Condos and HOAs

What can be done at a meeting without a quorum?

Everyone knows how difficult it can be to get a quorum to hold a board meeting and especially a membership meeting.

Board members cannot attend board meetings by proxy.

However, owners can attend meetings by general or limited proxy.

What happens if you cannot get a quorum for a meeting?  The meeting would then be considered inquorate.                                                                 

Can any action be taken?

Can motions be adopted?

There are several actions that can be taken

• Call the meeting to order
• Take measures to obtain a quorum

This could be making calls, or knocking on doors, or even appointing a committee for this purpose

• Take a recess, possibly to wait for more members
• Adjourn to a future time and place

Perhaps a more suitable time or more convenient place

• Adjourn the meeting

We give up. We will readdress the agenda at a future meeting

Can you adopt a motion to do something on an emergency basis pending ratification at a future meeting?

Roberts Rules says:

When an important opportunity would be lost unless acted upon immediately, the members present can, at their own risk, act in the emergency with hope that their action will be ratified by a later meeting at which a quorum is present.

Does this sound like a prudent action?

Does it conflict with any Florida Statutes?

Comments?

Want to learn all about community association meetings, Roberts’s Rules, etc.?

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My blog of Wednesday, June 27, 2012 reported an arbitration decision wherein the arbitrator determined that the conduct of a disruptive unit owner did not rise to the level of a “nuisance” under the law and, therefore, not subject to the Division’s jurisdiction.

I asked the readers to compare the results of that case to one in which a child of a unit owner is seen littering on the common elements, screaming in the unit, yelling at board members, appearing nude on the common elements and other disturbances.

While the arbitrator did find that the child’s conduct violated several rules and regulations, as well as other provisions of the condominium documents, in reality, is there really any relief available to the association through the Division? Stated otherwise, how can one control the conduct of a child? The law does not grant the Division the authority to evict a tenant or a unit owner.

What if, as was the case here, the “child” was of an adult age, but mentally only a child? While the Division lacked authority to restrain or remove the child, the association might seek protection through the Courts, perhaps obtaining an order appointing a guardian or compelling the child’s parents to take greater responsibility for the child’s actions.

Shared ownership housing communities are microcosms of society. The same problems experienced by society in general, from criminal conduct to social actions, must be dealt with by the association boards, except community associations do not have the authority or resources available to government. Although community associations are primarily charged with the responsibility for the maintenance and operation of the shared ownership community and the protection, safety and welfare of the residents, they often must call upon government agencies to assist in dealing with issues and problems outside the scope of their traditional obligations.

Perhaps a refresher as to that which constitutes a “dispute” and, thus, subject to the Division’s authority would be helpful at this point.

Florida Statutes, Section 718.1255(1) defines “disputes” that are subject to mandatory, non-binding arbitration, as:

(a) The authority of the board of directors, under the Condominium Act, or the condominium documents to:
1. Require any owner to take action, or not to take any action, involving that owner’s unit or the appurtenances thereto.
2. Alter or add to a common area or element.
(b) 1. Properly conduct elections.
2. Give adequate notice of meetings or other action.
3. Properly conduct meetings.
4. Allow inspection of books and records.

There are three situations wherein the Division has held what will render the election of directors null and void, compelling that there be a new election. Can you name them? Read my blog of July 11, 2012 for the answer.

First, we have Thomas Grady, defending nearly $10,000 in travel expenses when he was interim president of Citizens, a permanent president having recently been elected. The Naples News online by Jacob Carpenter reports stays at luxurious hotels wherever he went and a trip to Bermuda. And then there was a two night stay at the Ritz in Amelia Island, where he mingled with insurers at a big conference.

Mr. Grady said he needed to take these trips to “acclimate” himself with insurers, boost employee morale, and get this, put cost-cutting measures into effect.

Before he was interim at Citizens, Mr. Grady was commissioner of the Office of Financial Regulation. We should run a contest to see if anyone could possibly top this story on so many levels.

Next, in an article by Zac Anderson, Tallahassee Bureau, Ocala.com, are you surprised to learn that private insurers could be in more trouble than Citizens in a storm season? Yes, indeed, they’d need a bailout the same or greater than Citizens after most big hurricanes.

But, you may ask, haven’t we been told that Citizens is at terrible risk financially because it could run out of money to pay claims? Yes we hapless taxpayers have been told that, many times over.

A report by the Office of the Insurance Consumer Advocate said Citizens wouldn’t need any assessment money, but private insurers that fail would cost $200 million. Moving us into poorly capitalized companies would increase the chances of post-hurricane assessments.

It’s hard to believe even Governor Scott would continue to press for depopulation of the company government created in light of the facts that are just now coming out.

