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Setting the Ground Rules for Community Association Committees

Setting the Ground Rules for Community Association Committees

  • Posted: Nov 29, 2019
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Setting the Ground Rules for Community Association Committees

Not enough community association boards make effective use of committees. Committees can be very useful when it comes to providing recommendations to the board and assisting the board with carrying out its duties and responsibilities. However, many associations do not take the time to establish committees or set parameters for their work so that committees may assist in the operation of the association.

Setting up committees is the responsibility of an association’s board of directors. The board must appoint the members of each committee at a properly noticed board meeting, during which the directors should provide instructions and set parameters for the scope of the committees’ responsibilities.

One of the best approaches is for boards of directors to use their annual meetings to establish various committees, appoint committee members and establish areas of purview for each. Each committee should have at least three members.

With the exception of the rules enforcement committee, board members may also serve as members on committees. Many associations choose to have a board member on each committee along with two non-director volunteers, as this enables the board member to keep their fellow directors abreast of the committee’s work and progress.

The only committee that is required by law for Florida community associations is the rules enforcement committee, which is also often referred to as the fining, violation or grievance committee. Associations that wish to levy fines and impose the suspension of use rights for violations must utilize such a committee to do so. Per Florida law, this committee cannot be comprised of board members or spouses or relatives of board members in order to maintain its independence from the board.

Fines or suspensions may only be imposed after the association provides at least 14-days written notice to the owner, occupant, licensee or invitee to be fined or suspended, and they must be provided an opportunity for a hearing before the rules enforcement committee. During these hearings, the committee should hear and evaluate the alleged violator’s side of the story behind the underlying fine. The hearing should be closed to all members except for the alleged violator and the corresponding unit owner, should the violator be their tenant. At its conclusion, the committee members should vote on whether to confirm or reject the fine or suspension levied by the board, which requires a majority vote to be imposed.

The other most common types of committees are the budget committee, which assists the board with creating the annual budget, and the architectural review committee, which is typically charged with reviewing any requests for construction, improvements or alterations taking place on association property or within a unit or exterior of a lot.

By utilizing committees and ensuring that they are staffed by dedicated volunteers, associations can facilitate their operations while also avoiding overburdening board members with too many issues and responsibilities. When first establishing committees, boards of directors would be well advised to consult with highly qualified association legal counsel regarding their creation and setting forth the scope of their responsibilities.

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Creating Quality Board Meeting Agendas and Minutes

Creating Quality Board Meeting Agendas and Minutes

  • Posted: Nov 29, 2019
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Creating Quality Board Meeting Agendas and Minutes

Board meeting agendas and meeting minutes are a key part of condominium associations’ official records. For unit owners not actively involved with the association, they are the primary way to follow along with the board’s activities. Given this, it is important that the board produce quality agendas and meeting minutes. Generally, these two documents should provide sufficient detail so that a unit owner with no previous knowledge of the property will understand what the board is considering and the reasoning behind board actions. Agendas and meeting minutes are also reviewed by the association’s CPA during audits, and are some of the primary documents the Department of Business and Professional Regulation (DBPR) examines to resolve complaints against associations. Lastly, new managers or board members use meeting minutes to obtain insight into past association issues. In sum, having detailed agendas and meeting minutes can prove invaluable.

There is significant confusion around how agendas and meeting minutes should be formatted, and what information they must contain. The Florida Statutes provide little guidance on these topics, leaving it to the boards and their managers to determine what is appropriate. Many standard formats (i.e., Robert’s Rules of Order) are used and often the community’s bylaws will provide guidelines. The board is obligated to follow any agenda, meeting minutes or board meeting format requirements outlined in their governing documents. That being said, if your documents indicate that Robert’s Rules should be followed, the board should review these Rules and make reasonable decisions about how to apply them to a casual condominium board meeting. For example, there is no need to stand to make a motion and no need for the president to recognize a board member before they speak despite what Robert’s Rules tells us.

