Florida ROC : Florida Mobile Home & RV Lawyer & Attorney : Scott Gordon : Lutz Bobo Telfair Eastman Gabel & Lee Law Firm : FL Condo & Homeowners Associations

Here's a wild situation that apparently occurred in a ROC in Florida as reported by one of my community association law colleagues:

Every director on the board of condominium association resigned rather than respond to a unit owner's request to inspect the association's official records.   I'm sure we're all wondering what these directors were trying to hide but the question that was raised was what could be done to keep the association itself from collapsing in the absence of board members and officers?

There is a provision in the Florida Statutes that can be used to help a condominium association in this situation.  F.S. Section 718.1124 provides that, if an association fails to fill vacancies on the board sufficient to constitute a quorum in accordance with its bylaws, any unit owner may give notice of his or her intent to apply to the local circuit court for the appointment of a receiver to manage the affairs of the association.   The form of the notice is set forth in F.S. Section 718.1124(1) and the manner of notifying the membership is set forth in F.S. Section 718.1124(2).

Once the notice is properly posted and mailed or delivered, the association has 30 days to fill the vacancies.  If this is not done, the unit owner may proceed with the petition.

If the unit owner's petition is granted, a receiver will be appointed and will have all powers and duties of "a duly constituted board of administration".   The receive will serve in that capacity until the association fills enough board vacancies to constitute a quorum and the court relieves the receiver of the appointment.

Of course, the association will be responsible to pay the receiver's salary and the court costs and attorney's fees involved in the petition to appoint the receiver.

Provisions for the appointment of a receiver in similar situations in cooperative associations and mandatory homeowners' associations can be found in F.S.Sections 719.1124 and 720.3053 respectively.

Sounds like a costly situation and one that should be avoided if at all possible.   Since the governing documents of many associations provide that board vacancies can be filled by the members that remain on the board, even if those remaining members constitute less than a quorum, perhaps the best thing to do when the entire board wants to " jump ship" is for the members to convince one of those board members to remain on the board at least until that remaining member can appoint enough new board members so that a quorum of board members is in place.

Better yet, let's all hope that our communities can avoid this nightmare.

I'll look forward to seeing some of you at next week's Community Association Festival on October 19 or 20 at the Venice Community Center! 

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We are now well into our "season" in Florida and most resident owned communities will be holding their annual meetings during the next few months.  It's thus a very good time to remind my blog readers that are members of condominium or cooperative associations of some of the important differences between ballots and proxies:

• In general, neither general proxies nor limited proxies can be used to elect the directors of a condominium or cooperative association.   The applicable provisions of the Florida Statutes that deal with the election of directors of condominium associations (F.S. Section 718.112(2)(d)) and cooperative associations (F.S. Section 719.106(1)(d)) specify that the members of the board of directors shall be elected by "written ballot or voting machine".   While the majority of voting interests in a condominium association with ten or fewer units or a cooperative association can provide in their association's bylaws for a different voting procedure that allows for elections to be conducted by limited or general proxy, I suspect that the bylaws governing most ROCs do not allow for this alternative procedure.
• F.S. Sections 718.112(2)(b) and 719.106(1)(b) provide that, unless the association's bylaws provide for a different percentage, the percentage of voting interests required to constitute a meeting of the members shall be a majority of the voting interests (in other words, 50 percent plus one) and that, unless otherwise provided in the association's governing documents or the applicable Chapter of the Florida Statutes (either 718 or 719), "decisions shall be made by owners of a majority of the voting interests represented at a meeting at which a quorum is present".    While limited proxies or general proxies can be used to establish a quorum as provided in Sections 718.112(2)(b) and 719.106(1)(b), ballots cannot be used for this purpose.   In other words, in order for a member to be counted as "present" in establishing a quorum at the annual meeting (or other membership meeting), that member must either be present in person at the meeting or have delivered his properly executed general or limited proxy to his proxy holder or the association prior to the meeting.
• Neither general proxies nor ballots can be used for votes to waive or reduce the statutory reserves otherwise required by statute or to waive the financial reporting requirements of F.S. Section 718.111(13) (for condominium associations) or F.S. Section 719.104(4)(b).  The only way a unit owner can validly vote on these matters is either by limited proxy or in person at the meeting where the voting occurs.
• The election of directors occurs at the annual meeting even If a quorum cannot be established at that meeting if at least twenty percent of the eligible voters have cast a ballot in that election, as provided in F.S. 718.112(2)(d)3 and F.S. 719.106(1)(d)1.

The provisions governing timeshares and mandatory homeowners associations are somewhat different and members of timeshare communities and subdivisions should consult with their association's attorney for additional information.

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One of my blog readers recently emailed me and wanted to know whether Florida's "Sunshine Law" applies to meetings between less than a quorum of the members of the board of directors of an ROC.

Many members of resident owned communities incorrectly believe that the meetings of their ROC board or ROC committees are governed by Florida's "Sunshine Law," which can be found in Chapter 286 of the Florida Statutes.   It's clear from the provisions of this chapter, and in particular Section 286.011, that Florida's "Sunshine Law" only applies to meetings of boards or committees of state, county, or municipal agencies or other similar political subdivisions and not private enterprises.  In other words, only a very few ROCs (those that are agencies of state or local government--such as a community development district) are subject to Florida's "Sunshine Law".

Thus, in most situations, I see nothing wrong with a ROC President or other board member meeting with other board members as long as less than a quorum of the board is present during that meeting, even if the purpose of that meeting is to determine how the board members at that meeting are going to vote on a matter coming before the board in the future.   An effective President or board chairperson should already have a pretty good idea of how his or her board is going to vote on important matters before the board meeting and it's certainly logical that he or she contact the other board members in advance to find out how each member intends to vote and the reasons for that member's vote.

As long as there is less than a quorum of board members in the room where the meeting is occurring, even if ROC business is being discussed, there is no violation of the applicable provisions of Florida Statutes Chapters 718, 719, or 720.  I do want to remind ROC managers and board members that an illegal meeting occurs when a quorum of the board finds itself on the same conference call, receiving an email sent to them simultaneously, or in a "chat room" or other internet "meeting" area if that meeting was not properly noticed and made open to all members and does not fall within the limited exceptions that allow "closed" meetings.   The State's Department of Business and Professional Regulation will not take kindly to any such illegal meeting--even if it was held in "cyberspace".

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