Opinion on Undeveloped Lot Voting in Florida

Started by LisaS22 • 16 replies • 2384 views

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LisaS22 (Florida)
Posts: 4

Posted:

We have a small POA in Central Florida, which has little to no amenities offered for it's residents. Only a boat ramp and small fishing dock that is currently unusable due to low lake levels. The way the by-laws are written now, undeveloped lots are not required to pay annual dues, or assessments, until beginning construction on the home, but still maintain one vote per lot. The new POA President has an issue with the fact that if a developed lot is late in paying dues, they loose their vote, but undeveloped lots who are not required to pay at all, still can vote. She is planning to recommend an amendment change that will remove voting privileges from the undeveloped lots, since they do not pay dues. The number of undeveloped lots right now equals roughly 20% of the total votes in the association. Amendment changes require 3/4 of the signatures of all the lot owners to pass.

I would like to get an opinion of what the standard is in Florida on how the interests of undeveloped lot owners are represented.

Do undeveloped lots usually pay dues, or even partial dues, on their lots when there are no amenities such as golf courses, club houses, etc. offered?

Despite the fact that undeveloped lots do have a vested interest in the ownership of their lot, is it common for them to have no voting rights if no dues or assessments are currently being charged on these lots?

It is common for undeveloped lots to be exempt from paying special assessments?

Due to some glaring errors in the current amendments, changes will likely be done in the next few months. These additional changes regarding undeveloped lots will surely be a hot topic and cause a lot of heated arguments. Your help on what the norm is on these topics will be a huge help. Thanks in advance.

Lisa

PeterD3 (Florida)
Posts: 708

Posted:

Lisa

There is some conflicting statements in your post, this:

"...if a developed lot is late in paying dues, they loose their vote, but undeveloped lots who are not required to pay at all, still can vote."

conflicts with this:

"Despite the fact that undeveloped lots do have a vested interest in the ownership of their lot, is it common for them to have no voting rights if no dues or assessments are currently being charged on these lots? "

Common or standard language isn't really the issue here. It's about what YOUR documents state and what YOUR community wants to do [within the law].

If you only have 20% undeveloped and an active membership base it is likely that an change will take place due to the numbers (80% developed [i.e. paying], less than that required to change the docs).

LisaS22 (Florida)
Posts: 4

Posted:

I don't believe the statement is conflicting. In the first statement, I am explaining the way the by-laws and amendments are currently written:

Developed lots: required to pay annual dues and any special assessments if charged. Each lot gets 1 vote, but if payment of dues or assessments are past due, voting privileges for lot owner are suspended until account is current.

Undeveloped lots: NOT required to pay annual dues or special assessments until construction is started on the home. Each lot gets one vote.

The question I am asking is, is this normal in the state of FL where the subdivision has little to no amenities?

The current president is a developed lot owner. She is suggesting to change the by-laws/amendments because she feels the undeveloped lots should also be required to pay dues & assessments if they are allowed an equal vote in POA business. The undeveloped lot owners do not feel this recommendation to change the by-laws/amendments on this issue is fair, since when they invested in the property, they did so with the understanding that they would have some say about how the subdivision is being run despite not having to pay annual dues or special assessments.

I hope that clarifies things.

Thanks,
Lisa

PeterD3 (Florida)
Posts: 708

Posted:

Now I see one is fact the other is a question.

Still there is no FL. state 'normal' and very few standards except those in the applicable statutes.

I see the way each side feels (dev., un-dev.) but it looks like the un-dev. are out numbered so they would likely be forced to pay if the docs. are legally changed.

CarolynL2 (Florida)
Posts: 73

Posted:

Lisa,
I am assuming the language allowing unimproved lots to vote and not pay assessments was the original recorded language in the by-laws. If so, you should look at this Florida Statute.

