Tag Archives: board of directors

Florida Condominium Associations: Creating Quality Board Meeting Agendas and Minutes

Posted on March 24, 2014 | 39 Comments

NOTE: This post reflects our opinions and ideas and should not be taken as legal advice or professional guidance. References to language in the Florida Statutes or Florida Administrative Code are based on our reading and laymen’s interpretation of these documents. As always, we strongly encourage you to consult with legal counsel regarding the interpretation of law.

Board meeting agendas and meeting minutes are a key part of condominium associations’ official records. For unit owners not actively involved with the association, they are the primary way to follow along with the board’s activities. Given this, it is important that the board produce quality agendas and meeting minutes. Generally, these two documents should provide sufficient detail so that a unit owner with no previous knowledge of the property will understand what the board is considering and the reasoning behind board actions. Agendas and meeting minutes are also reviewed by the association’s CPA during audits, and are some of the primary documents the Department of Business and Professional Regulation (DBPR) examines to resolve complaints against associations. Lastly, new managers or board members use meeting minutes to obtain insight into past association issues. In sum, having detailed agendas and meeting minutes can prove invaluable.

There is significant confusion around how agendas and meeting minutes should be formatted, and what information they must contain. The Florida Statutes provide little guidance on these topics, leaving it to the boards and their managers to determine what is appropriate. Many standard formats (i.e., Robert’s Rules of Order) are used and often the community’s bylaws will provide guidelines. The board is obligated to follow any agenda, meeting minutes or board meeting format requirements outlined in their governing documents. That being said, if your documents indicate that Robert’s Rules should be followed, the board should review these Rules and make reasonable decisions about how to apply them to a casual condominium board meeting. For example, there is no need to stand to make a motion and no need for the president to recognize a board member before they speak despite what Robert’s Rules tells us.

This post will outline key considerations when constructing a format for your agendas and meeting minutes. It should be read in conjunction with my post on unit owner rights and association responsibilities at board meetings. We will discuss an appropriate and abbreviated version of Robert’s Rules for association meetings in a separate post.

Agendas

Florida Statute 718.112(2)(c) provides the following agenda requirements:

  • All regular board meeting agendas must be posted visibly on the condominium property at least 48 hours in advance of a meeting. NOTE: Members’ meetings (e.g., annual meeting), budget meetings and certain other meetings require additional advanced notice.
  • If there is no condominium property available where notices may be posted, the board must mail or email (if electronic consent form has been received) the agenda to all unit owners 14 days in advance of the meeting.
  • The board must adopt an official location for posting agendas on property.
  • Any item that will be discussed by the board at a meeting must be listed on the agenda.
  • If 20% or more of a community’s members petition to have an item on the agenda, the board must add this item to an agenda within 60 days of receipt of the petition.
  • Board meetings held in the event of an emergency may be held without a previously posted agenda.
  • Items not listed on an agenda may be taken up at a meeting on an emergency basis by a vote of a majority plus one of the board members.

NOTE: The DBPR has reprimanded associations for holding “emergency” meetings and discussing “emergency” items that are not true emergencies. If the board can wait 48 hours for proper notice to be posted before discussing the item, then the board should do so.

The above Florida Statute requirements do not provide any guidance on how a meeting agenda should be structured. This is up to the board to decide.  I recommend that an agenda format be approved by the board and used consistently. To better inform the unit owners, I also recommend that the agenda include a brief sentence on the purpose of each agenda item. For example, an agenda may list “Landscaping” as one of the items but to a unit owner that may mean very little. An agenda item like this is much more informative: “Landscaping: the board is considering proposals to replace all plants surrounding the front fountain”. Most management companies have their own agenda formats but the board can certainly request changes to that format.

Below, I have listed the primary sections of a board meeting agenda with some guidance on each item. They are listed below in the order which I would recommend they be listed on the agenda and addressed at the meeting.

NOTE: We will gladly provide a template agenda upon request.

1.     Meeting Date, Time and Location:  This information must be included on every posted agenda.

2.     Call to Order, Proof of Quorum, Proof of Notice & Roll Call: This item should be the first item at every meeting and is primarily a formality. The president will call the meeting to order, specify the time, and confirm that the agenda was properly posted at least 48 hours in advance of the meeting. The board members present should state their names and positions to confirm a quorum has been obtained.

3.     Special Speakers or Guests: Sometimes boards will request special guests attend a meeting. For example, the association may request that its insurance broker come to a meeting to discuss insurance policy renewal. I generally recommend listing any agenda items relating to guests at the top of the agenda so that the guest may conduct their business and then leave without having to sit through a long meeting.

4.     Prior Meeting’s Minutes: Minutes from the previous board meeting should be reviewed and approved by the board. If your community follows Robert’s Rules, they are required to be read aloud. To avoid this, the board should receive and make changes to draft minutes in advance of the meeting. If done this way, they do not need to be read aloud. Getting draft minutes to the board for review within a few days of a meeting really helps with accuracy as the information is fresh in the members’ minds.

