Homeowners association is also a business

Know which codes apply to your homeowners association

Q: Current homeowners associations are governed by Florida Statute 720, superseding F.S. 617. As an HOA, does any of F.S. 617 still apply? There seems to be a difference of opinion by some of our members. F.S. 720 was taken from F.S. 617 starting in section 300. I believe we should follow F.S. 720 only. Could you enlighten me in this matter?

A: F.S. 617 is the corporation not-for-profit act. Most associations are created under this act or the corporation for-profit act F.S. 607. Check your articles of incorporation; it will list one or the other of these acts. Don't forget, your association is a business and must comply with the corporate laws as well as association operations. F.S. 617, as well as many other statutes, must be followed in the business and actions of your association. Florida associations also fall under the Florida Administrative Codes and there are federal acts and codes in effect as well.

Lack of reserves affects value of condominiums

Q: We are running into problems getting our condominium financed as lenders give greater scrutiny to the association. The question about reserves keeps coming up, but our board of directors continues to recommend the owners waive reserves. I am concerned our values will suffer. Are you seeing this around the state with other associations, and what is the solution?

A: Financial intuitions, banks, and mortgage brokers are looking more specifically at how associations are operated. In fact, appraisers are downgrading values of units in associations without reserves. Buyers are more savvy and asking about reserves, and their offers are lower on those units without reserves. I suggest you urge the board to rethink their position. Suggest that they talk to a bank lending officer or mortgage broker.

Have attorney read next contract

Q: I live in a residential manufactured home park in which we rent the land. The park is managed by the owner and a management company. One item that has captured my attention in your column is that you often advocate seeking legal advice. My HOA does not have, and never has had, an attorney on retainer; our last two contracts with the owner have been a disaster. Our contracts are negotiated every five years, and I am trying to rally residents to acquire an attorney for the next contract. Can you advise us on the type of attorney to use?

A: I think your association should engage an attorney to help negotiate the contract and other maintenance matters. Look for an attorney who practices association law or real estate law. Many attorneys also will provide the association with information through newsletters or seminars. Have your attorney read the contract before you sign it. For reference, mobile home and residential manufactured home parks fall under Florida Statute 723.

Directors, not unit owners, vote on special assessments

Q: Our board has contracted to replace our condominium roof, but our reserve account does not cover the total expenses. The board members plan to call a meeting to approve a special assessment. Can this be done without a vote of the unit owners?

A: The board has the right to approve any required assessment. They are required to call a special board meeting to approve such assessments. Members can address their opinions, with limits, at the meeting, but it is the responsibility of the directors to vote on such assessments.

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.

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leg.state.fl.us

Homeowners association is also a business 06/11/10 [Last modified: Friday, June 11, 2010 5:30am]

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