Comments: Comments Off on SHOULD RESERVES BE MANDATORY?
I hate beating around the bush, so I want to get to the point. A financial crisis is coming and it’s
going to be a big one. It’s also going to hit those that can least afford it. It’s going to result in massive
amounts of foreclosures. It’s going to result in countless cases of elderly persons being displaced
from their homes. The worst part is, it’s absolutely avoidable but I don’t believe any legislator would
ever have the courage to float a bill to save the pending disaster.
I was at a meeting last night in a 55 and over condominium. Elderly owners were complaining that the pipes are getting
old, there are leaks, and they sometimes have to come out of pocket a few hundred bucks in order to clean up the mess in their unit
and/or repair that broken pipe. They are complaining about bills for a few hundred bucks and find it difficult to pay them because
their sole income is social security.
To state the obvious, there is no reserve account. There never will be. Generally, senior citizens don’t believe in reserving
funds for repairs that may be necessary a decade or two from now because they believe they won’t be here anyway. So, year after
year goes by, decade after decade goes by and there is never a reserve fund to fall back on should a major repair become necessary.
Think of how much building has gone on in the past 50 years. It is staggering. But the buildings are getting older. As the buildings
start to approach the 40 year mark or more, things start to break down and repairs become unavoidable. Concrete restoration is
incredibly expensive, and unavoidable. Replacement of pipes is incredibly expensive, and unavoidable. And the same goes for
electrical renovations and roof replacements. All unavoidable. Yet, so many people, especially seniors, are rolling the dice thinking
that none of these repairs will be necessary while they own the property. That may be true for now, but eventually, everyone rolls
a 7. Like it or not, some form of reserves should be mandatory
and not subject to being waived. There, I said it. Let’s get rid of the
“life expectancy” formula the state says you should follow but nobody
does. It’s a joke anyway. We all know the truth that the life
expectancy of the roof somehow gets longer, the closer you get to the
original estimate of how long it was going to last. Five years ago it
had a five year life expectancy. Money is tight, so today it has a new
10 year life expectancy. Somehow, like fine wine, the roof got better
with age. We all know that happens, and it happens every day. So
how about we make things simple. Let’s just say every condominium
must contribute 10% of its annual budget to reserves for roof,
plumbing, electrical, structural and painting. It all goes into one pot
and it can be used for any repair necessary for those categories. It
can’t be waived. If however an association wants to contribute more,
they can.
If we implemented this, I’m guessing the average monthly
increase for most condominiums that are not already reserving funds
would be anywhere from $25.00 to $75.00 per month per unit. I know
that for some that increase is not easy. However, it’s going to be a lot
more expensive if any one of these inevitable repairs become
necessary and it’s time to pass a special assessment in the thousands
or tens of thousands of dollars. What do you think?
Comments: Comments Off on Omnibus Bill (SB 630) Brings Changes for Florida Condos, Cooperatives and HOAs
This year’s large community association omnibus bill will likely become law. This bill, which bears an effective date of July 1, 2021, contains changes which will impact condominiums, cooperatives and HOAs. At more than 100 pages, we will discuss only some of those changes in today’s CALL Alert. This bill, along with all the others CALL has been tracking throughout the 2021 Legislative Session, will be summarized in our year-end Legislative Guidebook.
Several of the Condominium changes include:
If a condominium association’s insurance policy does not provide rights for subrogation against the unit owners in the association, an insurance policy issued to an individual unit owner may not provide rights of subrogation against the condominium association. This will help prevent the rash of unfounded negligence claims against associations we’ve seen filed by at least one insurance company operating in Florida but may unfortunately result in increased premiums if subrogation against the culpable party in a loss is no longer possible.
Bids for work to be performed must be maintained for at least 1 year after receipt of the bid. Previously bids had to be maintained from the inception of the association.
A renter would have the right to inspect and copy only the declaration of condominium and the association’s bylaws and rules. Previously, a renter was only allowed to inspect and copy the Bylaws and rules.
An association may not adopt rules requiring a member to demonstrate any purpose or state any reason for a record inspection.
For condominiums with 150 or more units, an association, in lieu of posting copies of certain required documents to a website, may make those documents available through an application that can be downloaded on a mobile device.
Condominium associations may extinguish a discriminatory restriction in the governing documents (e.g., a provision which restricts ownership, occupancy or use of real property on the basis of race, color, national origin, religion, gender or disability) by board vote alone.
Confirms that board term limits are intended to be prospective with the service start date being on or after July 1, 2018.
Transfer fees will be increased to not exceed $150.00 (from the current $100.00 cap) and may be adjusted every 5 years in accordance with the Consumer Price Index (CPI).
• Petitioners in recall disputes may now choose to either go directly to court with the dispute or to arbitration.
Contracts with a service provider that is owned or operated by a board member (or certain relatives with a financial relationship) are no longer prohibited.
The board may not prohibit the installation of a natural gas fuel station, and unit owners installing such stations must comply with all federal, state, and local laws.
A board may make available, install, or operate an electric vehicle charging station or a natural gas fuel station on the common elements or association property and establish the charges or the manner of payments by the unit owners, residents, or guests who use such stations. The station installation, repair, or maintenance will not constitute a material alteration or substantial addition to the common elements or association property.
Labor performed on or materials furnished for the installation of a natural gas fuel station or electric vehicle charging station may not be the basis for filing a lien against the association.
A challenge to a plan of termination may be handled via arbitration or mediation of the dispute.
This new law would allow the parties in a condominium dispute to now choose either presuit mediation (which has been used in HOA disputes) or arbitration through the Division of Condominiums, Timeshares and Mobile Homes (“Division”).
For election and recall disputes, mediation will not be an option, and such disputes must be arbitrated by the Division or filed in court.
The board can use emergency powers in response to damage or injury caused by or anticipated in connection with any occurrence, or threat thereof, whether natural, technological, or manmade, in war or in peace, which results or may result in substantial injury or harm to the population or substantial damage to or loss of property. This language was expanded to include emergencies caused by contagion.
The board may exercise its emergency powers to conduct board meetings, committee meetings, elections, and membership meetings, in whole or in part by telephone, real-time videoconferencing, or similar real-time electronic or video communication with notice given as is practicable.
Such notice may be given in any practicable manner, including publication, radio, US mail, the internet, electronic transmission, public service announcements, and conspicuous posting on the condominium property or association property or any other means the board deems reasonable under the circumstances.
