road and pavement maintenance, exterior maintenance, amenities and facilities maintenance, and capital improvement projects

Committee Updates

Updates on the activities, progress, and decisions made by various committees within the community

Summary of ongoing projects, committee meetings, requests for community input, opportunities for involvement, and the committee chair or point of contact

Board Action Items & Management Recommendations

Summary of action items or decisions made by the board of directors during the month, any items pending, and management recommendations

The monthly management report aids both the board members and managers in enhancing productivity and fostering a shared understanding within the community association. It plays a crucial role in ensuring that all stakeholders are well informed and aligned, promoting effective collaboration and decision-making.

The items listed below are how the report facilitates positive outcomes:

Improved Productivity—By reading the report, board members and managers gain a comprehensive overview of the association’s financial activities, operational updates, and overall status. This information enables them to identify any challenges, inefficiencies, or areas for improvement. By addressing these issues, productivity can be enhanced, ensuring that resources are utilized optimally and tasks are completed efficiently when drafting board meeting agenda items.

Shared Understanding—The report serves as a common source of information that brings board members and managers onto the same page. It is a collaborative effort. It provides a holistic view of the association’s performance, items pending, strategic planning, challenges, and goals.

By reviewing the report, all stakeholders can gain a shared understanding of the community’s financial health, ongoing projects, and compliance matters. This shared understanding fosters a productive relationship, better communication, coordination, and alignment among the board and management.

Informed Decision-Making—The report equips board members and managers with the necessary knowledge to make informed decisions. It provides insights into financial trends, budgetary allocations, and operational updates. By analyzing this information, stakeholders can assess the potential impact of pending decisions on the community association. This informed decision-making ensures that actions taken align with the association’s objectives and benefit its residents.

Enhanced Communication—The report serves as a valuable communication tool between the board members and managers. It provides a structured format for sharing updates, progress, and any concerns or issues. By regularly reviewing the report, all parties can engage in meaningful discussions during meetings, fostering open dialogue and effective problem-solving.

Accountability and Transparency—The report promotes accountability among board members and managers. It allows them to track progress, identify any deviations from plans or policies, address any areas of concern, and determine if they need to shift gears. This accountability ensures that everyone is aware of their responsibilities and actively working towards the association’s goals.

Moreover, the transparency provided by the report builds trust and confidence among the association’s leadership. The reports can be used to draft a monthly newsletter to keep the members informed.

In conclusion, the monthly reports are essential for facilitating effective communication, maintaining transparency, and upholding accountability. These reports provide a comprehensive overview of the association’s financial status, ongoing projects, and compliance with regulations. By regularly reviewing these reports, boards and managers can make informed decisions that benefit their community and ensure its efficient management. The insights gained from these reports empower managers and boards to fulfill their roles and responsibly contribute to the continued success of their community association.