Q: We are noticing a significant influx of corporate investors in our community with clear intentions of renting. Our Board wants to limit the number of rentals in the community to preserve values. How do we do this?
A: Possibly. This is a growing concern for many communities, many of which differ on whether they believe the rental situation is a problem. Legally, condominiums and homeowners’ associations can act to address this issue.
In a condominium, there is a very important court decision which provides that rental restrictions in the condominium documents can change over time as the condominium documents are amended. So, the condominium members could approve an amendment that a) limits the percentage of rentals at any time; b) provides a moratorium on the ability to rent after acquiring title to a unit; or c) limits the number of units that can be owned by any individual or entity. In a condominium, however, there is also a statute providing that amendments to the condominium documents which change the frequency or ability to rent are only enforceable against owners who vote in favor of the amendment or owners who acquire title after the amendment is recorded in the public records. In other words, the condominium membership can vote to prospectively address rental issues through the condominium documents, but it is problematic to track and enforce newly adopted amendments when landlord owners are likely to vote ‘no’ and therefore they are “grandfathered” under the prior rental restrictions.
In a homeowners’ association, it is important to note that the above-referenced statute applicable to condominiums is not in Chapter 720, Florida Statutes, governing homeowners’ associations. Thus, homeowners can arguably amend the Declaration of Covenants as described above and enforce the newly adopted amendments against all owners, including those who did not vote in favor of the amendment.
As another measure, the Association could implement a screening procedure reviewing criminal history reports and possibly credit checks to approve or deny tenants for cause. There are a few ways of doing this depending on the language in your governing documents, so I would strongly urge you to have the Association’s legal counsel review the governing documents and advise you on how to implement such a policy.
Q: I am an active owner in our community and I have requested a copy of all emails on a various subject. The property manager has indicated that there are none, which seems impossible. Am I entitled to damages for this blatant refusal?
P.R., Marco Island
A: Florida law requires condominium and homeowners’ associations to maintain their official records and make those records available to owners upon request. There are certain records that are privileged and may not be made available, such as attorney client communications, credit card information, and social security numbers.
With respect to emails, the prevailing opinion today is that emails only between Directors on their private computers are not official records of the association. So, if all the emails you are seeking were between the Directors only on their private email addresses, those records are not official records and are not required to be maintained by the Association.
Conversely, if there are emails that are maintained by the Association as official records and the Association refuses to make them available to you, the statute does provide a financial penalty that you would need to pursue either in court or with the Florida Department of Business and Professional Regulation depending on the type of association. There are certain procedural requirements that you must pursue before you can simply demand a check, so you should consult with a Florida licensed attorney to determine your rights and responsibilities under Florida law.
Q: Our condominium association adopted the 2018 budget last week and it was a total shock to everyone in the room. The Board claims it was the first time they had seen the proposed budget and there were multiple increases. The Board kept saying they were following the committee’s recommendation and adopted the budget. What committee is this? How can this be done in secret?
G.R., Bonita Springs
A: The budget “season” is one of the most important times of the year for a condominium. Every condominium association approaches the budget differently. Some rely on management to prepare the budget. Some have a treasurer that oversees the drafting process. Some have a committee of owners prepare and recommend the budget to the Board.
In this last situation, which appears to mirror the operation of your condominium, a committee makes recommendations to the Board. This is often referred to as the “budget committee” or the “finance committee” but no such committee is technically required under Florida law. The key point is that this committee may not act in secret. Pursuant to Florida law, certain condominium committees must always follow the same procedural requirements of meetings of the Board of Directors, which (for regular meetings) require at least 48 hours’ posted notice and must be open to the membership.
Specifically, Florida Statutes section 718.112 provides that “meetings of a committee . . . [to] make recommendations to the board regarding the association budget are subject to this paragraph.” This means that committee meetings to make budgetary recommendations must be open to the membership and must be posted at least 48 hours prior to the committee meeting. It also implies that said committee meetings should keep minutes.
In a condominium, owners have a right to be present for these committee meetings and be part of the budgetary process. I should note that this only applies if there is an actual committee that makes recommendations, meaning a sole property manager drafting a proposed budget for the Board is likely not the equivalent of a committee, and I should also note that the law is very different for homeowners’ associations.