Based upon advice of emergency management officials or public health officials, or upon the advice of licensed professionals retained by or otherwise available to the board, determine any portion of the condominium property or association property unavailable for entry or occupancy by unit owners, family members, tenants, guests, agents, or invitees to protect the health, safety or welfare of such persons.
The board may mitigate further damage, injury or contagion, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus or contagion. This section may be used to justify heightened sanitation protocols.
The board can contract, on behalf of any unit owner or owners, for items or services which are necessary to prevent further injury, contagion, or damage, including, without limitation, sanitizing the condominium property or association property.
The emergency powers are limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the unit owners and the unit owners’ family members, tenants, guests, agents, or invitees and shall be reasonably necessary to mitigate further damage, injury, or contagion and make emergency repairs.
Most importantly, when it comes to the changes to the emergency powers provisions in 718.1265, F.S., an association may NOT prohibit owners, tenants, guests, agents, or invitees of a unit owner from accessing the unit and common elements and limited common elements appurtenant thereto for if such access is needed to facilitate the sale, lease or other transfer of title to the unit. Presumably this language was included at the urging of the real estate industry because many associations restricted open houses and other in person showings of property during the height of the COVID-19 pandemic as well as in move-ins and move-outs in some cases.
Specifies that fines are due 5 days after notice of the approved fine is provided to the unit owner and, if applicable, to any tenant, licensee or invitee of the unit owner. Previously, fines were due 5 days after the date of the Fining Committee meeting at which the fine was approved.
Multicondominium associations may adopt consolidated or combined declaration of condominium but cannot merge the condominiums or change the legal descriptions of the condominium parcels, unless accomplished in accordance with law. This change applies to associations existing on July 1, 2021.
Expands the Division’s jurisdiction to now investigate complaints related to the maintenance of association records.
Several of the Cooperative changes include:
The definition of “Unit” is amended to state that “an interest in a unit is an interest in real property”.
The association may not require a member to demonstrate any purpose or state any reason in order to inspect the official records.
A board or committee member participating in a meeting via telephone, real-time video conferencing, or similar real-time electronic or video communication counts towards a quorum and such member may vote as if physically present.
The Petitioner in a recall dispute may choose to either go directly to court or to pursue arbitration with the Division.
Cooperative associations may extinguish a discriminatory restriction in their governing documents by Board vote alone. See the definition of a discriminatory restriction in the Condominium section above.
The same changes to the emergency powers language discussed above in Chapter 718 are also set forth in Chapter 719, F.S.
Several of the HOA changes include:
The definition of Governing Documents will no longer include Rules and Regulations.
In addition to the authorized means of providing notice of a board meeting, the association may also adopt a rule for posting the meeting notice and agenda on the association’s website or an application and must send an electronic notice including the hyperlink to the website or application to members whose e-mail addresses are included in the association’s official records.
The association must maintain for at least 1 year after the date of the election, vote, or meeting the ballots, sign-in sheets, voting proxies, and all other papers and electronic records relating to the parcel owners’ voting.
Information obtained in a gated community in connection with guests’ visits to parcel owners or community residents are records not accessible to members or parcel owners.
Reserves will only be considered mandatory if they are approved by a majority of the total voting interests or if the declaration, articles or bylaws obligate the developer to create reserves.
If the budget does not provide for reserve accounts under Section 720.303(6)(d), or the declaration, articles or bylaws do not obligate the developer to create reserves, and the association is responsible for the repair and maintenance of capital improvements that may result in a special assessment if reserves are not provided or are not fully funded, each financial report for the preceding year must contain certain disclosure language in conspicuous type.
The Petitioner in a recall dispute may choose to go directly to court or pursue arbitration with the Division.
Specifies that fines are due 5 days after notice of the approved fine is provided to the parcel owner and, if applicable, to any tenant, licensee or invitee of the parcel owner.
Removes the requirement that notices required by Section 720.306, Florida Statutes, be sent to the address on property appraiser’s website-notices only have to be sent to the mailing addresses found in the official records of the association.
Transports over the grandfathering of rental rights which has been in the Condominium Act for many years to the HOA Act. Any governing documents or amendments that prohibit or regulate rental agreements will apply only to owners who acquire title to the parcel after the effective date of the governing document or amendment, or to a parcel owner who consents, individually or through a representative, to the governing document or amendment. Existing owners who vote “no” or don’t vote on the rental restriction will not be governed by same. This restriction, however, does NOT apply to amendments or governing documents which seek to prohibit or regulate rentals for terms of less than six (6) months or to limit parcel rentals to no more than three (3) times per year. It will be important for HOAs with more than 15 parcels (this grandfathering of rental rights does not apply to associations with 15 or fewer parcels) who wish to impose other rental restrictions to do so before July 1 if they wish those restrictions to apply to all members.
For purposes of determining the applicability of a rental amendment or rental restriction, a change in ownership does not occur when a parcel owner conveys the parcel to an affiliated entity, when beneficial ownership of the parcel does not change, or when an heir becomes the parcel owner.
The Petitioner in an election or recall dispute now has the option to file for arbitration or file in court. These disputes are not eligible for presuit mediation.
Clarifies that turnover of control of an HOA will be triggered three months after 90 percent of the parcels in all phase of the community that will ultimately be operated by the homeowners’ association have been conveyed to members other than the developer.
HOA boards may extinguish a discriminatory restriction in their governing documents by board vote alone. See the definition of a discriminatory restriction in the Condominium section above.
The same changes to the emergency powers language discussed above in Chapters 718 and 719 are also being added to Chapter 720, F.S.
The foregoing are just some of the changes this bill creates for your association operations. Florida’s Legislative Session is scheduled to end on April 30th. Stay tuned for additional CALL Alerts and as promised, our comprehensive Legislative Guidebook.
Donna DiMaggio Berger is a member of the College of Community Association Lawyers (CCAL), a prestigious national organization that acknowledges community association attorneys who have distinguished themselves through contributions to the evolution or practice of community association law and who have committed themselves to high standards of professional and ethical conduct in the practice of community association law. Ms. Berger is also one of only 129 attorneys statewide who is a Board Certified Specialist in Condominium and Planned Development Law.
Comments: Comments Off on AND WHILE YOU’RE AT IT…. PLEASE FIX THE INSURANCE STATUTE
No doubt some changes are on the way for condominiums as a result of the Surfside tragedy. The changes are long overdue. Here’s another long overdue change that is necessary..the condominium insurance statutes.