In the article, professor Robert Klein, an expert on catastrophe insurance, who teaches at Georgia State University brought up the subject of the “pups” that I’ve blogged about before. He said “The state has allowed a lot of these small, single-state companies to come into the marketplace and there is a particular concern with some of those companies as to whether they would have enough capacity to cover a major storm.”

Imagine that. The article specifically mentions State Farm as one of the big players who have set up these Florida-only subsidiaries, or “pups.”

This tidbit was also revealed: Private insurers have fought efforts to give is more information about companies’ health. The industry successfully lobbied lawmakers to eliminate a grading system that would have issued a report card for each insurer.

Private insurers in Florida also are no longer required to carry enough reinsurance to cover all claims from a 100-year storm.

And this is where Governor Scott and 25 legislators want to place us, with companies about which we have absolutely no idea regarding fiscal soundness, and which don’t need enough reinsurance to pay claims from that 100-year storm our “leaders” continuously remind us of.

The best cure for injustice is the truth, and we’re finally beginning to peel back the layers of deception. Happy July 4!

Most of us understand and lament the issues confronting our State’s largest insurer: an insufficient CAT Fund should this Hurricane Season prove to be the one where we get hit after 6 years of calm; Citizens’ insistence on shedding policies; its failure to honor mitigation efforts and its desire to increase rates beyond the current 10% statutory cap.

Now that you know some of the problems, are you aware that the Citizens Board of Governors will be meeting on July 16th from 10 AM to 1 PM at the JW Marriott Hotel, 1109 Brickell Ave, Miami, 33131? For those of us in South Florida, this is a unique opportunity to show up and be heard on the issues that will impact our state’s long-term health and all of our wallets as Florida taxpayers. Even if you live elsewhere in the State, you can and should participate and make your voices heard.

For those of you unable to attend in person, you can participate via phone: the teleconference # is 888-942-8686 and the Participant Code is 5743735657#

At these meetings, the most impactful testimony is often that which comes from the recipients of the services, provisions and products provided by Citizens. This compelling, reality-based narrative should come from you, the consumers, along with the possibility of viable solutions.

The following suggested topics may provide some guidance to the Board of Governors regarding your experiences with the Citizens Property Insurance Corp.:

a.) How well does Citizens communicate with you? How friendly and effective are their employees? How useful is the Citizens website?;
b.) How helpful was the insurance agent that placed you with Citizens and serviced you as a policyholder?;
c.) What has been your experience with mitigation inspections and inspectors?;
d.) Have you ever submitted a claim to Citizens and, if so, did you require the assistance of a public adjuster or attorney to receive payment on that claim;
e.) Do you have a recommendation for any ‘take-out’ insurance company as a replacement for Citizens?; and
f.) Have you experienced any difficulties in buying or selling a property insured by Citizens?

The Community Advocacy Network (CAN) will once again be actively involved in representing our membership at this upcoming meeting of the Citizens Board of Governors. Barbara Zee, one of our Advisory Council members and the CAN Insurance Liaison, plans to testify at this Miami meeting before the Citizens Consumer Services Committee as she has done elsewhere in the state.

CAN is always ready and eager to listen to associations regarding concerns, issues and legislative matters. Therefore, at this time, we encourage everyone who has anything to contribute to this important subject to either attend the hearing in person, telephonically or to provide us with your comments, opinions, ideas, and suggestions. We, in turn, will incorporate all of your contributions in a packet that will be provided to the members of the Citizens Consumer Services Committee as well as Florida legislators.

Please forward your submissions by July 12th to Barbara Zee at bzee@canfl.com. For further information, you can also contact Julie Fishman at the CAN Corporate office at 954-486-7774.

On June 25, Daniel Vasquez wrote a blog entitled “Can condo owners attend committee meetings, access committee documents.”

This dovetails with a prior blog I posted on May 18, 2012 entitled “HOA board and certain committee meetings must be open (with limited exceptions).”.

With very limited exceptions, committee meetings in both condos and HOAs must be open. Mark Benson cited F.S. 718.112 (2)(c)(2). That provision requires committee meetings to be open, with the exception that bylaws may supersede this open meeting requirement for committee meetings that do not take final action on behalf of the board. HOA statutes are slightly different and do not have that exception.

F.S. 720.303 (2)(a) provides as follows:

A meeting of the board of directors of an association occurs whenever a quorum of the board gathers to conduct association business…The provisions of this subsection shall also apply to the [meetings of any committee or other similar body when a final decision will be made regarding the expenditure of association funds] AND [to meetings of any body vested with the power to approve or disapprove architectural decisions with respect to a specific parcel of residential property owned by a member of the community].