720.306 Meetings of members; voting and election procedures; amendments.—
(c) Unless otherwise provided in the governing documents as originally recorded or permitted by this chapter or chapter 617, an amendment may not materially and adversely alter the proportionate voting interest appurtenant to a parcel or increase the proportion or percentage by which a parcel shares in the common expenses of the association unless the record parcel owner and all record owners of liens on the parcels join in the execution of the amendment.

DeeS1 (Michigan)
Posts: 223

Posted:

our documents require undeveloped lots owned by the developer to pay a shared portion of expenses ... operating, administrative and maintenance cost, but they are are not required to pay special assessments, capital improvements, or reserve contributions. They are allowed to vote. Undeveloped lots owned by any other must pay full dues and may vote.

PeterD3 (Florida)
Posts: 708

Posted:

Lisa,

If your original post is acurate with regards to the 75% voting threshold then it would not appear that 720.306 (c) would apply in regards to the ammendment change as it is specified in your documents.

Additionally you said the undeveloped lots (~20%) are owned and not in control of the developer ('undeveloped lot owners').

CarolynL2 (Florida)
Posts: 73

Posted:

Lisa,
I believe a very good argument could be made that any ammendment, whether approved by 75% of the voting members or 99%, could divest you of a VOTING RIGHT appurtenant to your lot recorded in your original governing documents. I believe this is exactly what the statute was intended to clarify. I am not an attorney, an prehaps Peter knows beter, but it is my understanding that ammendments must be reasonable and may not be in conflict with public policy. In my opinion allowing even 99% of members to vote to divest you of your voting right, as recorded in your original documents, is unreasonable. They may be able to vote to have you pay assessments, but I think it goes against every interest of public policy to allow any percentage of the voting interest to effect a voting right guarantee. Just my opinion.

CarolynL2 (Florida)
Posts: 73

Posted:

Sorry about the first sentence. it should say-I believe a very good argument could be made that any ammendment which could divest you of VOTING RIGHT appurtenant to your lot as recorded in your original governing documents, whether approved by 75% of the voting members or 99%, is unreasonable and violates public policy.

PeterD3 (Florida)
Posts: 708

Posted:

Fair enough.
Conversely, it would then seem no change can be made under Fl. 720.306 (c) to either remove voting rights OR require payment for un-dev. lots.

CarolynL2 (Florida)
Posts: 73

Posted:

I would agree that this statute prohibits any attempts to increase the share in common expenses of undeveloped lots. However, I've often wondered if 75% of the voting membership could ammend the documents to create a requirement for build-out to begin and be completed?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Lisa:

Per your statements describing “lots” I am then assuming you are an HOA. There are various items which can determine whether or not certain aspects apply. If any of the bold areas below apply, then further clarification may be needed. However, from your statements and the statute, my potential determination is ALL lots must pay assessments. The following is the FL HOA statute regarding assessments:

http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0720/Sections/0720.308.html

Part of that statute is as follows:

720.308Assessments and charges.—

(1)ASSESSMENTS.—For any community created after October 1, 1995, the governing documents must describe the manner in which expenses are shared and specify the member’s proportional share thereof.
(a)Assessments levied pursuant to the annual budget or special assessment must be in the member’s proportional share of expenses as described in the governing document, which share may be different among classes of parcels based upon the state of development thereof, levels of services received by the applicable members, or other relevant factors.
(b)While the developer is in control of the homeowners’ association, it may be excused from payment of its share of the operating expenses and assessments related to its parcels for any period of time for which the developer has, in the declaration, obligated itself to pay any operating expenses incurred that exceed the assessments receivable from other members and other income of the association.
(c)Assessments or contingent assessments may be levied by the board of directors of the association to secure the obligation of the homeowners’ association for insurance acquired from a self-insurance fund authorized and operating pursuant to s. 624.462.
(d)This section does not apply to an association, no matter when created, if the association is created in a community that is included in an effective development-of-regional-impact development order as of October 1, 1995, together with any approved modifications thereto.

JanetB2 (Colorado)
Posts: 4,219

Posted:

To clarify as Carolyn pointed out you cannot deny them vote rights; however, they should be paying their fair share of any assessments for the association. If they do not pay then certain voting privileges can be potentially denied following your documents and state statutes. Keep in mind depending on the wording the state statutes can supersede governing documents.

