FCAP Community

Published May 2024

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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 www.fcapgroup.com/membership/education-training/.

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Harmony Beyond the Spreadsheet
Navigating Special Assessments—The Roles and Responsibilities in Community Associations

By Marcy Kravit, CMCA, AMS, PCAM, CFCAM, CSM
Director of Community Association Relations, Hotwire Communications
FCAP Education Program Coordinator

     Dealing with special assessments in community associations is more than just a financial matter; it’s a process that involves people, emotions, and a shared sense of community. To understand and assist with this process, it’s essential to discuss the communication strategies, the fiduciary duties of the board, and the role of the community association manager in guiding residents through these challenging times.

Communication as a Compass

     Imagine being a resident facing the news of a special assessment. Clear, transparent communication becomes the guiding compass in such situations. The board of directors plays a crucial role in ensuring that residents are well informed about the reasons behind the special assessment, its scope, and the expected impact on the community.

     Infusing compassion into the communication process involves empathy and understanding. The board should acknowledge the concerns and emotions of residents, addressing not just the financial aspects but also the shared sense of community. Regular updates, town hall meetings, email blasts, community channel, website, newsletters, and open channels of communication foster a supportive environment where residents feel heard and included in the decision-making process.

Board’s Fiduciary Duty

     The fiduciary duty of the board extends beyond financial responsibilities. It involves acting in the best interests of the community and its residents. In the context of special assessments, the board is voting to make decisions that safeguard, maintain, protect, and secure the financial health and well-being of the association.

     A compassionate board recognizes that special assessments can be a source of added stress for residents. While fulfilling their fiduciary duty to maintain and protect the community and its financial stability, the board should also attempt to minimize the impact on individual homeowners. This may involve exploring alternative financing options, negotiating favorable terms, or implementing payment plans that alleviate the immediate burden on residents.

     Researching banks that specialize in understanding and focusing on working in community associations is a strategic step the board can take to enhance their support for residents during special assessments. By proactively exploring financial institutions with expertise in community associations, the board can identify banks that offer loans, lines of credit, favorable terms, flexible financing options, and a deep understanding of the unique challenges faced by associations.

     This research empowers the board to negotiate better financing arrangements, potentially securing terms that lessen the financial burden on residents. Engaging with specialized banks allows the board to tap into resources tailored to the specific needs of community associations, ensuring a smoother and more informed financial process.

     Additionally, the board can share their findings with residents, keeping them informed about the selected banking institution partner and the benefits it brings to the community. Transparent communication about these efforts demonstrates the board’s commitment to securing the best possible financial solutions and builds trust and confidence among residents.

     Incorporating this initiative-taking approach into the overall strategy not only strengthens the financial foundation of the community but also reflects the board’s professionalism and dedication to exploring options that can alleviate the impact of special assessments on individual homeowners and the added stress that goes along with it.

The Community Association Manager’s Role

     The community association manager serves as a vital link connecting the board and residents, playing a fundamental role in the entire process. Beyond the administrative duties, they are professionals and a support system, helping residents navigate the intricate landscape of special assessments. Aiming to be approachable, responsive, and understanding, the manager becomes a reliable source of support during times of uncertainty, ensuring that residents feel heard and cared for throughout the challenges posed by special assessments.

     The manager’s role involves acknowledging the emotional impact that special assessments can have on residents. It requires actively listening to concerns, offering clear explanations, and providing reassurance. The manager should play an active role in facilitating communication between the board and residents, ensuring that information is shared in a clear, understandable, and empathetic manner.

     Examining the intricacies of expenses and the association’s financial shortfall provides clarity on the challenges faced. The detailed breakdown of expenses is crucial for residents to understand the specific areas where funds are allocated and the reasons behind the association’s financial strain.

     The board can transparently communicate the detailed breakdown, outlining specific expenses such as maintenance, repairs, insurance, and other operational costs. This clarity helps residents comprehend the necessity of the funds and why certain expenditures are essential for the overall well-being of the community.

     By providing a comprehensive overview of the expenses, the reasons for the financial strain, and an initiative-taking plan for improvement, this approach should build trust, transparency, and a shared commitment among residents and hopefully facilitate a collaborative effort to navigate the challenges associated with special assessments.

The Association Attorney’s Role

     In the context of special assessments, the association attorney plays a specific role related to legal aspects surrounding these financial measures. The attorney’s responsibilities include the following:

     Legal Compliance—The association attorney ensures that the process of implementing special assessments adheres to the legal framework governing community associations. This involves reviewing governing documents, state laws, and any specific requirements related to special assessments.

     Notification Procedures—Special assessments often require specific notification procedures and a vote of the membership regarding these financial obligations. The attorney aids in drafting and reviewing these notifications and procedures to ensure they comply with the documents, state statutes, and legal standards in providing residents with the necessary information.

     Challenge Resolution—In situations where residents challenge or dispute the legitimacy of a special assessment, the association attorney becomes involved in resolving these legal issues. They may provide guidance on the association’s authority to impose assessments and address legal concerns raised by residents.

     Enforcement Actions—If residents fail to comply with the special assessment requirements, the association attorney may initiate legal actions to enforce payment. This can involve pursuing liens on properties or taking other legal measures to collect the necessary funds.

     Documentation and Records—The attorney ensures that all legal documentation related to special assessments is accurately maintained. This includes records of notifications, board decisions, and any legal actions taken, providing the legal documents in case of future disputes.

     Contractual Compliance—Special assessments may involve contracts with service providers or contractors for specific projects. The association attorney aids in reviewing and negotiating these contracts to protect the association’s legal interests.

     Review of Governing Documents—The attorney examines the association’s governing documents to confirm that they grant the board the authority to impose special assessments. They also ensure that any limitations or requirements related to special assessment procedures are in compliance.

