Tag Archives: unit owner

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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Florida Statute 718.111(12): Unit Owner Access to Florida Condominium Association Official Records

Posted on March 8, 2014 | 57 Comments

A reader recently asked how frequently a unit owner has a right to view the official records. In this person’s case there was a unit owner requesting official record documents on a weekly basis. This question prompted the following post on unit owner official records access.

Every Florida condominium association is required by law to maintain official records. An overview of what constitutes official records is provided here with a more detailed overview of financial records here. Florida Statutes 718.111(12)(b) and 718.111(12)(c) provide unit owners the right to view and make copies of official records; however, aside from very basic guidelines, the association remains responsible for creating reasonable rules surrounding the frequency, time, location, notice and manner of unit owner record inspections. Because associations are left to construct official record inspection rules, I recommend (as I always do) that the board create and distribute a policy around official records access. In general, it is my opinion that the more official records transparency the better; is a great way to earn unit owner trust.

This post will review the access provisions laid out in the Florida Statutes and provide general guidelines on constructing a reasonable official records access policy.

Florida Statute Guidelines

  • Official records must be maintained within the state for 7 years
  • Official records must be made available within 5 days of a unit owner’s written request
  • Official records must be available to unit owners within the condo’s county (or within 45 miles if the county boarder is more than 45 miles from the condominium)
  • Official records must be open to inspection at reasonable times
  • Associations may charge a reasonable expense for copies of official records
  • Associations may approve reasonable rules surrounding frequency, time, location, notice & manner of inspections
  • Unit owners who are denied access to the official records 10+ days after a written request are eligible for damages no lesser than $50 per day and reimbursement of any attorney’s fees.
  • Unit owners may take photos of official records with a camera, phone or other electronic device.
  • The association must maintain copies of the declaration, articles of incorporation, bylaws, rules & regulations, frequently asked question & answer sheet and most recent year-end financial report on the condominium property for unit owners and prospective purchasers. The association may charge its actual costs of preparing these documents.
  • The following documents are protected and NOT available to unit owners: (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 (e.g., passwords); and (5) personnel records (if the association has employees).

NOTE: Personnel records include items such as the health records, W-4s and performance reviews. This records exemption does not include salary details of the employee as this information should be readily available in the association’s budget.

 

Official Records Storage

Before an association can establish reasonable rules around unit owner access to official records, the board must have a good handle on how/ where official records are stored. Associations that are self-managed or in-house managed have much more control over the storage of their official records than do professionally managed associations. As I discussed in length in my post on management transitions, I strongly recommend that boards of professionally managed associations complete official records “audits” from time to time to ensure proper records maintenance. I also recommend that boards provide guidelines to their management companies on how they would like their records organized and stored. Here are a few recommendations:

  1. If the association has an on-site office or lobby, consider keeping a computer with all official records on it for unit owners to review at any time.
  2. If the association has a website, keep the association’s key records (e.g., financial statements, meeting minutes, agendas, budgets, reserve studies, insurance information) on the website for unit owners to access at their convenience. This 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 frequently requested records on property or at the manager’s office. A simple way to do this is to have a binder for each key item.
  4. Store any hard copy records that will be accessed infrequently (e.g., copies of checks, invoices from prior years) in a professional storage facility designed to withstand hurricane force winds.

 

Official Records Access Policy

Given that the Florida Statutes provide associations with the flexibility to create reasonable rules surrounding official records access, I believe establishing a policy is prudent in that it specifically informs management how to proceed and ensures consistent unit owner treatment. Of course, if your association has its official records readily available on property or electronically for unit owner viewing at their convenience, the majority of this policy becomes irrelevant. If unit owners in your community are frequently asking for official records documents and your records are primarily in hard copy, it may be worth contracting to have all of your records scanned and made available via the web. From personal experience, the time saved by directing every official records request to one website is well worth the upfront cost.

I would recommend that every official records access policy include the following:

Governing Documents, FAQ Sheet & Year-end Financial Report: While the Florida Statutes specifically say “copies” of these documents must be available on property, the association should focus instead on compliance with the spirit of the law. If the association would like to keep paper copies of these documents on property, that’s great. If that doesn’t make sense for your association, I believe the following options also comply with the law: (1) making the documents available on a website, (2) making them available on a CD/ thumb drive, (3) emailing them to the requestor.