Suppose I told you that under Florida law, there is no absolute requirement that your condominium association insure the building(s). Sounds crazy right? Yet, here is what the law actually says:
d) An association controlled by unit owners operating as a residential condominium shall use its best efforts to obtain and maintain adequate property insurance to protect the association, the association property, the common elements, and the condominium property that must be insured by the association pursuant to this subsection.
What in the world does “best efforts” mean? Does it mean that “We made a few calls…..the premiums were too high…..so we forgot about getting insurance?” Is that using best efforts? Have you ever read such a contradictory statute? On the one hand it says the board must use its best efforts. On the other hand, the same statute says that the condominium property “must be insured.” Which is it?
Think for a second if Champlain Towers was not insured? The very thought of it sounds impossible, but it isn’t.
But wait…..it gets worse. Even if the property is insured the statute says:
The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.
So, let’s say your condominium property is insured, but you did not purchase a separate HO-6 policy for your unit. All you get back is your four walls. That’s right, basically a shell.
What about flood insurance? Is that mandatory in Florida for your condominium? No, it isn’t. The association “may” purchase it.
Just to make things crystal clear for our esteemed legislators, at the moment there is absolutely no requirement to fund reserve accounts so that the money is there should major life threatening repairs become necessary. And to make matters worse, if a tragedy does befall the property and the owners, there’s not even a requirement that the building was to be insured.
This would almost be comical if it weren’t so sad. We live in a state that:
1. Every year gets hit with tropical storms and hurricanes;
2. Suffers sinkhole collapses;
3. Has thousands of buildings lining our coasts and the buildings take a beating from the salt water;
4. Does not require unit owners in a condominium to put away reserve funds should major repairs be necessary
5. Does not require associations to purchase insurance, but only use their “best efforts” which is undefined;
6. Is home to more senior citizens on fixed incomes than almost any other state in the country.
You do the math. When the special assessments start coming as a result of massive repairs that are required on our aging buildings, associations will look to save money elsewhere. Yes, many boards believe it or not will take the position that insurance is not necessary, or that despite their “best efforts” it is simply unaffordable. I have met boards like that already.
In the upcoming legislative session, The Florida Legislature has a real tough job on their hands. Passing laws that reflect the true cost of actually living in a condominium, and no longer giving unit owners and board members enough rope to hang themselves with.
Comments: Comments Off on Exclusive Savings On Fountains & Aeration Labor Day is over but the deals aren’t! Purchase a new fountain or aeration system and receive FREE installation.
We believe balanced, healthy waterbodies help create meaningful experiences on and around the water. That’s why we are excited to extend this exciting offer that will help enhance your waterbody (and save you money)…
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Deal expires October 31. Maximize your savings NOW.
*Free basic installation, or $700 off installation, with purchase of new fountain or aeration system. Offer valid for contracts signed after 09/07/21. Installation must be prior to 12/31/21.
Comments: Comments Off on Can Remote Meetings Be Held Now That the State of Emergency Has Expired?
Can Remote Meetings Be Held Now That the State of Emergency Has Expired?
The “state of emergency” that had been imposed by Governor DeSantis in light of the COVID-19 pandemic expired on June 26, 2021. As a result, the “emergency powers” given to condominium, cooperatives, and homeowners’ associations in Sections 718.1265, 719.128, and 720.316, Florida Statutes, respectively, are no longer in effect. The emergency powers that were in effect during the COVID-19 state of emergency included conducting board meetings and membership meetings with notice given as is practicable, but did not specifically give associations the authority to conduct meetings remotely. Nevertheless, many associations did hold meetings remotely in an effort to slow the spread of the virus and to protect its residents and employees. (NOTE: The emergency powers statutes were amended effective July 1, 2021, and now specifically provide that during a declared state of emergency, the association may conduct board meetings, committee meetings, elections, and membership meetings, in whole or in part, by telephone, real-time videoconferencing, or similar real-time electronic or video communication.)
Now that the state of emergency has expired, what meetings can associations hold remotely, either in whole or in part?
With regard to board meetings, the statutes specifically address the board members’ participation by telephone or videoconferencing, but do not address whether owners may participate remotely or whether the owners can be required to participate remotely. The statutes do provide that meetings of the board must be “open” to all owners. If your board wishes to hold remote board meetings, the board can allow owners to also participate remotely in the same manner as the board members by giving the owners the call-in number or videoconference link. The law is unsettled as to whether a remote only meeting is valid, as some owners may not have the capability or desire to participate remotely.
With regard to owner meetings, the statute governing corporations not-for-profit, Section 617.0721(3), Florida Statutes, provides that owners and proxyholders may participate remotely and can also vote remotely if authorized by the board of directors, and subject to such guidelines and procedures as the board may adopt. But as with Board meetings, none of the statutes indicate whether “remote only” meetings, which require the owners to participate remotely, are valid. (Note that this type of “remote voting” contemplated by Section 617.0721(3) is different than the electronic/online voting that is permitted by Sections 718.128, 719.129, and 720.317, Florida Statutes).
For owner meetings at which an election will be held, the issue is more difficult. The Condominium and Cooperative Acts require owners to vote by “secret ballot” and many homeowners’ associations governing documents also have a secret ballot requirement. In that case, an owner participating remotely would be unable to vote on the election of directors unless the owner voted in advance of the meeting or unless the association had authorized electronic/online voting pursuant to Sections 718.128, 719.129, and 720.317, Florida Statutes). Further, in condominium and cooperative associations, the “election committee” that opens and counts the election ballots must be physically together, and owners are entitled to observe the ballot counting process in the owners’ “presence”.
Because of these legal issues, a “hybrid” approach where owners are given the option to participate remotely, but are not required to participate remotely, is the best approach. Some meetings lend themselves to remote participate more than others. For instance, board meetings and non-election owners’ meetings are the types of meetings that can be managed remotely. However, if there is an election, there will need to be additional considerations.
Boards should discuss these issues with the association’s attorney so that all of the necessary board authorizations can be prepared and approved by the board.
Comments: Comments Off on Budget. Reserves. Insurance. Collections. How your community association addresses these will determine its financial health and well-being for years to come.
Budget. Reserves. Insurance. Collections. How your community association addresses these will determine its financial health and well-being for years to come.