 

Agendas

Florida Statute 718.112(2)(c) provides the following agenda requirements:

  • All regular board meeting agendas must be posted visibly on the condominium property at least 48 hours in advance of a meeting. NOTE: Members’ meetings (e.g., annual meeting), budget meetings and certain other meetings require additional advanced notice.
  • If there is no condominium property available where notices may be posted, the board must mail or email (if electronic consent form has been received) the agenda to all unit owners 14 days in advance of the meeting.
  • The board must adopt an official location for posting agendas on property.
  • Any item that will be discussed by the board at a meeting must be listed on the agenda.
  • If 20% or more of a community’s members petition to have an item on the agenda, the board must add this item to an agenda within 60 days of receipt of the petition.
  • Board meetings held in the event of an emergency may be held without a previously posted agenda.
  • Items not listed on an agenda may be taken up at a meeting on an emergency basis by a vote of a majority plus one of the board members.

NOTE: The DBPR has reprimanded associations for holding “emergency” meetings and discussing “emergency” items that are not true emergencies. If the board can wait 48 hours for proper notice to be posted before discussing the item, then the board should do so.

The above Florida Statute requirements do not provide any guidance on how a meeting agenda should be structured. This is up to the board to decide.  I recommend that an agenda format be approved by the board and used consistently. To better inform the unit owners, I also recommend that the agenda include a brief sentence on the purpose of each agenda item. For example, an agenda may list “Landscaping” as one of the items but to a unit owner that may mean very little. An agenda item like this is much more informative: “Landscaping: the board is considering proposals to replace all plants surrounding the front fountain”. Most management companies have their own agenda formats but the board can certainly request changes to that format.

Below, I have listed the primary sections of a board meeting agenda with some guidance on each item. They are listed below in the order which I would recommend they be listed on the agenda and addressed at the meeting.

 

1.     Meeting Date, Time and Location:  This information must be included on every posted agenda.

2.     Call to Order, Proof of Quorum, Proof of Notice & Roll Call: This item should be the first item at every meeting and is primarily a formality. The president will call the meeting to order, specify the time, and confirm that the agenda was properly posted at least 48 hours in advance of the meeting. The board members present should state their names and positions to confirm a quorum has been obtained.

3.     Special Speakers or Guests: Sometimes boards will request special guests attend a meeting. For example, the association may request that its insurance broker come to a meeting to discuss insurance policy renewal. I generally recommend listing any agenda items relating to guests at the top of the agenda so that the guest may conduct their business and then leave without having to sit through a long meeting.

4.     Prior Meeting’s Minutes: Minutes from the previous board meeting should be reviewed and approved by the board. If your community follows Robert’s Rules, they are required to be read aloud. To avoid this, the board should receive and make changes to draft minutes in advance of the meeting. If done this way, they do not need to be read aloud. Getting draft minutes to the board for review within a few days of a meeting really helps with accuracy as the information is fresh in the members’ minds.

5.     Manager/ Board Member/ Committee Reports: If the manager, a board member (typically the president) or committee head wishes to provide an update on specific items, they should be listed on the agenda. Further, I would recommend a brief listing of the topics they will discuss. Just listing “President’s Report” could be used as a catch all agenda item during which the president/ board may talk about any association topic. In my opinion, this does not comply with the spirit of the Florida Statutes.

6.     Treasurer’s Report/ Financial Statements Review: The association’s most recent monthly (or quarterly) financial statements should be reviewed and approved at each meeting. Any items the board may need to vote on relating to collection efforts (e.g., a vote to lien a unit) should also be listed as an agenda item (specific unit numbers may be listed).

7.     Amenities Use & Voting Rights Suspensions: As discussed in this post, boards must vote to suspend the amenities use rights or voting rights of unit owners in arrears. As such, this should be listed as an agenda item (specific unit numbers may be listed).

8.     Unit Owner Comments/ Questions/ Concerns: As discussed in our post on unit owner rights at board meeting, unit owners have the right to speak on any agenda item. I recommend listing an agenda item specifically for this purpose near the beginning of the meeting.

9.     Old and New Business: This section should include any business the board wishes to discuss. Keep in mind that the agenda should include all discussion items not just those that the board plans to take a final vote on at the meeting.

10.  Email Vote Ratification: While boards should try to avoid voting by email entirely (see this post for more information), if the board does vote via email I recommend that the item be included in the next meeting’s agenda and ratified at the meeting.

