ASK 

THE 

LAWYER

By

Chelle Konyk, Esq.

QUESTION: Is a Condo Association responsible for payment of the monthly maintenance fees when it has obtained ownership of a delinquent owners unit? The association obtained ownership via a foreclosure due to the delinquency.

ANSWER: Yes, the Association would be responsible for payment of the monthly maintenance fee because it is now the owner of the unit. If the unit owner is delinquent and the Association places a lien on the property, it would have the option of pursuing a lien foreclosure and thereby obtaining title to the unit. If the unit has a mortgage, the Association will take title of the unit subject to the mortgage, but it would not be obligated to pay the mortgage.

Some Associations will go forward with the lien foreclosure when a unit owner is behind on the assessments and rent the unit so that it will become income producing. This income can be used to offset delinquent assessments and the monthly maintenance fees. If the unit has a mortgage foreclosure that is pending and/or it is not going to become income producing, there may not be any advantage to the Association proceeding with the lien foreclosure, although each situation would have to be decided based on all of the facts.

QUESTION: Six of nine Board seats recently came up for election. Between existing members and new candidates, only five people ran for the six seats. In that case no election is held but a question arose as to how to fill the sixth seat. I believe and suggested that Chapter 718.112 (2)(d)(1) applies. This section states:

"If no person is interested in or demonstrates an intention to run for the position of a board member whose term has expired according to the provisions of this subparagraph, such board member whose term has expired shall be automatically reappointed to the board of administration and need not stand for reelection."

A Board member whose term expired was willing to serve. The board asserted that this was not correct and that Chapter 718.112(2)(d)(8) applied providing that the Board vacancy could be filled by a vote of the remaining Board members appointing an eligible person for the balance of the unexpired term. I believe this is in error because there is no unexpired term and because Section 718.112 (2)(d)(1) covers this very instance. The Board said this was wrong and they said this was confirmed by an opinion from the attorney for the Association, who was paid for by the Association. In your opinion who is correct.

ANSWER: The attorney is correct. In this case, you had interested parties that ran for the board.

Let’s take a look at two scenarios that will have different results.

Scenario One: There are six available seats on the board and five candidates file the necessary paperwork to run for the board. This is an election, although it was not necessary for the members to vote, since there were less people running for the board than available positions. Since there was an election, the existing board is entitled to appoint a new member to the board. The board could consider the existing member that did not file to run or they could appoint someone else in the community that is willing to serve.

Scenario Two: There are six available seats on the board. There are not any candidates that have filed the necessary paperwork to run for the board. In this example, since there is not one interested party running for the board, then the members whose seats are up for election would "roll over" and there would not be an election.

If one of those members did not want to continue serving on the board, he or she could resign. The existing board could appoint someone to fill that vacated position.

QUESTION: I asked the Board for a copy of the opinion provided by the Association attorney. The Board responded that the Association attorney’s opinion was confidential information that could be shared only with Board of Directors and that this information was not available to the Association members. There is no dispute that the Association is the "client" and that the attorney’s bills are paid for by the Association.

I believe that my request for this information is supported by rights to access to records under Section 718.111 (12)(a)(15). I am well aware that an exception exists regarding disclosure of an attorney’s opinion, mental impressions, etc. under 718.111 (12)(c) (1) where there is actual or threatened litigation or administrative proceedings. (That portion of the statute goes on to specify that the exception only applies so long as the litigation or administrative procedure is pending.) That is not the case here. There is no pending or threatened litigation. The Board asserts that all advice received on interpretations and other condo issues, outside of litigation, are only within the Board’s purview and that Association members have to take their word for it.

The Association acts through its Board and the attorney-client relationship exists between the Association and the attorney. If the advice is in furtherance of the rendition of legal services to the client (Chapter 90.502(10(c)(1), then what basis does a Board have to assert a separate privilege to opinions of the Association attorney where no litigation or administrative procedure, pending or threatened exists?

ANSWER: If there is not any pending or threatened litigation or administrative proceedings, the unit owners are entitled to request a copy of such an opinion. An owner has every right to inspect the records under Florida Law and this is clearly part of the records that should be made available. We often encounter boards that do not realize there is a fine line between their obligations as board members and the rights of an owner. It may just be a misunderstanding on the part of the board and I would suggest you make your request to view the legal opinion in writing. If you are denied after making this request in writing, you may want to pursue this further, although you may have a better understanding of the issue now that you have seen this opinion.

QUESTION: Our Board of Directors meets every month. After the recent election, the new President of the Board stated that the "minutes of the last meeting will not be read", as they are posted in the Office. Can the President of the Condo make this rule? It seems as if he is trying to hide something.