5.     Manager/ Board Member/ Committee Reports: If the manager, a board member (typically the president) or committee head wishes to provide an update on specific items, they should be listed on the agenda. Further, I would recommend a brief listing of the topics they will discuss. Just listing “President’s Report” could be used as a catch all agenda item during which the president/ board may talk about any association topic. In my opinion, this does not comply with the spirit of the Florida Statutes.

6.     Treasurer’s Report/ Financial Statements Review: The association’s most recent monthly (or quarterly) financial statements should be reviewed and approved at each meeting. Any items the board may need to vote on relating to collection efforts (e.g., a vote to lien a unit) should also be listed as an agenda item (specific unit numbers may be listed).

7.     Amenities Use & Voting Rights Suspensions: As discussed in this post, boards must vote to suspend the amenities use rights or voting rights of unit owners in arrears. As such, this should be listed as an agenda item (specific unit numbers may be listed).

8.     Unit Owner Comments/ Questions/ Concerns: As discussed in our post on unit owner rights at board meeting, unit owners have the right to speak on any agenda item. I recommend listing an agenda item specifically for this purpose near the beginning of the meeting.

9.     Old and New Business: This section should include any business the board wishes to discuss. Keep in mind that the agenda should include all discussion items not just those that the board plans to take a final vote on at the meeting.

10.  Email Vote Ratification: While boards should try to avoid voting by email entirely (see this post for more information), if the board does vote via email I recommend that the item be included in the next meeting’s agenda and ratified at the meeting.

11.  Adjournment: Similar to #2 above, this is a formality. The time of adjournment should be specified.

 

Meeting Minutes

According to Florida Statute 718.111, meeting minutes must be taken for each board meeting. In my opinion this includes those meetings not open to unit owners (though minutes should be brief). Further, minutes must be retained for at least 7 years and must include how each board member voted on each item including if the board member abstained from voting. These are the only requirements for meeting minutes per Chapter 718. Robert’s Rules provide guidelines on preparation of meeting minutes but otherwise the style and content of the meeting minutes is up to the board.

I recommend the following as it relates to constructing meeting minutes:

1. Use the meeting’s agenda as a base for the meeting minutes.

2. Include meeting start and end times.

3. List the board members, unit owner and other guests in attendance (including those present by phone)

4. Record the meeting and listen to the tape while drafting the minutes to ensure accuracy. Tapes may be destroyed once meeting minutes are approved.

5. Ensure the minutes are sufficiently thorough for a unit owner not present at the meeting to understand what actions were taken by the board and why.

6. Transcribe the specific wording of each motion including who voted in favor of or against the motion.

7. Include any identified board member or manager conflicts of interest.

8. Briefly summarize any discussions the board had that did not end in a vote.

9. Do not include board member quotes or the specific opinions of one board member (unless requested by the board member).

10. If email votes were ratified at the meeting, Include copies of the email chain showing the vote with the meeting minutes.

The board of my association has begun attaching a “status update” document to our meeting minutes which I think is very helpful. This document specifies what actions have occurred on each agenda item from the time of the last meeting to the time of the current meeting. For example, if in last month’s meeting the board voted to re-landscape an area of the property, the “status update” document (which is provided to the board for review and approval at the current meeting along with the draft minutes of the prior meeting) would state something like: “Landscapers removed all old plants and have replaced all irrigation piping. New plants are scheduled to be installed next week”. This provides and straightforward way for unit owners to obtain updates on the status of past agenda items.

Hopefully this overview of agendas and minutes has been helpful. If you have any questions, don’t hesitate to reach out.

Emily

Emily Shaw is a condominium homeowner in Tampa, Florida and a Director of VERA Property Management, a firm providing full-service community association management in the Tampa Bay Area as well as consulting, financial and legal services to all Florida community associations. 

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Reserving Funding Requirements and the Procedures for Waiving Reserves in Florida Condominium Associations

Posted on March 4, 2014 | 108 Comments

Florida law is very clear: every association must fully fund reserves unless a vote to waive reserves is obtained. This post will review the reserve funding requirements detailed in the Florida Statutes/ Florida Administrative Code and the process for waiving reserves.

Reserve Funding Basics

NOTE: There are specific requirements for developer-controlled condominiums and multicondominiums that are not discussed here.

Section 718.112(2)(f) of the Florida Statutes and Rule 61B-22.005 of the Florida Administrative Code require ALL Florida condominium associations to fund reserve accounts for deferred property maintenance and replacement projects. Specifically, a reserve account must be established for roofing replacement, property painting, asphalt paving, and any other project that has an anticipated cost of greater than $10,000.

For each identified project, the association must identify the anticipated date and cost of the project. For example, a community’s roof may have an estimated remaining useful life of 10 years and replacement cost of $50,000. Therefore, in 10 years, the association will need to have $50,000 in the roof reserve account to pay for the replacement.