11.  Adjournment: Similar to #2 above, this is a formality. The time of adjournment should be specified.

 

 

Meeting Minutes

According to Florida Statute 718.111, meeting minutes must be taken for each board meeting. In my opinion this includes those meetings not open to unit owners (though minutes should be brief). Further, minutes must be retained for at least 7 years and must include how each board member voted on each item including if the board member abstained from voting. These are the only requirements for meeting minutes per Chapter 718. Robert’s Rules provide guidelines on preparation of meeting minutes but otherwise the style and content of the meeting minutes is up to the board.

We recommend the following as it relates to constructing meeting minutes:

  1. Use the meeting’s agenda as a base for the meeting minutes.

  2. Include meeting start and end times.

  3. List the board members, unit owner and other guests in attendance (including those present by phone)

  4. Record the meeting and listen to the tape while drafting the minutes to ensure accuracy. Tapes may be destroyed once meeting minutes are approved.

  5. Ensure the minutes are sufficiently thorough for a unit owner not present at the meeting to understand what actions were taken by the board and why.

  6. Transcribe the specific wording of each motion including who voted in favor of or against the motion.

  7. Include any identified board member or manager conflicts of interest.

  8. Briefly summarize any discussions the board had that did not end in a vote.

  9. Do not include board member quotes or the specific opinions of one board member (unless requested by the board member).

  10. If email votes were ratified at the meeting, Include copies of the email chain showing the vote with the meeting minutes.

The board of my association has begun attaching a “status update” document to our meeting minutes which I think is very helpful. This document specifies what actions have occurred on each agenda item from the time of the last meeting to the time of the current meeting. For example, if in last month’s meeting the board voted to re-landscape an area of the property, the “status update” document (which is provided to the board for review and approval at the current meeting along with the draft minutes of the prior meeting) would state something like: “Landscapers removed all old plants and have replaced all irrigation piping. New plants are scheduled to be installed next week”. This provides and straightforward way for unit owners to obtain updates on the status of past agenda items.

 

 

NOTE: This post reflects our opinions and ideas and should not be taken as legal advice or professional guidance. References to language in the Florida Statutes or Florida Administrative Code are based on our reading and laymen’s interpretation of these documents. As always, we strongly encourage you to consult with legal counsel regarding the interpretation of law.

 

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Rental Property Expenses are deductible only in the year they are paid…

Rental Property Expenses are deductible only in the year they are paid…

  • Posted: Nov 26, 2019
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End of year Taxes for your property

While tax returns aren’t due until April, to minimize your tax burden the strategy of accelerating rental property expenses should be considered now, property owners, should start deducting these expenses this year could be more important than ever, especially if you’re affected by the new Affordable Healthcare Act tax.

Under the Act, if your modified adjusted income exceeds $250,000 (filing jointly) then you’ll pay an additional 3.8% tax on any rental income or other passive income above that amount. Rental property expenses are deductible only in the year they are paid, so December is your last chance to pay for any rental property-related expenses that you want to deduct this year. Additionally, you can pay your expenses in advance, so consider paying in December some expenses due next year (such as a mortgage payment, property taxes, or utility bills) to offset this year’s income.

As far as rental income is concerned, don’t be tempted to defer rental income for December rents to next year. The Internal Revenue Service matches 1099s for commercial leases, and they want to see rental income match up with 1099s. While residential rental owners don’t receive 1099s from their tenants, many audits that CAP’s have been involved in where the IRS examined residential lease agreements and had issues with the rental owner declaring less than a full twelve months of income if the unit was occupied for the entire year. But what if you were on vacation for all of December and didn’t check your mailbox until mid-January? That’s still income for December.

It’s important to not make assumptions about rental income losses–several clients get burned because they thought they could deduct these losses. The problem is that rental income losses fall under the “passive income rule” which can be a complicated beast. Rental income is considered passive income, and under the rule, passive income losses can only be offset against passive income, which means you need to have another rental property that makes money or some other passive income source. The rule is different if your adjusted gross income is less than $150,000. The passive income rules are very complex and everyone has a different situation, so it’s critical that you consult with your tax adviser before you act on any assumptions.