ANSWER: The reading of the minutes of the previous meeting may be either read or waived at each meeting. The minutes of the meeting, whether in final format or otherwise, are part of the official record of the the association and must be available to the membership for inspection and copying. Your association has more than complied with the requirements of availability of the minutes by making them available in the association office. If your Association is posting the minutes at the office, they have established a basis for waiver of the reading of the minutes at each meeting, but they have not eliminated the necessity of bringing it up at each meeting. Your Association documents may or may not contain additional requirements for the posting and/or reading of the minutes.

Additionally, the minutes of the membership meeting serve as the permanent record of the proceedings. The minutes are not required to be an elaborate account of every discussion or debate that took place at the meeting, but should identify relevant information such as location, time, presiding officer and the exact quorum in attendance. Florida Statute 718.111 requires that the minutes be retained for seven years. Their content should include any motions made, the result, and other pertinent items of business.

QUESTION: We have a president who runs our community without holding meetings. She makes decisions, hires and fires contractors without the other Board Members knowledge. Is this legal? What can the owners do about this?

ANSWER: No, it is not legal. An association acts through its Board and it is the Board which makes decisions on behalf of the association. The President’s powers are limited to those set forth in the governing documents of the association and those powers which are delegated to her by the Board. In the case of contracts, the association is additionally required (with some exceptions) to solicit bids before awarding contracts where the materials, equipment or services being contracted for exceed 5% of the total annual budget (in the case of a condominium) or 10% of the total annual budget (in the case of a homeowners’ association) with some specific services being exempt from this requirement. In most circumstances, the association will be bound by the President’s actions and contracts if the other Board members are aware that she is holding herself out as acting on behalf of the association and the Board takes no action to limit her authority. In most cases, the Board has the authority to remove any officer at any time by a majority vote of the Board if any officer, including the President, fails to follow the direction of the Board.

QUESTION: Our community has several committees, including Finance and ARC. We never know when they meet and as far as I can see there are never any minutes taken. We should know what is going on. Is this right?

ANSWER: No, it is not right. Committees are not allowed to act in secret. Under Florida law, any committee which acts in place of the Board is required to keep a record of all its actions. Those records form part of the official records of the association and are available for inspection by all members of the association. In addition, in many instances, committee meetings are open to all members of the association and the members are entitled to be notified of the meetings in the same manner that they are notified of Board meetings.

In the case of a homeowners’ association, this notice requirement applies to any committee which makes a final decision regarding the expenditure of association funds or any committee vested with the power to approve or disapprove architectural decisions regarding individual lots.

In the case of a condominium association, this notice requirement applies to all committees. The meetings of a committee which does not take final action on behalf of the Board or make recommendations regarding the association are not open to all members, except if the association bylaws so state.

QUESTION: We have a bulk cable contract and our board decided to get a different cable provider. We are being told the previous provider either will not or cannot provide service to our building anymore for cable and Internet. As such, we are about to lose our email addresses that were offered for free by that provider. Is this legal?

ANSWER This is extremely frustrating. Unfortunately, the previous provider may not have enough customers on an individual basis to continue to provide service to the building in the event that it is no longer the bulk cable provider. If that is the case, then you would no longer have access to your email address that was given to you by that provider.

We recommend that everyone set up a free email account, rather than rely on one that is offered through your Internet provider, especially if you use your email to run a business. It can be a major disruption to be forced to give up an email address and add to that the expense of reprinting business cards, stationary, and advertising. Some of the more popular free email address can be obtained from AOL located at www.aol.com, gmail, located at www.google.com, and yahoo, located at www.yahoo.com. Once you set up an email on this type of a free account, notify all of your contacts that you will no longer be using your previous address. This will safeguard your ability to continue with the same email address, regardless of who your purchase Internet access from.

QUESTION: Our condo association by-laws state "No dogs or pets are allowed..."

However, a new owner moved in and has a barking dog (which he is not curbing). The noise disturbs neighbors. Our President said there is nothing he can do to get rid of this owner. Do we have any recourse?

Thank you for your help

ANSWER: Covenants that restrict or prevent pets are enforceable. This restriction cannot be selectively enforced and the board should proceed with the remedies that are granted under the governing documents and Florida law to cause the owner to remove the pet (although you may be tempted to "get rid of the owner" you will have better luck removing the pet).

Although No Dogs means no dogs . . . the Unit owner may qualify or attempt to qualify a pet by having it classified as needed as a handicap accommodation by asking a doctor to write a letter.