The association must calculate annually the amount it needs to contribute to its reserve accounts and include this amount in the budget. Generally, associations will collect one maintenance fee payment from each unit owner monthly or quarterly and deposit it into an operating account. From there, the percentage of maintenance fees allocated to reserves per the budget is transferred into a separate reserve account. Reserve and operating funds may not be commingled for more than 30 days from the date of receipt of a maintenance fee payment. As such, if an association receives maintenance fees monthly (quarterly), they must contribute the appropriate amount to their reserve funds monthly (quarterly).

NOTE: There are two ways to look at monthly or quarterly reserve funding. Let’s look at an example. An association has a $100,000 annual budget with $20,000 (20%) allocated to reserve funding. The association requires maintenance fee payments monthly. In a given month, the association should received $8,333 in maintenance fees ($100,000/12) of which $1,667 is allocated to reserves ($8,333*20%). Let’s say in January the association actually received $7,000 in maintenance fees (several units failed to pay). The association could choose to fully fund the reserve account that month by transferring $1,667 dollars of the maintenance fees received to a reserve account. Or, the association could choose to only transfer $1,400 ($7,000*20%) to a reserve account, as they have not yet received the maintenance fees that would have contributed the remaining $267 ($1,667-$1,400) in reserve funds. The majority of associations (and management companies) choose the first option, ensuring that reserves stay fully funded. Both are acceptable per the law in my opinion. While the first option is preferable, if there is a situation where a large percentage of unit owners fail to pay maintenance fees and contributing the full budgeted monthly amount to the reserve account would hinder the association’s operations, then the second option may be best.

Florida law specifies two acceptable methods for calculating the necessary annual reserve contribution: pooling or straight line (component). We have discussed these two methods as well as the pros and cons of each here.

Recap: So, we know that condominiums must budget for sufficient reserve funds to pay for all long-term maintenance and replacement projects greater than $10,000. Further, we know that the annual reserve contribution necessary is based on the expected timing and cost of each project using one of two calculation methods (pooling or straight line). Great. But how does a board know exactly what projects greater than $10,000 will need to be done, when they will need to be done, or how much they will cost?

This is where a reserve study comes in. A reserve study is a professional engineering survey of your property. The reserve study firm will examine the property and determine what major capital maintenance and replacement projects will need to be done in the next 30 years. The study will provide expected costs of each project and expected timeframe for completion. While there is no specific requirement in Florida law that associations obtain a professional reserve study, I don’t see any way for a board to properly determine annual reserve contributions without one. I recommend a reserve study be completed every 2-3 years. Prices generally range from $3,000 – $6,000 for an initial study with a reduction in price for study updates completed by the same firm. To ensure the association always has the funds to complete routine reserve studies, I recommend including a reserve account for the study itself.

NOTE: If you need a good reserve study firm, I have had great success with Reserve Advisors.

Waiving Reserve Contributions

For those communities where, for whatever reason, fully funding reserves is infeasible, Florida law provides the option to reduce or eliminate reserve funding. Here’s how it works.

Every year, the board must present a proposed budget to the community assuming full reserve funding. The association cannot hold a vote to waive or reduce reserve funding until after a proposed budget with full reserve funding has been provided to the membership. If the board would like to put a vote on the table to reduce or waive reserves funding, then they should provide (along with the proposed budget which must be distributed 14 days prior to the budget meeting): (1) a second budget with waived or reduced reserves and (2) a limited proxy to be filled out by unit owners specifically requesting the membership to vote on the second budget. The proxy must include the following wording per Florida Statutes:

WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.

To successfully reduce or waive reserve funding, a majority of the membership (i.e., 51% of unit owners) must vote in favor of the reduction/ waiver.

If by the time of the budget meeting arrives the association has received insufficient votes, the board may delay approving the budget to attempt to collect more votes. Of course, realistically, the board may only postpone so much as the budget should be approved in time for coupon book deliveries prior to year-end. Further, the limited proxies are only valid 90 days from the date of the first scheduled budget meeting. So, if your association would like to vote to waive reserves but getting sufficient unit owner participation will be a struggle, it may be worthwhile to set the budget meeting earlier in the year than you would otherwise.

If a majority vote is not obtained, the board must approve the budget with full reserve funding. If a majority vote is obtained, the board must proceed with the waived or reduced reserve funding. It is important to note that any vote to waive or reduce reserves is only effective for one annual budget. Therefore, the vote must be obtained for every year the board would prefer not to fully fund reserves.

Why Fund Reserves?

Arguably one of the biggest problems facing condominium associations today is the failure to fully fund reserves. Many associations put little to no money aside, creating project delays and large special assessments. With the primary focus being low maintenance fees, boards can easily loose sight of the big picture reasons to fund reserves.