Checklist: Year-end Review
Review rental property insurance policies; update amounts if necessary.
If you don’t have an umbrella liability insurance policy, consider one.
Make sure that if you have converted your primary residence to a rental property, that you made that classification change with your insurance company.
Review local city or county ordinances for changes, such as registration requirements.
Review federal and state laws, including fair housing rules and your state landlord-tenant statute, for any changes.

 

 

We have Courses, Meetings and Seminars to help Managers, Board Members with Taxes.

RMS Accounting:  https://www.facebook.com/RMSAccounting/

 

 

Checklist: End of Year Taxes
Meet with your accountant to discuss end of year tax strategies.
Consider paying now expenses due next year to offset this year’s income.
Let your accountant know if you anticipate any rental losses next year, or if you’re planning on refinancing, buying, or selling rental property as these activities may have tax consequences that might be partially mitigated with informed planning.
If you formed an LLC or S-Corporation to hold your rental property, order 1099s now to send to your unincorporated vendors (to whom you paid more than $600) by January 31st–it can sneak up quickly.

 

Year-end reviews:

Revisiting and evaluating insurance policies and rental regulations and laws is key to protecting your rental property investment. We recommend that rental property owners set an annual calendar reminder to review their insurance policies for proper and adequate coverage and check on new local ordinances affecting landlords.

Insurance policies and their respective coverage amounts change frequently. We have seen many owners move out of their property and convert it to a rental but forget to call their insurance provider to make sure their policy is updated from a primary occupant policy to a landlord policy. If an owner does not make this policy change then it is very likely a future claim will be denied for the wrong policy classification. The classification change to a landlord policy will likely result in a premium increase but without the proper classification the property owner is not adequately insured which, in the end, will be a much bigger price to pay.

City ordinances can change quickly and are difficult for distant and even local landlords to be aware of. While a local professional property manager should be able to help you with local ordinances, It is ultimately the property owner’s responsibility to make sure rental property is compliant with local city and county ordinances.

In addition to local ordinances, make sure you understand federal and state laws that impact rental property, such as fair housing requirements and your state’s landlord-tenants laws. Your property manager, if you have one, will be an important resource here. If you self-manage your rental property, consider joining a state or local landlord association, as these groups often have attorneys provide updates on changing laws as well as provide other benefits. Property Managers can join forces with www.sfpma.com.

 

Planning for Next Year:

While it might be a slower time for year for landlords and property management companies, the winter, especially December, can nonetheless get busy because of the holidays. However, it’s important to have a game plan for the coming year. Schedule a planning meeting to meet with key people, including any co-owners of your rental property or your property manager, if you have one, to address these issues:

 

Checklist: Planning for Next Year
Confirm annual or six-month rental property inspections are scheduled.
Review lease agreement template.
Review policies or “house rules.” Consider adding a policy addressing space heater safety. Adding a Pet Policy, we see many more tenants and owners with pets, along with service animals.
Review rents and consider an increase.
Discuss whether any significant repairs, such as re-roofing, need to be undertaken in the coming year.

 

 

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We are Running a Florida Rising Magazine – Cover Picture Contest.

We are Running a Florida Rising Magazine – Cover Picture Contest.

  • Posted: Nov 13, 2019
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We are Running a Cover Picture Contest.

Submit to this page Florida Pictures for consideration. We will select the winner to be the DEC 2019 Cover

– If your picture is Selected We will Place your company on a Full Page ( With a Great Bio and Article, Letting our industry know more about You!)

  • Think of Pictures showing Condo & HOA along with Property Management In Florida!
  • With Voting Season coming – December we will learn more about Voting for Officers, How it is Accomplished, Some stories on how things go bad, and new companies ready to help with Voting for your Condo and HOA’s
  • Please include your Info: so we can contact you, most will be from a FB, LI or Email – we can IM you with our decision..

This closes on 27, November 2019. So we can have a few days to place the company information

You can also send the pictures in an Email: FloridaRising@sfpma.com

 

   

   

   

Best of Luck to the Winner..

SFPMA

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If Your Association Fails to Hold Board Elections at an Annual Meeting, Do You Still Have a Board?

If Your Association Fails to Hold Board Elections at an Annual Meeting, Do You Still Have a Board?

