ROC Boards Face Tough Decisions in a Difficult Economy

Posted on October 28, 2009 by Scott Gordon

The President of one the many "55 and over" resident-owned communities we represent recently contacted me to discuss what is becoming an all too familiar situation:

The rules governing this community specify that at least one of the persons occupying a home had to be at least 55 years of age and that any other person occupying the home had to be at least 45 years of age.   Many, if not most, "55 and over" ROCs in Florida have similar provisions.

During the past year, several residents in the community found themselves opening their homes to children who had lost jobs or were otherwise suffering financial hardships.    This community's rules were similar to many other ROCs and provided for a period of time (in this case, thirty days) where an underage person could occupy a home as a permitted "guest".   Unfortunately, none of these underage children were able to find affordable housing within that thirty day guest period. 

The residents had requested the Board for an extension of the "guest period" for their underage children and the Board had granted two separate extensions of ninety days and had advised each of the residents requesting these extensions that none of their current "guests" would be granted any further extensions.

All but one of  the underage children found affordable housing during the final extension period.  As can be expected, the members whose child was not able to secure housing outside of the community was now requesting that the Board grant yet another extension.  

I suggested to the ROC President that the Board should consider a number of factors in deciding whether to grant this latest request:

  • The "55 and over" exemption to the Fair Housing Laws was not an issue as the parents (both of whom were over 55 years of age) would remain in the home with the child. 
  • Since the "55 and over" exemption was not a factor, the real issue was whether the Board felt comfortable allowing a further exception to the community rules. 
  • The Board had expressly stated to the requesting members that no further exceptions would be allowed and the residents in the community could certainly view the granting of another extension of time as a sign of weakness or lack of concern with enforcing the community rules.
  • At the same time, every member knows the problems that our current economic crisis has created and a Board refusal to grant an additional extension might be viewed as heartless and insensitive.

I offered some guidelines that might help provide a solution--an extension for a shorter time period (perhaps thirty days) with the understanding that each and every request for an additional extension be accompanied by documentation establishing to the Board's satisfaction that the underage child was continuing to make good faith efforts to find employment that would provide him with an income sufficient to find housing outside of the community.

Clearly, there is no quick and simple answer for board members when considering requests based on the economic hardship of underage children of residents in the community.    What is clear is that every community may find itself dealing with requests of this nature in the near future.

 

 

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ROC Seminars Are Scheduled for November and December

Posted on October 22, 2009 by Scott Gordon

Our first set of ROC seminars for the 2009-2010 "season" have been scheduled.   We'll discuss how the new "Red Flag" identity protection rules will affect resident owned communities, cover election procedures and the differences between ballots and proxies, provide some updates on developments in the Fair Housing area and recent court cases and highlight proposed legislation that may impact community associations.   In addition to that rather full agenda, as always, we'll devote some time to an "open forum" for questions from our attendees. 

The seminars are scheduled as follows:

  • Tuesday, November 17, 2009 at the Molokai community in Leesburg.
  • Wednesday, November 18, 2009 at Sandalwood Park in Venice.
  • Thursday, December 3, 2009 at Old Bridge Village in North Fort Myers.
  • Thursday, December 10, 2009 at Westwinds Village in Bradenton.

The seminars start at 10 a.m. and end at 12:30 p.m. and all of the seminars will be held in the clubhouse at each of these communities.  We plan on covering the same topics at each of these locations so you can choose the date and location that's most convenient.

While the seminars are free of charge to all attendees, because we do serve refreshments and want to make sure that there is enough seating and space for everyone,  please notify us in advance if you wish to attend.   Also, please note that the seminar at Molokai is being held in conjunction with the monthly meeting of the Mid-Florida ROC group and if your community is located in or near Lake or Sumter County and is not yet a member of that group, please let us know when you make your reservation and we'll provide you with the contact information for one of the Mid-Florida ROC officers.

If you are interested in attending one of these seminars and your community hasn't already reserved seats, please email either Karen Midlam (kmidlam@lutzbobo.com) or Kathy Sawdo (ksawdo@lutzbobo.com).  They'll be able to provide you with directions and answer any other questions you might have.

We're looking forward to seeing you at one of these seminars and if you have any topics you'd like to have us discuss at future seminars, please email me at sgordon@lutzbobo.com.

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Reports from the FMHA Convention and the Institute on Condominium and Cluster Developments

Posted on October 16, 2009 by Scott Gordon

I'm writing this entry from Ft. Lauderdale, where I am attending the Institute on Condominium and Cluster Developments presented by the University of Miami School of Law.   This two day seminar has provided me with a wealth of material for future entries to this blog and has allowed me to spend some time learning and meeting with many of my fellow community association attorneys throughout Florida.   A colleague from our Tallahassee office, Karl Scheuerman, spoke at one of yesterday's sessions on the many issues facing "subsequent developers" of condominiums and other community developments.  Hopefully, these are issues that your community or association will never have to face.  

