John C Goede: Condo Owners at Odds with Association
By:John C Goede -
March 30, 2017
Q. Our original condominium association board foreclosed on a condo unit and rented it out for $1,250/month. A new board was seated that stopped renting this unit out on March 31, 2013. The condo unit remained unoccupied until March 29, 2016 when the board wrote off $34,136 in bad debt expense for these maintenance fees. What recourse do the condo owners have and against whom?
A. First, I would like to know the reason the board stopped renting out the unit. There may have been a legitimate reason. If so, I do not think the board would be liable for failing to collect any rent. The board would have pretty broad authority to decide whether or not to rent the unit, but if the board simply just did not want to have the hassle of renting the unit, there may be a claim that they did not act in the association’s best interest. I think such a claim would be difficult to prove, however, as there are myriad valid reasons one might choose not to rent their property.
Q. Some owners in our condominium want and need to install a chair lift in the stairwell to the second floor. They want only those who pay for it the use of it. However, if it is in the common elements, wouldn’t the condominium association have to maintain it? Finally, can owners who don't want it deny those that do, the right to have it?
G.W., Bonita Springs
A. The Fair Housing Act requires an association to approve a reasonable modification of the common elements if the person or persons have a handicap and need the modification in order to use the common elements. The Act requires the persons in need of the modification to pay for it and to maintain it. The association is not required to pay for the installation or the maintenance. Only the persons that are in need of the chair lift would be allowed to use it. Owners who do not need or want the chair lift cannot deny the installation of it. The board has the only authority to approve or deny the lift, and if the person or persons qualify, then the board must approve the installation.
Q. My condominium board has created new line items in our reserve funds and has moved close to $200,000 from other reserve line items to fund these newly created projects. Our reserve funds are pooled. Is this legal, and is it recommended to rob Peter to pay Paul for reserve items coming up in from 2-3 years?
C.T., Marco Island
A. By law, reserves can only be used for the purpose originally intended unless the members vote to approve an alternate use. When you have pooled reserves, the money in the pool can only be used for those items listed as part of the pool. If you want to add an item to the reserve pool, the members would be required to vote to approve this, as well. When you add a new item to an existing restricted reserve pool, in essence, you are allowing some of the existing reserve money to be used for the new added item. Thus, again the members must approve this addition. The board of directors cannot add items to a reserve pool or use reserve funds for an alternate purpose without approval of the membership.
Q. I have a board of directors that is adamant that no one will smoke at the pool and the smoking residents are fighting this issue. Has this occurred in other pools and if so, how did you handle it? Also, the board refuses to install a smoking section to the fenced in pool area.
A. First you need to review your governing documents and determine that the board has the authority to adopt rules regarding the use of the common elements. If the authority exists, then the board could adopt a rule prohibiting smoking at the pool or, for that matter, anywhere else on the common elements including the limited common elements such as lanais. The board is not obligated to provide a smoking area on the common elements but should strongly consider doing so. Without providing an approved smoking area, the incidents of violations will undoubtedly increase. No-smoking rules are becoming more common, and I recently had a client that amended their Declaration to prohibit smoking on the entire property, including inside of units.
Q. The homeowner association documents that we received from our developer do not contain any requirement for membership approval of any financial expenditure made by the board of directors. Basically a majority of the board (4) can develop a project and spend unlimited funds. When the incorporation of a member-approved financial control system is suggested, the difficulty of obtaining 75 percent approval of all the voting interest (1,291) to amend our Declaration of Restrictions and Covenants is stated. A recent long range planning survey indicated that 92 percent of the membership favored a member approved financial control and 91 percent were satisfied overall with the quality of the facilities.
Since there is no financial control whatsoever in the Declaration of Restrictions and Covenants is it possible to amend the bylaws to develop a member approved financial control? Our bylaws require two-thirds of the board (5) and 75 percent of a quorum, 20 percent (259) to amend.
A. Great question! First, as a homeowner association controlled by Chapter 720, Florida Statutes, there are no financial spending limitations or budget increase restrictions contained in the law. If you were a condominium association under Chapter 718, Florida Statutes, or a cooperative association under Chapter 719, Florida Statutes, there are laws that allow owners to overrule budget increases greater than 15 percent year over year, under certain circumstances. So in your case, your budget constraints are completely controlled by the governing documents. In most cases the adoption of the budget provisions are found in the bylaws as opposed to the Declaration of Covenants or Articles of Incorporation. If this is the case in your community, then I believe you could amend the bylaws to impose certain restrictions on the expenditures of money and adoption of the budget.
Q. Our board president has stated that membership approval is not required to change the colors of our condominium buildings. Our declaration states, "The Association shall determine the exterior color scheme of the buildings and the nature and color of all exterior decorative elements, fixtures or furnishings." Can the board change the color scheme without approval of the unit owners?
A. Section 718.113(2)(a) of the Condominium Act provides that “there shall be no material alteration or substantial additions to the common elements or to real property which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions.” Changing the color scheme is definitely a material alteration. In your case the provision you quote is poorly worded. It provides that the association shall determine the color scheme. It does not provide that the board will determine the color scheme. However, your governing documents probably provide that any power granted to the association is exercised by the board unless an express vote of the owners
is required. Your governing documents do not provide that the owners must vote on the material change. The statute, however, does, unless your documents provide otherwise. In this case I think your documents are ambiguous and a conservative opinion would be that the board does not have the right to make the change without a 75 percent vote of the owners.
Attorney John C. Goede is a shareholder at the law firm of Goede, Adamczyk, DeBoest & Cross. Visit the website at www.gadclaw.com or ask questions about your issues for future columns by sending an inquiry to: email@example.com. Goede, Adamczyk, DeBoest & Cross is a full-service law firm with a focus on condominium and homeowner association law, real estate law, litigation, estate planning and business law. With offices in Naples, Fort Myers, Coral Gables and Boca Raton, the firm represents community associations throughout Florida. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of a
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