Naples Daily News Q&A Column, June 11, 2017

By June 11, 2017News, Questions & Answers

Q: We have a condominium unit owner that emails our property management literally ten times per day with questions and requests.  The manager is doing her best to respond, but the questions can be complicated and rude.  How do we handle this?

-R.T., Marco Island

A: If owners are submitting questions to the Board or management for response, this is generally referred to as a written inquiry.  It is important to note that the statute only requires the Association provide a substantive response if the inquiry is submitted via certified mail.  If the inquiry is submitted by certified mail, the Association must provide a substantive response within 30 days after receipt of the inquiry and, if the Board requests a legal opinion to provide a response, the Association has up to 60 days after receipt of the inquiry to provide a substantive response.  The statute also provides that the Association can adopt written rules limiting the frequency and manner of requests and specifically provides that the rule can limit owners to 1 written inquiry per 30-day period.  

So if the individual is emailing these requests, there is arguably no legal responsibility to timely respond to the owner because it is not submitted by certified mail.  If the owner elects to make these requests via certified mail, the Board could adopt a rule limiting the requests to a maximum number per 30 day period.  

Q: My homeowners association claims to have fully funded reserves, but we routinely hear about the Board using the reserve funds to supplement operating funds and the fear is that the reserves are not really fully funded.  How can we know if this is true?

-A.B., Naples

A: This is a common question and a great source of confusion in homeowners associations.  Florida Statutes chapter 720 governing homeowners associations was amended about ten years ago to provide for two (2) distinct types of reserve accounts.  The first type is a Board adopted reserve account, or sometimes referred to as a deferred maintenance expenditure account.  This type of reserve is completely in the Board’s control and the level of funding and the use of these funds is in the Board’s control – meaning the Board could likely use funds from this account to supplement operating funds.

The second type are called “established” reserve accounts, or sometimes referred to as statutory reserve accounts.  If your homeowners association has established reserve accounts, the Board may only use the reserve funds for their intended purposes and the reserve accounts must be on track to be fully funded.  These reserve accounts are largely similar to condominium reserve accounts.

So how do you know whether your homeowners association has discretionary or established reserves?  Florida Statutes section 720.303 provides that reserve accounts are established if a) approved by a majority of all lot owners; or b) if originally established by the developer of your community.   If neither (a) nor (b) above have occurred, then the default type of reserve is the discretionary Board adopted reserves.  If you are unsure which type of reserves you have, I would highly recommend consulting with a Florida licensed attorney.

With respect to the claim of fully funded reserves, the answer depends on which type of reserve you have.  If the reserves are discretionary Board adopted reserves, there is no “full” because the funding level is completely within the Board’s discretion.  If the reserves are statutory or established, you should ask for a copy of the most recent reserve budget and, if applicable, the most recent reserve study to compare funding levels based on professional recommendations.

Q: Our condominium association wants to amend the Declaration of Condominium, but the documents state that any amendments must be approved by seventy-five percent (75%) of all the unit owners.  This is virtually impossible based on past participation levels.  How can we accomplish these important amendments?

-H.R., Bonita Springs

A: Many older condominiums required 100% to approve simple amendments and the legislature amended Section 718.110 in 1992 to provide that no future condominiums could require more than 80% to amend the covenants.  In other words, the law supports a 75% approval threshold despite the difficulty.

One option is to suspend the voting rights of delinquent owners.  As of the date of the drafting of this article, the statute permits the Association to suspend voting rights for any owner who is delinquent in any monetary obligation to the Association for at least 90 days.  That statute may change in the coming days.  If you suspend the voting rights, it reduces the total voting interests and arguably makes it easier to pass an amendment because the delinquent owners are less likely to participate.

I have many clients that work very hard to contact every owner and ask for participation.  Depending on the current language of your Bylaws, Florida law also generally permits the Association to adjourn and continue the vote for up to 90 days.  This means that if you only have 50 percent participation, for example, as of the meeting to vote on the amendment, you can continue that meeting for up to a maximum of 90 days.  This permits the Association to narrow its efforts to obtain participation from only those owners who have not voted and also keeps the original proxies “alive” for the 90 day window so that owners do not need to vote more than once.

Q: I am a full time resident in my condominium and the entire Board of Directors has gone north for the summer.  Can we require that all Directors be full time Florida residents?

-D.B., Bonita Springs

A: I am frequently asked this question, and the answer is that residency cannot be a condition of eligibility.  If the candidate meets the minimum requirements, the Florida Division of Condominiums has determined that a condominium is not able to require Directors be full time residents.  The statutes do allow Boards to meet via conference call which would allow business to be conducted in the summer months when the Directors are up north.