Write to board, not manager, for a copy of bylaws
Q: I was wondering where a homeowner can find copies of the association bylaws. We are a registered homeowners association, and I would like to have copies of the bylaws. The property management company has not been the most efficient in providing any documents that are requested.
A: The statutes require that associations have extra copies of the documents to provide a copy when an owner makes a request.
The documents have three sections: the declaration or covenants, the articles and the bylaws. All owners should have received a copy of the documents at closing when they took title. Search the package of papers you received at closing. If you can not find your documents, then you must send a letter to the board of directors requesting a copy of the documents. The association can charge a copy cost for the documents. Do not ask the manager as that is not the correct person; however, the manager may have instructions from the board to provide the documents at a cost.
Understanding governing roles in a rental mobile home community
Q: The question has come up concerning the right of the president of a homeowner association having a vote on issues at board meetings. Could you enlighten us as to just what FS 723 says concerning this matter?
A: FS 723 governs rental mobile home communities. Section FS 723.078 defines the duties of the board of directors. As with the other statutes that govern other type associations, only the directors vote on issues and motions. Since the officers and the president are usually directors first, the old thinking of the president only voting to break a tie is not a valid option. Officers as well as the president never vote as officers but as directors. In board meetings or annual meetings the president never votes to break ties in association meetings.
Insurance coverage simply a cost of doing business
Q: Our condominium association does not carry D&O insurance or fidelity insurance. The board says we do not want this expense because we need to save money, since we only have 12 units and three board members. Is it mandatory for all condominiums to have these types of insurances?
A: Before I answer your question, I need to point out that the condominium act changed in 2010 and condominiums of more than 10 units must now comply with the complete FS 718. In past years the number of units was more than 50 units; that is now reduced to 10 units.
To your question: You should read FS 718.111, the insurance section and the requirements. It starts with, "In order to protect the safety, health and welfare of the people of the State of Florida and to ensure consistency in the provision of insurance coverage to condominiums and their unit owners, this subsection applies to every residential condominium in the state, regardless of the date of its declaration of condominium."
The Directors and Officers Liability Insurance (D&O) protects the directors if a lawsuit names them as a defendant. Fidelity insurance protects the association from loss of money, securities or inventory resulting from crime. Common fidelity claims include employee dishonesty, embezzlement, forgery, robbery, computer fraud, counterfeiting and other criminal acts. Insurance is a small cost to avoid a large and crippling loss in the future. I would never serve on a board as an officer or director that did not provide these two protections. It is simply a cost of doing business.
Kickbacks by any other name are still illegal
Q: In a past column, you indicated that directors and officers cannot receive kickbacks or receive personal gain from positions they serve. Is there a specific chapter or section in the condominium act that covers this? I made a cursory search, but could not find anything specific in the act.
A: "Kickback" can be synonymous with many terms and is covered by federal and state laws. Think outside the condo box. It is considered to be unjust compensation or even the expectation of receiving value. It is an element of contract law violations or just about any exchange of services or value.
The condominium act specifically says that directors may not receive compensation for their services. Although this section is not necessarily addressing kickbacks, it could be said that it would be a part of the requirement not to receive kickbacks. In certain situations the law could say it was racketeering.
Here are two situations that I have seen: The board contracted with a vendor for services at the recommendation of the president. Three months later, the vendor did work in the president's apartment. It was found that the president received a 25 percent discount on the repairs. The second involved a manager who received $500 under the table for allowing a vendor to see the other bids before the board saw the final bids. Such enrichments are illegal.
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.