A column in a recent edition of the Sarasota Herald Tribune highlighted the problems that all too often arise in communities when boards and managers fail to enforce a community rule on a consistent basis.   When a particular rule is enforced only against some of the residents in the community (with no legitimate reason for the rule’s "selective enforcement"), it becomes difficult, if not impossible for that particular rule to withstand a legal challenge from a resident that feels he or she is being singled out for this "selective enforcement". 

I discussed this problem in my "mini board orientation" at our ROC seminars last week at Japanese Gardens in Venice and this week at Harbor Oaks in Fruitland Park.  Thanks to both of these communities for being gracious hosts and to all of the attendees.  I’ll be presenting the same "mini board orientation" March 23 at Golf Lakes in Bradenton and on April 1 at Enchanting Shores in Naples.  Please contact either Karen Midlam (kmidlam@lutzbobo.com) or Kathy Sawdo (ksawdo@lutzbobo.com) if you haven’t already rsvp’d and would like to attend one of those seminars.  These seminars begin at 10 a.m. and end by 12:30.  There’s no charge to attend and refreshments are served.

I also wanted to note that last week a 96 year old man in Venice was attacked by a rabid otter while taking his early morning walk.   Fortunately, the man was rescued by several onlookers but suffered some fairly serious cuts and bites and both he and one of his rescuers will require a series of rabies shots.  Every community seems to have at least one resident that takes great pleasure in feeding the raccoons, birds, alligators, etc. that share Florida with us.   These residents need to be gently but firmly reminded that the "wild" in "wildlife" means just that, and that if the community has rules against feeding these wild animals those rules will be enforced--in a consistent manner against all residents in the community.

I always enjoy reading Richard White’s column in the Florida Community Association Journal.  While there are several attorneys that contribute regularly to this publication, Mr. White presents the manager’s perspective on questions and issues arising in resident owned communities.  

His column in the January 2010 issue of the Journal included an answer to a reader who asked whether Florida Statutes, an association’s bylaws, or Robert’s Rules of Order prohibited a ROC President from making a motion.   I appreciated Mr. White’s  response as I’ve answered the same question in substantially the same way on many occasions.

Here’s a summary of what Mr. White (and I) have to say on this issue:

  • Board members are elected by the general membership and they answer to the general membership
  • Motions and resolutions must be voted on by the directors as they (the directors) are responsible to the general membership
  • Officers are elected by directors and thus have duties to these directors
  • In a board meeting, the primary responsibility of a person who is both an officer and a board member is to fulfill his or her obligation to the general membership as a board member, and this requires that each board member have the right and responsibility to make motions and to vote.
  • Accordingly, not only can the President make motions, the President must vote on any motion that comes before the board.

Mr. White also states (and I agree wholeheartedly) that Robert’s Rules of Order is "the most misunderstood guide as a directive" in ROC board and membership meetings.  Many residents don’t realize that there is a specific section in Robert’s that covers procedures in small boards (where there are not more than a dozen board members).  As Mr. White notes, nowhere in Robert’s is there any prohibition against a President (or any other officer) making a motion or voting.

As I’ve mentioned in other entries to this blog and on many occasions during our seminars, board members should only abstain in those very rare occasions when a legitimate conflict of interest   exists.

The general members in a resident owned community elect directors and expect  them to vote on all issues coming before the board.  Many thanks to Richard White for highlighting this in his column.

 

We’ve just been advised that House Bill 419 has been withdrawn from consideration for the upcoming legislative session in Tallahassee.   As you may recall, House Bill 419 contained provisions allowing the Department of Business and Professional Regulation to examine and inspect the property, books and records of almost any condominium, cooperative, timeshare, or mobile home park in Florida at any time and for any reason (or for no reason) whatsoever.   The bill also would have prohibited weekday meetings of the Board of Directors of condominium and cooperative associations from being held before 6:00 p.m.   In addition, no association would be permitted to make any contribution to a charitable organization unless that association received a direct benefit from that charitable organization. 

Apparently, proposed amendments to the statutes governing ROCs will be found in substitute Senate Bills 1196 and 1222 that have now been introduced and are making their way through the committee process.

We’ll keep you posted.

 

The last of our second series of seminars for the season is set for February 24th at Caribbean Isles in Apollo Beach.  We’ll be starting our last set of presentations less than two weeks from now.