Recent federal court decisions have held that an Association has the right to inquire of a doctor who states that a pet is needed as an handicap accommodation and to ask the doctor to explain the specific nature of the alleged handicap and why the handicap requires the prospective resident to have the animal. In this regard, the patient must establish through the doctor’s statement that the patient is handicapped within the meaning of the law in sufficient detail so that the Association is on notice of the handicap. It should also explain why an accommodation may be necessary to afford the handicapped person equal opportunity to use and enjoy the dwelling and also that such an accommodation is necessary.

The doctor’s conclusions regarding the need for the animal must be included and there must be specific facts regarding the activities of daily life which may be limited, as defined under the Florida and Federal Fair Housing Acts, and specific facts indicating how the animal enables the resident to use and enjoy the home or the common facilities of the Association; how the animal alleviates or mitigates the handicap; or that the animal in question has skills as a service animal which would require an accommodation.

When an accommodation of this type is requested, it is appropriate for the Association to require a doctor’s sworn certification that will furnish the necessary facts.

QUESTION: I am the president of a condominium with an enormous amount of units that are delinquent. We have sent these people to the attorney who has filed liens on the unit. The law firm has advanced all of the costs associated with filing, until these matters are resolved. In the event we are unable to collect from the unit owners, who is ultimately responsible for the things like court costs that have been advanced?

ANSWER: The association will be responsible for paying any costs that have been advanced by the law firm in the event they are not collected from the unit owner. Several years ago, before the foreclosure debacle that is facing our entire country, lawyers often advanced the costs and collected them when the matter was resolved. This was never an issue in the past, as the associations had few liens filed and had sufficient funds in operating accounts to pay such fees in the event the costs were not recovered from the unit owners.

In today’s environment, many associations have large percentages of their unit owners in various stages of collection and they have a significant amount of money that has been paid on their behalf by their attorney to advance the costs associated with filing the lien with the Court. The costs involved in filing a lien exceed $400 per unit and multiplied by the number of units the association has been forced to file a lien on – this could be a significant debt to the association. Since this situation is not getting any better, every association should take a look at the dollar value of all fees that have been advanced on its behalf and consider adding a line item to their budget to cover a percentage of these fees in the event that they are not recovered from the unit owner.

One last note on this subject. If a unit owner is living in a unit and is reaping the benefits of the things that are being provided by the association, you would think he would do the right thing and pay the association. Unfortunately – many people assume that if they are not paying the mortgage, they should also stop paying the association. This can complicate things for many reasons. For example, if the unit owner is able to successfully seek a loan modification from his bank and reduce his mortgage payment, he will still owe the association. Many association documents provide for penalties, late fees, as well as attorney’s fees that are associated with the collection of delinquent assessments. These costs can often spiral out of control until the unit owner finds himself in a hole so deep he may not be able to retain ownership of his unit – even with a loan modification.

QUESTION: I am on the Board at my Association and we have quite a few unit owners who are delinquent in the payment of assessments and I have recommended to the Board that we post the list of delinquent owners on the community bulletin board. Is this legal?

ANSWER: Even though your question does not indicate whether you are on the Board of a homeowners association or a condominium association, the answer is the same for both types of associations. Both Chapter 718, which governs condominium associations, and Chapter 720, which governs homeowners associations, specifically state that the official records of the association include a periodic statement of account for each member designating their name, the due date and amount of assessments owing, the payments to the account and the balance due. As you may know, the official records of the Association are available for inspection and copying by any member of the Association. In lieu of posting the list of delinquent unit owners on a community bulletin board where it could be viewed by non-members (tenants, guest of residents, vendors, etc.), we recommend that the Association post notice that the list is available for inspection and copying at the owners request or that the Board bring extra copies to board meetings or membership meetings to provide to the members who would like a copy. In this way, if there is an error in the information, you have not published the information or made it available to the public for viewing which could give rise to a defamation claim.

QUESTION:  We had a roofing company provide our association with a new roof and now we come to find out that the roofer did not pay one of his subcontractors, as we now find out that he has placed a lien on the association property. We executed a Notice of Commencement and were provided with a Release of Lien with each payment. What should we do, as no one can sell his or her units now with this lien on the property?

ANSWER: Under the Florida Condominium Act, labor performed on or materials furnished to the common elements are not the basis for a lien on the common elements, but may be the basis for the filing of a lien against all condominium parcels in the proportions for which the individual owners are liable for common expenses of the condominium. However, a lien can be filed against association-owned property (not common elements) for work done on that property.

