Top 10 Homeowner association mistakes!

Top 10 association mistakes!

Serving on the board of your condominium association can be a rewarding experience. In addition to helping protect your investment, volunteering for the board provides a civic involvement opportunity and can even forge lifelong friendships.However, the operation of community associations in Florida has become big business. Even though directors are typically not paid for their efforts, many actions or inactions of an association can result in legal liability. In my experience, most mistakes made by associations do not result from ill intentions, but rather lack of knowledge.Today, and in next week's column, we will look at what I categorize as the top 10 mistakes made by association boards:
• Posting Notice Of Board Meetings: Since 1992, Chapter 718 of the Florida Statutes (commonly called The Florida Condominium Act) has required that condominium association boards adopt a rule specifying where notice of board meetings are to be posted. This requirement of the law is probably honored more in the breach. While most associations routinely post notice of board meetings in a conspicuous location on the condominium property, as required by law, many do not have a formal written rule specifying where the notices are to be posted. Adopting such a rule is simple enough, and can be done at a regularly noticed meeting of the board of directors.• Hurricane Shutter Specifications: For at least a decade, The Florida Condominium Act has required that the board adopt hurricane shutter specifications. An association cannot prohibit a unit owner desiring to install hurricane shutters from doing so, but can require installation in conformity with the specifications. The board's specifications must comply with current building codes, and may regulate aesthetic requirements, such as color and shutter type. In most disputes involving hurricane shutter installations I have seen, a prime factor in the dispute is the association's failure to adopt the legally mandated shutter specifications. Obviously, an association contesting a unit owner's installation request, when those specifications are not in place, faces an uphill battle. Additionally, as building codes have changed substantially over the years, associations with outdated hurricane shutter specifications should update them as well. I recommend that the association enlist the services of an engineer or other qualified consultant (and not just rely on boilerplate specifications given out by shutter companies), to address issues such as how the shutters are attached to the building, prevention of structural damage during installation, and the like.
• Official Records Access: In recognition of the quasi-governmental authority of associations, The Florida Condominium Act affords unit owners in condominiums (or their designated representatives) broad rights to inspect (and copy) the official records of the association. Unit owners desiring to inspect records do not need to demonstrate a proper purpose for their request, nor do they even need to tell the association why they want to look at the documents. The law contains fairly strict deadlines for production of official records, after receipt of a written request from a unit owner. In general, the documents must be made available for inspection (and if desired, copying at the expense of the requesting owner) within five working days of receipt of the written request. After 10 working days, a rebuttable presumption arises that access has been wrongfully denied. Penalties for noncompliance include statutory minimum damages of $50 per day (up to $500) and actual damages. Further, the association could be cited by the state regulatory agency if records are not timely produced. The association is under no obligation to mail records to unit
owners, only make them available for inspection and copying where the records are kept. The board is authorized by the law to adopt reasonable rules regulating the frequency and manner of records inspections. As is the case with hurricane shutter specifications, the board's failure to have a records inspection rule in place can wreak havoc when a dispute arises with a community resident.• Certified Mail "Inquiries" From Unit Owners: In apparent reaction to a perception that some associations ignore their members, the law was amended a number of years ago to require an association to provide "substantive response" when it receives an "inquiry" from a unit owner by certified mail. In general, the response must be provided within 30 days of receipt of the inquiry, although this deadline can be extended to 60 days if the matter has been referred to legal counsel for an opinion, and the unit owner is notified of that within the requisite 30-day time frame. Failure to comply with an owner's rights subjects the association to citation by the state. Perhaps more significantly, the statute imposes an additional penalty for non-compliance. If the association does not comply with a certified mail inquiry response in a timely fashion, the association will be precluded from recovering attorney's fees should litigation arise regarding the subject of the inquiry, even if the association is the prevailing party (in which case, it would typically be entitled to the recovery of its attorney's fees). Again, the law empowers the board to adopt reasonable rules regulating unit owner inquiries. Such rules may include a requirement that inquiries be limited to one per month. The failure of associations to comply with unit owner rights arising from certified mail inquiries is a common and costly mistake.• Signing One-Sided Contracts: Each year, condominium associations in Florida contract for billions of dollars worth of goods and services. Association contracts range from minor purchases to multi-million dollar construction projects. Most purveyors of these goods and services encourage associations to use their "simple" forms, which they often represent "have been reviewed by an attorney." In most cases, contractors' one- or two-page "proposals" do nothing to protect the interest of the association. Issues ranging from insurance to indemnification and from warranties to dispute resolution are rarely covered (or if they are, are covered to the benefit of the contractor) in these "simple" forms. While associations have a legitimate desire to control costs affiliated with legal review by the association's counsel, if the contractual relationship turns sour, this is often a penny-wise, pound-foolish decision.