Let’s look at our roof example. The community’s roof has an estimated remaining useful life of 10 years and an anticipated replacement cost of $50,000. If an association does not put aside money routinely in a roof reserve account, then the unit owners would likely have to pay a $50,000 special assessment in 10 years. This is a negative outcome in several ways:

  1. Hesitancy to issue a special assessment or difficultly collecting the special assessment may lead to delays in project completion and further deterioration of the roof (i.e., more roof leaks which cost money to repair.
  2. The special assessment will be a burden on the unit owners.
  3. A special assessment is unfair in that prior unit owners did not have to contribute any money to the roof (though they benefited from it) while current unit owners have to pay for the entire thing. This creates an inequitable distribution of expenses.
  4. Limited reserve funds and a history of special assessments will drive away buyers, keeping home prices lower than they otherwise would have been.

I strongly recommend that every board fully fund reserves. If a board does not feel that full funding is feasible right away, they should still contract for a professional reserve study and establish a long-term plan for achieving full funding by gradually increasing reserve funds each year.

I hope this overview of condominium reserve funding was helpful.

Please let me know if you have any questions,

Emily

 Emily Shaw is a condominium homeowner in Tampa, Florida and a Director of VERA Property Management, a firm providing full-service community association management in the Tampa Bay Area as well as consulting, financial and legal services to all Florida community associations. 

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Florida Statute 718.303: Suspend the Voting and Common Element Use Rights of Unit Owners in Arrears

Posted on March 1, 2014 | 12 Comments

Today’s topic was discussed briefly in my post on condo association collections policies; however, we have received more than one question on this issue so I am dedicating a post to it exclusively.

Along with the traditional remedies for unit owners past due in paying their maintenance fees (e.g., late fees, interest, rent garnishment, foreclosure), Florida Statutes 718.303(4) and 718.303(5) allow associations to suspend the common elements use rights and voting rights, respectively, of unit owners (and their tenants/ guests) who are more than 90 days in arrears.

What is important to note here is that this suspension doesn’t happen automatically at the 90-day mark. According to FL Statute 718.303(6), the board must vote to suspend a unit owner’s voting and common elements use rights at a board meeting and must notify the unit owner of the suspension via mail or hand delivery. These rights are automatically reinstated once a unit owner is again less than 90 days delinquent.

If your association is going to take advantage of these remedies, it is very important to do so consistently. The board should be careful not to suspend the rights of one delinquent unit owner but not another. My recommendation is to keep a permanent item on the association’s Board meeting agendas specifically for this purpose. At each meeting, as the Board reviews the accounts receivable, the property manager should provide a list of all unit owners more than 90 days delinquent that have not yet had their rights suspended. At that time, the Board may vote to suspend them. During meetings when no new unit owners have become 90+ days in arrears, the Board should simply skip this agenda item.

NOTE: As a vote to suspend rights is required per Florida Statutes, the board should be sure to list in the meeting minutes the specific units they have voted to suspend.

Regarding the common elements restriction, when possible, associations should restrict the unit owner’s access to the pool, gym, clubhouse, car wash, laundry facilities or any other amenities the property offers. For occupied units (and particularly for rented units where the tenant is restricted from using the amenities), this inconvenience can often be enough to encourage unit owners to pay their past due balance.

NOTE: The common elements suspension does not apply to limited common elements, common elements needed to access the unit, utility services provided to the unit, parking spaces, or elevators.

Regarding the suspension of voting rights, this particular restriction does not tend to do much to encourage unit owners to pay past due balances as those in arrears tend not to care enough to vote. However, it is still worthwhile as the association may reduce the total number of votes necessary to constitute a quorum of the membership by the number of voting rights suspended. This can be a difference maker if the association is struggling to obtain enough votes for their annual meeting, for amendments to the association’s documents, or for any other vote.

Let me know if you have any questions on this topic.

Best,

Ryan

Ryan Koski is a condominium homeowner in Tampa, Florida and a CPA and Attorney with Accounting Clinic, Inc. He is also a Director of VERA Property Management, a firm providing full-service community association management in the Tampa Bay Area as well as consulting, financial and legal services to all Florida community associations. 

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Florida Condo Association Board Meetings: Unit Owner Rights and Association Responsibilities

Posted on February 25, 2014 | 99 Comments

Board meeting are run in many different ways. Boards can choose a flexible approach, allowing unit owners to chime in at will. Or they may prefer a highly structured approach, with unit owners allowed to speak only if a request to speak was submitted in advance. The fact is both of these methods (and the many in between) are acceptable. The Florida Statutes and Florida Administrative Code (F.A.C) provide limited guidance on unit owner rights and conduct at board & committee meetings, leaving it to the board to determine specifics. Many association board members and managers do not understand the law; they often confuse common meeting recommendations (e.g., 3 minute speaking limits per unit owner) with legal requirements. These misunderstandings can create inconsistency and frustration for all parties.

Given the above, I recommend that associations draft and disseminate a detailed policy outlining board & committee meeting rules. This policy will educate unit owners on their rights, help keep meetings short and focused, and ensure consistent treatment of all unit owners. As I recommend with all policies, the board’s attorney should review the policy initially and the policy should be reviewed annually to ensure continued compliance with the Florida Statutes & F.A.C.

