The Term-Limit Clock Has Started

The Term-Limit Clock Has Started

By Ryan D. Poliakoff / Published September 2018

Photo by iStockphoto.com/Ake Ngiamsanguan

Q

uestion:

 

As I understand the law pertaining to our association elections—Section 718.112(2)(d)2, Fla. Stat., and FAC 61B-23 (a code provision that does not seem to modify the statute in any material respect)—the terms of all current members of our board expire at the next annual meeting, and all of the members may run for re-election. But our bylaws provide that directors are elected to staggered terms (three, two, and one-year terms, in accordance with their respective vote counts). How either the statute’s (as amended in 2017) limitation to two-year terms, or our bylaws’ provision for staggered three, two and one-year terms, apply given the most recent (2018) statutory amendment, I do not know, but the statute clearly prohibits three-year terms. If no change is made to our bylaws, is each member now serving a one-year term? Must our bylaws now be amended to reach any other result in the next election?

Answer:

This particular provision of the statute has been changed many times over the past 10 years and has, as a result, made a mess of many staggered boards. Let’s look at the recent history of the statute. Up until 2008, there was no limitation on the length of board terms, so long as the term was specified in the bylaws.Many communities, like yours, had three-year staggered terms. Then in 2008, the statute was amended to provide that, if the bylaws permit staggered terms of no more than two years and there was approval by a majority of the total voting interests, the directors were allowed to serve two-year staggered terms. That is, even if the bylaws expressly provided for staggered two-year terms, that was only allowed if a majority of the membership affirmatively approved using staggered two-year terms.

     In 2013, the statute was amended to provide that, if the bylaws so provided, directors could serve terms of not more than two years, period. That is, no membership vote was required, and the terms could be either two years, or two years and staggered, whatever was provided in the bylaws.

     The law was amended again in 2017 to provide that board members were prohibited from serving more than four consecutive two-year terms unless approved by a vote of two-thirds of the total voting interests, or unless there were not enough eligible candidates to fill the vacancies. This new term limit provision created some confusion, as it was not clear whether the law applied retroactively

(such that board members who had already served four consecutive two-year terms would be prohibited from serving again), or prospectively (such that the term limit clock started at the next election after July 1, 2017). Most attorneys feel that the term limit law should be applied prospectively.

     This year, the law was amended to expressly state that board members may serve terms longer than one year if provided in the bylaws (that is, three-year terms are now back in play), but a board member cannot serve more than eight consecutive years (regardless of the length of their term) unless approved by two-thirds of all votes cast in the election (not two-thirds of the entire membership, as it was in 2017). This is how the law now stands.

     You state that your bylaws expressly provide for three-year staggered terms. Note that the statute does not flatly state that all board terms expire at the annual meeting—it states, “except in a timeshare or nonresidential condominium, or if the staggered term of a board member does not expire until a later annual meeting, or if all members’ terms would otherwise expire but there are no candidates, the terms of all board members expire at the annual meeting.” That is, if your bylaws provided for longer terms, your bylaws control. Even though the statute briefly stated that three-year terms were not permitted, that did not permanently invalidate your bylaws, and you do not need to amend them—they are simply valid again and should be followed going forward. So, at the next election, your directors will in fact be elected to three-year terms, as originally provided in the bylaws. It’s going to be up to the board to determine how to re-create the three-year staggered terms, if there are directors who are not currently up for election—the statute does not address that issue at all.  Also, as I noted above, the new law does not prohibit three-year terms—it expressly states that “board members may serve terms longer than 1 year if permitted by the bylaws or articles of incorporation.” Every association is going to have to look closely at their bylaws to determine exactly how to elect directors at their next annual meeting, given how variable the law has been.

     As far as the term limits are concerned, you should assume, until an arbitrator says otherwise, that the term-limit clock started at the election that fell after July 1, 2017—and so it will not be until 2025 that term limits will come into play. Who knows—by then the statute could be completely different again. 

Ryan D. Poliakoff

Partner of Backer Aboud Poliakoff & Foelster

Ryan D. Poliakoff is a partner of Backer Aboud Poliakoff & Foelster and serves as general counsel to condominiums, homeowners associations, and country clubs throughout South Florida. He is the co-author of New Neighborhoods—The Consumer’s Guide to Condominium, Co-Op, and HOA Living. In addition to representing associations, he is a frequent contributor at seminars and workshops for attorneys and board members, and he has written hundreds of articles for magazines and newspapers throughout the United States. He can be reached at email hidden; JavaScript is required. For more information about his firm, visit www.bapflaw.com.