In addition to filing a notice of commencement in the county clerk’s office, the association must post a certified copy of the notice in front of the building where the work will be done. The association must also file a copy of the notice of commencement with the local authority issuing the building permit. All of this puts any subcontractor on notice of the identity of the association and the direct contractor. Any subcontractor wishing to pursue his lien rights to secure payment must then make himself known to the association. The subcontractor has to serve a "notice to owner" form on the association before the final payment has been made to the direct contractor. This notifies the association that the subcontractor can file a lien if he has not been paid, even if the association has paid the contractor in full. If the association has done everything it is supposed to with regard to filing and posting the notice of commencement, the subcontractor cannot record his claim of lien until after serving the notice to owner. Once the association has received the notice to owner, it must not pay the contractor any partial or final payment without first getting a partial or final release of lien from the subcontractor that gave the association a notice to owner. Another option is to pay the subcontractor and deduct the amount paid from what would otherwise be due to the contractor. It is preferable, however, to have the contractor first pay its subcontractors so that there is no question about the amounts charged by the subcontractor. The association should also request an affidavit from the contractor listing all unpaid subcontractors and the amount that each is owed.

In your case, if you filed and posted a notice of commencement and did not receive any notice from the subcontractor, the non-receipt would be a complete defense to an attempted enforcement of a lien by the subcontractor. If there is no available defense to the lien, an individual owner may relieve his condominium parcel of the lien by payment of the proportionate amount attributable to his condominium parcel. Upon payment, the lienor must release the lien of record for that unit. All of this is a brief overview of a very complex area of the law. An association should seek legal counsel experienced in this area before beginning any construction or maintenance project.

QUESTIONS: Can our Association reject a potential tenant that I have for a unit I own in a condominium?

ANSWER: If the provision for screening is included in the Governing Documents of the Association, the Association may "reject" a potential tenant. The provisions of your Association’s Declaration, Bylaws and Articles of Incorporation provide important guidelines for the screening process.

If the Association’s Documents so provide, a unit owner’s failure to be current on his assessment payments can give the Association the authority to disapprove a potential lease.

A prospective tenant’s criminal background is not reason for a denial of an applicant unless his criminal record relates to the types of conduct that will adversely affect other residents in the community, or if, for example, the Documents specify that the occupants must be of good character.

The Association’s documents may provide that the potential lessee’s financial situation is a factor to be considered, and this would justify considering such information. In other cases, unless the tenant’s financial situation poses a risk to the Association, the person’s credit history is not usually a criterion to reject a prospective tenant. This is because of the credit history’s failure to have a direct impact on the Association. A renter is not in a debtor / creditor relationship with the Association. The tenant is in such a relationship with the owner of the unit. It is the owner and not the tenant who is liable to pay maintenance assessments. In most situations, an Association is not in the position to obtain a credit report on a prospective tenant unless that tenant has consented, in writing, to such an investigation. If a credit report is required, the consent should be made part of the application process and the application should provide for the consent by the applicant.

Where potential tenants will be in clear violation of the Association’s Documents, the Association has the authority to reject the lease. For example, if trucks are prohibited and a potential tenant states on the application form that the tenant intends to park a truck in the community. This is considered a "threshold" condition that allows the Association to withhold approval of the lease.

If it becomes clear to the Association in a personal interview that the applicant is unwilling to respect the Association’s rules and regulations, or if an applicant refuses to sign an acknowledgment that the tenant will follow the rules, the Association can disqualify the applicant.

Additionally, the Association can reject an applicant under the "threshold" requirements of the Documents for occupancy including, for example:

1. No pets where pets are prohibited;

2. No commercial or other prohibited vehicles where such vehicles are not allowed; and

3. Too many persons will occupy the unit for the number of bedrooms, in violation of local ordinance or the Documents.

The Documents of some association provide for a Right of First Refusal, which often requires the Association to provide an alternate renter if the candidate presented is disallowed. According to Florida case law, in some instances, where the candidate does not qualify under the Documents, the "threshold" condition, the Association can disallow the proposed candidate without being required to provide an alternate renter.

QUESTION: We are a 55+ condo association. One of the units owned by parents, is occupied solely by a 25ish son and his girlfriend. Under the 80/20 formula, we are still considered 55+. The couple have been residents for 4 years, without any problems. By visual observation, it appears the young lady is pregnant.

Our Condo documents do not allow children under 18 to reside for more than 14 days at one time, with a total of 30 days annually. Does FL condo law consider a pregnant woman to be a violation, also?

ANSWER: Many condo’s have age restrictions so that the senior citizens can live in peace and harmony.

