Rein in rogue president and board
Q: For the past five years, our condominium president has granted himself the title of project manager and claims he is the CEO of a not-for-profit organization. For his services he has been collecting about $50,000 per year for at least the past couple of years. No vote by the membership was ever taken. It is also obvious that the other members of the board pretty much rubber-stamp all decisions made by said president for fear of threats and intimidation. Is this legal? Also recently there have been flyers posted on building bulletin boards offering plumbing, A/C, electrical, and other services, etc., to be done through the association office rather than through outside licensed contractors. Basically, he is using association maintenance staff to run a handyman service on the side. Should this individual be profiting from his position in the association in such a way? It sounds shady to say the least.
A: There are so many mistakes concerning your board and your association that I do not know where to begin. Florida Statute 718.112 says that board members must serve without compensation unless your bylaws allow the directors to be paid. Check your bylaws. The association also can only pay licensed managers (F.S. 468.432). If, in fact, you are paying your president to perform management duties and he is not licensed, the association is in violation of the statutes. Obtain proof of the payments and then report the matter to the state Department of Business and Professional Regulation at toll-free 1-866-532-1440. The DBPR will require you to file a complaint form with proof of the payments.
Why would your membership allow this to go on for so long? Each year you have an election by sealed ballot; your membership must use that opportunity to take control of the situation.
Three simple reasons not to use volunteer workers
Q: You have written that use of volunteers creates a possible liability. Would you expand on these problems? Boards do not know how to read insurance policies and can make serious mistakes, leaving the association short on coverage.
A: There are three reasons I do not recommend using volunteer workers. If a volunteer is injured, the association's insurance will not cover any of the expenses such as medical costs or loss of wages. In addition, if the injured person sues the association, the association's insurance will not cover any expenses or settlements. The second reason is that volunteers may not have the necessary experience and can cause damage to property. The third problem is that volunteer work will not provide an accurate financial report. Though use of volunteers may save money, it will not provide an accurate budget or financial costs to operate the association.
If volunteers are used, there are ways to protect the association and the volunteer, but the board must seek guidance from professionals such as an insurance agent, a CPA to assist in accounting and, of course, the association attorney.
To enforce association's rules, start with published policy
Q: I live in a 55 and older community. We have a board of directors and a manager to oversee our rules and regulations. How do the directors and manager enforce these rules when residents refuse to comply? Fines are ignored, and underage residents refuse to respond to written warnings. Some problems have been going on for months.
A: I have found that one of the best ways to enforce violations is to have a published policy that has been approved by the association attorney. The policy should establish actions to be followed in the event of a violation: letters to be sent, time schedules for compliance and procedures to turn the matter over to an attorney for final action. Too many boards do not want the legal expenses, but it is a cost of doing business. Failure to enforce rules can result in lower property values and a loss of legal ability to enforce rules in the future. As an adult community with age limits, failure to enforce the age restrictions can result in loss of the 55 and older status. Once the board has taken one or two members to court, the word will get out and almost all members will comply with the published rules.
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.