Rembaum’s Association Roundup

Is It Time to Amend and Restate Our Governing Documents?

By Jeffrey A. Rembaum, Esq. / Published June 2024

When was the last time your board of directors sat down to review the governing documents of the association, including the declaration, the articles of incorporation, the bylaws, and the rules and regulations?  Not only is it one of the first things every new board member should do, but it is a good practice for each board member to do on a regular basis. Good business practices suggest that the board consider asking legal counsel for the association to review the governing documents to provide recommendations for updating based upon case law and the current Florida Statutes. In addition, each of the governing documents needs to be consistent with the others, and often times there are embedded conflicts. Amending and restating the entirety of these documents will often identify these problems so that they can be fixed once and for all.

     Another positive benefit is that those rules which have been adopted over the years by the board of directors (or other committee vested with such authority) can be inserted into the declaration. Rules drafted into the declaration that have been duly approved by the membership have a much better chance of surviving a legal challenge. In other words, an owner fighting their association over a violation has a better chance of prevailing if they are fighting a board-adopted rule rather than a rule contained within the declaration  that was voted on and approved by the membership.

     Other reasons to consider revising the governing documents include conformance with current laws, revisiting the powers and authority of the board of directors, deleting obsolete provisions such as references to the developer and other developer obligations, tailoring the documents to the needs and the desires of the community, such as clarifying maintenance and repair responsibilities, and updating use restrictions regarding important topics such as vehicles, pets, architectural control, and more.

     Updating the sales, lease, and transfer provisions could be worthwhile as well. Grounds for potential denial of an applicant could include lying on the application, a history of felony convictions or guilty pleas of crimes of moral turpitude, a history of financial irresponsibility, and even being a bad neighbor elsewhere. Oftentimes individuals (guests, family members, etc.) who are neither owners nor tenants are overlooked period. The declaration could provide a provision that anybody staying longer than 30 days must be considered a tenant and thus subjected to the same rules of approval as all other tenants.

     Does your HOA charge a transfer fee? The authority needs to be within the declaration to avoid a potential legal challenge. Condominium associations remain limited to charging $150 per applicant, and spouses or parents and any dependent children are all considered one applicant, and condominium associations cannot charge the transfer fee or charge the tenant of an owner a security deposit unless such authority is set out within the declaration, articles, or bylaws.

     As to new leasing restrictions, there are limitations for both condominium and homeowners’ associations that should be reviewed with legal counsel, as many such leasing amendments, even if duly approved by the owners, will only apply to those owners who vote in favor of the leasing amendment and those owners who acquired title to their home after the effective date of the amendment.

     While an HOA can amend its governing documents to i) prohibit or regulate rental terms of less than six months and ii) can prohibit rental of a parcel more than three times in a calendar year, which amendments would apply to every member of the association, any other leasing restriction would only apply to those members who vote in favor of the restriction until such time as title to the property changes hands.

     On the other hand, condominium association leasing amendments only apply to those owners who vote in favor of the leasing amendment when the amendment i) prohibits unit owners from renting their units for a period of time, ii) alters the duration of the rental term, or iii) specifies or limits the number of times unit owners are entitled to rent their units during a specific time.

     Through an amendment to the declaration, an HOA can clarify who is responsible to maintain, repair, and replace various improvements within the association; and condominium associations can clarify who is responsible to maintain, repair, and replace limited common elements as well as hurricane protection.

     Maybe the vote of the members needed to approve the amended and restated governing documents is too high and should be lowered. This can be handled by presenting an amendment to the membership before presenting the draft amended and restated governing documents and thus provide a better chance of achieving the necessary votes.

     While the condominium association election regime is fully governed by Florida statute, the HOA’s election takes place, for the most part, by following the provisions set out in the governing documents. Therefore, the HOA election regime should be carefully reviewed and revised.

     Regarding vacancies on the board, Florida law provides that an individual appointed to the board serves the remaining period of the unexpired term unless the bylaws provide otherwise. Perhaps instead of staying on the board through the end of the predecessor’s term, the bylaws could provide the appointed board member serves only until the next election. Staggered terms could be considered and/or altered as well.

     The body of law surrounding Florida’s community associations is ever evolving. Each year the legislature passes new laws that seem to affect us all; or do they? “Does that legislation apply to our association?,” association lawyers are often asked. (Well, it certainly does if the declaration has global “Kaufman” language that is applicable to the entirety of the document. Global “Kaufman” language is a term used to describe a sentence, usually near the beginning of the declaration, that provides the entire declaration is subject to the Florida Statutes “as it is amended from time to time.” By careful inclusion of “Kaufman” language applicable to only carefully selected declaration provisions, an association can ensure it benefits from new legislative changes while perhaps not being subject to the more onerous legislative changes. Only detailed conversation with the association’s legal counsel will provide better clarity as to which new laws apply to your association and which laws may not.

     The most important part of this process is to have detailed and productive conversations with your legal counsel regarding the entirety of the process.

Jeffrey Rembaum

Partner, Kaye Bender Rembaum

     Attorney Jeffrey Rembaum has considerable experience representing countless community associations that include condominium, homeowner, commercial, and cooperative associations throughout Florida. He is a board-certified specialist in condominium and planned development law and is a Florida Supreme Court circuit civil mediator. Every year since 2012 Mr. Rembaum has been inducted into the Florida Super Lawyers. He was twice awarded as a member of Florida Trend’s Legal Elite. Kaye Bender Rembaum P.L. is devoted to the representation of community and commercial associations throughout Florida with offices in Palm Beach, Broward, Hillsborough, and Orange Counties (and Miami-Dade by appointment). For more information, visit kbrlegal.com.