Board should have clear policy, act quickly on delinquents
Q: My condominium board argues that it is impossible to file a lien and initiate foreclosure on any defaulting unit. Please lay out the process.
A: This question is in my mailbox every day in this economy. Here are the steps that I think the board must take.
• The board must have an association attorney available for guidance and legal action.
• Board members must read and understand the association documents and statutes.
• I suggest that the board create a collection policy, which must be approved by the association attorney. The policy should spell out that delinquent letters will be sent and note when the account will be turned over to an attorney for lien and foreclosure action. I suggest that three delinquent letters be sent in the first 60 days, then turn the matter over to the attorney. Too many owners are letting the bank foreclose, which causes the association to lose delinquent funds. Slow action can also result in further delay if the owner declares bankruptcy.
If the board is strong, takes fast action and communicates to the owners, an owner may think twice about not paying his fees.
Consult CPA, attorney, statute for finer points of financial reporting
Q: We would appreciate your assistance in helping our board determine if we are required by statute to provide reviewed or audited financial statements to our owners. We provide an internal prepared statement made using a well-known software program. The last external review was for 2006. Since that time our owners have approved a waiver of an external report. Our condominium is 51 units.
A: I would suggest that you talk to your CPA and attorney for guidance and read Florida statute 718.111 on financial reporting. I will caution you that if someone were to file suit, his or her attorney likely will ask to review past association records, including the end-of-year financials. If you do not have the records, it may show a failure of the association to comply with proper operations. Also, a third-party financial report proves to the owners that their money has been properly handled.
Even number of directors raises several questions
Q: The following two questions came up at our annual meeting. We have a four-member board. Is the president allowed to vote to break the 2-2 tie? Is the president the person to present all motions or is he restricted from making motions but can second the motions? Our condominium has 228 units.
A: First, I am curious as to why you have an even number of directors. Florida statute 617.0803 does not declare that you have an odd number but it does require that you have the number listed in your bylaws and documents. Review your document to determine if you are properly operating with an even number of directors, as most boards are an odd number to avoid a tie. The president's role is often misunderstood, but in general, the president, according to Robert's Rules of Order, can make motions, speak in debate and vote. You can find more details about parliamentary procedure at robertsrules.com.
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.