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Community living: Putting annual fees in escrow is not the answer to unwanted increase

Putting annual fees in escrow not a solution to increase

Q: Our master association just increased our annual fee for 2011. Can the residents refuse to pay this amount and place it in an escrow account while they try to negotiate a more realistic figure? Can the master association close the only entrance and exit road to our homes if we put the money in an escrow account? What would we do to set up this account if the master association does not ban us from reaching our homes?

A: In order to create an escrow account for your fees, you need to have the courts and a judge issue such an order. You have no right to just say you are creating such an account and deposit your fees. No, the board cannot close the roads but they have an even stronger action they will take.

They can lien and foreclose on your home even if you have an escrow account that was not court ordered. It would be like not paying your fees and the board would consider you delinquent.

You must pay your fees on time to the association. Not paying fees because you do not like the increase is not a valid reason to stop payments. You have other options to address the board and their decisions.

Board president has no power to break tie votes

Q: We had four board members (a quorum) attend a board meeting. One of the members attending was the president. A motion was made and two members voted for the motion and two members voted against the motion. So it was a tie vote. Our president then said that he had the power to vote and declare the motion as passed or failed, whichever he so desired, even though he had already cast his vote. Does the president of a condominium association have the right to break a tie and declare the motion to have failed or passed even though he already voted on the motion?

A: No officer or president has a vote at a condominium or HOA board meeting. Only directors vote on motions. Just because one of the directors serves as the president does not give him/her a special vote.

In most associations, it takes a majority vote by the directors to approve a motion. A split vote is not enough to pass a motion. The president breaking a tie vote is not found in Robert's Rules when it comes to condominium or HOA voting as the statutes take priority.

Quorum for board meeting is half the directors, plus 1 percent

Q: If the bylaws state that three board members constitute a quorum, have the amendments last July changed this requirement? We may only have one or two board members attend our next board meeting; can they still hold a board meeting or vote?

A: In the case of three directors, I assume that the documents refer to a five-member board of directors. Quorum is 51 percent of the board, which would mean that three directors must be present to conduct business and vote. It is possible for an association to have three directors, or five, or seven, and an even larger number of directors. Regardless of the size, a quorum would be half plus 1 percent.

Members get notice of proposed budget after board gives approval

Q: In an HOA is it mandatory to send out a proposed budget to the members of the association? Am I correct that if you send out a proposed budget to the members that it should be one that all board members have approved?

A: For HOAs, the information can be found in FS 720.303 and for condominiums FS 718.112, and you must check your documents for other requirements. Four to five months before the end of the year, the board must study and create a proposed budget. This means new calculations on real expenses, not just percentage increases.

Three months before the end of the year, the board should approve a proposed budget, at a board meeting, which will be sent to all owners. Two months before the end of the year the board must hold a board meeting to approve the formal budget. This will allow time to send out the approved formal budget with the new fees.

Although most associations are only required to provide their members 30 days' notice of a fee change, some documents may require a 60-day notice and in that case the board must take these actions a month earlier. It is the board that votes to approve the budget as it is their responsibility. The board is required to provide members a copy of the budget.

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.


Community living: Putting annual fees in escrow is not the answer to unwanted increase 12/24/10 [Last modified: Friday, December 24, 2010 3:30am]
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