This post will review the law surrounding unit owner rights at board & committee meetings, and provide specific policy construction recommendations for board members.

NOTE: We will not be discussing agendas or meeting notices in this post. We will address these issues in a future post.

Per Florida Statute 718.112(2)(c) and Florida Administrative Code 61B-23:

1. Unit owners may attend all board meetings and all committee meetings with the exception of:

  • Meeting with the association’s attorney where litigation is being discussed;
  • Meetings to discuss personnel (i.e., employee) issues; and
  • Committee meetings specifically deemed private in the bylaws.

NOTE: Regardless of what the bylaws state, committee meetings where (1) final action will be taken on behalf of the board and (2) where budget recommendations will be provided to the board are always open to unit owners per Florida Statutes.

2. Unit owners may speak at meetings regarding items on the agenda for at least three minutes.

3. Unit owners may record (video or audit) meetings so long as the equipment does not produce distracting sounds or lights. Further, the board may adopt any of the following rules:

  • A specific place to assemble audit and video equipment
  • Equipment must be setup in advance of the meeting start
  • Equipment must be stationary throughout the meeting
  • Unit owners must give the board advance notice of  their intentions to record the meeting

4. Associations may adopt reasonable rules governing when and for how long unit owners may speak

Each property’s governing documents may have further guidance on the above; however, generally speaking, this is the extent of the rules surrounding unit owner rights at meetings. The last bullet point above is vague, requiring boards to decide how they want to run their meetings. The approach that best suits your community will depend in large part on the personalities of the board members and the level of unit owner involvement at board meetings. The following paragraphs will discuss the key components of a well-drafted board meeting policy.

Attendance: The policy should explain which types of board and committee meetings unit owners may attend per Florida Statutes, F.A.C., and the community’s bylaws.

Speaking: The policy should specify (1) about what topics unit owners may speak, (2) when unit owners may speak, and (3) for how long they may speak. Let’s look at each of these individually.

Discussion topics: The Florida Statutes are clear that unit owners may speak on any topic listed in the meeting agenda. Questions arise, however, when non-agenda topics are introduced. The concern here is that if a unit owner brings up a non-agenda issue and the board begins a discussion on this issue, the board is denying absent unit owners their right to contribute to the discussion. In short, any material discussion and/or voting on non-agenda items is a violation of FL Statute 718.112(2)(c). To avoid this risk, the policy should stipulate that unit owners tailor their comments to agenda items. The policy may also stipulate that if a unit owner would like a specific item on the agenda, they should contact the association a certain number of days in advance of the meeting.

NOTE: If a unit owner does bring up a non-agenda item, the board should simply do their best to limit the discussion on that topic and, if necessary, add the item to the next meeting’s agenda. Less than a quorum of board members may also speak to the unit owner separately after the meeting. It is not necessary, in my opinion, to comply with the strictest interpretation of the law and never speak one word about non-agenda items. This is unrealistic. Instead, make sure to comply with the spirit of the law and do what you can to let the unit owner know his/ her comments are taken seriously.

Speaking times: In order to be compliant with the rules around a unit owner’s right to speak on agenda items, the association must grant unit owners the right to speak in advance of any board vote on a topic. Obviously, there would be no benefit in boards granting unit owners the right to speak after all of the meeting’s business had been conducted.

This essentially leaves boards with two options: (1) allow unit owners the right to speak on all agenda items at one specific point in the meeting (typically near the beginning), or (2) allow unit owners the right to speak on each agenda item prior to the board voting on each item. There are pros and cons to both options and only your board will know which is best. In my experience, unit owners are partial to the second option as it allows them to first learn about the agenda item and hear the board’s thoughts before commenting.

 Speaking length: The board should specify in the policy any time limits on unit owners’ comments. If your association is interested in running a very structured board meeting where unit owners may speak but there will be no conversation between unit owners and the board, then setting time limits may be possible. In my experience, however, board meetings do not operate this way and time limits are not only difficult to implement but tend to create unit owner resentment. What boards need to be careful of is establishing a time limit and then only enforcing the limit when a unit owner disagrees with the board or is being “difficult”. This can happen more easily that you might think. My recommendation would be to avoid specifying time limits in the policy. In practice, if a unit owner is being unnecessarily long winded and the majority of the board feels he/ she has had sufficient time to speak, the president of the board should simply thank the unit owner and proceed with a vote.

Recording: Florida law gives unit owners the right to record meetings but leaves the details to associations. The policy should specify if unit owners must provide the board advance notice of any recording and how to provide such notice. Further, the policy should specify (1) whether recording devices must be set up in advance of the meeting, (2) a location in the meeting room where recording devices may be placed, and (3) whether recording devices must be stationary during the meeting. Lastly, the policy should specify that the board may require the unit owner to turn off the recording device if it produces any disturbing noises or lights.

