How can my community review applications for proposed owners and tenants?
As a property owner, I am always concerned about who is moving in next door. In order to have the right to screen applicants prior to their occupancy within your community, your community’s organizational documents must grant your board of directors the power to do so. If they do not, your community has the ability to amend its documents to permit such a right. Once a community has the right to screen applicants, we suggest adopting a protocol to ensure that all applicants are screened pursuant to the same set of rules. As long as the screening rules your community adopts are a reasonable with all applicants screened according to that protocol, your community will have an excellent means by which to defend any discrimination claims that may arise from the screening.
What does the State consider to be an emergency?
Boards of Directors like to toss around the word “Emergency”. This is typically used as a reason to either close a meeting to the unit owners or make a decision without holding a meeting. The State considers an emergency to be something along the lines of a fire, flood or hurricane. The reality is that the only reason you can close a meeting to your owners is if (1) you are discussing pending or threatened litigation with your attorney or (2) you are discussing employee issues such as salary, benefits or termination. This applies only to employees. This does not include contractors. Beyond that, you can only make decisions outside of a meeting if the nature of the emergency is such that waiting 48 hours to hold a properly noticed meeting in front of your community will cause significant damage to your community. For example, in a high-rise building, it would be proper to call a plumber upon learning that there was a significant leak affecting multiple floors of the building without first calling a meeting because allowing running water for 48 hours would cause substantial damage. Even then, the board of directors should discuss and ratify the hiring of the plumber at the next meeting.
What is the difference between an officer and a director?
In the vast majority of associations, the owners elect the board of directors and then at the following organizational meeting, the directors elect the officers. Although the primary focus is on the president of the association, he or she only works at the behest of the directors. In a community with five directors, each of those directors holds 20% of the association’s power. The only way that any officer, including the president, can act is if the majority of directors from a properly noticed board meeting vote in favor of such action. If any officer acts without the authorization of the board of directors, he or she acts at their own peril. The association’s insurance policies only cover officers and directors when they are acting within the scope of their responsibility. An officer, acting without the permission of the Board of Directors, may be doing so without the benefit of the association’s insurance coverage.
My documents provide a specific date and time for our annual meeting but that is never convenient. What can we do about that?
It is best to follow the terms of your organizational documents. If your Bylaws state that your annual meeting should be at 10:00 am on the second Tuesday of January, stick to that if you can. If it’s untenable, then keep to it as close as possible. As an example, run it at 7:00 pm that day rather than 10:00 am. In speaking with the State, it seems like their primary concern is that you hold an annual meeting at least once per calendar year. We also suggest that you keep the time between annual meetings as short as possible. It is better to have 13 months between annual meetings than 23 months. Running annual meetings at least once per calendar year will keep the State off your back but not necessarily your unit owners. Try to change your Bylaws to make it easier to schedule annual meetings. If you are unable to do so, you run the risk of unit owners seeking to enforce the terms of your organizational documents if you continue to hold annual meetings other than as required by your organizational documents.
How do we avoid the defense of selective enforcement?
The trick to avoiding selective enforcement charges is to treat similarly situated people similarly. Adopt protocols and policies that are properly adopted, and stick to them. Many associations are terrified of denying anybody the right to own or occupy a unit. If you adopt proper policies and you follow them every time, you may receive discrimination complaints made to the County regarding denied applications, but as long as you are denying for permissible reasons and you follow your adopted policies, the County will not be able to make these complaints stick. Not having the proper policies in place is an invitation for a lawsuit. Work closely with your legal counsel to make sure that you adopt proper policies that are reasonable and only screen for deniable issues.
We have a big project looming ahead of us and we are contemplating taking a loan. How do we prepare for that?
Contact multiple lenders who are accustomed to making loans to associations. Lenders are not interested in securing your pool or your clubhouse; instead, they secure their loan with your ability to assess your unit owners. There are big factors in determining whether a loan will be approved, which include the rate of delinquency of your unit owners and what percentage of owners are renting out their units. The lower the percentage of each, the more likely your loan will be approved. Keep steady on your collections. A good practice is to adopt a collection protocol so that all owners face the same proceedings as the rest of the owners in your association. In the event that you have a high rate of owners renting out units, that can be overcome if your units are widely unencumbered by mortgages.