  • Posted: Nov 04, 2019
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If Your Association Fails to Hold Board Elections at an Annual Meeting, Do You Still Have a Board? The Answer May Surprise You…

As Condominium and HOA attorneys, we often receive questions from our clients dealing with all the issues that can get in the way of conducting a successful annual meeting. Most often, it is the issue of not being able to achieve a quorum of owners in attendance—which stymies the Association’s ability to hold Board member elections, approve the budget, and take other important actions to further the HOA’s business for the coming year.  So what happens if an Association’s Bylaws calls for annual board elections, but the Association does not hold elections for a number of years?  Is there a Board? Does the Board have any authority? A recent case addressed these issues, and the court’s findings might surprise you.

Keep up to date with articles and information on SFPMA.COM

Facts

In a 2019 case, a Condominium Association sued an owner for violating the governing documents.  The owner claimed that the Association’s Board, who initiated the lawsuit against him, lacked the authority to sue (and lacked the authority to do anything for the Association) because the Association had not held board elections in recent history.  Instead, the same directors had been in place for many years, despite the mandate in the Bylaws that board elections should be held each year at the annual meeting. The Association had not held annual meetings, and as a result, no Board elections had taken place.

Court Rulings

The trial court agreed with the homeowner defendant that the Association Board did not have any authority to act on behalf of the Association because they did not follow the Bylaws and hold annual elections.  The Association appealed, and the Court of Appeals reversed the trial court’s decision, finding in favor of the Association, holding that the Board members did have authority because they were still “in power.”  Why?  The secret was held within the language of the Bylaws, which stated that Board members serve until the earlier of (1) the next annual meeting of the Association or (2) such time as the Board members are replaced.  As the Association never held an annual meeting, and the Board members were not replaced, the Board members still legally served as the Board.

Find Upcoming Events all over Florida on our Calendar

Lesson

Board members, beware—or at least, take care!  If your Association does not or cannot hold its annual meeting due to quorum problems (for example) it is likely that you will remain on the Board until your successor is elected.  Unless you have formally resigned your Board position as set forth in your Bylaws, you are still a director, with all of the duties, obligations, and authority that come along with your position.

Channel View East Condominium Association, Inc. v. Ferguson, 2019 WL 2865987 (Ct. App. Michigan).

By Lydia Chartre

 

 

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Statutory Limitation on Condominium Transfer Fees

Statutory Limitation on Condominium Transfer Fees

Statutory Limitation on Condominium Transfer Fees

A Reminder that the Limit is the Limit

Transfer fees are those fees an association may charge in connection with the sale or lease of a unit. There are significant differences between allowable transfer fees for homeowners’ associations as compared against condominium associations. When it comes to transfer fees for condominium associations, Florida law is patently clear – in no event may such a fee exceed $100 per applicant. In spite of this clear limitation, some condominium associations charge more than the statutory maximum, and doing so is not without significant consequence.

 

In fact, unit owners of a condominium association recently brought a successful class action lawsuit in Miami-Dade County against their condominium association that charged transfer fees beyond the statutory limit. That association now faces a significant financial impact from the suit. Not only must the association return the money charged over the statutory limit to each member of the class, the settlement stipulated that the association must pay $95,000.00 in attorney fees to the law firm representing the residents. The class period was from 2014 to 2019, and the association may end up paying over $200,000.00 to satisfy all the claims in the class. Yikes!

 

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Specifically, section 718.112(2)(i), Florida Statutes, provides that “no charge shall be made by a condominium association in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless i) the association is required to approve such transfer and ii) a fee for such approval is provided for in the declaration. In no event may such fee exceed $100 per applicant other than husband/wife or parent/dependent child, which are considered one applicant.” The law does allow the association to require a prospective lessee place a security deposit, not to exceed the equivalent of one month’s rent, into an escrow account maintained by the association.

 

It is important to note that the statute requires that the condominium’s declaration provide authority to the association to approve a transfer and to impose the transfer fee. If these powers are not granted in your declaration of condominium, the condominium association may not charge any transfer fee. If the declaration of condominium does provide for a transfer fee, then the association must abide by the statutory maximum.

