Community Living: Board can request personal information to extend payments

Board wants personal information

Q: Our board has approved a special assessment and offered a payment plan. I have offered to the board an optional payment plan to extend my payments. The board has asked for financial information such as tax returns for past years and other expense reports. Does the board have the right to ask for this personal information?

A: Although the board has responsibility to approve special assessments and payment schedules, if you want a different payment plan the board has the option to approve or not to approve the schedule. Say the board decides that the payment must be made by a specific date and you do not have the funds. You can go to a bank and borrow the money. The bank is going to ask for your personal financial information. The board is doing the same thing as they will be acting as a lending institution if they allow an extension. It is not the board's right, it is your right to pay on time or extend your payment into the future. It is the board's decision and they have that responsibility to decide to lend you the money or not to lend you the money. Looking at your personal financial information is a prudent thing for the board.

Each unit entitled to a vote

Q: One owner has two units in our condominium complex. Does that owner have the right to vote for each unit? If not, why not — they own two units.

A: At an annual or members meeting each unit has a vote or the percentage listed in the documents. Votes are tabulated by the units and not the owners. The owner of two units would have votes for each unit at annual or member meetings. If they are on the board of directors, each director would have only one vote. Also, though the statutes do not allow husband and wife or other family members to serve on the board of directors at the same time, it would be correct that this would not necessarily apply since the owner has two units. A husband and wife or other family member can serve at the same time subject to the multi-unit ownership.

E-mail voting in a pinch

Q: Our board needs to approve an emergency repair for $600. Our manager said the directors could vote by e-mail to approve this expense. The president reported that the manager had checked with our attorney and he said e-mail voting would be proper. They reported that the statutes allowed e-mail voting.

A: I am not aware of any statute section that covers this question. In an emergency situation, the directors can vote by any way that they can communicate. However, that action must be ratified at the next official board meeting.

Buy vs. renting common grounds

Q: I am a real estate agent and also on the board of a mobile home community that does not own the common grounds. The owners have offered the purchase of the common grounds and facilities to the renters, the members of the HOA. My contention is it is a futile attempt — we do not have the knowledge of business finance or experience collecting funds to pay a mortgage. I feel that I am considered an obstacle to the members pushing for the purchase, despite my knowledge of real estate. Can you give me some guidance?

A: Few associations and members really understand mobile home communities when they do not own the common facilities. Many homeowner associations, not just mobile home communities, have a similar situation. A developer constructs the facilities and retains the title rights to the buildings and facilities (sometimes including golf courses). He constructs the community and sells or rents lots and homes with the obligation to pay for the upkeep of the facilities that he owns. It is a double win for the developer. He sells or rents the homes and makes his profits. In a future sale, he sells the buildings and facilities as a bonus profit.

You are going to have to determine whether to pay rent or pay for a mortgage. I am sure that your members have some people with experience in business and will come forward to help make the decisions. In such a decision, you cannot look at today's situation. You must look to the future. If you do not take title to the facilities, then you can expect higher rents to pay for the upkeep and the profit of the new owners.

If you buy and have a mortgage, your payments will be locked until the mortgage is paid. During this period you will have to pay for the maintenance and upkeep of the facilities but your board will be in control of such funds. I cannot look into your crystal ball and provide a picture of your future. But at some point in the future your rents will be higher. If you buy, the mortgage will be paid and the members will hold title to the facilities free and clear.

Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115. Please include your name and city.