To ensure the financial well-being of the association, boards and managers should focus on at least four factors in the association: budget, reserves, insurance, and collection practices. This article will take a brief look at each of these, but this is not a finite list. It is recommended that you consult with your association attorney and accounting professionals to ensure you are doing all that you can to address these and any other financial facets of the association in the best way possible for your community.
Budgets
Without sufficient funds, the association cannot carry out all the duties it is required to undertake pursuant to the Florida Statutes or its governing documents. The association obtains these funds from its members. Unfortunately, many associations tend to try to keep the budgets as lean as possible to keep the assessments as low as possible. While no one likes to pay high maintenance fees if that can be helped, no one is served well by an association maintaining an artificially low budget to keep the monthly assessments low either.
The budget process should be an honest evaluation of the known and expected expenses the association will have in the coming year, and the ultimately adopted budget should reflect as much. A budget committee can be formed to help the board with the budgeting process. The Florida Condominium Act requires the proposed annual budget of estimated revenues and expenses to be detailed and to show the amounts budgeted by accounts and expense classifications.
Rather than minimizing anticipated expenses in the hopes they won’t be needed after all or creating a budget on an expectation that certain expenses may be negotiated for a lower price in the future, the association should budget on what things are actually expected to cost. Thereafter, if the lower price is negotiated, the budget can be amended downward. Most owners will agree that an amendment to lower the budget is much more palatable than a surprise special assessment because the anticipated expense did not go down as previously hoped.
Properly budgeting the association is the first step in securing the financial well-being of the association.
Reserves
The next step in ensuring the financial well-being of the association is to ensure the monies necessary will be available when expensive, but expected, repairs and maintenance are needed. This is the concept of reserve funding. Florida community association law requires associations to establish and collect “reserves” as part of their annual budgets. This means that an association must create a separate budget that will ensure it collects enough money every year so that when the estimated useful life of the component is expired, the association will have saved the amounts necessary to replace the component without the need for a special assessment.
For example, condominium associations are required by law to collect reserve amounts for the roof, building painting, and pavement resurfacing, regardless of the amount of the replacement costs of these and for any item for which replacement or deferred maintenance will exceed $10,000. The monies in these reserve accounts must be used for the purposes they were collected unless the owners vote to approve their use for alternative purposes.
While associations must include full funding of statutory reserve accounts in each year’s budget, the statutes allow the owners to vote to waive full funding of reserves. In such a vote, or in a vote to use reserve monies for other purposes, the statutes require warning language to be printed on the voting documents to advise owners that voting to use reserve money for another purpose or waiving reserves altogether may lead to special assessments in the future.
Reserve funding should be part of the budgeting process. Maintaining proper reserves ensures the association’s ability to handle its expected needs effortlessly by saving for this over time.
Insurance
In the case of the association’s financial well-being, two kinds of insurance are important. The most obvious may be the property and/or liability coverage that every association should have to cover damage to property or persons due to casualty or other unanticipated events. This kind of insurance is extremely important because, besides the fact that insurance is required by law or the association’s governing documents, an association can suffer untold damage that could create substantial financial strain on its members if they must pay for the repairs or damages out of pocket because the association did not carry the proper insurance.
In addition, however, it is also very important to remember that among the numerous provisions in the Florida Condominium Act and the Florida Homeowners Association Act, there is a requirement that the association carry fidelity bonding/insurance. For example, Florida Statute §718.111(11)(h) states:
The association shall maintain insurance or fidelity bonding of all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this paragraph, the term “persons who control or disburse funds of the association” includes, but is not limited to, those individuals authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association shall bear the cost of any such bonding.
These fidelity policies help protect the association against the financial loss in cases of defalcation of association funds.
Collection Practices
The association should have fair, but effective, collection practices and policies in place. While associations often feel the need to give some owners time to catch up with payments, or delay “sending the file to the attorney” to “help out” the owner, this can create a number of unanticipated problems for the association’s finances. First, an uneven application of “giving an owner time” can lead to potential defenses to legal action by those who were not “given time.” Second, many boards woefully underestimate exactly how long collections and foreclosure processes can take from start to finish.
Prior to the 2021 legislative session, the statutes already required the association give notice to owners far in advance of the association filing a claim of lien and then again waiting a long time before proceeding to filing a complaint for foreclosure of the claim of lien. The 2021 statutory changes have further expanded the timelines. Now, associations must give an owner a 30-day notice before even sending the file to the association attorney for collections. Once the attorney receives the file, it must give the owner 45 days’ notice of the association’s intent to file a claim of lien for delinquent assessments.
Thereafter, if the owner still has not paid the delinquent amounts, another 45-day notice must be sent to the owner advising of the association’s intent to foreclose the lien, prior to filing the complaint to foreclose. All told, a condominium association, for example, would have to wait at least 120 days after it decided to send the file to the attorney for collections before it would be able to even just file a complaint to foreclose a claim of lien for delinquent assessments.
Associations should consult with their legal and accounting professionals to ensure they have and consistently implement a collections policy to rein in delinquencies and send out the appropriate notices to owners as soon as possible to avoid even longer and more drawn-out collections of needed funds.
Again, this is not a finite list of considerations an association should take into account related to the association’s financial well-being. However, these issues do form the base for the association’s economy and should be top of mind for boards and managers.
Lilliana Farinas-Sabogal is a Board Certified Specialist in Condominium and Planned Development Law and a shareholder in Becker’s Community Association and Business Litigation practice groups. In addition to her experience assisting community associations with day-to-day management and operation of governing their communities, she advises Boards of Directors, unit owners, and community association managers on how best to resolve their contractual and transactional disputes and issues. To learn more about Lilliana, please click here.
Comments: Comments Off on BOARDS ARE NOT POWERLESS WHEN IT COMES TO COVID By Eric Glazer, Esq.
BOARDS ARE NOT POWERLESS WHEN IT COMES TO COVID
By Eric Glazer, Esq.
It’s hard to believe that we have been dealing with COVID for a year and a half now. It’s harder to believe that it looks like we will be dealing with it for at least another year and a half. It’s a never ending nightmare with no end in sight apparently. Who would ever have thought this could happen?
While we are constantly being told about social distancing, wearing masks, getting vaccinated and avoiding gatherings, as many of you know it is extremely difficult to mandate and practice these objectives in a condominium setting. Now that the State of Emergency has been lifted (obviously too soon) it is even harder, because the Boards of Directors don’t have the emergency powers any longer.