CarolynL2 (Florida)
Posts: 73

Posted:

In my opinion, if Lisa's governing documents as originally recorded determined the undeveloped lots propotional share for common expenses to be zero (0), while still having one vote, then everyone contractually agreed to this prior to purchasing their lots. It is my understanding, and I am not an attorney, that a voting right is a substantive contractural right, which can not be changed unless agreed to by all parties affected or serves some compelling public purpose for change.

The Florida Constitution prohibits the legislature from passing laws "impairing the obligation of contracts". The recent Florida Supreme Court ruling in Cohn vs. Grand Condominium declared certain laws to be unconstitutional which affected voting rights as originally recorded because there was no language in the governing documnents agreeing to be bound by future changes in the law. Although this case was a condominium case I believe, just my opinion, the decision would also apply to non-condominium associations.

Carolyn

LisaS22 (Florida)
Posts: 4

Posted:

Janet, the development is a POA (Property Owners Association) originally formed in August 1990, so I don't believe the statute 720.308 would have any bearing on it due to the fact that it was formed prior to Oct 1st, 1995.

720.308 Assessments and charges.—

(1)ASSESSMENTS.—For any community created after October 1, 1995,

From all the great info and feedback everyone has provided here, it sounds like 720.306 might be the undeveloped lot owners' best friend.

720.306 Meetings of members; voting and election procedures; amendments.

(b) Unless otherwise provided in the governing documents or required by law, and other than those matters set forth in paragraph (c), any governing document of an association may be amended by the affirmative vote of two-thirds of the voting interests of the association.
(c) Unless otherwise provided in the governing documents as originally recorded or permitted by this chapter or chapter 617, an amendment may not materially and adversely alter the proportionate voting interest appurtenant to a parcel or increase the proportion or percentage by which a parcel shares in the common expenses of the association unless the record parcel owner and all record owners of liens on the parcels join in the execution of the amendment.

If, I am understanding this correctly, the undeveloped lot owners plus any lien holders on those lots would have to agree to their votes being removed or increases in % expenses on their lots, which is right now $0? or would they just all have to participate in the vote to change that part of the original documents, but due to undeveloped lot owners being only 20% of the total lots now, they would likely get out voted? Other changes would be subject to the 75% of all property owners approval as stated in the documents, but it appears voting rights and assessment changes from original documents on those issues are excluded from the typical 75% approval. Does that sound correct?

Thanks again for all your help,

Lisa

CarolynL2 (Florida)
Posts: 73

Posted:

Lisa,

Your association was probably incorporated under F.S. Chapter 617, Corporations Not For Profit. In 1992 F.S.617.301-312 were added to give statutory recognition to homeowner associations and protect the rights of members. F.S. 617.306(1)c had this requirement:

(c) Unless otherwise provided in the governing documents as originally recorded, an amendment may not affect vested rights unless the record owner of the affected parcel and all record owners of liens on the affected parcels join in the execution of the amendment.

Depending on what your governing documents say about future laws you may still be protected.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Lisa:

That is why I made sure to bold that particular text as an important item regarding when you were formed. With regards to 720.306 which you posted the way I am reading it is … if the text stating not having to share in common expense was in the “original” recorded document, then both the record parcel owner and record owners of liens would have to agree to any amendment change.

What you might do is check your County Records and make sure if there may have been a “Original” document filed which you may not be aware of snd if so does it include this statement. It might be possible that it was an afterthought of the developer and added after original filed. Slim chance, but still might be worth checking to make sure.

(c) Unless otherwise provided in the governing documents as originally recorded or permitted by this chapter or chapter 617, an amendment may not materially and adversely alter the proportionate voting interest appurtenant to a parcel or increase the proportion or percentage by which a parcel shares in the common expenses of the association unless the record parcel owner and all record owners of liens on the parcels join in the execution of the amendment.

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