TC Palm Q&A Column, July 9, 2017

By July 9, 2017News, Questions & Answers

Editor’s note: Attorneys at Goede, Adamczyk, DeBoest & Cross, 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: I heard there is a new law concerning estoppels.  Is there anything we need to do?

B.D., Stuart

A: Yes, there is a new law effective July 1 amending Florida Statutes section 718.116 and 720.30851.  The association will now be required to provide estoppels within 10 business days as opposed to 15 calendar days and the estoppel is automatically effective for 30 days from delivery.  If the estoppel is not timely provided, the statute now provides that the association forfeits its fee and the statute sets a schedule of maximum estoppel fees.

As far as a “to do” list, we are recommending that clients revise their standard estoppel form, if one, to mirror the information required by the statute and the Board adopt a resolution establishing a fee schedule as well as naming the authorized person or entity to receive and respond to estoppels.  It is important that the Board be able to rely on a written resolution to establish the fee and to ensure that estoppels are not being forwarded to unauthorized people who may not timely respond or have all of the information.   You should contact an attorney that is versed in these legislative changes to assist you through this process.

Q: The Board of Directors in my homeowners association is considering an addition to the clubhouse to include a fitness center and social room.  Does the membership need to approve any change to the footprint?

D.A., Delray Beach

A: Possibly, but membership approval is not be required by the statute.  First, changing the footprint of the clubhouse is a material alteration to the clubhouse because it does change the use, function and appearance of the clubhouse, but it is critical to note that the concept of a material alteration is statutorily unique to condominiums governed by Chapter 718.  If your homeowners association is governed by Chapter 720, the statute would not impose any restrictions on the Board’s ability to alter the clubhouse because most governing documents provide that the Board is responsible to manage the common area.  

Nevertheless, many HOA governing documents self-impose a restriction.  I have seen many governing documents in homeowners association that adopt the concept of a material alteration and also require membership approval to materially alter the common areas.  

The third part of the analysis needs to examine how the alteration will be paid for.  There is a difference between the Board’s ability to alter the clubhouse and the Board’s ability to raise the funds for the alteration.  If the Board is seeking to raise the money by borrowing from a lender or from special assessing the membership, it is very possible that your governing documents require the membership to approve the fundraising for this project which is an indirect way of requiring the membership to approve the project itself.

In summary, the answer is that the statute would not require the membership to approve the alteration, but it is very possible the governing documents will require membership approval either to perform the alteration or to raise the funds for the alteration.  I would highly recommend you have a Florida licensed attorney review the governing documents to determine whether the Board alone can approve and pay for this project.

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, 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.