So what do we do now? Are Boards prohibited from making rules that protect the health, welfare and safety of the community in regards to COVID, simply because the emergency powers statute is no longer in play? I say HELL NO.
Florida Statute 718.123 (for condominiums) states the following:
The entity or entities responsible for the operation of the common elements, common areas, and recreational facilities may adopt reasonable rules and regulations pertaining to the use of such common elements, common areas, and recreational facilities.
Florida Statute 720.304 (for HOAs) states the following:
The entity or entities responsible for the operation of the common areas and recreational facilities may adopt reasonable rules and regulations pertaining to the use of such common areas and recreational facilities.
In Hidden Harbour Estates, Inc. v. Norman, 309 So.2d 180, 181–82 (Fla. 4th DCA 1975), the court explained the unique character of condominium living which, for the good of the majority, restricts rights residents would otherwise have were they living in a private separate residence:
It appears to us that inherent in the condominium concept is the principle that to promote the health, happiness, and peace of mind of the majority of the unit owners since they are living in such close proximity and using facilities in common, each unit owner must give up a certain degree of freedom of choice which he might otherwise enjoy in separate, privately owned property. Condominium unit owners comprise a little democratic sub society of necessity more restrictive as it pertains to use of condominium property than may be existent outside the condominium organization. Neuman v. Grandview At Emerald Hills, Inc., 861 So.2d 494, 497 (Fla.App. 4 Dist.,2003)
The statutory test for rules regarding the operation of the common elements of the condominium is reasonableness. Neuman v. Grandview At Emerald Hills, Inc., 861 So.2d 494, 497 (Fla.App. 4 Dist.,2003)
There is no doubt in my mind that at this point in time, an association may continue to impose rules and regulations regarding the common elements that the association previously had in effect during the State of Emergency. I doubt highly that an arbitrator or judge would say that limitations on the number of people in the pool, elevator, clubhouse or exercise room during this pandemic is an unreasonable rule. I can’t imagine requiring masks in the common areas would be considered an unreasonable rule, especially when the CDC is recommending it. There are obviously other rules that absolutely may be considered reasonable, especially if you’re in a 55 and over community and the population is at great risk.
I’m getting calls from associations who are wondering if they are now powerless to take necessary precautions to avoid the spread of COVID. Again, the answer is you are not powerless and on the contrary, never lost your ability to continue to make reasonable rules to protect your community.
So what do you need to do? Put the proposed rule on an agenda for a properly noticed Board meeting. At the board meeting, make it extremely clear why the rule is being made. Put in on the record and in a resolution or motion that the Board is making this reasonable rule taking into account the health, welfare and safety of the community. Leave no doubt.
And if you’re wrong? I always say that it’s better to be tried by 12, than carried by 6.
Comments: Comments Off on Learn Everything about Reserve Funds For Homeowners Associations
Although reserve funds are often not mandatory, an ample reserve can play a big role in protecting a community’s long-term financial health.
To function as intended, a homeowners’ association (HOA) must rely on assessment revenue from its members. Most communities calculate assessments, at least in part, based on an annual budget of anticipated expenses. These typically include the costs involved in performing all of the HOA’s maintenance duties, procuring necessary insurance, and covering overhead, along with any other fixed or reasonably foreseeable outlays. The resulting gross budget is then divided among the members of the association, and homeowners are assessed accordingly.
When creating an annual budget in this manner, it’s generally a good idea to be as precise, analytical, and transparent as practically possible. However, a budgeting approach that relies exclusively on predetermined, repeating, line-item expenses doesn’t leave much room for error. After all, what if an essential common element is unforeseeably damaged—resulting in significant repair or replacement costs—and there’s no money in the budget or insurance to cover the loss? Or it may be that the association has some legal issues arise and incurs attorney’s fees much higher than could have been reasonably anticipated. And, of course, some common elements don’t need maintenance every year, but, when maintenance time comes, it’s costly.
Rather than get caught scrambling for cash when an unexpected contingency or major maintenance need arises, many communities maintain “reserve accounts” or “reserve funds,” as a sort of back-up savings slated for emergencies, long-term upkeep costs, and irregular expenditures. Although reserve funds are often not mandatory, an ample reserve can play a big role in protecting a community’s long-term financial health.
What are Reserve Funds?
We’re all familiar with the differences between checking and savings accounts. Aside from cash itself, a checking account is as liquid as assets get. You use it to pay bills, buy groceries—the sort of everyday expenditures it takes to run a household. A savings account, on the other hand, serves as a rainy-day fund you can tap when something unexpected arises—like, say, your vehicle needs a new catalytic converter.
Most homeowners’ associations have an operating account or similarly designated checking account to cover the routine expenses. Office supplies and regular maintenance of common elements, for instance, are typically paid from the operating fund.
An HOA’s reserve fund, in contrast, is an account dedicated to unanticipated and deferred expenditures, particularly large ones. The association allocates money toward its reserve account over time so that, when a costly repair or comparable outlay becomes necessary, cash reserves are available to handle the expense without sacrificing day-to-day functions.
By way of example, an HOA might pay out the costs of routine snow removal from its operating account. If the community expects to need plowing a few times each winter, the board will build the costs into the annual budget. But when all the plowing over the years leaves a significant portion of the development’s roads in need of repaving, the money is more likely to come from a reserve fund.
Reserve requirements are not addressed under every state’s HOA laws. And some states that do address them, leave a lot to the board’s discretion. More commonly, reserve account standards are found in a community’s declaration or bylaws. Statutes governing condominiums are usually more explicit in setting forth precisely what is required of an association with regard to reserves.
The Purpose of Reserve Funds
An association’s annual budget takes into account reasonably foreseeable expenses like landscaping, equipment upkeep, and payroll if the HOA has employees. But when an association-owned building needs a new roof, the community pool requires a major repair, or all the equipment in the fitness center starts breaking down, the unbudgeted costs will need to be paid from reserves.
A reserve fund can also be used to cover expenses that are not necessarily unforeseen, but arise infrequently enough that it wouldn’t make sense to include them within annual budgets. If the community’s tennis courts need to be resurfaced every ten years, the board might hold back in reserve around ten percent of the cost each year so that, when the time comes, the resurfacing costs can be paid outright. Of course, it’s not always so easy to predict precisely how much money will be needed.