This means that HOA meetings of committees vested with the power to make decisions regarding the budget or architectural approval requests must be open. Presumably other committee meetings, related to arguably less divisive issues, are not required to be open.

The policy reasons behind these statutes should be abundantly clear. Mark Benson lamented that statutes even need to exist requiring committee meetings be held “in the sunshine.” I agree that this should be common sense. Unfortunately, it isn’t.

Is there any legitimate reason why committee meetings of condos or HOAs should be closed to the members (absent attorney client privilege or personnel matters)? I can’t think of any.

Even more important, is there any reason why any final architectural or budget decision should be made without an open meeting? A colleague mentioned that a trial court judge (not in south Florida) ruled that an architectural decision could be made without having any meeting at all. With all due respect to that judge, this contradicts the clear intention of the legislature. By this reasoning, as long as the board or committee always makes decisions in secret, they never need to have a meeting. What is wrong with this picture?

In last week’s scenario, a unit owner repeatedly belittled other unit owners, challenged the contractors used by the unit owners and complained if an owner placed a sign on the property. Mind you, we are not talking about a member of the board, but a busy body with apparently nothing better to do with her time.

The issue to be decided is how many disturbances does it take to make a nuisance? A “nuisance” has been defined as a noise, smell or other bothersome condition or event that interferes with a neighbor’s right of peaceful use and possession of his or her unit.

The question for decision is not simply whether the neighbor is annoyed or disturbed, but is whether there is an injury to a legal right of the neighbor. The law of private nuisance is a law of degree. It generally turns on the factual question of whether the use to which the property is put or a conduct of an individual is reasonable under the circumstances, and whether there is an appreciable, substantial, tangible injury resulting in actual, material and/or physical discomfort, and not merely intending to injure.

There have been several arbitration cases that held that a single incident does not create a nuisance. For example, a single act of yelling, screaming, harassing and threatening neighboring unit owners and board members does not rise to the level of a nuisance. And, that is exactly what the arbitrator determined in the above-noted case. The association’s petition failed to state a present, ongoing dispute within the rules and did not involve the same subject matters. As such, the allegations did not rise to the level of a “dispute” as defined by the Act and the petition was dismissed.

How does the above holding compare with a similar situation involving the child of a unit owner who frequently is seen littering on the common elements, screaming in the unit, yelling at board members, appearing nude on the common elements, digging up sod on the common elements, using the pool to wash pots and pans, covering the windows with prohibited material, and creating disturbances that require the police and file department to enter the condominium?

Is it practical to expect that the association will be able to control the conduct of this child? Can the child be ordered from the unit?

Read my blog on July 4 to learn how the Division dealt with these issues.

The Sun-Sentinel reported that Citizens wants new customers to be removed from protection of the 10 per cent cap on rate increases. That means if you’re trying to sell your home or condo unit, anyone who is considering buying it needs to be aware that the rates for windstorm coverage could go up without any cap.

It’s no secret that Governor Scott has directed Citizens to depopulate quickly. He claims private insurance companies will come in to write policies when the premiums are what they consider viable for them.

Problem is, what they consider viable will probably kill us. Who but wealthy buyers would be able to pay unlimited premiums for windstorm coverage in Florida? Maybe they’re counting on the cash buyers who don’t have mortgage companies requiring insurance to be the main group.

Same goes for shrinking Citizens and making policyholders shop for coverage from private companies charging thousands more.

But what about middle class and others who can’t buy homes without getting mortgages? Most likely they’ll have to rent, and maybe the developers are building rental units with that prospect in mind. I hate to sound like a conspiracy theorist, but it is a logical progression of thought.

Consider: If the cost of windstorm insurance, because of a shrinking Citizens or the private companies who enter the market is so high that people go into foreclosure because they can’t afford it, and few people come into Florida to buy homes, there will be another meltdown and another glut. The prices of the homes will plummet as they did in 2008, and be there for the pickings of those who look to buy cheap, rent them out or sell to those who want to do the same.

It’s not a pleasant thought that those who see big profits are systematically destroying the tiny housing recovery.

And that’s putting it mildly.

The following post is written in response to my recent column about an owner trying to get permission to attend his condominium’s committee meetings related to TV service contracts.

By Dennis J. Eisinger, Managing Partner, Eisinger Brown Lewis Frankel & Chaiet, P.A.

In a June 19 Sun Sentinel article by Daniel Vasquez titled “Owner Launches E-newsletter to be Heard by Board,” Century Village Boca Raton homeowner Fred Hadley said he was denied access to meetings and information regarding a search for new cable TV service for all communities within the development. The Century Village’s Cable TV committee chairman said that the committee will release information when it makes its recommendation to the Board of Directors that can approve a new contract.