 The policy should specify how these documents will be provided to unit owners/ potential buyers and any costs associated with these documents. The law specifically states the association may charge actual costs of these documents. If they are available via website or email, there should be no charge. If available via hard copy, CD, or thumb drive, the association should charge whatever amount the manager or document preparation services (e.g., Kinkos) charges the association. For self-managed associations completing printing work in-house, a cost of $.10 – $.15 per page for black and white or $.50 for color is reasonable. This range should cover your paper, ink and printer wear and tear. If creating CDs or thumb drives in-house, the cost should reflect the actual cost of the CD or thumb drive.

 Copying Fees: For official records excluded from #1, the association may charge a reasonable fee for copies, CDs or thumb drives of these records. I don’t see this as much different than actual cost given that it seems unreasonable for the association to make a profit (even if a small one) on official record distribution. As mentioned above, unit owners should charge the exact cost charged to them by the manager or other professional preparing the records. For self-managed associations, the cost guidelines mentioned in #1 remain reasonable though the association may charge an additional amount for time spent making copies so long as the amount is defendable.

 Viewing Location:  The policy should specify where unit owners may view the records. There may be multiple locations. For example, meeting minutes, budgets and monthly financials may be available on the association’s website while copies of contracts and invoices are available at the management company’s office.

 Frequency of Requests:  The policy should specify how frequently a unit owner may request records and clarify that any requests in excess of the frequency limitations will not be accepted. There is no right choice: daily may be too burdensome on the association but quarterly may be too limiting for the unit owner. It may be worthwhile here to distinguish between how frequently a unit owner may request electronic records (i.e., those that can be easily emailed) and how frequently they may request viewing of hard copy records.  These specifics will entirely depend on how your property is managed and how records are stored.

Viewing Times: The policy should specify when documents are available for review. For those available on the web, there is no limitation on viewing time. For all other documents, viewing times may be by appointment during the management company’s business hours.

Making a Request: This section should indicate how the unit owner makes a request. It should specify who the unit owner contacts and what information to provide. I would recommend associations require unit owners to select specific records or groups of records (e.g., 2009-2011 budgets, March 13, 2013 invoice from Joe Plumber). This avoids the “I’d like to see all your records” requests which are nearly impossible to accommodate. Generally these requests arise if a unit owner feels the association is hiding something. All requests should be in writing (mail or email). The policy may also require the unit owner to provide his/ her availability over coming days (if applicable).

Request Response: This section should indicate how and when the association will respond. The law states that documents must be made available within 5 days of a written request. Do not read this to mean that in all circumstances the documents must be in the hands of the requestor within 5 days. If the association has the requested documents available electronically, they should certainly be emailed within 5 days. However, for hard copy documents, the association should respond as promptly as possible (I’d recommend within 1 business day) and offer reasonable viewing time(s) that fall within the 5 days window.

 

As I recommend with all policies, the association’s attorney should review the policy before it is finalized. Further, the board should re-review and re-approve the policy annually to ensure continued compliance with applicable law.

Feel free to reach out with 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 Association’s Collections Policy and Procedures

Posted on August 3, 2013 | 14 Comments

One of the most important responsibilities of condominium associations is to actively collect maintenance fees from each homeowner. To avoid various legal and reputational issues, Boards of Directors must be sure that the process the association uses to collect maintenance fees is consistently applied. Many associations prefer to leave the majority of their collection efforts to their attorney; however, with a thorough collections policy in place, the Board of Directors (or the property’s manager) can easily handle the majority of the association’s collection efforts, which, in turn, can materially reduce the association’s collection-related expenses.

The association’s documents (i.e. Declaration and Bylaws), along with Florida Statutes Chapter 718, provide various collection methods for Boards to use in an effort to keep past-due maintenance fees to a minimum. These tools provide the foundation for successful collection efforts and will be discussed in detail below. We will only be focusing on past due maintenance fees in this blog post and will not be talking about fines, utility bills or any other monetary obligations of homeowners to associations.

I strongly recommend that prior to implementing a new collections policy, the Board have the association’s legal counsel review the policy. Further, I recommend the Board update and re-approve this policy annually to ensure continued compliance with Florida Statutes.

Maintenance Fees

The collections policy should specify how frequently (i.e. monthly, quarterly) and on what date (typically the first day of the month or quarter) maintenance fees are due.