Boards and Reserve Accounts
For the most part, deciding just how much cash a community needs to hold in reserve is the responsibility of an association’s board. Under state HOA and condominium statutes, board members owe a “fiduciary duty” to the association. See, e.g., Fla. Stat. §§720.303(1), 718.111(1); 765 ILCS 605/18.4. The obligations of a fiduciary are among the highest recognized by the law. In carrying out their responsibilities, a board and its members must act in good-faith, prudently and loyally, and always in furtherance of the association’s best interests. Id.
“Board members must avoid conflicts of interest when budgeting and allocating reserves.”
The duty of good-faith loyalty includes not wasting or misappropriating an association’s money, including reserves. HOA funds should only be used for their intended purposes and in the best interests of the community. Anything less potentially breaches the board’s fiduciary obligation. Condo associations in Florida, for instance, can only expend reserve funds for authorized reserve expenditures or if a specific outlay is approved in advance by majority vote of the association. Fla. Stat. §718.112(2)(f)(3).
In furtherance of their fiduciary duties, board members must avoid conflicts of interest when budgeting and allocating reserves. If a board member, family member, or related business could potentially bid on or otherwise benefit from an association contract, that board member should recuse him or herself from any discussion or voting related to that contract. See, Tex. Prop. Code § 209.0052.
The duty of prudence means taking reasonable steps to avoid a scenario where a cash-strapped HOA is unprepared for a major expense it should have seen coming. This means budgeting realistically and ensuring the association has sufficient reserves. Deciding what is “sufficient,” though, can be difficult because, by definition, reserves pay for expenses that are irregular and not reasonably foreseeable. Even a board making a good-faith effort to act prudently might not recognize all potential expenses a reserve fund needs to cover.
When setting reserve requirements, the key questions board members need to ask are (1) what unbudgeted expenses are likely to arise over an extended timeline; (2) how much are those expenses likely to cost; and (3) how much additional savings will that necessitate per year. Most board members are volunteers just trying to help keep their communities running on all cylinders, so it’s probably unrealistic to expect them to know the answers without some professional assistance—especially in large communities with substantial common elements. Fortunately, though, there are accounting professionals who specialize in “reserve studies” designed to calculate the cash-reserve needs of HOAs and similarly situated organizations.
Reserve Studies for Homeowners’ Associations
Reserve funds present something of a conundrum for HOA boards. If you maintain reserves for the express purpose of paying expenses that are unanticipated and infrequent, then how does the board decide how much it needs to hold in reserve? If the association holds back too much, it is essentially over-taxing its members. But if reserves are inadequate, then the HOA might find itself insufficiently liquid to meet its obligations without imposing a costly special assessment or taking out a loan—neither of which is likely to be popular with homeowners.
Reserve studies are intended to help Goldilocks (i.e., the HOA board) find the porridge (i.e., the reserve amount) that’s just right. A reserve study is an examination conducted by a consultant or accounting firm for the purpose of analyzing probable long-term expenses. The idea is to use the analysis to estimate the community’s reserve needs as scientifically as possible.
Along with reviewing the association’s assets (including current reserves), budget, and anticipated revenue, the auditor will survey community equipment, buildings, and other common elements. Based on all available information, the auditor comes up with a long-term schedule of expected repairs, replacements, major maintenance, and any other relevant liabilities likely to affect the HOA’s bottom line.
Once the study is concluded, the board uses the estimates to calculate the level of regular homeowner assessments needed to maintain the optimal reserve account balance. For instance, if the study estimates that a parking lot within the community will need new asphalt in ten years, and that the cost will be around $20,000, the board might adjust the budget and assessments to hold back $2,000 in additional reserves each year. That additional $2,000 is divided among all members’ annual dues so that, when the time comes for new asphalt, the funds are already available in the reserve account.
Of course, a study will in all likelihood identify numerous potential expenditures over the relevant period, and the reserve recommendation will be based on the aggregate anticipated long-term cash needs—not just any single item. But the principle is still the same.
Reserve studies cost money, so they don’t make sense in every situation. In a small association with only minimal commons and simple maintenance duties, a reserve study would probably cost more than the value it could reasonably be expected to provide. At the same time, a large association with elaborate commons and extensive duties would be imprudent not to use a reserve study or other means of scientifically calculating reserve needs.
Reserve Funding Requirements
The appropriate dollar balance for any given community’s reserve fund depends in large part on the size of the association, the nature of the common elements, and the extent of the HOA’s obligations. Some state HOA and condo laws establish specific reserve requirements, but funding needs are more commonly set by the board in accordance with standards detailed in the association’s governing documents. A reserve account is “fully funded” if it covers 100% of the community’s reasonably foreseeable expenses. Many communities choose to set reserve requirements at a percentage of anticipated expenses, as estimated by the board or identified in a reserve study. So, for example, an association might require the board to hold in reserve at least 75% of anticipated expenses at any given time, adjusted based on the schedule for deferred maintenance.
A few states establish specific funding requirements for reserves stated as a percentage of the association’s overall budget. See, e.g., Ohio Rev. Code §5311.081(A)(1) (requiring annual reserve contributions of at least 10% of budget, but allowing waiver by majority vote). More commonly, states adopt statutory principles for reserves but leave the specifics to the discretion of the board or community as a whole. Generally, condo laws go into much more detail when it comes to reserve requirements.
Florida’s condo statute requires an association’s annual budget to include reserves for “capital expenditures and deferred maintenance … [including but not limited to] roof replacement, building painting, and pavement resurfacing,” and any other deferred maintenance or replacement cost exceeding $10,000. Fla. Stat. §718.112(f)2a. For each included item, the calculation must be based on the “estimated remaining useful life and estimated replacement cost or deferred maintenance expense.” Id.
Though Florida’s condo statute requires reserves by default, it also allows a condo association to waive reserve requirements, or require a lesser amount, by majority vote. Id. Florida’s HOA statute likewise makes reserves optional. If a community opts for reserves, the reserve account funding must be calculated based on each asset’s estimated deferred maintenance or replacement cost divided by its predicted useful life remaining. Fla. Stat. §720.303(6)(g).
California requires associations to maintain reserve balances based on reserve studies conducted at least once every three years and including diligent, on-site inspections. Civil Code §5550. The study must, at a minimum, identify all major components the HOA is obligated to maintain, the estimated costs and useful life associated with each, and the annual reserve contribution necessary to defray the costs. Id.