State law is clear on this matter: Umbrella associations that are composed exclusively of condominium unit owners or their representatives and which operate or maintain common elements are governed both by Florida’s not-for-profit corporate statute and Florida’s Condominium Act. State law says that most committees that do not make final decisions are not subject to “open-meeting” requirements. In this instance, it would seem that the Cable TV committee does not have to allow Mr. Hadley to attend its meetings, even though it would generally be a good idea to permit unit owners to attend.

State law also says that unit owners must be granted access to condominium association records such as those involving the cable TV service negotiations — including bids, contracts, and minutes — at reasonable times. So, even when in the hands of the Cable TV committee, unit owners are entitled to access those records. Competitive bids are required if the cost of the service exceeds 5 percent of the community’s budget and there are other potential bidders. Without budget figures, we cannot know if multiple bids are required for this particular contract.

Dennis Eisinger is the founding member of Eisinger Brown Lewis Frankel & Chaiet, P.A. and serves as the firm’s managing partner. For the past three decades, he has represented the interests of condominium and homeowners’ associations and co-ops in South Florida and statewide. Since 2005, he has been an Adjunct Professor at the University of Florida’s School of Law, teaching a class on condominium and community development law to second and third year law students.

Last week, the Florida Bar’s Standing Committee on the Unauthorized Practice of Law met in Orlando to once again discuss the issue of what does and does not constitute the “unauthorized practice of law” insofar as activities being undertaken by licensed community association managers.

In 1996, the Florida Supreme Court held that: (1) ministerial actions taken by CAMs which do not require significant legal expertise and interpretation do not constitute the unauthorized practice of law, such as completing various forms and drafting of notices, but (2) CAMs would violate the bar against the unauthorized practice of law by drafting documents requiring a legal description of property or establishing rights of the community association by making determinations and drafting documents requiring interpretations of statutes and various rules, or by giving advice as to the legal consequences of taking certain courses of action.

The topic of the unauthorized practice of law as it pertains to professional advisors assisting volunteer boards across Florida is certainly worthy of discussion. However, the lengthy list of items being debated by the UPL Committee suggests that there might be a real disconnect between what constitutes “practicing law” and what constitutes “following the law”.

Practicing law is generally understood as “appearing before courts,” and includes “giving legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments including contracts…etc”

Shouldn’t the distinction between following the law as opposed to practicing it be crafted in a common sense fashion? “Determination of affirmative votes” or “Approving new owner documents” can usually be categorized as following the law and the association’s particular governing documents, and is quite different from drafting a document amendment, preparing a lien or a pre-arbitration demand letter.

If there is ambiguity or confusion on whether or not the activity is ministerial or legal, then obtaining advice from a Florida attorney in good standing would be prudent and should be required. In the absence of any such ambiguity or confusion, however, a volunteer board and its manager should be allowed to evaluate the risk/reward in the specific approach/decision that is being considered and proceed in the best interests of the association membership.

It appears to be in the best interests of common interest ownership communities throughout Florida to allow reasonable and capable licensed CAMs and Board members to exercise common sense and judgment in each particular situation when the contemplated activity constitutes “following the law” as opposed to practicing it. Having to run to an attorney to tell you how many owners are needed to pass an amendment when the answer can be found quite simply in many instances can either be categorized as overkill or territorialism on the part of some attorneys pushing for these changes.

It would not be in the best interests of common interest ownership communities to create an arbitrary or petty list of “activities or decisions” that must have a legal opinion. More than half of the state’s approximately 60,000 community associations have fewer than 50 units or lots. The UPL Committee should bear in mind the potential economic impact of its ultimate decision on these small associations should these boards feel they cannot act without the benefit of legal counsel on daily operational matters and thus, refrain from acting altogether to their communities’ detriment.

In Daniel’s weekly column yesterday he featured a unit owner who is publishing a newsletter in his condominium association.

Newsletters can be published online or be printed and distributed directly to the owners. They can include all sorts of information such as notifications of special events, contact information, minutes of meetings, project reports and updates, reports or messages from the president or other officers, and even answers to frequently asked questions from owners.

There are many types of correspondence that you may receive from your association.

• Official communication required by statute, such as proposed budgets, proposed amendments, meetings and election notices, rules violation notices, and notices of suspension of use rights and voting rights.
• Letters from management which may include coupon books for maintenance payments or valuable information about communicating with your manager, rules changes etc.
• A thank you to the community for complying with the rules and regulations, especially newly promulgated rules.
• Welcome letters to new owners.
• Thank you letters to owners who volunteered to help with an event or agreed to serve on a committee.
• Condolence cards to owners who have experienced a loss.

If you can think of any others please let us know.

Link to our free classes:

http://www.kgblawfirm.com/linkPdfs/KGB-Master-Course-Listing.pdf