Thursday, November 18, 2010

Common myths surrounding community associations!


I am fortunate to be able to go out and speak to various organizations about community association issues. Inevitably at these meetings, an audience member will make a statement or ask a question that adds to my list of common association myths that persist out there. Here are some that I have heard over the last few years and none of them are correct.

• The association president can only vote to break ties (This is true for the Vice President of the United States who also serves as President of the Senate and only votes to break ties; in a community association setting the President of the association has the same voting rights as every other board member).

• An insurance company will cancel you for filing a property damage claim. (It is illegal under Florida law for insurance companies to drop policyholders for filing claims. Specifically, Section 627.4133(3) provides: “Claims on property insurance policies that are a result of an act of God may not be used as a cause for cancellation or nonrenewal.”

• An association cannot foreclose on homesteaded property (This statement was actually made by a Florida licensed real estate broker at an open meeting. In fact, mandatory community associations have the same rights as banks have to foreclose on real property in Florida regardless of its homestead status).

• The board is required to adhere to Roberts Rules of Order. (While RRO is a well-established guidebook for parliamentary procedure, an association is not required under the common interest ownership statutes to use it for meetings. An association’s individual governing documents might require its use so please check your documents).

• If an attorney is present, the board can keep owners out of its meeting. (Some associations think having its attorney present means the entire meeting can be closed to the membership. In fact, the attorney must be present to discuss pending or proposed litigation and even then, the meeting must be properly noticed to the members with a line item revealing that it will be closed for the purpose of discussing proposed or pending litigation).

• A director may abstain from a vote if he or she doesn’t want to go on the record. (A director must have a true conflict of interest-a direct or indirect monetary benefit- to abstain from a vote, not just a reluctance to go on the record on a particular issue).

• The association attorney works for the board. (An association attorney’s client is the not-for-profit corporate entity or association which is naturally made up of the membership; the client is not the board or particular directors. As with any corporate representation, however, the attorney must take direction from a corporate head, in this case the board and in many instances, the authorized contacts for that board).

• Once a quorum is established it’s good for the duration of the meeting. (If the board notices that a quorum during board meetings or membership meetings no longer exists because of the departure of people, the meeting must be suspended or adjourned once that lack of a quorum becomes apparent).

• If you take a sprinkler opt-out vote and it does not pass on the first try you must install sprinklers. (There is no limit in the statute to the number of times an older high-rise community can vote to waive the sprinkler retrofitting requirement in their building. The vote must be taken by 2016 but it can be taken as many times as needed to attain successful opt out before then; it is not a one-time vote. The vote to opt back in to sprinkler requirements can only take place once every three years but the vote to opt out can take place as many times as necessary to achieve the majority approval prior to 2016.

As with most myths, they often spread quickly, do a lot of harm and take a lot of time to overcome. If you know of any other association myths out there, please let me know and to the extent you can now debunk the ones listed above, please do!

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

2 comments:

  1. At each annual meeting and periodically throughout the year, one or more directors must recite sections of the Declaration and Bylaws to homeowners to refute the myths you cite herein and more, if that were not enough to remind some co-directors those duties they must fulfill and other actions which they can not engage.

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