Identification/ Sign In: For the purposes of property recording the minutes, all unit owners should be required to sign in upon arrival. Particularly for large properties where neither board members nor managers know all unit owners, the policy should specify if attendees will need to show proof of identification during sign in.

Board Member Materials: One infrequently discussed but relevant issue is a unit owner’s right to a copy of the board’s “information packet”. These packets generally include the most recent financial statements, draft meeting minutes, a manager’s report, and any proposals or other documentation relevant to the agenda items. Distributing packet documents keeps unit owners engaged during the meeting, may elicit useful comments from unit owners, and helps to maintain positive unit owner-association relations. On the other hand, providing this information to unit owners at the meeting may lead to numerous unit owner questions and interruptions, effectively creating a large roundtable discussion that may draw out the meeting for hours.

Most associations do not provide copies of information packets to attendees and there is no clear-cut obligation to do so. In order to decide how the board would like to proceed on this point, it is first important to consider the relevant laws. According to Florida Statute 718.111(12):

  • Unit owners are entitled to review any document considered an association official record. Notably, draft financial statements & meeting minutes are not official records until they are approved by the Board. All other documents relevant to board meetings (e.g., proposals, unit owner requests) become official records as soon as they are considered by the board (i.e., presented at a board meeting).
  • Unit owners may request in writing to view the records and the association has 5 days to comply.
  • Associations may charge the unit owner their actual cost to make them copies of official records.

Based on these laws, if a unit owner provided written notice 5 days in advance of a board meeting requesting they be provided a copy of the board information packet once completed, I believe they would have a right to it (excluding draft financials & minutes).

Given the above, I recommend allowing unit owners to request that a copy of the packet be made available to them at the meeting. I would require that the request be made at least 24 hours in advance of the meeting. Much more than 24 hours in advance may be prohibitive as meeting notices are only required to be posted 48 hours in advance per Florida Statute. Further, I suggest specifying any cost the unit owner will incur (generally a price per page).

Tenants, Other Residents and Unit Owner Representatives: Tenants and other non-owner residents are not granted the right to attend board meetings by Florida law. Similarly, unit owner representatives such as property managers or family members have no right to attend meetings. Given this, it is up to the board to decide if they will allow anyone other than unit owners to attend meetings. It is my recommendation that non-owners be allowed to attend and speak at board meetings if accompanied by the owner. This benefits the association as it prevents tenants, property managers and other interested parties from bypassing the unit owner and going straight to the board with their issues. Further, this provides an opportunity for non-owner residents to voice their opinion which is important particularly for properties with high rental rates.

NOTE: The Department of Business and Professional Regulation has indicated that anyone with a unit owner’s Power of Attorney has the right to attend and speak at board meetings.

I hope this overview of unit owner rights at board meetings has been helpful. If your association has not done so already, consider encouraging the board to draft a policy outlining the items discussed here.

If we can be of any help, please feel free to contact us.

Emily

Emily is a Florida condo owner and a director of VERA Property Management, a condominium and homeowners’ association management and consulting firm serving the Tampa Bay Area.

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Your Florida Condominium Board Member Electronic Voting and Communication Policy

Posted on February 2, 2014 | 13 Comments

The use of email and other forms of electronic communication in the operations of condominium associations continues to be a controversial and confusing topic in Florida. The Florida Statutes are significantly behind the times as it relates to technological advances and, therefore, do not provide any guidance around when, if ever, Board email communication and voting is allowed. Further, these issues have not been sufficiently litigated to have a clear understanding of what Florida courts consider legal behavior.

One the one hand, using no electronic communication in this day and age is completely unreasonable. On the other hand, if a Board chooses to conduct all business electronically, the unit owners are denied their right to be present during Board meetings, which violates the law and leads to unit owner distrust of the Board. Given this, all associations can do is comply with the spirit of the Florida condominium statutes (Chapter 718) and use good judgment when conducting association business via email or other electronic communication. In order to ensure all Board members act consistently, I recommend that each association draft and approve a Board Member Electronic Voting and Communication Policy.

Florida Statute Chapter 718.112(2)(c) is clear that all unit owners have the right to attend any meeting of the Board at which a quorum of the Board is present. This means that any gathering of a quorum of the Board, whether at the standard meeting location, in a Board member’s home, or at a local restaurant, is considered a Board meeting if association-related topics are being discussed. It is a common misconception that in order for a gathering of the Board to be considered an official meeting, the Board has to be voting on something. This is not the case.

There are two notable types of meetings that are not open to unit owners:

1. Meetings between the Board and the association’s attorney to discuss litigation and obtain legal advice

2. Board meetings held for the purpose of discussing personnel matters (e.g., employee issues)

The Statute also states that notice of Board meetings (including date, time and location) along with a meeting agenda must be posted conspicuously around the condominium property at least 48 hours in advance of the meeting. This requirement also applies to the two types of meeting mentioned above that are not open to unit owners.