A community claiming senior-adult status is required to register with the Florida Commission of Human Relations stating that the community is compliant with the with the requirements in order to qualify for the status. This must be submitted in writing, on association letterhead, signed by the president. Anyone who knowingly submits fraudulent information can be fined.

In order to preserve a common scheme there are rules that a condominium must follow. The 80 percent / 20 percent rule is often misinterpreted. First, 80 percent of the units must have one occupant that is over 55 years of age in order to allow an occupant less than 55 to live in a unit. The only exception would be a spouse who is less than 55 that continues to live in a unit after the death of the spouse that qualified by being over 55 and/or someone that inherits a unit.

In the case of the owner’s son and the pregnant girlfriend, neither can occupy the unit as their residence unless the parent who is over 55 also resides there or they inherited the unit. The pregnancy in and of itself would not prevent them living there.

So – even though the law is clear in that the baby can never occupy the unit – the son and the girlfriend are also in violation. The Association should inform this couple that they need to relocate because they are in violation of the requirements for maintaining a community that is age restricted since they do not qualify under any of the the exceptions.

QUESTION: Last year our condominium board hired a general contractor for a new roof. The general contractor hired a roofing contractor and other subcontractors. About one-third of the way through the job, the roofing contractor had equipment break down and the roof was exposed. During the time the roof was exposed a rainstorm hit, causing $1M of water damages to the building and the unit owners personal property. The board discovered the general contractor was not a licensed contractor after he disappeared with $200,000+ deposit. The unit owners that were not in town were not informed of damages to the units and commons areas. The contract for the roofing job required the association to purchase a performance and payment bond. The bond was not purchased and the board decided to pay the outstanding bills from various reserve accounts. Now we have a special assessment for many things including $250,000 to replenish reserve accounts.

Can unit owners file a claim against the Board’s Directors and Officers Liability Insurance for wrongful acts of the board?

ANSWER: This unfortunate but not uncommon situation often occurs because individuals without the proper training or resources are suddenly thrust into a position of great responsibility by virtue of their election to the board. Often these individuals may not be qualified by either education or experience to undertake a responsibility such as a major renovation. Although professionals make every attempt to point out the dangers of the board taking on projects and long-term contracts for services without the appropriate professional guidance, it is not uncommon for boards to be penny wise and pound-foolish. Instead of paying for the appropriate professionals either to assist in the project and/or paying the association attorney to render an opinion, the board often thinks they are saving money by making these decisions themselves and by supervising the project.

If a competent engineer had been hired to oversee this project, it may have added an extra layer of protection. The contractor(s) should have been investigated thoroughly before allowing them on the property to do any work. This investigation should include at a minimum the verification of references, licenses, and proof of insurance. An inquiry to the department of contractor certification in the county where the work is taking place would have uncovered the status of the contractor’s license and may have even revealed complaints filed against that contractor. Furthermore, no work should begin before a proper notice of commencement is filed with the clerk of court.

After the damage was done, the first action taken by the board should have been to secure the property from further damage, including the common area and the property of unit owners. An association may be sued with respect to the exercise or non-exercise of its powers, including, but not necessarily limited to, the maintenance, management, and operation of condominium property. Nothing precludes a unit owner from bringing common-law or statutory causes of action against the association. The unit owner(s) would be bound by the rules that require mandatory non-binding arbitration and other dispute resolution provisions.

Under certain circumstances, the failure of the board to carry out its responsibilities can result in additional financial requirements, such as you have described. If the unit owners are successful in proving the board was negligent, the association may be responsible for the damage and expenses that are incurred by a unit owner as a result of the board’s negligence. This is in addition to any obligation on the part of the unit owners to contribute to the repair or replacement of the common areas. Inaction by the board cannot be justified because another party is responsible. F.S. 718.111(3); 718.1255

This board should have notified its directors and officers liability carrier of a potential claim. The unit owners could bring action against the board, not the insurer. If the claim were found to be something for which the board had coverage, the insurer would defend the claim. In the event the board was found to be liable there may be coverage under the directors and officers policy to offset that liability.

Board members put themselves in a position of personal liability every time they proceed on behalf of the association. This volunteer position is just that – a volunteer position. Every person that serves on the board should insist that the association consult with professionals every time the association is involved in a project that could potentially create personal liability for the board members. A volunteer position is not worth the risk of losing everything an individual has worked his whole life to accumulate.

QUESTION: Our Association has a five-member board but two positions are vacant. How many board members are required in order to have a quorum for a board meeting?

ANSWER: That is not a question that is easily answered because the governing documents for every community must be reviewed to determine how many board members are required and that number would be used to determine how many board members constitute a quorum.