Similarly, Washington requires calculation of reserve contributions in communities with “significant assets” (defined as assets valued at 50% or more of the association’s gross budget) based on regular reserve studies. Wash. Code §64.34.020. At least every three years, the study must be conducted by an independent professional who visually inspects the relevant assets. Notably, though, the Washington statute merely “encourage[s]” HOAs “to establish a reserve account… to fund major maintenance, repair, and replacement of common elements.” Wash. Code §64.34.380.
State legislation routinely recognizes the importance of reserve funds to homeowners’ associations but doesn’t make them mandatory. However, deferred maintenance, repair and replacement of major elements, and surprise expenses will inevitably come up. When adequate reserves aren’t available, a community will need to employ alternate means of paying for these significant costs.
Alternatives to Reserve Funds
Boards often face a temptation to underfund reserves—or even dip into reserves to pay for what would normally be regular operating expenses—to cover increasing operating costs without raising assessments. Homeowners often object to additional assessments or reject them altogether. But paying a little extra up front to make sure sufficient cash-flow is available for adequate reserves can actually save money over time. And, the alternatives—special assessments, loans, and putting off repairs and replacements—are not particularly attractive options.
“The duty of prudence means taking reasonable steps to avoid a scenario where a cash-strapped HOA is unprepared for a major expense it should have seen coming.”
With a special assessment, the community is paying all-at-once what it could have paid over time. In effect, current owners are footing the bill for costs that were rightfully the responsibility of prior owners. And, of course, special assessments often require member approval. A rejected special assessment is just as helpful to a board facing a major expense as an unfunded reserve account.
If an HOA can’t cover unexpected expenses and long-term maintenance directly from member assessments, there’s also the option of taking out a loan in the name of the HOA. Obtaining a loan probably won’t be too difficult for an association with regular revenue and relatively little debt, but it may require the use of community assets as collateral. And, just as significantly, loans require interest.
Even assuming the HOA can secure a loan with a competitive interest rate, the cost of repaying the loan still ultimately comes from assessments, but members end up paying a lot more than the actual expense cost due to interest and transaction costs. By contrast, an adequately funded reserve account itself earns interest, leading to the opposite result—members pay less out of pocket because money applied to reserves is earning interest up until the expenses become necessary.
And there’s also the option of simply not paying for maintenance, repairs, and replacements that aren’t included in the annual budget. In this scenario, homeowners lose access to benefits of the community. If the pool needs an overhaul, but there’s no money to pay for it, members and their families no longer have a neighborhood pool to swim in. Not to mention, property values may decrease, as the allure of living in a community with a pool is reduced when the pool is inaccessible.
Kicking the can down the road by underfunding reserves almost always leads to losses in the end. With this in mind, Florida’s HOA statute requires associations without reserves to notify members annually that no reserves are held and that special assessments may be enacted to pay for capital expenditures and deferred maintenance. Fla. Stat. §720.303(6)(c).
Inadequate funding can lead to safety concerns as well. Association-owned equipment or facilities that are not receiving scheduled maintenance due to insufficient reserve funding can increase the risk of injury and create unnecessary liability exposure.
Under the right circumstances, insurance coverage can help defray some of the costs caused by underfunded reserves. Many states mandate that HOAs carry insurance coverage. Arizona requires property damage coverage for at least 80% of the value of common elements and liability insurance with coverage limits decided by the board. A.R.S. §33-1253A(1) – (2). Eight states (Alaska, Colorado, Connecticut, Delaware, Minnesota, Nevada, Vermont, and West Virginia) have adopted the Uniform Common Interest Ownership Act (“UCIOA”), which has requirements similar to Arizona’s, along with mandatory fidelity insurance. See, e.g., Conn. Gen. Stat. §47-255.
Insurance, though, isn’t foolproof. A policy won’t cover every major expense that comes up. A property policy might cover losses due to accident but not if damage results from inadequate maintenance. A major expense like a new roof might be needed as a result or ordinary wear and tear that a regular property damage policy excludes from coverage.
And for insurance to help, you have to actually procure a policy. State condo association laws often require insurance, but it’s frequently optional for HOAs. Even in states that ostensibly require insurance like Arizona and the eight UCIOA states, there’s a limitation—a policy must be obtained “to the extent reasonably available.” Id.
HOA insurance is generally a good thing to have; it’s just not a foolproof substitute for reserves. Ideally, it’s more of a supplement, avoiding a scenario in which a catastrophe like a fire or major storm completely saps a community’s reserve funds or forces the association to write off common elements that were once valuable community resources.
Reserve Disclosure Requirements
Most state HOA laws require associations to make regular budgetary disclosures to members, usually including the status of reserve funding. Florida HOAs, for instance, must prepare yearly budgets estimating anticipated expenses and revenue and identifying any reserve accounts or funds set aside for deferred expenditures. Fla. Stat. §702.303(6)
In Washington, the statutorily mandated annual budget report must state amounts currently held in reserve, estimate year-end reserve balances, propose a plan for funding reserves, and project future reserve balances if the plan is adopted. Wash. Code. §64.38.025. Colorado requires a similar disclosure of present reserve balances, along with the board’s proposal to ensure the community’s reserve needs are adequately funded. Col. Rev. Stat. §38-33.3-209.5.
California requires a detailed reserve report based on the most recent reserve study, including the remaining useful life of each major component, estimated repair or replacement costs, and the amount of reserve money held by the HOA. Civil Code §5565. California HOA members also have a right to notice of “the mechanism or mechanisms by which the board of directors will fund reserves … including assessments, borrowing, use of other assets, deferral of selected replacements or repairs, or alternative mechanism.” Civil Code §5300.
Particularly in condo associations, prospective purchasers often have a right to receive notice of current reserve balances. Tex. Prop. Code § 82.157; A.R.S. §33-1260. Absent an affirmative disclosure requirement, homeowners have a right to request inspection of association records. See, e.g., Fla. Code §720.303(4). Records subject to an inspection typically include financial records and budgets.
Homeowner Recourse
A homeowner who believes an association’s board is mishandling or underfunding reserves has a few options. First, the homeowner can bring up reserve issues at the next homeowners’ or open board meeting, or informally discuss concerns with a board member. A formal records request can also help provide detailed information about how reserves are being maintained and used and whether there is in fact a problem.