What is this 40 year inspection I keep hearing about?
The 40-year inspection seems like a big, scary event. It can be! It’s a protective inspection of each building as it reaches 40 years of age. This is limited to all buildings in Miami-Dade County other than single-family homes, duplexes and buildings that have less than 10 occupants and are smaller than 2,000 square feet. If you are in Broward County, it applies to all buildings except single-family homes, duplexes, and buildings less than 3,500 square feet. This is a health and safety inspection to make sure your building is fit for ongoing human habitation. You will hire an engineer who will make the assessment. This assessment will be split between projects that must be completed and projects that should be completed. This assessment will be submitted to the County and your association will be given a period of time to complete the project that will be commensurate with the amount of work to be completed. This can be a costly undertaking. Proposals for engineers should be reviewed and you may want to begin any projects you know will require work earlier as that will reduce the financial impact to your community at the time of the inspection and ensuing work.
How can we enforce our association’s rules?
There are two primary means by which the board of directors may enforce the association’s rules, whether they are contained in the Declaration or the Rules & Regulations documents. The first means by which a board of directors may enforce its rules is by employing a fine committee. The DBPR (Department of Business and Professional Regulation) has determined that whether you have a fine committee or not in your organizational documents, you still have the right to fine as long as you do so properly. Do work closely with your legal counsel to modify your fine committee proceedings. If you do not comply with the fining requirements, you will not be able to collect the fines you impose. The second means by which a board may enforce its rules is by seeking injunctive relief from the Courts. If you file such a suit, make sure you’re going to win because association law enjoys the benefit of prevailing party legal fees. This means that if you win, the other side pays your legal fees but beware, if you lose, you end up paying their legal fees.
We’re thinking about amending our organizational documents. How do we do that?
Revising your organizational documents can be a costly event, particularly with some of the firms out there. Before undertaking any legal fees, we strongly suggest that you take a straw poll to see if your community would be amenable to such a change. Changing your Declaration, Articles of Incorporation or Bylaws virtually always requires a unit owner vote. Each document will advise as to the percentage of owners required to agree to the change. If your straw poll indicates that the number of interested owners meets or exceeds the required number to change your documents, you should consider proceeding to have your legal counsel draft a proposed amendment. Otherwise, you are spending what can only be seen as wasted legal fees. If you feel that you will be successful in revising your documents, your legal counsel will draft the proposed revision(s) and the proposed revision(s) will be mailed out to your owners for a vote. In the event that the vote passes, a certificate of amendment will be drafted and executed. The certificate, together with the amendment, will be recorded in your County’s Official Records. You will then mail out the recorded amendment to your owners and the amendment will then be in effect.
What can we do about the animals in my community?
This has become a much more difficult issue in community associations in recent years. In the past, a community could adopt a policy prohibiting certain pets or pets in general and the community was able to enforce that policy. Now, our government has taken the position of not standing between a doctor and the doctor’s patient. If the doctor believes that the patient will be well-served by having a service animal or an emotional support animal, a community will not be able to keep such an animal out. That does not however, mean that the association cannot enforce reasonable rules to control such issues as animal waste and nuisance noise. As animals appear here to stay, even in no-pet communities, it is important to craft a policy to deal with service animals and emotional support animals.
Do we have to record our rules and regulations?
The answer, at least for now, is no, if you are a condo or a co-op. On the other hand, as of 2015, Home Owners Associations (“HOAs”) are obligated to record their Rules & Regulations. If the last time your Rules & Regulations were recorded as part of the recordation of your Declaration and you have revised your Rules & Regulations in the ensuing years, you should compile the sum total of all of your current Rules & Regulations and record them in the Official Records of your County. This is also a good time to review your Rules & Regulations to make any revisions as your board of directors sees fit. To proceed, provide a two-week notice to unit owners by mail that there will be a rules meeting, and provide a list of rules that the board of directors will discuss and vote upon. At the meeting, it is the board of directors who will vote on the rule changes. Unit owners do not have voting privileges.