 NOTE: The Statutes are silent regarding where Board meetings may take place. However, the Statutes do specify that the annual meeting must be held within 45 miles of the condominium property so this is a good guideline for all Board meetings.

 Based on the above definition of a Board meeting, an email chain or other form of electronic discussion (e.g., a chat room, web-based conference) where association-related items are being discussed by a quorum of the Board would be considered a Board meeting. Notice for this meeting would have to be posted 48 hours in advance and all unit owners would have the right to attend. As this is impossible in the context of a Board member group email, technically any emails between a quorum of the Board are in violation of the Florida Statutes.

NOTE: In theory, the association could set up some type of web-based conference with a login that all unit owners have. So long as the meeting was properly noticed and all unit owners have access, I believe (though there is no case law to support this that I am aware of) this would comply with the Florida Statutes.

 So, given the rules just discussed, what is a Board to do? My recommendation is to use electronic communication (e.g., email, group texting) but do so in a responsible and considerate way. Remember, Board meeting rules are established to ensure unit owners may remain up-to-date on association issues. Unit owners are only going to become concerned if they feel their rights are being violated and/ or if the Board is acting secretively or unethically. Given this, when considering a Board Member Electronic Voting and Communication Policy, the Board should worry  less about complying with the exact letter of the law and more about ensuring the Board is acting in a way that unit owners would consider appropriate.

NOTE: If a unit owner files a complaint against the association to the Department of Business and Professional Regulation (DBPR) and the DBPR finds the complaint warranted, the association may be fined pursuant to the Florida Administrative Code. Learn more here.

Board Member Electronic Voting and Communication Policy

As association’s policy regarding electronic voting and communication should be reviewed and approved by a quorum of the Board at a properly noticed Board meeting. This gives unit owners the opportunity to provide feedback and helps to protect the Board in the event a unit owner complains about the policy down the road. As I recommend with all policies, the Board should review and re-approve the policy annually (perhaps at the meeting following the annual meeting given the likely presence of new Board members). In my opinion, this policy should include:

1. A requirement that each Board member and the property manager establish an email account for the specific use of association business. The Board member/ property should be required to stop using the account and provide the association access to the account once the Board member/ manager ceases to be involved with the association. Why do this?

  • This requirement can prove to be very useful when a Board member or manager leaves. As association business with attorneys, CPAs, maintenance vendors and unit owners is often conducted via email, losing all of those records can be detrimental to the smooth operations of the association.
  • Depending on the type of communication, these emails may be considered part of the Official Records of the association and, therefore, the association may be required to keep some of them for up to seven years.
  • Knowing that emails may be viewed by future Board members encourages the current Board members/ manager from saying anything via email that they would not want others to read. Comments made via email have hurt associations during litigation when emails were admitted into evidence.

2. A requirement that electronic communications between a quorum of the Board are only to be used as a means to transmit information and not as a discussion forum. For example, a Board member can send an email to the Board providing an update regarding an association project or providing an opinion on an upcoming meeting agenda item (perhaps the Board member won’t be there). These messages should be in FYI format and should not ask the Board to provide feedback. If an informative email from a Board member elicits a back-and-forth discussion, the emails should cease and a Board meeting should be scheduled. There are no restrictions on communications between less than a quorum of the Board.

3. A requirement that no Board voting take place electronically unless there is no other option. For example, the association’s insurance policies are up for renewal in 5 days and the Board’s next meeting is scheduled for tomorrow. At the time of the meeting, the insurance broker was unable to obtain all necessary insurance quotes. Due to scheduling conflicts, a quorum of the Board will not be able to meet again before the policies expire. Once the quotes are received, the Board reviews them and votes via email to renew the current policies.

These types of situations, calling for an electronic vote, arise from time to time and the association’s Board Member Electronic Voting and Communication Policy should outline how to proceed during and after the electronic vote. Here are some general guidelines regarding electronic voting:

1. Robert’s Rules of Order should be followed as best as possible:

  • A Board member should send an email with a motion to the Board
  • Another member should second the motion in an email to the Board and ask “All in Favor?”
  • All Board members should respond to the Board with a “yes” or a “no” vote

2. The vote should be included on the agenda for the next Board meeting and ratified

3. The minutes should provide an explanation as to why the vote was cast via email and a copy of the email chain showing the Board’s vote should be included with the minutes.

NOTE: You may have heard that Boards are allowed to vote via email so long as the vote is unanimous. This relates to non-profit law (Florida Statutes Chapter 617), which allows for voting outside of a Board meeting if all Board members vote unanimously in writing. Whether this Statute allows for written votes via email (as opposed to a signed document) is unclear. Regardless, for condominium associations the Florida Condominium Statutes (Chapter 718) overrule Chapter 617 when there is a conflict and Chapter 718 does not allow Boards to avoid a meeting by voting unanimously in writing.

