Q. It is known throughout the community that my neighbor filed for bankruptcy six months ago, and she continues to use the community pool and gym. This owner is also telling everyone that she does not have to pay assessments anymore. Is this true and what can be done? — C.S.
A. Many bankruptcy debtors (and attorneys) do not fully understand the debtor’s assessment obligations in bankruptcy, particularly when there is a superior first mortgage. Although there are exceptions, the general rule is that an owner is responsible for paying all assessments due after the date the owner filed for bankruptcy. If the owner filed for bankruptcy on Dec. 15, 2011, for example, the owner is generally responsible for paying the Jan. 1, 2012 assessment.
The association’s ability to collect, however, is limited by an “automatic stay” imposed by the bankruptcy court which prohibits the association’s ability to collect any debt. The duration of the automatic stay depends on a number of factors, including whether the owner filed for bankruptcy under Chapter 7 or Chapter 13.
The association may suspend the owner’s voting rights or the right to use the common amenities, but one bankruptcy court has ruled that the suspension of an owner’s right to use the pool or gym violates the automatic stay. If the association wants to suspend the owner’s right to use the pool or other amenities, the association should obtain relief from the automatic stay or use great caution to ensure that the automatic stay is not in effect.
Q. I recently received a copy of my condominium’s 2012 budget and my assessments are going up by more than $200 per quarter. This is a significant increase and I am not sure if I can afford this increase. Does my condo board have the right to charge this increase? — A.C.
A. Whether your board has the right to charge this increase depends on the percentage increase. Although the board of directors generally has significant discretion in the budgetary process, there are a number of statutory requirements and limitations. Although generally the board approves the budget at a board meeting without a membership vote, the board must conduct a special meeting of the entire membership to approve a budget which exceeds 115 percent of assessments for the preceding fiscal year. If your $200 per quarter increase goes beyond this threshold, the owners must be presented with the opportunity to present and approve a substitute budget. The budget with the $200 increase will take effect if a quorum is not obtained at the special membership meeting or if a substitute budget is not adopted.
Q. My homeowners association typically notifies homeowners of our annual budget meeting by posting notice at our clubhouse with no mailings sent to the owners and the meeting usually occurs in October when the majority of owners are up North. Additionally, the notice does not contain a copy of the proposed budget. A copy of the proposed budget is typically handed out to those owners, who request a copy — at the budget meeting — minutes before the board votes on and passes the budget. Is this proper? — N.T.
A. Unfortunately, if you were looking to review the budget in advance, the notice might have been legally proper. Pursuant to Florida Statutes section 720.303(6), “the association shall provide each member with a copy of the annual budget or a written notice that a copy of the budget is available upon request at no charge to the member.” The deadline imposed by Chapter 720 (the homeowners association statute) indicates that the association’s obligation to distribute the budget is only triggered after (and not before) the budget is adopted by the board of directors.
This is significantly different from the condominium statute, which provides an express obligation to distribute a copy of the budget to condominium owners at least 14 days in advance of the budget meeting. Although your homeowners association’s bylaws may provide additional notice requirements, the board of directors likely satisfied its notice requirements so long as the posted notice of the board meeting was timely posted and included the budget approval process on the agenda. The association may change its procedures by amending its bylaws to include additional notice requirements, which is something you should lobby for if you feel that the current process does not provide for adequate input from the members.
Q. I am on the board of directors in my condominium and we have a pet problem. The owners are respectful of the pet rules and the tenants generally disregard the pet rules and the owners are complaining. Our Declaration of Condominium provides that owners may have domestic pets in the condominium unit with a certain weight limit. Can the board adopt a rule which prohibits tenants from keeping pets in the condominium? — J.S.
A. This is one of the community issues we most frequently encounter. The board needs to exercise caution and consult with its legal counsel before passing a rule that treats tenants differently than owners. The ability of the board to regulate this activity without a membership vote depends on the language in your Declaration of Condominium.
Under Florida law, the Declaration is superior to your Rules and Regulations in the “hierarchy” of your community documents, and, therefore, the board may not adopt a rule which directly conflicts with the Declaration. Further, Florida condominium law is clear that a tenant enjoys the same rights to use and enjoy the condominium property that the unit owner would have unless the Declaration expressly states otherwise. If the board desires to restrict pet privileges for tenants, the Declaration should provide clear and specific authority to do so.
If your legal counsel advises that the association is unable to enforce a “no-pet” rule for tenants, the association may hold the unit owner(s) responsible for pet problems by imposing fines and other penalties authorized by the community documents. If the documents provide authority for the removal of nuisance pets, the association may also require unit owners to remove pets that become an unreasonable nuisance or danger to the community.