 

It is not unheard of for more than one condominium association to attempt to circumvent the statutory limitation by changing the name of the fee. Some may call the charges “screening fees” or “move in fees,” but that does not change the fact that the fees are still legally considered transfer fees. Remember, the limit is the limit, regardless of whether the condominium association’s expenses in obtaining credit and criminal history reports exceeds the $100.00 limitation. Any condominium association charging more than the statutory maximum is violating the statute and opens itself up to liability. With the award of attorney fees, there is an incentive for attorneys to bring more cases challenging any transfer fees that violate the statute. Your condominium association could be liable for hundreds of thousands of dollars for charging improper transfer fees.

 

On the other hand, there is good news for homeowners’ associations, these statutory maximums only apply to condominium associations. However, homeowners’ associations are not without some statutory limitation. Section 689.28, Florida Statutes, declares that transfer fee covenants violate public policy by impairing marketability of real property. However, section 689.28(2)(c)7., Florida Statutes, does allow a homeowners’, condominium, cooperative, mobile home, or property owners’ association to charge a fee if the declaration allows such a charge. So, a homeowners’ association may only charge a transfer fee if the authority is granted to the association in the declaration. Just keep in mind, if your declaration specifies a set fee, your association is limited to the fee provided in the declaration.

 

Now is a good time for all board members to review their community’s governing documents and seek advice from the association’s lawyer as to whether any existing transfer fee complies with the statutory requirements. A simple check now can help your association avoid costly litigation in the future.

Article written by Jeff Rembaum of KBRLegal.com 
with permission for SFPMA to republish for our industry.

 

Kaye Bender Rembaum, Attorneys at Law

The law firm of Kaye Bender Rembaum, with its 19 lawyers and offices in Broward, Palm Beach and Hillsborough Counties, is a full service law firm devoted to the representation of more than 1,200 community and commercial associations, developers, and their members throughout the State of Florida. Under the direction of attorneys Robert L. Kaye, Michael S. Bender and Jeffrey A. Rembaum, the law firm of Kaye Bender Rembaum strives to provide its clients with an unparalleled level of personalized and professional service that takes into account their clients’ individual needs and financial concerns.

Thank You, SFPMA.COM

 

 

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THE FLORIDA LEGISLATURE NEEDS TO MANDATE CONDO AND HOA EDUCATION By Eric Glazer, Esq.

THE FLORIDA LEGISLATURE NEEDS TO MANDATE CONDO AND HOA EDUCATION By Eric Glazer, Esq.

  • Posted: Oct 28, 2019
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THE FLORIDA LEGISLATURE NEEDS TO MANDATE CONDO AND HOA EDUCATION

By Eric Glazer, Esq.

We all know that condo and HOA board members must get certified within ninety (90) days of getting on to their Board of Directors. Unfortunately however, Florida law allows board members to get certified either by attending an educational course or by signing a ridiculous, silly, self-serving, nonsensical affidavit that says you read your governing documents and promise to enforce them. If you live in a condominium, the affidavit does not require you to say you have read Florida Statute 718. If you live in an HOA, the affidavit does not require you to say you have read Florida Statute 720. In fact, many association documents contain illegal provisions. So leave it to the State of Florida to certify a director who promises to uphold and enforce the illegal provisions contained in their governing documents.

Just a few years ago a Miami Dade County grand jury delivered a blistering report about the state of condominiums in Miami-Dade County. It wasn’t flattering. The grand jury report was on the contrary, a blistering report about just how bad things are in many of our associations. Kickbacks, stealing and conflicts of interest seem to be everywhere. In response to this grand jury finding, The Florida Legislature passed numerous new laws making certain actions a crime. If anyone knows anyone who knows anyone that was arrested under any of these new crimes, let me know because I haven’t heard of anyone. I warned when these laws were passed that the local police departments have murders, rapes and robberies to solve, not election crimes. Sure enough, law enforcement rarely if ever gets involved.

One way that The Florida Legislature could have helped is by mandating that if you want to be a board member you must take an educational class approved by the Department of Business and Professional Regulation. There is no requirement under the law that a Board member be an attorney, accountant, contractor, or have any prior experience in association matters of any kind. Yet, when board members are elected or appointed, they are given the keys to the kingdom and are often times in charge of budgets in the seven or eight figures. They need to immediately know some laws, rules, regulations and have a general understanding of their governing documents. When they don’t, money is misspent. Lawsuits happen. Maintenance suffers and ultimately all the unit owners suffer financially. The lawyers do well however.

