ROC Boards Must Carefully Consider "Material Alterations"
One of the resident-owned cooperatives we work with recently contacted me with a very interesting question. This ROC wanted to create a "community garden" on an unused common area and the manager wanted my opinion as to whether the board could authorize this "community garden" or whether a vote of the members would be required.
As many of my blog readers know, the answer to this question turns on whether creating a "community garden" is a "material alteration" of the common areas. The applicable section of the Florida Statutes for cooperatives states that, unless other procedures are included in the community's governing documents or such action is expressly prohibited in the articles of incorporation or bylaws governing the community, a ROC may not "materially alter" the common areas of the community unless the action is approved by two-thirds of the total voting interests in the community. The applicable section of the Florida Statutes governing condominiums has similar language but requires (in the absence of any language in the condominium documents) the approval of 75% of the total voting interests.
So is this community's planned "community garden" a "material alteration"?
While there is no clear-cut rule determining exactly what is and what isn't a "material alteration," there are a few important factors to consider:
- The common area in question is currently unused
- No structure would be build on this common area
- The nature of the common area would not be substantially changed
Based on these factors, my "gut feeling" is that this "community garden" would not constitute a "material alteration" and the board could authorize this usage without membership approval.
My colleague from our Tallahassee office, Karl Scheuerman, provided me with a copy of a 2003 arbitration decision from Florida's Department of Business and Professional Regulation, Tilney v. Association of the Fountains, Inc., which determined that a condominium association board's landscaping project over a portion of the common elements did not constitute a "material alteration". The arbitrator reviewed and discussed several prior decisions from Florida's appeals courts and DBPR arbitrators in the process of making his determination.
While the Tilney decision provided me with an additional reason to advise that the "community garden" was not a "material alteration," I suggested to the ROC manager that the best and safest course of action--both legally and politically--might be to obtain membership approval.
After all, why fight a battle that could have been avoided in the first place--especially if the board knows that a substantial majority of the membership is in favor of the planned improvement--even if it's not a "material alteration"?
I'll be finishing a very busy season of presentations on Tuesday morning, April 20, at the Mid-Florida ROC meeting at Country Club Manor in Eustis. We've had great attendance and fantastic responses at all of our recent seminars and I want to thank all of our hosts for the hospitality and our attendees for their participation.
