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Community Living

Community Living: Condo board's responsibilities remain despite budget crunch

Q: What recourse do the owners have to lower our annual budget? We recently replaced all of our roofs on all condominium buildings with a special assessment of $3,900 per unit. We all thought that after this assessment and the state of the economy, our board would have made an attempt to save some money and lower our monthly fees. Instead, they actually have increased the budget by adding items such as $48,000 for a contingency account and an additional $15,000 for a miscellaneous account for our reserves. We think there are additional areas that can be lowered without compromising our reserves or funds required to properly maintain the appearance of our property. Our board is not receptive to any suggestions from the owners. Some owners have started a petition for the owners to sign asking the board to reconsider.

A: The board has a responsibility to maintain the association's common areas and operations. As such, they have a duty to produce a budget to meet these needs. At a members' meeting the members can vote to reduce or eliminate the reserves. I do not recommend this action because you will have to pay in the future. As to the budget, the members can only request a change to the budget if the expense part of the budget increases 115 percent. Then the members can petition the board to call a members meeting and the members must submit a substitute budget.

Enforcing the rules

Q: I am on a homeowners association board and would like to know what powers if any we have to enforce our documents. How do we implement rules such as cutting grass, removing mold on homes, and signs in yards, to name a few of the violations? It is my understanding that we cannot fine violations. Can we go on a home owner's property to mow grass or remove unauthorized signs?

A: There are two primary sources for the board of directors' powers, the statutes and your documents. I have suggested that the board approve a rule enforcement policy that has been approved by the association attorney. Circulate this policy to the members. That policy would first identify the rules and regulations published in your association's documents. The policy would classify how and when inspections of the community are made and how complaints are received and investigated. The key is consistent inspections to prevent selective enforcement problems. The policy would require notices to be sent to violators. Usually I recommend three letters, the first a notice of the violation, the second a more stringent demand to correct the violation, and the third a certified demand letter to correct the violation before the matter is turned over to the association's attorney for legal action. Each letter would define what the violation is, the expected action and a deadline. I do not recommend fines due to the strict requirements listed in the statutes and the possible delay in legal action to correct the violation. Your attorney should be able to provide guidance on this question.

My recommendation is to never set foot on a private property unless you have your attorney provide counseling on your entry.

Assessments lost

Q: I am on a board of directors for a condominium association and I would like to know what the association would do if someone moves out and lets their unit go into foreclosure. It is my understanding that the lending institute that has the mortgage will take it over. But what happens to the monthly assessments and future assessment to be incurred while the property is vacant?

A: Most of the fees are uncollectible if the property goes into bank foreclosure. That is the main reason I suggest that you have a fast and strong collection policy to reduce your losses. That policy requires that you have an attorney guide you in a policy that is fast and strict. For example, send a delinquency letter by the 10th or 15th of the month depending on your documents. Next send a second letter by the end of the month and a third certified letter by the 10th of the second month. Then turn the collection matter over by the 60th day to the attorney to lien and start foreclosure as soon as possible. This way you may be able to take control of the property before the bank starts foreclosure in many situations.

Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., #201, Winter Haven, FL 33884-4115. He cannot provide personal replies by mail, but you can e-mail him at CAMquestions@cfl.rr.com. Please include your name and city. Online: talkwithcam.com.

Simple resources

Q: Is there a book available that covers legalities, or rules, or regulations, or by-laws, or whatever in a simple language that everyone can understand? Sort of a "Governing a Town House Association for Dummies"?

A: There are several sources on the Internet that you can search under homeowner associations or association operations. Here are a few:

• www.caionline.org

• www.communityassociations.net

I would first start with your association documents. They are the primary source of information. They are dividend into three main sections, the declaration or covenants, the articles, and the bylaws. In general the declaration or covenants is the section that defines the property, the articles are the formation of the business entity, and the bylaw defines how the association operates. Your next sources are the statutes. For homeowners associations the act is FS 720, for condominiums it is FS 718, for cooperatives it is FS 719; these are the three main statutes. In addition, you can include the administrative codes. These documents are online at the state sites www.LEG.state.fl.us and www.myflorida.com. Although there are several other statutes where associations may be involved, FS 617 defines the business operations as any other commercial business. There is a lot to study, and you are wise to ask.

Community Living: Condo board's responsibilities remain despite budget crunch 12/19/08 [Last modified: Monday, December 22, 2008 12:39pm]

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