TC Palm Q&A Column, December 24, 2017

By December 24, 2017News, Questions & Answers

Editor’s note: Attorneys at Goede, Adamczyk, DeBoest & Cross, PLLC respond to questions about Florida community association law.  The firm represents community associations throughout Florida and focuses on condominium and homeowner association law, real estate law, litigation, estate planning and business 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?

TD, Vero Beach

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.

Q: Our community has 120 single family homes.  Because of a single and significant issue, we have a lot of owners wanting to be on the Board.  We currently only have 3 Directors but we have 9 owners that want to serve on the Board.  Is it advisable to increase the size of the Board to 9?

PR, Treasure Coast

A: It depends.  Generally, a Board of 3 or 5 Directors would be appropriate for a community of that size.  The first consideration is how do you increase and decrease the size of the Board?  Depending on your governing documents, this may require a membership vote to amend the Bylaws.  Second, while it is great that you have a lot of participation at the moment, you may be struggling to get a quorum of Directors to serve on the Board once this big issue is resolved.  You do not want to find yourself needing to beg neighbors to serve on the Board just so that you can get 5 Directors (a quorum of 9) to show up at a meeting.  You also want the election process to serve its purpose so that very unfavorable and/or unpopular candidates do not get elected just because there are so many open seats.  My first recommendation would be to contact a licensed Florida attorney to determine how you could effectuate an increase and, if necessary, a subsequent decrease in the size of the Board.

John C. Goede Esq. is co-founder and shareholder of the Law firm Goede, Adamczyk, DeBoest & Cross, PLLC.  Ask questions about your issues for future columns send your inquiry to: question@gadclaw.com.  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, PLLC 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 an attorney is a decision that should not be based solely on advertisements or this column.