Officers may not be compensated
Q: You recently discussed an association that voted to exempt the board from payment of their fees as compensation for serving. You answered that the statutes FS 720.303(12) did not allow directors to receive compensation. Our HOA voted to waive the fees of the president. I have read the section you referred and it appears that our HOA has improperly voted. Could you support your position that this exemption is improper?
A: Let me first discuss compensation. This is not a legal answer but highlights an illustration of the word. It symbolizes the transfer of value. Most times we think of a transfer of money as compensation but it means more than just money or valuables. It would include a forgiveness of debt, promises or other valuables. The statutes, including condominium and cooperative statues, say that compensation is prohibited for directors and officers. Yes, it would be nice to compensate directors and officers as that could entice others to volunteer to be candidates. Keep in mind that most associations are corporations not for profit and this could result in the loss of your corporation's rights. No, the members cannot vote to compensate directors and officers as it would be in violation of the statutes.
Delinquent fees need quick action
Q: With the ongoing crisis facing many condominiums and homeowner associations concerning bank foreclosures and the banks taking so long to finalize the process, what is the defense from having the other owners from paying all the fees to operate the associations? How can a bank start a foreclosure and in some situations take years, if ever to finalize the foreclosure?
The other members must pay their fees for the freeloaders. The banks share the blame for this crisis and yet they are the ones being bailed out while others are paying.
It seems to me that the laws need to be changed to force banks to foreclose faster. Where are all the attorneys and other professionals that should be lobbying to correct this wrong? What do you think can be done to ease the financial burden on those that pay for the slack?
A: Associations have very strong collection action already in their power. Each board must establish a strong collection policy to take fast action on delinquent owners. The board needs to lien and foreclose on delinquent accounts immediately as they become delinquent. The fact is that associations have the power to foreclose and put the people on the street.
Using attorney guidance, liens should be filed within 60 days of late payment and foreclose action begin as soon as possible. This would mean that final judgment could possibly be completed within six months thereabout. The reason the board should take a fast collections policy is to get the unit paying fees as soon as possible.
Once the association has title, they can rent the home, sell the home, or possibly deed the bank title. In any case, the home should begin to generate funds to pay the fees.