Most condominium and homeowner associations (collectively known as community associations) recently had their annual meeting and annual election wherein new directors and officers came on board. Some of these new directors, being unfamiliar with Florida community association laws, probably have some misconceptions on how certain things are handled in conducting association business.
We will go through some of the more common misconceptions.
n Executive sessions. Just like sitting on boards of for-profit corporations, when sensitive issues come up, the board can go into “executive session,” where the members cannot attend the session. Not True.
Under the sunshine provisions contained in the Florida statutes pertaining to community associations, there are only a few instances wherein a board can go into closed executive sessions.
For condominium associations, the only time board meetings do not have to be open to the unit owners is when the meeting is with the association’s attorney with respect to proposed or pending litigation when the meeting is held for the purpose of seeking or rendering legal advice.
For homeowners’ associations, in addition to these attorney-client privileged closed meetings with respect to proposed or pending litigation, the board can hold a closed meeting for the purpose of discussing personnel matters. The ability to have executive sessions to discuss personnel matters will be extended to condominium associations if House Bill 1195 passes this last legislative session is not vetoed by the governor.
n Closed committee meetings. Committee meetings need not be open to the members. Some truth.
For condominium associations, committee meetings that can take final action on behalf of the board or make recommendations to the board regarding the association budget must be noticed and opened to the members.
All other committee meetings (other than attorney client privileged meetings with respect to proposed or pending litigation) must also be open to the members unless the association bylaws exempt such other committees from the open meeting requirements.
For homeowners’ associations, only meetings of committees where a final decision will be made regarding expenditure of association funds or meetings of committees vested with the power to approve or disapprove architectural decisions with respect to a specific parcel of residential property owned by a member of the community must be open to the membership.
n President breaks ties. The president of the association only votes on board matters to break a tie. Not true.
The president of a community association votes in board meetings as a director on all matters the same as any other director. His or her vote counts no more or less than any other director. If there is a split vote on an issue, the minutes must reflect how each director voted either for or against a motion put forth or abstaining.
n Director’s abstention from voting. A director can only abstain from voting if he or she has a conflict of interest and must first state the conflict before abstaining. No longer true.
This use to be the case for condominium associations, but now the director does not have to have a conflict of interest. He or she can just abstain and the minutes must reflect that the director abstained and the abstention will be counted as no position was taken by the director on the action.
If a director is present at the meeting and does not vote against or abstain will be presumed to have assented to the action.
n Graft. A director or officer can accept “tokens of appreciation” from service providers as long as such tokens are not of great value or as long as the officer or director is not caught. Definitely not true.
Section 718.111(1)(a), Florida Statutes specifically provides that officers, directors, or managers of condominium associations “may not solicit, offer to accept, or accept any thing or service of value for which consideration has not been provided for his or her own benefit or that of his or her immediately family, from any person providing or proposing to provide goods or services to the association. However, this does not prohibit an officer, director, or manager from accepting services or items received in connection with trade fairs or education programs.”
Sorry, no gangster type operations legally allowed in Florida. No free Bahamas cruises, golf clubs, turkeys, or cases of fine wine for getting that good deal contract signed.
n President sits for year. The president sits as president of the association for the entire year after elected. Not true.
The officers of the association (being the president, vice president, secretary and treasurer) are elected by the board of directors usually at the organization meeting following the annual members meeting, but they sit as officers at the pleasure of the board.
The board can at any time re-elect or vote to change the officers. Therefore, if a board is unhappy with how the president is performing his or her job, the board can switch out the president at any regular or emergency board meeting.
n President picks committee members. Committee members are picked by and sit at the pleasure of the president. Not true.
Association committee members sit at the pleasure of the board of directors and are typically appointed by the board. Sometimes as a matter of association custom, the association’s president will appoint committee chairpersons and allow the chairpersons to pick their committee members.
However, ultimately, just like if there is a problem with an officer, the board can kickoff and reappoint any or all committee members at any time.
Rob Samouce, a principal attorney in the Naples law firm of Samouce, Murrell, & Gal, P.A., concentrates his practice in the areas of community associations including representing condominium, cooperative and homeowners’ associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. If you have any questions about the column, Rob can be reached at www.smglawfirm.com.