Late Fees and Interest

Most associations’ declarations or bylaws outline whether or not late fees and interest can be charged to homeowners that have accrued past due maintenance fees. If your documents silent on the amount of interest that can be charged, Florida Statute 718.116(3) specifies that interest should accrue at 18% per year. Further, 718.116(3) allows for a late fee for each delinquent payment of up to the greater of $25 or 5% of the monthly/ quarterly maintenance fee.

The Board should determine when and how they will apply interest and late fees to a delinquent homeowner. More specifically, by what date each month must the homeowner have paid their monthly maintenance fee, in full, to avoid accruing a late fees and interest? Will interest begin accruing immediately upon the homeowner’s account becoming delinquent (i.e. after their first missed payment) or will the association wait unit some later date (e.g. after the account becomes 90 days past due) to begin accruing interest? The relative difficulty of properly calculating and accounting for accrued interest should be considered when making these decisions.

The Board should also determine a procedure for waiving late fees and interest in certain situations. For example, the Board may include in its policy that the late fees and interest associated with a homeowner’s first delinquent payment may be waived upon request of the homeowner but that all other late fees and interest may not be waived. Or, they may decide that late fees and interest will never be waived except as part of a settlement or payment plan approved by the Board (we will discuss this more below). Again, it is very important that these rules be applied consistently. The Board must take care not to provide special treatment to certain homeowners based on personal relationships.

Delinquency and Pre-Lien Letters

The association’s strongest weapon against maintenance fee delinquency is their right to lien and foreclose on a unit if the homeowner fails to make maintenance fee payments when due. As such, the lien and foreclosure process should be included in the collections policy.

When a homeowner fails to make a maintenance fee payment when due, the homeowner’s account becomes delinquent and most associations will send a letter to the homeowner informing them of the past due balance on their account (including all late fees and interest accrued) and the next steps the association will take in the event the homeowner fails to pay. This letter should include a copy of the homeowner’s ledger (supplied from the association’s accounting program) and a date by which the homeowner must pay all past due amounts to avoid additional fees. The collections policy should specify when these letters are sent (i.e. how many days after the homeowner’s account becomes delinquent) and through what method(s) they are communicated (e.g. email, USPS).

As required by FL Statute 718.121(4), the association must provide a notice of intent to file a lien (f.k.a. pre-lien) to the homeowner. This notice should also comply with the Fair Debt Collection Practices Act. The above mentioned delinquency letter may serve as the association’s pre-lien letter or the association may send a separate letter to the homeowner. If you would prefer to send a second letter as your pre-lien notice, the collections policy should specify when these letters are sent (generally some point in the second month of delinquency) and through what method(s) they are communicated (e.g. certified mail, return receipt requested as required by FL Statutes).

Lien Filing and Foreclosure

If delinquency and pre-lien letters failed to encourage a delinquent homeowner to cure the past due balance on their account, the association may choose to have their attorney file a lien on the unit. Filing a lien (which is only good for one year) is a prerequisite to foreclosure. If the association has chosen not to foreclose on any units, it may not be worth accruing the attorney’s fees to file a lien. The collections policy should state when the association will direct its attorney to file a lien against a unit (generally when the homeowner is more than 90 days delinquent), and what information should be provided to the attorney at that time.

Whether or not to foreclose a lien (which typically results in the association taking title to the delinquent unit) should be discussed on a case-by-case basis with the association’s attorney as there are many factors to consider including whether the unit is owner-occupied, rented or abandoned, and if there is a mortgage foreclosure case in process. Most importantly, the association should consider if they intend to rent the unit after they have taken title to it through foreclosure. While acting as a landlord can be time consuming for associations, the rental income earned often more than covers the past due fees owed by the old homeowner. The collections policy should outline the broad scenarios in which the association would foreclose on a unit.

Amenities Restrictions

Florida Statute 718.303(4) allows associations to suspend a homeowner’s (and their tenants’ and guests’) right to use the common elements of the property if the homeowner is more than 90 days delinquent in paying their maintenance fees. When possible, associations should use this to their advantage by restricting the homeowner’s access to the property’s 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 homeowners to pay their past due balance. The collections policy should specify which amenities would be restricted as well as how and when they would be restricted. According to FL Statute 718.303(6), the Board must vote to suspend a homeowner’s right to use the common elements at a Board meeting and must notify the homeowner of the amenities restriction via mail or hand delivery.

