Placing liens on delinquent properties part of the process
Q: You recommend that a condominium board association take fast action on delinquencies. We have placed liens on properties, but we are not in a financial position to foreclose on the properties, take ownership or rent. Several units have been sold without our association receiving delinquent fees and dues. If a property has a lien, can it be sold without first satisfying the lien at closing? If so, then what is the purpose of going through the legal costs of filing liens? If liens must be satisfied, what steps can an association take to ensure delinquent fees are remitted to the association?
A: It is not an option to forgo foreclosing on a unit because an association does not have money to pay for legal expenses. It is the association's responsibility — even if a special assessment must be made. If you do not have adequate funds, increase your budget or approve a special assessment. Placing a lien on a delinquent property is only half the process. If the home is foreclosed by a first mortgage or tax lien, your lien will be worthless. A home can be sold with a lien filed by the association; the lien will remain a claim against the unit unless it is wiped out by the bank foreclosure. Condominium statutes do limit the lien to one-year enforcement if no other action is taken. You need proper guidance from an attorney.
No conflict of interest here
Q: I am in a homeowners association. Is it proper for a member of the board of directors to place his name on a petition that could compromise his fiduciary duty to the association? I feel that it is a conflict of interest.
A: Remember that all directors and officers are owners as well. As a director or officer, he or she has fiduciary duties and responsibilities to the members and to the association, but also has obligations to the association as an owner. As long as his position on an issue does not conflict with his responsibilities, he can express his opinion. Conflict of interest primarily is used to describe a situation in which a person is compensated significantly, or expects to be, because of his office.
Spouses can be HOA directors
Q: We are an 18-unit HOA. Can you please tell us if a husband and wife can serve on the board?
A: For condominiums, two members from the same unit cannot serve at the same time. For homeowners associations, a husband and wife can serve on the board of directors, and each will have a vote at board meetings. I strongly recommend, however, you avoid this if at all possible.
Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115 or you may e-mail him at CAMquestions@cfl.rr.com. Please include your name and city.