Karl and I attended the dinner meeting of the Florida Bar's Condominium and Planned Development Committee (which is part of the Bar's Real Property Probate and Trust Law Section) that was held at the end of yesterday's presentations.    Again, this event gave me the opportunity to discuss with a number of my colleagues problems facing ROCs and potential solutions to those problems.

As my blog followers know, I also attended the convention of the Florida Manufactured Housing Association at the Saddlebrook Resort north of Tampa earlier this month.   This annual event gives the members of our firm that work with the owners of manufactured housing communities the opportunity to network with those owners and many of the companies that provide important services to those communities.    A number of my colleagues from our firm, including Allen Bobo, Jody Gabel, Richard Lee, David Eastman, Karl Scheuerman, Carol Grondzik and I made presentations to convention attendees on a variety of topics, including:

  • Evictions
  • Fair Housing Issues
  • Dealing with Abandoned Mobile Homes
  • How to amend rental prospectuses

It was clear from our experiences at the FMHA convention that the current state of our economy has created an environment that is extremely challenging for community owners, whether they be private investors or ROCs. 

The FMHA is well aware of the importance of resident owned manufactured housing communities in Florida and will be making a concerted effort to encourage these communities to join FMHA and to participate in its activities.  I've always felt that the FMHA and the community associations that own and operate manufactured housing communities have many common interests and will be posting details on the FMHA's increased efforts to bring more ROCs into its organization in the future.

 I'll be posting the dates, locations, and topics of our upcoming November and December seminars next week.

 

 

 

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ROC Board Members Should Rarely Abstain from Voting

Posted on October 6, 2009 by Scott Gordon

I've always told board members that the residents in their communities elected them to vote on the issues that come before them and not to refuse or decline to vote on those issues.   There are very few circumstances that justify a board member abstaining on an issue and most, if not all, involve situations where the board member would find himself in a conflict of interest if he voted on that particular matter.

The following are not valid reasons to abstain:

  • The board member feels he doesn't know enough about the issue.   It's that board member's responsibility to do his homework about the issue before the meeting.
  • The board member doesn't want to take an unpopular position or offend any of the residents.  Board members should not be elected because they are nice or will make the easy and popular decisions.   They are elected to properly and prudently make the sometimes difficult and unpopular decisions required  to effectively operate the community.
  • The member, who happens to be the chairman/president, feels he only has to vote if a tie needs to be broken.   In most communities, the chairman/president is elected by only the members of the board while each board member is elected by the entire membership.   I believe that the chairman/president is first and foremost a member of the board that was elected by the entire membership and has been given and accepted the same responsibility of every other board member--which is to vote on every issue that comes before the board, regardless of whether a tie vote needs to be broken.

What is the effect of an abstention?  

  • The 2008 amendments to Florida Statute Section 718.111(1)(b) provide that a member of the board of directors of a condominium association who abstains from voting "on any action taken on any corporate matter shall be presumed to have taken no position with regard to the action."   Apparently, that abstaining member's vote cannot be counted either for or against the action.  
  • However, this provision is not found in Chapter 719.  Instead, cooperative associations are governed by Florida StatuteSection 719.104(8)(b) which provides that a director who is present at a board meeting is presumed to have assented to the action taken by the board unless  the director votes against such action or abstains because of an asserted conflct of interest.    It would seem that any abstention that is not based on a conflict of interest would be held to be a vote "for" the action taken by the board.
  • It appears that the provisions of either Florida Statute Sections 607.0824(4) or 617.0824(4) will  apply to homeowners associations, depending on whether that particular association is organized as a for profit (Chapter 607) or not for profit (Chapter 617) corporation.   Those sections provide that a director who is present at a meeting of the board or a committee of the board when corporate action is taken is held to have assented to that action unless he either objects at the beginning of the meeting or promptly upon his arrival to holding the meeting or transacting specified affairs at the meeting, or he votes against or abstains from the action taken.   

As you can see, the statutes are not quite identical and can cause some confusion.   My apologies to those of you that caught my earlier entry this morning which did not include the reference to Section 719.104(8)(b).   We've talked about this not quite logical provision at a number of our seminars and thanks to the followers of this blog that reminded me of the inconstency between Chapter 718 and Chapter 719.  

In any event, the best way to avoid the questions arising from abstentions is for a board member to vote on the issue unless a conflict of interest prevents him from doing so.

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