Lease Restrictions and Rent Garnishment

If a property’s declaration or bylaws allows the Board to approve or deny a proposed lease of a unit, FL Statute 718.116(4) allows Boards to deny a proposed lease of a unit due to a homeowner being delinquent in the payment of maintenance fees. Preventing homeowners from leasing their units is a very important tool for associations and, if allowed by the property’s documents, should be included the collections policy. The policy should specify when a homeowner becomes ineligible to lease their unit, how they are informed of their inability to lease their unit, and what will happen if a unit is leased by a homeowner that is ineligible to lease their unit.

Rent garnishment is the association’s primary weapon against homeowners with past due maintenance fees that are renting their units. Florida Statute 718.116(11)a allows the association to demand that the tenant make lease payments directly to the association until all past due maintenance fees have been paid. Further, if the tenant refuses to make payments to the association, the association may sue for eviction of the tenant. The collections policy should specify when the association will attempt to rent garnish and the process for doing so (the FL Statutes provide specific details on how the tenant and homeowner must be informed). Further, the collections policy should specify when the association would begin eviction proceedings should the tenant fail to make lease payments to the association.

The leasing section of the collections policy should be reinforced by a separate and distinct Leasing Policy (to be discussed is a separate blog post).

Voting Rights

Florida Statute 718.303(5) allows associations to suspend a homeowner’s voting rights if the homeowner is more than 90 days delinquent in paying their maintenance fees. This particular restriction does not tend to do much to encourage homeowners to pay past due balances as those with past due balances tend not to care enough to vote. However, it is worthwhile for the association to include suspending homeowners’ voting rights in their collections policy 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. Similarly to the common elements restriction, according to FL Statute 718.303(6), the Board must vote to restrict voting rights at a Board meeting and must notify the homeowner of the voting restriction via mail or hand delivery.

Payment Plans

If a homeowner has accrued past due maintenance fees and would like to avoid having the association foreclose on their unit, they may wish to establish a payment plan with the association. While each payment plan approved by the Board may be customized for each homeowner, the collections policy should establish the basic guidelines for when the Board may consider a payment plan, how the homeowner should request a payment plan, how a payment plan is approved, who (the association or its attorney) will receive the payment plan installments, whether or not late fees and interest continue to accrue during the implementation of the payment plan, and what will happen if the homeowner fails to abide by the payment plan (typically foreclosure). The collections policy may also want to specify that the Board will not accept any payment plans that reduce the total amount owed by the homeowner.

 Settlements

A homeowner with past due maintenance fees may wish to come to a settlement with the association where by they would negotiate with the association some reduction in the amount owed. This typically occurs when the homeowner is looking to sell their unit. The Board will typically negotiate settlements on a case-by-case basis but some basic guidelines can be included in the collections policy including when the Board may consider a settlement, how the homeowner should request a settlement and how a settlement is approved. As I have mentioned before, consistency is key. Whatever the logic the Board choses to use in determining if a settlement is acceptable, they should be sure to apply that same logic to all homeowners and not allow personal feelings enter into the decision making process.

Repayment Order

The collections policy should specify how payments are applied to a homeowner’s past due balance. More specifically, Florida Statute 718.116(3) specifies that payments should first be applied to interest, then to late fees, then to attorney’s fees and costs associated with collection, and then to the delinquent maintenance fees.

Verbal Communications

The collections policy may want to specify the situations in which a member of the Board or the association’s manager will actively reach out (via phone or email) to a homeowner with past due maintenance fees in an attempt to encourage the homeowner to pay. An appropriate time to do this may be prior to the Board voting to lien and foreclose on the property as there is no point in accruing additional legal fees if the homeowner is planning to make payment in full in the coming days or weeks. Further, it may be wise for a representative of the association to offer the homeowner a payment plan, as the homeowner may not have realized this was an option. In my experience, actively communicating with homeowners makes collection efforts more successful.

This post addressed all of the key components of a quality collections policy. If your Board does not have a collections policy, I strongly recommend this be an agenda item at an upcoming Board meeting. If you have any questions or would like our assistance in drafting a collections policy for your property, feel free to reach out to us.

Ryan

Ryan is a Florida condo owner and a director of VERA Property Management, a condominium and homeowners’ association management and consulting firm. VERA will gladly draft a Collections Policy (including delinquency letters, pre-lien letters, rent demand letters and all other relevant notices) for your Association based on the desires of the Board, your association’s declaration and bylaws, as well as the Florida Statutes.  Please contact us today for a quote!

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