     Legal Guidance to the Board—Offering ongoing legal guidance, the attorney advises the board on the legal implications of special assessments, potential challenges, and the best practices to minimize legal risks.

     By actively taking part in the legal aspects of special assessments, the association attorney contributes to a transparent and legally sound process. This involvement helps protect the association’s interests, ensures compliance with relevant laws, and addresses any legal challenges that may arise in the course of implementing special assessments.

     In the management of special assessments within community associations, it is crucial to acknowledge that this is a collective and collaborative effort that involves the board of directors, the community association manager (CAM), the attorney, and residents. This undertaking requires professionalism, patience, support, compassion, and a willingness to listen.

     Beyond mere numerical entries on a spreadsheet, the focus should be on the lives, homes, and sense of belonging within the community. It involves conveying communication with a human touch, approaching fiduciary duties with compassion, and utilizing the significant role of the CAM as a guide in this process.

     By embracing these principles, associations can develop resilience and unity in the face of financial challenges. Together, residents, boards, and managers can navigate this journey with empathy and understanding, ensuring that the association remains a secure, supportive, and stable community for all involved.

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

Betsy,
     The troubles here continue! A board member approached me the other day and said the new board members changed passwords and codes and won’t share them with him.  He is locked out of the computers, the office, and banking passwords. And three of the board members are having private meetings and excluding the fourth one. What recourse does he have, if any?
–  Cathie

Cathie,
     I don’t think he has much recourse. It doesn’t seem to be a legal problem or something an attorney would get involved in and neither would the DBPR. It appears to be a moral, ethical, and procedural issue, which is unfortunate and sad since these people are not fifth graders.
– Betsy

Betsy,
     Our bylaws list us as the “White Ibis Condominium Association, Inc.” Are we not an HOA?
– Bob

Bob,
     No, you are a condominium association under Chapter 718. The use of the word “homeowners” is a misuse of the word since there is an actual formal law known as Chapter 720, Florida Homeowners’ Association Act. You could say you are a “COA,” but don’t use HOA to describe your community.
     Please be sure to subscribe to my YouTube channel, CAM Matters™. You’ll learn a lot about living in and managing a condominium association. www.youtube.com/c/cammatters    
– Betsy

Betsy,
     One of my condominium developments has heavy investor ownership, and as such the tenants don’t have the same level of pride in the community. The board was asking if they can charge a rental fee to the owners. The documents do not have any rental restrictions. It seems to make sense to me, but I question if it’s legal.
– Lori

Lori,
     My understanding is you can only charge the owners a fee if it is in your declaration, which is where rental restrictions would be too.
     If you did charge the owner a fee, it can only be up to one month’s rent and cannot be held in operating funds. It is for damage the tenant may do to common elements/property and must be refunded if there is no damage at the end of the rental term.
     To add rental restrictions and charge the owners the damage deposit, you’ll need to amend your declaration. That means the investors will have to agree to restrictions on themselves, which they may not want.
– Betsy

Betsy, 
     We were told that a document needed to be filed at the county level giving an HOA the right of first refusal in the event an HOA wanted to buy a mobile home park.  You said you would check into it, so I wanted to know what you discovered.  
– John

John,
     The Florida Statutes section 723.076(3) and 723.071 are the statutory requirements for recording a notice with the clerk of the court. The statute does not provide the form. So, you’ll need to create one or have an attorney do it for you.
     As an aside, the Chapter 723 Florida Mobile Home Act is poorly named because it is often confused with Chapter 720, the Florida Homeowners’ Association Act. The two types of ownership and statutes are worlds apart. When the legislators named Chapter 723 owners’ association, they should have left out the word “home.” Something like “tenants’ association” would have been a better fitting term.
– Betsy

Betsy,
     I really enjoyed your class at the Star Hospitality Conference in Punta Gorda. I found it very enlightening and insightful. I have three questions.
     We are going to videotape our meetings. What rules, etc. are required to have only homeowners view them? We cannot use our website.
     Currently the financials are posted on the owners’ web page. They include the owners’ nonpayments, balances, etc. Is that ok?
     All our correspondence and business is on our CAM’s laptop. I assume if we change CAMs, then he or she is  obligated to turn over all emails and files to the new CAM, right?
– Lynda

Lynda,
     Basically, there are only a few laws for videotaping meetings and who can see the video. Mainly, owners may audio or videotape the meetings based on rules adopted by the board. What the owners do with the recording is not regulated. There is no regulation for putting videos on the website.
     Account receivable (A/R) reports are not secret or private: they are official records. Any owner can request access to the report. An A/R report is not available to third parties except in the case of an estoppel request.
     You don’t say if the CAM is your employee or works for a management company. If the CAM is an employee, I’ll assume the computer belongs to the association so it will stay with you when the CAM leaves.
     When you change management companies, they are required by law to turn over all official records of the association within 10 days of termination of the management agreement. Emails are considered official records, but I honestly don’t know how they could be downloaded or transferred.
– Betsy

Betsy,
     In my HOA, the question on everyone’s mind is if the BOD can vote off another member without a meeting? Or with a meeting? And is there a Chapter 720 publication for dummies?
– Cathie

Cathie,
     Board members can only be removed by the membership through a specific statutory process called “recall.”
     Officers may be removed from their office (but not from the board) by the board members. That board member would then take a plain board seat.
     The Florida Board Education Course Homeowners manual is a good resource as well as the CAM QuickStart™ manual. Both come with the class with the same name.
     Also, all the free articles on my website and of course my YouTube channel, CAM Matters™ at www.youtube.com/c/cammatters, are additional helpful resources.
 – Betsy