I hope this overview of electronic Board communication has been helpful. Our management and consulting firm, VERA Property Management, will gladly draft a Board Member Email Voting and Communication Policy for your association. Please contact us today for a quote.

As always, feel free to reach out with questions or comments.

Emily

Emily Shaw is a condominium homeowner in Tampa, Florida and a Director of VERA Property Management, a firm providing full-service community association management in the Tampa Bay Area as well as consulting, financial and legal services to all Florida community associations. 

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Florida Statute Review: 718.111(12) Official Records

Posted on June 21, 2013 | 37 Comments

The Florida condominium statutes are very specific about what records an association must keep and for how long. For a self-managed condominium, one Board member (typically the Secretary) should be responsible for ensuring that the association’s records comply with 718.111(12) at all times. I will provide a brief review of the requirements of this statute here as well as some helpful tips to maintaining your association’s records.

What are the key items you are required to keep?

  1. All plans, permits, warranties and other items the developer provided to the association upon turnover.
  2. The Declaration of Condominium and any approved amendments.
  3. The Bylaws and any approved amendments.
  4. The Articles of Incorporation and any approved amendments.
  5. The current Rules & Regulations (old versions do not need to be maintained)
  6. Meeting minutes of all association meetings for the last seven years.
  7. Any audio or video recordings of association meetings (at least until the minutes from the meeting has been approved)
  8. A current roster of all homeowners’ unit numbers, mailing addresses and telephone numbers.
  9. A current roster of all homeowners’ email addresses and fax numbers if the owner has consented to receive notice by electronic transmission. This information is not available to other homeowners unless the homeowner has consented to receive notices by electronic transmission.
  10. Current insurance policies (old policies do not need to be maintained)
  11. Every contract to which the association is or was a party (including management, janitorial and landscaping contracts, to name a few) over the last seven years.
  12. All accounting records of the association for the last seven years. Details surrounding accounting record retention will be discussed in a separate post.
  13. Ballots, sign-in sheets, voting proxies and any other documents related to a homeowner vote for one year from the date of the vote.
  14. A copy of the current question and answer sheet referenced in FL Statute 718.504. As sample of this sheet is available from the Florida Department of Business Regulation (Form CO 6000-4).
  15. All other pertinent records of the association.

The association’s official records must be available for homeowner viewing. Homeowners have the right to view and photocopy all of the association’s official records with the exception of (1) documents protected by lawyer-client privilege; (2) information associated with the sale of a unit; (3) homeowner medical records and other confidential information such as Social Security Numbers; (4) association security information; and (5) personnel records (if the association has employees). If the homeowner requests a hard copy of a specific record, the Association may charge the homeowner its actual costs to prepare those records for the homeowner. It is very important that the association comply with requests from homeowners to view association records as failure to do so can lead to monetary damages.

I strongly recommend that self-managed associations follow these guidelines to ensure that the association’s records are protected and also easily accessible for viewing by homeowners. Official record transparency is a great way to keep homeowners confident in the Board’s ability to successfully manage the association.

  1. Keep hard copies of the Declaration of Condominium, Bylaws, Rules & Regulations, meeting minutes, and budget with maintenance fee schedule available for homeowners and prospective buyers at all times. Establish a reasonable fee schedule for these items ahead of time based on production costs and ensure these fees are enforced consistently.
  2. If the association has a website, keep all of the association’s records on the website for homeowners to access at their convenience. Not only does this provide complete transparency but it also provides a web-based backup of the official records so there is no concern about them being destroyed due to theft or natural disaster.
  3. Keep binders with hard copies of all of the association’s records on property. A simple way to do this is to have binders for each key item (e.g. meeting minutes, contracts, historical budgets, etc.).
  4. Keep a binder with all Board member meeting packets (the information provided to each Board member prior to a meeting). All of this information is considered official records of the association, and it is a great way to look back at exactly what the Board discussed in past meetings.
  5. Keep electronic copies of all association records on one designated association computer and backup all of these records routinely onto an external hard drive maintained by one of the Board members.

Two other items that I think are worth keeping in both hard and soft copy include:

  1. Any opinions provided by the association’s attorney. Often these are kept in the email of the Board member that asked the question and, therefore, when new Board members join, they waist association resources by asking the same questions again.
  2. Any email communications where a quorum of Board members discuss or take a vote on an association issue. Email communication between a quorum of Board members should be limited as much as possible as these email chains technically constitute a Board meeting which must be open to homeowners. However, in certain circumstances this cannot be avoided so my advice would be to use email to communicate to a quorum of the Board as little as possible and to keep copies of those communications for homeowner review.

I hope this overview of the official records statute has been helpful. As always, feel free to comment or reach out to me via email if you would like to discuss this topic or any other.

Emily

Emily Shaw is a condominium homeowner in Tampa, Florida and a Director of VERA Property Management, a firm providing full-service community association management in the Tampa Bay Area as well as consulting, financial and legal services to all Florida community associations. 

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