Here are the dates and locations of these upcoming seminars:

  • Wednesday, March 3, at Japanese Gardens in Venice
  • Tuesday, March 9, at Harbor Oaks in Fruitland Park in Lake County
  • Tuesday, March 23, at Golf Lakes in Bradenton
  • Thursday, April 1, at Enchanting Shores in Naples 

We’ll be covering a number of very interesting topics, including a mini-orientation for ROC board members and a discussion of financial opportunities for ROCs in this challenging economy.  Current cases and pending legislation will be covered, including any additional information we’ve gathered on House Bill 419 and companion Senate Bill 864  that appear to be on the agenda of Florida’s legislature during its upcoming session.  As always, we’ll try to provide ample time for a general "question and answer" session.   The seminars will be begin at 10 a.m. and we should be finished by 12:30 pm at the latest.

Refreshments will be served, and there’s no charge to attend.  If members of your community would like to attend any of these seminars, please rsvp by emailing either Kathy Sawdo at ksawdo@lutzbobo.com or Karen Midlam at kmidlam@lutzbobo.com.  Just let them know which seminar you’d like to attend, the name of your community and the number of residents from your community that will be attending, and whether you’ll need directions to the host community.   We like to give each of our host communities a "head count" of attendees a few days prior to the seminar that community is hosting so, if at all possible, please rsvp at least a few days before the event you’re planning to attend.

We hope to see you at one of these events.

 

It’s always exciting to spread the word to my blog readers when a community joins the list of ROCs in Florida.  

Earlier today, the residents of Riverwalk Mobile Home Village closed on the purchase of their community.   Riverwalk is a beautiful manufactured housing community with over 200 sites located in North Port near the Myakka River.   The residents formed their homeowners association a number of years ago and maintained a good relationship with the community owner over those years.   The association made a point to contact the owner at least annually to remind the owner that the residents were interested in purchasing the community if and when the owner was ready to sell.

The community owner contacted the homeowners association in late December of last year and offered to sell Riverwalk to the association.   The terms offered by the owner required that the closing of the sale occur by no later than February 18, 2010.  Fortunately, the homeowners association had prepared for this opportunity and because of that advance planning and a tremendous amount of effort, the association was able to raise the funds and meet the conditions required under the agreement in time.   As a result, the homeowners association now is the proud owner of what will soon be known as Village at Riverwalk, the newest ROC in Florida!

The associatIon’s efforts to purchase Riverwalk were ably led by a terrific group of directors and many volunteers.   Bill Gorman and Norman Loiselle from Lifestyle Choice Realty did a fantastic job of coordinating these efforts and helping the residents keep their enthusiasm and optimism at the highest levels while working with lenders, engineers, vendors, insurance agencies, and many other outside parties throughout the process.

Several financial institutions, including Florida Shores Bank, First Community Bank of America, and Calusa National Bank helped residents finance individual membership share purchases and Bank of America’s commitment to the association to provide the blanket loan was crucial to the association’s ability to purchase the community.

The association had less than two months from the date that the offer to sell was received to raise the funds needed to complete the purchase.  What the residents lacked in time they more than made up in faith and hard work.  As a result,  Village at Riverwalk is now a resident owned community.

Congratulations and welcome to the residents of Village at Riverwalk!

 

I just returned from a brief trip to Memphis, Tennessee and visited the National Civil Rights Museum, which is located at the site of the murder of the Reverend Dr. Martin Luther King, Jr.  The museum has incorporated much of the Lorraine Hotel (including the room in which Dr. King stayed and the balcony outside that room where he was killed) as well as the apartment across the street from the hotel where James Earl Ray aimed and fired from a bathroom window and took Dr. King’s life.   I recall the exact moment when I learned of Dr. King’s death and to be able to view the site of his assassination in an "up close and personal" manner was an extremely powerful experience for me.   I highly recommend a visit to the museum if you are in the Memphis area and suggest that you view the short movie at the museum called "The Witness" before beginning to tour the exhibits.

As I made my way through the museum, I was reminded that many of the freedoms we take for granted today are the result of great sacrifices and courageous efforts by Americans of all colors and beliefs.   I couldn’t help but marvel that less than fifty years ago, Dr. King was gunned down simply because many of his fellow countrymen could not accept the fact that all Americans were entitled to certain basic rights.   The fact that many of the injustices that Dr. King sought to overcome have been remedied speaks volumes to his legacy and to the laws that our federal and local legislators have enacted during the past five decades.

