Monday, May 25, 2015

Florida shared ownership statutes continue to catch up with Digital Age

Given the significant percentage of Floridians living in all types of shared ownership communities, it is not surprising that each year we see at least a handful of bills pass which directly or indirectly impact those private residential communities and one primary association bill which contains both substantive changes and technical fixes needed to address glitches associated with the legislative changes from prior years.

2015 was no different. Florida's 60-day Legislative Session recently ended (and abruptly with the House adjourning several days early) with another omnibus association bill, HB 791, having passed; that bill is now on the Governor's desk awaiting his action. The Governor is likely to sign this bill into law and it will become effective on July 1, 2015.  

Among other changes, HB 791 will help Florida condominiums, cooperatives and homeowners' associations catch up with the digital age thanks to the following changes:
Electronic Voting (Condominiums, Cooperatives, & Homeowners' Associations): The
bill provides that associations may conduct elections and other membership votes by utilizing 
an electronic (interned-based) method. The bill also specifies the requirements necessary to 
establish an electronic voting method, including a board resolution.  The bill requires that an 
owner consent to online voting, and if the owner does not consent, the owner is entitled to 
vote by paper ballot. While it is certainly easier to cast your vote from the comfort of one's 
home or office, the real question here is whether or not communities are ready for this kind of
change and whether or not the typical complaints of election fraud will increase or 
decrease once voting online is implemented.
Digital or Electronic Transmission of Proxies (Condominiums, Cooperatives &
 Homeowners’ Associations): The current law does not specifically authorize owners to 
transmit a copy of their proxy to the association (for example, by fax or a scan of the proxy
sent via email).  The intent of this language is to facilitate voting.  Many owners are not able
to attend meetings in person and may wish to bypass U.S. mail and send their proxy to the 
association in some other fashion.  The proposed language is similar to language currently 
found in Section 607.0722(10), Florida Statutes, which governs corporations for-profit.  The
proposed language is being added to Section 617.0721, Florida Statutes, which governs 
corporations not-for-profit, and therefore, will also apply to condominium, cooperative, and 
homeowners' associations. It is important to remember that this change does not allow 
someone to simply send an email stating how he or she wishes to vote on a particular matter; 
it requires an owner to actually scan or fax his or her actual proxy. Also, this change does 
not allow directors to cast votes at board meetings by email. Still, this change is well
overdue-whatever can be done to make it easier and more cost-effective to relay one's vote 
should be permitted.
Electronic Notice to Owners (Condominiums, Cooperatives and Homeowners’
Associations):  Currently, in order to provide notice to owners electronically, an Association's
bylaws must provide for electronic notice and the owner must consent in writing.  The bill
removes the requirement that electronic notice be authorized by the bylaws which is a 
welcome change as some communities cannot easily amend their bylaws to include this 
language.  Therefore, as long as the owner consents in writing, the association can provide
the owner with electronic notice. Some ways to obtain such consent would be in the new
owner approval package and as a separate consent form included with
the annual meeting package. Speak to your association attorney about the easiest methods
to obtain this consent from your owners.
It is encouraging to see that our statutes are changing to address the way Florida's significant
shared ownership population actually lives and conducts business. Now that we've made it a
little easier for people to become involved in the voting process, let's hope the numbers increase in terms of those who actually do participate.

Sunday, May 10, 2015

Five Questions You Need to Ask Yourself Before Serving on Your Association's Board

Before agreeing to serve on your community association's Board of Directors, please do yourself and everyone else a favor and run through these five questions first.

1. Do I have time to serve on the Board?

Running and being elected to your community's board of directors can be an exciting experience as it is an affirmation of sorts. However, once the election is over there is that little matter of actually attending meetings and handling the work that may be delegated to directors. In self-managed communities, your successful service on the Board is likely to be even more dependent upon your ability to carry your share of the workload. If you have certain circumstances in your life which would prevent you from being an active and responsible director, you should reconsider your decision to serve..

2. Can I make unpopular decisions?

Being a community association director should not be a popularity contest. As a director, you will be asked to make decisions which can upset your neighbors. These decisions can range from having to lien and foreclose on the nicest guy in the community as well as passing a costly special assessment to make necessary roof repairs. You cannot play favorites and you should not abstain from casting your vote because you want to be liked. Also, trying to "fly under the radar" by allowing a dominant director or directors to make all the decisions or abdicating control entirely to a manager is a choice that will will likely come back to haunt you.

If you cannot bear the thought of making someone unhappy (including yourself), then serving on the Board might not be for you. 

3. Do I have an ax to grind with anyone?

Do you see serving on the Board as an opportunity to help your community or is it a chance to use the position with a less than noble goal in mind?  While there is nothing wrong with new Board members joining with a goal towards correcting a former board's mistakes, there should be concern if the battle is a more personal one with a neighbor or vendor. Board service requires a neutral stance where you are making decisions based on the overall good of the membership and not for personal gain.

Be honest with yourself about your intentions for serving on the board because if they aren't good, you won't fool anyone for long.

4. Am I willing to read and comply with the governing documents?

I have been reading governing documents for two decades and I have yet to come across a set which would qualify as a thriller. When you include amendments passed over many years, some governing documents can be comprised of hundreds of pages of legalese so reading them is not on most people's "Wish List". Still, if you agree to serve on your community's Board, you have an obligation to read those documents. No, you do not have to perfectly understand them-that is what your association attorney is there to explain. You do, however, have to be prepared to comply with them along with everyone else. Also, attending a class each year will not only make you a better director, it might make you happier serving on the board.

5. Do I have skills that would assist the community?

Despite what some owners might think, association directors are not tied to a standard of perfection. These volunteers are human and they will make mistakes. Community association directors are tied to a reasonableness standard so one of the greatest skills you can bring to your Board of Directors is that of being a reasonable person willing to listen with an open mind, eager to seek assistance from experts when an issue is beyond your skill set and mindful of the tone and content you use when communicating with members, fellow directors and vendors.

I served on my HOA Board for a two-year term and during that time we undertook some major community projects, we made a few mistakes and I found myself on the losing end of more than one vote. I applaud everyone who volunteers and serves on a community association board with the right intentions. It is not an easy job but it does give you a different perspective from that point forward!