Condominium Associations

New 2018 Legislation that affects condos, co-ops and HOAs

This year a 72-page bill (House Bill 841) became law and will become effective July 1, 2018. HB 841 is a mixed bag mostly for condos but a few items also pertain to cooperatives and HOAs.

Last month we discussed in detail the provisions in the Bill affecting electrical vehicles, owners, and the rights the owners will now enjoy to install electric charging stations at their assigned parking spaces and pay for the electricity all at their sole cost.

This article is a review of the Bill’s other provisions in the order presented in the Bill and not in any order of importance. All the following provisions affect condominium associations except where noted also for cooperatives and/or HOAs.

Association Records:
Although most association records only have to be kept for at least seven (7) years, the minutes of board meetings and members meetings of the association must now be kept from inception of the association forever. Items provided by the developer at turnover, including copies of plans, permits, warranties, must be kept forever along with copies of the association’s Declaration, Articles of Incorporation, Bylaws and current Rules of the Association.

Association Website for Large Condos:
If an association manages a condominium with 150 or more units, it must have a website operating no later than January 2019. The website must post a copy of the Declaration, Bylaws, Articles of Incorporation, Rules, Contracts, Bids (for 1 year), Annual Budget, Financial Report, Director Certification, Contracts wherein association directors or officers are financially interested, conflict of interest documents, and notices and agendas for unit owner meetings.

Notices for Board Meetings Levying Assessments (Cooperatives too):
Notices of any meetings, at which a regular or special assessment against the unit owners will be considered by the board, must specifically state that assessments will be considered and provide the estimated cost and description of the purposes for such assessments. Boards can also adopt rules to post board and membership meeting notices on association websites.

Board Terms and Limits:
Now board member terms may be more than one (1) or two (2 years but a board member is limited to no more than eight (8) consecutive years unless approved by the affirmative vote of two-thirds of those voting or unless there are not enough eligible candidates to fill the vacancies on the board at the time of vacancy.

The recall procedures of board members has been clarified. If a board concludes that a recall is facially valid, the recalled director must turn over all association records and property within 10 business days. If the board does not hold a meeting to determine a recall is facially valid or concludes at a meeting that the recall is not facially valid, the unit owner representative may file a petition with the Division within 60 days challenging the board. A recalled director may within 60 days file a petition challenging the recall. If the arbitrator determines the recall was invalid, the director shall be immediately reinstated and is entitled to reasonable prevailing party attorney’s fees.

Material Alteration Vote: 
A membership vote to approve material alterations to the common elements or association property must now be taken before the material alterations or substantial additions are commenced. In the past, sometimes a condominium association board would make the material alteration or substantial addition, and then if an owner complained, take the vote. Now it does not appear you can correct “not taking the vote” after the alteration or addition. If you do the alteration now before a vote, you may well have to pay for the cost of undoing the material alteration or substantial addition even if after the alteration a vast majority of the owners approve of the alteration or addition.

Conflicts of Interest Contracts:
If a director, officer or relative proposes to engage in activity that is a conflict of interest with the association, the conflict must be disclosed and then a vote of two-thirds of all other directors is required to approve the contract. At the next regular or special meeting of the members, a majority vote of the members may cancel the contract.

Fines (Cooperatives and HOAs):
If a fining committee approves a fine or suspension at a committee hearing, the fine payment is due five (5) days after the date of the committee meeting at which the fine is approved. The association must provide written notice of such fine or suspension by mail or hand delivery to the unit owner and, if applicable, to any tenant, licensee, or invitee of the unit owner.

Email Voting Prohibited (Cooperatives and HOAs):
Directors may use email as a means of communication but may not cast a vote on an association matter via email.

Delinquent Cooperative Directors or Officers:
In a cooperative, a director or officer more than 90 days delinquent in the payment of any monetary obligation due the association shall be deemed to have abandoned the officer, creating a vacant in the office to be filled according to law.

HOA Governing Document Amendments:
HOAs must now amend their governing documents the same as condos. Either the full text of the provision to be amended must be referenced with stricken and underlined language, or if the proposed language is extensive, a notation must be inserted that there is substantial rewording and see the governing documents for current text.

HOA Elections: 
If an HOAs election process allows candidates to be nominated in advance of the meeting, then an election is not required unless more candidates are nominated than vacancies exist. If an election is not required and nominations from the floor are not required because you allow for nominations in advance, write-in nominations are not permitted and such qualified candidates shall commence service on the board of directors, regardless of whether a quorum is attained at the annual meeting.

Rob Samouce, a principal attorney in the Naples law firm of Samouce & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners’ associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.