Recent arbitration decisions confirm that you base a quorum on the number of members required by the documents, not the number currently sitting on the board. If the documents require a five (5) member board, then three (3) board members must be present to constitute a quorum. Even if there were two (2) positions vacant, a quorum would still require three (3) board members present as you determine the quorum based on the number required to serve.

Some documents specify a range that is required such as "The board will consist of not less than three (3) nor more than nine (9) persons." If that is the case, than the quorum would be determined by the number actually serving on the board and a quorum, based on that number, could be as few as two (2) or as many as five (5).

Fortunately, there is one action a board may take even if there is less than a quorum serving on the board. The condominium act does give the board the ability to appoint board members to fill the vacant positions, even if those currently serving on the board are less than what is required for a quorum.

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QUESTION: I serve on a five member board and I am newly elected. Three of the board members have been on the board for some time. Those three members make all the decisions and they do not even listen to the two newest members. What can we do?

ANSWER: This perceived abuse of power is not an uncommon problem when there are long-standing members serving on the board. Some governing documents limit the number of successive terms an individual may serve, but many do not have a provision to prevent a person from seeking subsequent terms. It is often a benefit to the community that there is continuity on the board because the long-standing members have a history with the community.

There are matters, based on the condominium act and the community governing documents that must be conducted at a properly noticed board meeting, although many day to day items do not fall under that requirement. Unfortunately, unless a law is being violated, you may simply be a victim of voter and community apathy, which has put you in the position of serving on a board that does not give you a voice and has allowed the community to be governed by a board that does not get along. In any case, it is counterproductive when boards do not work together for the good of the community.

In the event that the community tires of hearing the same old thing from the same old board, there is an obvious option. At the next election, you may be able to convince someone else to run for the board.

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QUESTION: We were told that our condominium association may be exempt from paying sales tax on some of the electric that is used in the common areas, but we cannot find any information about this on the FPL website.

ANSWER: Your Association may be exempt from paying sales tax on electric power used for the benefit of the members. This almost unknown provision of the Florida Administrative Code, Section 12A-1.053 (1) (a), provides for a sales tax exemption on electric power or energy used in common areas of condominiums, cooperatives, and homeowner associations. Since the responsibility for lighting streets and common areas in associations is, in many ways, a quasi-governmental function, the statutes and regulations allow a similar sales tax exemption that a government receives for providing the same service. Often referred to as the common use facility exemption, the provision provides that an electric utility does not have to collect or remit sales tax on electric power, when that power is sold to and used by condominiums, cooperatives, and homeowner associations in the common areas.

Associations must meet several state requirements, first of which is exclusive use of the power. In order to claim the exemption from sales tax, 100% of the energy must be used exclusively by the members of the association. None of the energy may be used in any activity which sells or rents a commodity or provides a service for a fee. If an association operates a public or semi-private facility, then the electric power used in that facility will not be eligible for the exemption. An association cannot allocate percentages to apportion the energy used between exempt and non-exempt uses. All exempt uses must be metered separately from non-exempt uses.

The Florida Department of Revenue has concluded that there is some electrical power used in the common areas that is not exempt from sales tax, such as energy that is used to operate a water or sewage system. In addition, non-energy charges, such as charges for re-lamping street lights or pole and light rental are not exempt.

In order to claim your exemption, you must have a responsible legal entity established, such as your existing Florida not-for-profit corporation and, in the case of homeowners’ associations, membership must be mandatory for all owners in the community. The utility will require written documentation establishing the customer’s entitlement to the exemption. FPL has a packet of information and forms for a community association to obtain exempt status under the regulation. The package includes a form to request a refund (limited by a number of years) for sales tax that was paid prior to applying for the exemption. The forms can be obtained by contacting FPL at (800) 749-2285, Option 22. The form numbers are: form 6037- Common Use Facilities Exemption; form 792-Common Use Facilities Rider; and form 6036-Application for Refund of Florida State Sales and Use Tax From Florida Power and Light.

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QUESTION: What can we do about unit owners that are current with last night’s episode of their favorite TV show on cable even though they are behind on paying the monthly assessments due the Association? In other words – can a condominium association shut off the bulk cable to unit owners that are not paying the Association?

ANSWER: No. The Association cannot deny members who are delinquent in the payment of assessments the use of the recreational facilities and amenities of the Association and it cannot take away other "privileges" by turning off their cable/internet as a mechanism of enforcement. Condominium associations are creatures of statute, and as such, there are a number of arbitration decisions and declaratory statements, as well as case law, that have held that if the authority to do something is not conferred in the Condominium Act, then the association, members and developers do not have the authority to take such action. As such, the Association only has the mechanisms and procedures set forth in the Condominium Act for collection of delinquent assessments. It cannot restrict use of the common elements, turn off cable/internet or take any other action that is not otherwise permitted by the Condominium Act.