I have taught the Board Certification educational course to about 20,000 Floridians all across the state. These people wake up early, take time out of their busy lives and all want to become better board members and keep their association out of harm’s way by attending a 3 hour class. It is embarrassing for me to tell them that they were not required to attend today’s class and instead they could have printed out a stupid form off of the internet, signed it, and have become certified to the same extent as if you took this seminar. It’s insane and it’s insane that The Florida Legislature lets this shenanigans and this farce continue.

After having the honor and privilege of practicing in this area of law for 27 years I am delighted that The Florida Bar now recognizes Condominium and Planned Development Law as an area that is complicated and where attorneys themselves can become “certified.” I am honored to be one of a miniscule percentage of attorneys in the state to be certified in this area. Now it’s time for The Florida Legislature to step up to the plate, realize that education must be mandatory and make sure that board members don’t get certified by signing a dumb form. They have to attend a course for a few measly hours before they get to control millions of dollars in cash and real estate and potentially wreck the lives of their fellow owners. If they can’t find the three hours of time to attend the class how are they going to find the time to attend meetings, pass budgets and solve the association’s problems?

If you agree with me, then make your voice heard today. Not tomorrow. Right Now.

Here is the website to find your local Florida Senator and House members: https://www.flsenate.gov/senators/find

Send them an e-mail today that says:

“I’m writing to demand that The Florida Legislature remove the ability of officers and directors of community associations to become certified by signing an affidavit. All Florida community association directors and officers must be required to attend an educational course approved by the Department of Business and Professional Regulation.”

 

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HOA Balance Sheets

HOA Balance Sheets

HOA Balance Sheets

The balance sheet in your HOA financial statement is the quickest and easiest way to get a feel for the financial strength of your community association. There are three parts to a balance sheet: assets, liabilities, and equity.

Assets = Liabilities + Equity. This is the basic formula that your HOA balance sheet should follow. It will provide a general snapshot of how well your association is doing financially at a certain point in time whether it be at the end of every month, quarter, or year. It should be included in every official financial statement.

 

 

  • Assets – the positive. Assets are anything of monetary worth owned by your HOA. This includes things like reserve funds, petty cash, bank accounts, property, etc.
  • Liabilities – the negative. This will be anything owed by the association such as maintenance fees, improvements, or vendor bills. Anything that costs money will be a liability. Depreciation on community structures, vehicles, or equipment also counts as a liability and should also be added to the HOA balance sheet.
  • Equity – what’s left. Equity is the difference between the value of the assets and the value of the liabilities. To find equity, the formula can be rearranged as: Equity = Assets – Liabilities.

 

If you follow the formula and your equity is positive, good job! Your association is doing well and is bringing in more money than it owes. If equity is negative, it means that you should quickly reevaluate your finances; more money is being spent than is coming in.

Not all equity is created equal. Having an equity of $5,000 would be great for a small HOA that only brings in $8,000 monthly but not so great if your community collected $100,000 monthly. That’s where equity ratio comes in. Equity ratio can be calculated by taking your total equity and dividing it by total assets: Equity Ratio = Equity / Assets. Using the same example from above, the smaller HOA would have an equity ratio of 63% while the larger HOA’s ratio would be only 5%. When listed as a ratio, it becomes quite clear which HOA is more financially sound despite having the same total equity.

HOA balance sheets, whether prepared monthly, quarterly, or annually, are a good representation of the daily operation of your community association. A negative equity on an annual sheet does not only mean that an HOA has lost money over the year, but it also means that day to day operations are flawed and need to be reconsidered.

Just as with financial statements, the more frequently balance sheets can be made up, the more insight they can provide into the financial workings of a community association. While it is perfectly acceptable to release financial and balance sheets annually, it is preferred to release them monthly or quarterly. The more information your board of directors has to work with, the more effectively they can operate.

