Richard White: Condo association looking for ways to pay insurance premium

Q: Our association's cash flow is not sufficient this month to pay an insurance premium due. Can the board vote to borrow funds from our reserve account and pay it back when a CD comes due within 30 days? Or must this be done at a monthly or a special meeting of the board and approved by a majority of the association members in attendance? We would rather not cash in the CD with penalty.

A: According to the statutes, the board cannot use, borrow or spend reserve funds for insurance payments. As I see your situation, you can approve a special assessment, borrow the funds or cash in your CD. One other option is to talk to the insurance agent about paying over time or call a special members meeting to vote on using the reserves. Next year, plan ahead and make sure you have proper funds to pay the insurance.

Support charities as group, not as formal association

Q: Our association wants to adopt an orphan. Other than making a monthly automated payment there are no obligations. Can the board of directors make this decision or does the membership need to be asked?

A: Your association cannot support charitable groups of any type if it uses the members' funds or lists the item on the budget. If a group of members want to support a charity and it is not directly involved with the association, there is no problem. The board should never become involved as directors in supporting religious or charitable groups.

In a quorum quandary: What to do about officers?

Q: What happens when there is no annual meeting because there is no quorum of the HOA owners? Do the old officers hold over until a quorum is reached, possibly a week or two later when the annual meeting is finally held? Must the directors keep trying until a quorum is reached?

A: Until a new board is elected, the old board remains in power. HOA proxies are valid for 90 days. The board can continue the annual meeting within this period. What I suggest is that the board reschedules the meeting and begins to knock on doors and ask members to sign a proxy. Condominiums have a different problem in that they need 20 percent of the ballots returned.

Look to statutes for guidance on board director terms

Q: Our HOA board of directors consists of seven members, three of whom were recently up for election. A quorum of the membership was not established, so the three were appointed by the other board members. During the year, two other board members resigned and people were appointed to those vacancies. Since six of the board members were appointed and not elected, can a majority of the board remove a board member for any cause or must we still follow the FS 720? I know a majority of the board can remove officers.

A: You must follow the statutes. The appointed directors are to fill the unexpired terms of the directors they replace. The directors cannot remove a director unless there are specific confirmations in your documents. Recent changes to the condominium statutes require that if a director is delinquent, he or she is automatically removed. While the HOA act does not include this requirement, the state may add it in the future.

Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115 or e-mail him at CAMquestions@cfl.rr.com. Please include your name and city.

Richard White: Condo association looking for ways to pay insurance premium 05/15/09 [Last modified: Friday, May 15, 2009 7:03am]

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