In any event, it is unlikely the cable company could / would provide such a remedy even if it were permitted under the Condominium Act. The bulk contact is with the provider and the association. Often a unit owner has premium services that are current because they continue to pay the cable company on a retail basis even though they are behind on everything else. The cable company cannot disconnect a customer that is meeting its contractual obligation with the cable company by paying the retail portion of a cable bill. The association cannot disconnect the cable as the unit owner is subject to the remedies offered the association under the statutes. It may seem unfair that the association is in Jeopardy while the unit owner enjoys his Wheel of Fortune, but at this time, that is the Final Answer.

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QUESTION: I just received a notice from our property manager that all the directors of our condominium association must resign, because under the changes to 718 that took place last year, a board member may not serve for more than 2 years. She also said that there is no defined time you must be off the board. Is she correct?

ANSWER: No. The statute says that staggered terms for board members cannot be longer than two years. A board member may be elected to subsequent terms of office as long as each term is no more than two years.

STAGGERED TERMS FOR CONDOMINIUM DIRECTORS: The legislature amended Florida Statute 718.112(2)(d), effective October 1, 2008, regarding staggered terms for condominium directors. The statute was amended to permit staggered terms for directors for no more than 2 years upon approval of a majority of the total voting interests. Staggered terms of 3 or more years are no longer allowed. If a condominium association has staggered 3-year terms for directors, the association must definitely take a new vote to amend for a staggered 2-year term structure.

The question arises whether a condominium association with an existing staggered 2- year term structure in its documents must take a new vote to approve the staggered 2-year term structure. The Division of Florida Condominiums, Timeshares and Mobile Homes ("Division") has taken the following position on this issue. If the condominium association documents already provide for 2-year staggered terms, the Division recommends that the association reaffirm this by a new vote with approval from a majority of the voting interests in order to continue using 2-year staggered terms. This is the case even if you can prove that your 2-year staggered term provision was previously adopted by a majority of the total voting interests of your association.

We recommend that this approval vote should be taken before the association mails out the first notice of annual meeting and election.

Staggered terms of 3 or more years are no longer allowed. If your association wants to adopt 2-year staggered terms as a new provision or your current association documents provide for staggered terms of 3 years or more, you must amend your documents accordingly. If you currently have staggered terms of 3 or more years, board members who are not up for election because they are in mid-term of a 3-year term may serve out the remainder of their term. If a board member’s 3-year term expires at the next (upcoming) election, the newly elected member is limited to either a 1-year term or 2-year staggered term depending on how your documents are amended and approved by a majority of the voting interests. This process will repeat itself in subsequent annual elections until all board members are serving either 1-year term or 2-year staggered terms.

QUESTION: We have a problem with Mr. Disruptive, a unit-owner who, whenever he attends our condo meetings becomes argumentative, loud, abusive and threatening to the point we are in fear of violence. We are then obliged to end the meeting abruptly. What recourse do we have?

ANSWER: A disruptive unit owner makes everyone’s life miserable. In fact, even if Mr. Disruptive has a good idea - very few board members will listen because of the frequent outbursts. Often this is the guy who stands up and quotes 718 in part, but never in the right part!

One thing that can help is to provide your board with a primer on condo law. There are several good ones available and your property manager can probably help you find one. This is a preferable method for the layperson to avail themselves with enough understanding of the law to be able to perform the duties of a board member. Additionally, rely on your property manager and association attorney to fill in the blanks or to deal with difficult issues.

There are things the board can and should do to avoid confrontations such as this, since these outbursts serve no real purpose and are rarely the catalyst for the change the unit owner is seeking. Mr. Disruptive feeds off confrontation and the reaction that others have to his outbursts. There are several things that may help diffuse the situation. The most important thing is to remain calm and not let him get you to shout back. I know it sounds easier than it may be at first - but remember - you cannot control him, only your reaction to him.

The board must put policies in place to distance themselves from the unit owners. If there is a property manager, he should be the point person to discuss issues with the owners. If the person has a legitimate request for information, try to make sure he is given that information before the meeting.

What you must do next is afford yourself as much protection from Mr. Disruptive as the board can muster. Before the next meeting, send him a letter informing him that the board will be videotaping all future meetings. Have the equipment set up behind the board, facing the audience. This may serve two purposes - the first being that Mr. Disruptive will behave if he knows he is being videotaped and the second purpose will be that the board has a record of the meeting to provide to law enforcement in the event things get out of hand. Even better than the video tape alone would be to contract with your local law enforcement agency to have an off-duty police officer at the meeting. A very small price to pay for peace and tranquility. If the videotape and the officer’s presence don’t calm him down, then removal by the officer may provide the relief you need.