 

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Building Bridges Through Communications

Building Bridges Through Communications

  • Posted: Oct 19, 2019
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Building Bridges Through Improved Communications

Before you can improve on something, it helps to have a clear picture of where the problems are. Take an honest look at what’s been going on between your HOA board and the association members. Perhaps you’ve already tried (several times) to connect with the members of your HOA, but it just doesn’t seem to work. They won’t listen. Or they seem to listen and then ignore what was said. The board members wonder why they can’t get anything through to the association members.

 

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What’s wrong with the bridge we already have?

add this to the article building bridges.The Bridge to Nowhere, located in Southern California was intended to connect two places, but due to flooding, the original road was re-routed and now the bridge is part of a hiking trail. However, its use as a trail is often hampered because the trail going to it washes out, leaving the bridge practically inaccessible. In building a communication bridge, consider the approach—from both sides.

Be knowledgeable and confident in your purpose for the communication in the first place. Make sure the reason is clear and easy to see. As much as possible, prepare the other end of the bridge as well. Is it evident to the association members why they need to pay attention to the board and welcome the information into their lives? And do they have a clear way to approach the board with reactions to what the board says or to express both related and unrelated concerns that are common to the community? Is the board prepared to welcome what the owners say?

Two lanes

Does your communication bridge accommodate traffic going in two directions? Help your association members be prepared to receive your communication and deliver it in a means that is relevant and relatable.

Speak the same language as the members. If you are trying to communicate an issue that the board has researched in-depth or if it is closely related to your personal interests or profession, it might be easy to slip into using jargon. If the members don’t know what you’re saying or if they think you’re being arrogant, they will likely turn you off.

Be direct

What if bridges meandered the way a scenic road up a mountain does, switching back and forth? While both engineering feats serve a purpose, that purpose is not the same and cannot be achieved by the same means. Know what you have to say and say it as concisely as possible.

Maintenance

Even the best bridges require maintenance. Potholes form; supports and structure are subject to forces of nature and friction; the vehicles using it change in size and shape. Over time, the communication bridge between the board and the association members will need attention. The people on the board and in the association fluctuate, economics change, the social environment changes, and nature can affect the physical environment too.

Monitor the use of your communication bridge and be aware of potential problems as they arise. Different communication modes are appropriate at different times. While communicating through brief, direct emails may work at times, there will be other times a regular newsletter will be necessary or maybe you can use bills posted on bulletin boards. Sometimes phone calls are more helpful and other times just keeping the bridge clear by friendly, personal communication like a “hello” when you meet at a mailbox will support more weighty business communications down the road.

Transparency

A bridge smothered in fog may be daunting to traverse. If your association members feel they can’t see what’s going on, they are less likely to approach and you’re left with a communication gap instead of a bridge. Do not shroud important details in mystery and allow members to stumble onto them. Keep relevant information easily visible and accessible.

Structure

Every part of a bridge must be structurally sound to create a safe, positive transfer from one place to another. Make sure the structure supporting your communication bridge is sound. Are you using a management company? They are an important part of your structure. Make sure they are clear on the intent of the board and that the association members know how to access both the management company and the board with their concerns.

 

 

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PANHANDLE RESIDENTS! Make sure to attend this important Townhall! – “Navigating Complex Insurance Claims”

PANHANDLE RESIDENTS! Make sure to attend this important Townhall! – “Navigating Complex Insurance Claims”

  • Posted: Oct 15, 2019
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PANHANDLE RESIDENTS! Make sure to attend this important Townhall! You will be able to share your experience of navigating complex insurance claims resulting from Hurricane Michael.

It’s been a year since Hurricane Michael and over 20,000 claims are still open due to insurance companies delaying your road to recovery. Don’t miss the chance to have your voice heard!

 

DETAILS:
Hosted by Florida’s Insurance Consumer Advocate, Tasha Carter
THIS Saturday, October 19, 2019 from 10:00AM – 2:00PM
Located at Gulf Coast State College (Student Union East Building) 5230 W. US Highway 98 Panama City, FL 32401
Email YourFLVoice@MyFloridaCFO.com for more information

 

 

In cooperation with:  Cohen Law Group

You work hard for your money, but there are so many instances where an insurance company may deny or severely reduce your claim after completing restoration work. Learn how to get the most out of the insurance claims process!

Members of SFPMA

 

 

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