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!