Very often, Mr. Disruptive can be controlled if you get to the "real" basis for the outburst. As a board member, you are not expected to delve into his deep-seated issues - but it may be something obvious and easily resolved. Does he feel that the community in some way slighted him? Was he not invited to assist in preparing for a community event? A real pro can turn a negative into a positive if they can get to the basis for his disruptive behavior. It may be as simple as he was denied his request to paint his mailbox and explaining the basis for the denial may calm him down. If Mr. Disruptive thinks the meeting notice should be posted in the mail room of every building - not just on the main bulletin board - give him the necessary copies and thank him for offering to post the notice himself.

That said, - Mr. Disruptive has probably been difficult most of his life – so remember this, he has years of experience and is very talented when it comes to upsetting the apple cart. Try to remember the good people in your community who truly benefit from your sacrifices and show their appreciation. After the next board meeting - take the good guys home in your thoughts - and don’t give Mr. Disruptive any more power over your free time.

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QUESTION: Our Board of Directors meets every month. After the recent election, the new President of the Board stated that the "minutes of the last meeting will not be read", as they are posted in the Office. Can the President of the Condo make this rule? It seems as if he is trying to hide something.

ANSWER: The reading of the minutes of the previous meeting may be either read or waived at each meeting. The minutes of the meeting, whether in final format or otherwise, are part of the official record of the association and must be available to the membership for inspection and copying. Your association has more than complied with the requirements of availability of the minutes by making them available in the association office. If your Association is posting the minutes at the office, they have established a basis for waiver of the reading of the minutes at each meeting, but they have not eliminated the necessity of bringing it up at each meeting. Your Association documents may or may not contain additional requirements for the posting and / or reading of the minutes.

Additionally, the minutes of the membership meeting serve as the permanent record of the proceedings. The minutes are not required to be an elaborate account of every discussion or debate that took place at the meeting, but should identify relevant information such as location, time, presiding officer and the exact quorum in attendance. Florida Statute 718.111 requires that the minutes be retained for seven years. Their content should include any motions made, the result, and other pertinent items of business.

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QUESTION: We require that all persons running for board be an owner of their unit. If the unit is held by two or more persons, a statement must be signed by all owners of that unit that they appoint that particular person the voting representative (interest). This person holds an expanded life estate deed. The owner of the unit was alive at the time that this person filed to run for the board (therefore he was not the owner) and though the "life estate" is held by this person, it is held with another relative. There was no statement signed by either the owner (who has since died), nor the person that holds the "life estate" with this person. In an attempt to notify the other inheriting party, we find that the information regarding that person was not given correctly either. What action should this board take?

ANSWER: A voting representative and a board member are two separate issues. Many condominium bylaws require that owners designate one person as the voting member when a unit is owned by more than one person or a corporation. The bylaws may also require a valid voting certificate on file in the association records. A voting certificate does not determine that the holder of the certificate is the only owner that may be a board member.

While Florida law does not specify that individual board members must be members of the association, most bylaws will specify who is eligible to serve on a board. The person with a life estate enjoys all rights of ownership, except for the ability to convey the property to another beyond the life estate. Therefore, the person with the life estate has full control and all rights as the current owner.

Unless there is something specific in the governing documents that forbids a life estate holder from serving on the board, this person may serve. The board should review the bylaws of the association to determine if any provisions have been violated. In the event that this person is not eligible to serve, the board should require that he or she step down. If the board is not comfortable making the determination on its own, it should consult the association attorney.

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QUESTION: Is there any way legally or in a roundabout way to pay a person to be the president of the condominium board? I think it would be worth it to get someone who would put in all the time and hard work of being president. We are in Volusia County FL, 32114. There must be some way around the conflict of interest or whatever.

ANSWER: Pursuant to Florida Statutes, Section 718.112, the directors and officers of the Association cannot receive compensation for their services unless the bylaws of the Association specifically permit compensation to be paid. If the bylaws allow compensation to paid, the board should strictly observe the requirements in the bylaws for compensating a board member. Although compensation may not be allowed, a board member should be allowed reimbursement for reasonable out of pocket expenses. The board should require a strict accounting for all expenses before reimbursement is made. One last thought – no one on a board should embark on a roundabout way to accomplish anything and should rely on guidance from the association attorney, the licensed property manager, the documents, and Florida law.