My visit to the museum reminded me about the direct connection between the Civil Rights laws and the Fair Housing and Disability laws that often create divisive problems for board members and other residents in the communities we work with.   Those Fair Housing and Disability laws built upon the earlier Civil Rights laws and extend rights of equality to which all Americans are entitled.  The underlying philosophy of all of these laws is simply that no American should be deprived of certain opportunities, whether in employment, or voting, or obtaining housing, simply because of his or her color or religion or disability.   Unless our legislators carve out an exception (such as the Housing for Older Persons Act), it’s that underlying philosophy that should guide ROC board members.

Some forty-two years after Dr. King’s death, it’s an important lesson for all of us to remember.

Thanks to our friends at Francis I in Sebring for hosting last week’s well-attended seminar.  We’ll be at Windward Isles in Sarasota and Marco Shores in Naples this week and at Caribbean Isles in Apollo Beach during the last week in February.  If you’d like to attend one of these free seminars and haven’t yet rsvp’d, please contact either Karen Midlam at kmidlam@lutzbobo.com or Kathy Sawdo at ksawdo@lutzbobo.com.  I hope to see you at one of these events.

 

ROC managers, board members and the professionals that advise them quite often long for the "good old days" when the Florida Statutes governing condominium associations (Chapter 718) and cooperative associations (Chapter 719) were almost identical in provisions concerning elections, eligibility to run for the board, and waivers of financial reporting requirements. 

Those days are, for better or for worse, long gone.   Here’s a quick sampling of the just a few of the important differences that now exist between the statutes governing cooperatives and condominiums:

  1. Terms of board members:   F.S. Section 718.112(1)(d) now provides that the terms of all members of the board of directors of a condominium association expire at the annual meeting unless a majority of the unit owners approve a provision in the bylaws that permits staggered terms of no more than two years.   F.S.  Section 719.106(1)(d) imposes no such term limitation on board members in cooperative associations.
  2. Eligibility to serve as a board member:   F.S. 718.112(1)(d) also prohibits co-owners of a unit in condominium associations with more than 10 units from serving on the board at the same time and also prohibits persons who are more than 90 days delinquent in payments of any fees or assessments due to the association, and many persons convicted of a felony from such service.  There is also a rather curious requirement that any candidate for the board of a condominium association sign a form certifying that "he or she has read and understands, to the best of his or her ability, the governing documents of the association" as well as the provisions of Chapter 718 and any " applicable rules".   Any member of a cooperative association that wishes to run for the board of directors will find that Chapter 719 does not contain any of these eligibility requirements or prohibitions if he or she wishes to serve his or her community.
  3. Financial reporting requirements:  F.S. 719.104(4)(b) allows cooperative associations that are larger than 50 units  to waive the requirement that the association’s financial statements compiled, reviewed or audited.   This waiver must be done annually by the vote of a majority of the voting interests present, in person or by proxy, at a duly called membership meeting.   F.S. 718.111(13) now prohibits a condominium association’s membership from waiving these financial reporting requirements for more than 3 consecutive years.

I’ve just highlighted a few of the many differences that now exist between Chapters 718 and 719.   We haven’t even touched on Chapter 720 HOA’s or those "hybrid" ROCs that may or may not be governed exclusively by the provisions of Chapter 617, Florida’s statutes for not-for-profit corporations.   With the next session of the Florida legislature just a few months away, we’ll just have to wait and see if there’s any hope of returning to those "good old days".

Stay tuned.

 

The dates and locations for the resident-owned community seminars we’ll be conducting in February are now set.   We’ll discuss helpful hints for conducting annual membership meetings and other unit owner meetings and will also provide some insights into the importance of screening potential owners, occupants, and guests in your communities.   We’ll also leave time for our traditional "open forum" to answer general questions from the attendees.

Our first series of ROC seminars for this season were very well attended with lots of participation from our attendees.   We expect an even greater turnout for these upcoming events.   As always, there’s no charge to attend and the refreshments are also provided free of charge.  The dates and locations of our February presentations are:

  • Monday, February 1 at Francis I Mobile Estates in Sebring
  • Wednesday, February 10 at Windward Isle in Sarasota
  • Thursday, February 11at Marco Shores in Naples
  • Wednesday, February 24 at Caribbean Isles in Apollo Beach

All of these seminars will be held in the clubhouses of our host communities and will start at 10 a.m.   We expect to wrap up the seminars by 12:30 p.m. at the latest.

