Owners must okay percentage change
Q: Several years past, two residents purchased adjoining vacant lots adjacent to their homes. They petitioned the board to consolidate these lots into one so they could pay one fee. The board approved the merge and only assessed the owners for one fee.
At a members' meeting, a petition was received by the board saying that such a merger would have to be approved by the members and not the board alone. According to their documents, all of the owners' fees increased due to the change in the percentage each lot would have to pay. The association's attorney agreed that the change would require all members to approve the reduction of lots.
Shortly after the meeting, several owners sued the association to collect the overpaid fees. The judge ruled that he did not have jurisdiction over the covenants, and the number of lots could not change without the members' approval. The judge did not rule that the losing party would have to pay the legal fees. To cover these expenses, the board approved a special assessment to pay the legal fees.
Does this special assessment have to be paid by all members according to the lot schedule found in the documents? It seems unfair that the mistakes of the board and these two owners must be paid for by all the other owners.
A: Here is the clear fact: The percentage of ownership cannot be changed unless 100 percent of the owners approve the percentage. The board should go back to the years during which the percentage was incorrectly calculated and fees were incorrectly charged and figure out how much these two owners failed to pay and charge them with the shortage. Then all the other owners would have a credit applied to their account for the overpayments.
Here is the bad part: All owners would be responsible for the legal costs. It would be called a cost of doing business. There is one possibility, and your attorney could answer this question: Could the two owners be charged for all the legal costs? I doubt it, but it would be worth the attorney's time. Whenever documents say you have so many units/lots, which is called a percentage of ownership in the association, the board can never change the percentage as it take all owners' approval.
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.