Q: Our condominium association is largely empty during the summer months but I continuously receive emails and updates from the Board, despite knowing that they are scattered across the country this summer. How can the members attend Board meetings if they are not in town?
DB, Marco Island
A: A Board meeting is defined as any time where a quorum of the Board is together conducting association business. If your condominium has five Directors and three of them are on a phone call discussing the color of the building, that is a Board meeting that must be noticed in advance and open to the membership.
It is very common, however, for Board meetings to occur remotely during the summer months. The Directors’ fiduciary obligations do not take a break during the summer months, so neither should the Board. Florida Statutes section 718.112(2)(b) provides that a Director may participate in a meeting via telephone or other real-time conferencing and that such participation counts towards a quorum. So if your Board is meeting via conference calls during the summer months, that is a permitted under the statute so long as the phone call is noticed as a Board meeting in advance of the meeting with an agenda.
Another critical aspect is that the Association must provide an opportunity for the membership to participate in Board meetings. Members have the right to address the Board on each agenda item. The statute provides that if the Board is going to meet remotely, “a speaker phone must be used so that the conversation of such members may be heard by the board members attending in person as well as by any unit owners present at a meeting.” As long as the Board is providing a locating where you can listen and participate or providing instructions to allow you to actually join the conference call, the Board meeting is technically open to the unit owners.
Q: An owner in our community died a few months ago. The family has not visited the property and has not paid the assessments and the property is looking unkempt. How can we compel the estate or the children to fix the property and pay assessments?
A: There are a number of variables to property answer this question, and one of those variables would require a detailed review of your governing documents.
Generally, when an owner dies, title needs to pass to the beneficiaries. If the property was owned in a way that avoids probate, there will be no estate and you will need to seek legal counsel to review the land records to determine the identity of the legal owner. If the property will require probate administration, the family petitions the local court to appoint a personal representative (sometimes called the executor) who is responsible for all assets in probate. Because the owner of the property is responsible to comply with the covenants, the first step is to determine the identity of the legal owner.
As another general principal, death does not alleviate the obligation to pay assessments. If the owner was current on assessments before death, the Association will look to the probate estate for payment and the Association still has lien rights even during the probate process.
Concerning the appearance of the property, look to your governing documents. Many documents will provide that the Association has the right to provide curative maintenance and to charge back any expenses to the homeowner. If this is the case, and if it appears probate is going to take a long time, it may be cost effective to maintain the property and assess any charges to the lot. It is critical, however, that you have your documents reviewed by an attorney to make sure you have the right maintain the lot, and if so, what is the legal mechanism to pursue repayment. It is possible that you would need to pursue reimbursement through small claims court and it is also possible that the Board needs to assess these specific charges to the appropriate lot. In addition, the association also has the right to fine and/or suspend the amenity privileges of the owners provided the condition of the property is a violation of the covenants.
Q: Our finance committee is getting bids from contractors to replace the roofs to determine the reserves for roof replacement. Should the Board be using a licensed engineer?
TR, Bonita Springs
A: Technically, no. The Board is required to exercise business judgment, which means that the Board should use reliable sources to determine the current condition and future costs associated with roof replacement. If the Association obtains an opinion from a licensed roof contractor along with reliable quotes to replace the roof from that licensed contractor, that is likely sufficient.
Others rely heavily on reserve studies using licensed engineers. These studies can provide a tremendous value and would almost certainly be a reliable source of information.
The downside of relying on contractors is that they are bidding to get your business, not necessarily to advise the Association on market value for a roof replacement in the future. The contractor may have a personal interest in shortening the useful life of the existing roof whereas the engineer would be disinterested. Provided the contractor’s opinion is reliable, it would probably meet the Board’s fiduciary obligations.
Q: Our condominium operating budget will almost double next year due to the unexpected replacement of the irrigation system. Owners are objecting and claiming the Board can’t increase the budget more than 15%. What is the law on this?
A: Generally, the Board of Directors is in control of the budget, but Florida Statutes section 718.112 provides that any budget adopted by the Board exceeding 115% of assessments for the preceding may be subject to a membership veto. That being said, the same statute provides that expenses for the repair or replacement of condominium property are excluded from the calculation. So if all of the increase is due to the replacement of the irrigation system on the condominium property, your budget may not actually exceed the statutory threshold allowing for a membership vote on the budget.