Because of the democratic character of community associations, there’s also the option of running for the board in the next election or organizing a campaign to amend the association’s declaration to include more stringent or specific reserve requirements. If misconduct or fiduciary lapses are involved, an individual homeowner or group of homeowners usually have standing to pursue legal claims against the board or its members, depending upon the specifics of the situation and whether actual damages have been incurred. It’s almost always a good idea to consult with an experienced attorney before asserting or pursuing legal claims.
In situations involving outright fraud or embezzlement, homeowners should bring the matter to the attention of local law enforcement agencies. Misappropriation of funds entrusted to an individual is criminal conduct in every state, though, of course, the precise standards vary by jurisdiction.
Comments: Comments Off on EVERYONE IS AN EXPERT By Eric Glazer, Esq.
EVERYONE IS AN EXPERT
By Eric Glazer, Esq.
I agree that a “reserve study” should be done by an accredited firm following the industry standard guidelines. We have used both Association Reserves and Reserve Advisors. The fact remains that both these and most other competent firms are in fact comprised of engineers and architects.
There is an larger issue in this: In a majority of cases, board members are qualified in NOTHING: Not in construction, not in finance, not in personnel management, etc. Which is why they should use a management company. And even so, how can they possibly assess the value of an opinion issued to them by a construction expert, a financial advisor etc…
Being a board member is a huge responsibility, and I always thought they should be qualified or certified before being admitted in a board.
Imagine a world where accountants can examine your heart and give you an opinion regarding its condition and your life expectancy. Suppose an auto mechanic can examine your kidneys and liver and give his opinion on whether or not they are healthy. Perhaps one day you can walk into my office and one of the attorneys here can take your blood and talk to you about your blood pressure, sugar and cholesterol. If this all sounds crazy, it should. This is exactly how the health of our buildings are determined. Not by qualified experts like architects, engineers and general contractors, but by former cab drivers, teachers, nurses and the like. Now these people may be the absolute best in their trained professions, but they certainly are not qualified to make a determination of the condition of the condominium property and the life expectancy of things like the roof, structure and electrical systems. Yet, this is what is going on in Florida as we speak.
For about a two year period of time, condominiums were required to have a reserve study performed by an architect or engineer. But in 2010 Governor Charlie Crist signed a bill which repealed that requirement. So since then, the reserve study analysis can be performed by the butcher, baker and candle stick maker.
We all know that the analysis is a joke. If a new Board comes in that wants to save money and decrease assessments, suddenly the roof has a greater life expectancy than before. Somehow, like fine wine, the roof got better with age. It’s a miracle!
The current law is dangerous on so many levels. It’s so obvious that it would be insulting to all of you to even have to explain further.
Next legislative session I urge all of you to contact your legislators and demand that Florida Statute 718 be amended to again require that reserve studies be performed by an architect or engineer. Unless your Board has an architect or engineer serving, the Board is simply not qualified to do the analysis.
Many associations now install security cameras on the common areas to guarantee video evidence of any intentional vandalism or negligent actions which result in damage to the common areas, such as a vehicle running into the gate of a gated community. Some association want to install security cameras as a way of deterring criminal acts or violations of the governing documents.
Florida law does not prohibit video surveillance of the common areas. However, both State and Federal laws prohibit audio cameras in certain circumstances.
Florida law makes it illegal to intentionally intercept oral communications through the use of a device if one does not have the prior consent of all parties. This is commonly referred to as wiretapping. Florida’s wiretapping law is a “two-party consent” law which makes it a crime to intercept or record a “wire, oral, or electronic communication” unless all parties to the communication consent.
However, there is an exception for in-person communications when the parties do not have a reasonable expectation of privacy in the conversation, such as when they are engaged in conversation in a public place where they might reasonably be overheard. Arguably, this exception applies to the security cameras installed on the common areas. However, the best and safest approach would be to only install security cameras with video and without audio.
Further, while video security cameras are not prohibited, such video security cameras should be pointed in the direction of the common areas and should avoid individual units or lots. Section 810.14, Florida Statutes, prohibits anyone from looking into a person’s house, structure, or conveyance or from looking at a person’s intimate areas that are protected by clothing from the public view. This is referred to a video voyeurism and is a criminal offense. Florida’s Video Voyeurism law is not violated if the video camera is
recording the non-private common areas,
not recording inside any dwelling/unit or even a motor vehicle, and
not recording in portions of the common areas where a person has a reasonable expectation of privacy or might be expected to be in a state of undress (bathrooms, locker rooms, etc.).
Elizabeth “Beth” A. Lanham-Patrie’shas been practicing law since 1993, and she has focused on representing community associations since June of 2001. Beth provides a variety of legal services to condominium, homeowner, and cooperative associations and is a transactional attorney with extensive experience drafting and amending governing document, and preparing and reviewing contracts. Beth is also involved in resolving disputes between associations and owners. Ms. Lanham-Patrie is also one of only 190 attorneys statewide who is a Board Certified Specialist in Condominium and Planned Development Law.
SFPMA works throughout the State of Florida, we are a multi-member organization for the Condo, HOA and Property Management industry. Through knowledge based Articles, Events and our Members Directory, Clients find the right information to make an informed decisions for their Florida properties.
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Like it or not, some form of reserves should be mandatory
This year’s large community association omnibus bill will likely become law. This bill, which bears an effective date of July 1, 2021, contains changes which will impact condominiums, cooperatives and HOAs. At more than 100 pages, we will discuss only some of those changes in today’s CALL Alert. This bill, along with all the others CALL has been tracking throughout the 2021 Legislative Session, will be summarized in our year-end Legislative Guidebook.
The “state of emergency” that had been imposed by Governor DeSantis in light of the COVID-19 pandemic expired on June 26, 2021. As a result, the “emergency powers” given to condominium, cooperatives, and homeowners’ associations in Sections 718.1265, 719.128, and 720.316, Florida Statutes, respectively, are no longer in effect. The emergency powers that were in effect during the COVID-19 state of emergency included conducting board meetings and membership meetings with notice given as is practicable, but did not specifically give associations the authority to conduct meetings remotely. Nevertheless, many associations did hold meetings remotely in an effort to slow the spread of the virus and to protect its residents and employees. (NOTE: The emergency powers statutes were amended effective July 1, 2021, and now specifically provide that during a declared state of emergency, the association may conduct board meetings, committee meetings, elections, and membership meetings, in whole or in part, by telephone, real-time videoconferencing, or similar real-time electronic or video communication.)
Lilliana Farinas-Sabogal