Please call my assistants, Karen Midlam or Kathy Sawdo at 941-951-1800 or email them at kmidlam@lutzbobo.com or ksawdo@lutzbobo.com if you are interested in attending and provide them with the following information:

  • The event your community wishes to attend
  • The number of attendees from your community
  • Whether you will need directions to the seminar

Our seminars are always a great opportunity to network with residents at other resident owned communities.   We hope to see you at one of these events.

 

 

What can the directors or other members of a ROC do when the President refuses a request to bring an item before the board for consideration?

There are a number of factors that should be considered in answering this question:

  • Traditionally, the President (or the board’s chairperson) has been given the task of setting the agenda for meetings of the directors.  However, it’s also customary that the President consult with the other directors when setting that agenda.
  • There’s certainly nothing wrong with allowing the President and the other members of the board to exercise a reasonable amount of discretion in setting the agenda.   Clearly, no purpose is served by allowing an issue that has already been decided by the board to have that issue placed on the agenda simply because a board member or other resident disagrees with the board’s decision.
  • However, the continual refusal of a President to place an item on the board meeting agenda may be a symptom of dangerous divisions within the board and the entire community.   When a ROC board member complains to me that his or her President will not place an item on the board meeting agenda, that’s a warning sign that requires my contacting the ROC manager to determine the reasons for the refusal to place the item on the agenda.    Quite often, I’ll learn from the community’s manager that there are legitimate reasons for the President’s position and at the same time will discover that personality conflicts or other issues are preventing the board from effectively governing the community.

If the President’s refusal to place an item on the agenda is not justified, board members should review the association’s bylaws.   The board members themselves usually appoint the association’s officers, including the President, and a President that refuses to listen to a majority of his or her board members runs the risk of being removed from his office by his or her fellow board members.   While he or she would remain on the board, that removed President would no longer be able to unilaterally control the agenda.

I’ll be posting the dates and locations of our seminars for February and March in my next blog entry.   We’ve got some exciting topics to cover and hope you’ll be able to attend one of them.

The headline of Sunday’s edition of the Sarasota Herald-Tribune reads "Condo Groups in Financial Pain".  The story accompanying that headline details the severe economic problems many condominium associations face as a result of the ongoing foreclosure crisis.   The article is well worth reading and contains examples of how several associations are attempting to survive a substantial decrease in their members and maintenance fees.

Our resident owned communities, for the most part, have not been severely impacted by the foreclosure crisis.  One of the reasons for this is that the ROCs we work with truly are resident owned--our ROC members customarily live in their homes for at least part of the year (or have one or more members of their family in the home).   In other words, very few of the homes in any of the ROCs we represent can  be characterized as "investment properties".

Nonetheless, I’d like to offer a few suggestions that may help ROC managers and board members better deal with problems arising from residents that fail to make timely payments of rents, maintenance fees or assessments:

  1. Given the current economic climate, it’s important to strongly encourage all residents to make payments when they are due.   I suggest a policy that should be developed and consistently and uniformly followed to send written notices to all delinquent members no later than 5 to 10 days after payment is due.    Many of the rights given to ROCs by the Florida Statutes to file legal actions or record liens for unpaid assessments and fees are triggered by providing written notice to the homeowner and the sooner this notice can be given the sooner the association can exercise its statutory rights.
  2. The association should not be shy about getting its attorney involved early in the process to assist in recording liens and the legal actions that may be needed to protect the association’s interests.  While there are certainly expenses involved in these legal remedies, it’s quite often necessary to send a message to the members of the community that the ROC board and manager will do whatever it takes within the limits of the law to collect delinquent fees and rents owed to the community.,
  3. When the association is named as a defendant in a foreclosure action filed against one of its members by an institutional lender, I always advise the association to answer that foreclosure complaint.  The association’s filing of that answer ensures that the association will receive copies of all of the important pleadings that will be filed in that law suit, including the certificate of title that is issued to the person or company that purchases the home at the foreclosure sale.   It’s very important that the association determine the new owner of the home as quickly as possible as Florida statutes quite often require that new owner to pay at least a portion of the unpaid maintenance fees or assessments to the association.   The association may have no way to quickly determine the name of the new owner if it has not filed its response to that foreclosure action.

Let’s hope that 2010 brings us all heath, prosperity and happiness and that the "foreclosure crisis" is just a dim memory by this time next year.