Florida Board says no records?

After posting common area 1&2 post on this website about our BOD charging swimming fee with no notice vote etc I tried get records to see how it was decided on. That was May 2. On my 4th attempt someone signed the certified letter. It was now June 17 and when our Pres showed and I looked at the few sentences of chicken scratch he called minutes and found nothing. He had no financial or pool records but said he would check and get back to me. They had not even made out taes for 2010. I was told he read a letter to me at the monthly meeting explaining that the board felt they had shown me all of the non proprietary information I was entitled to. I still have not received the letter and will see my lawyer tomorrow and waste more time. I will now make them pay.

James,

As long as you will be seeing your lawyer today, why don't you please post here what he advises you to do. What really bothers me is your statement of " . I will now make them pay."

2 things here! The " THEM" is you and all of your neighbors and you will all pay. And it sounds like the Board made a decision outside of a duly called Board meeting. This is against the State Statutes. The Board could fix this quite easily by calling a meeting and then to recind the fee for pool use. Should you go all legal? I would try to work this out before getting everything into a turmoil. Try the high road first

Who takes minutes at your meetings? No minutes?, then you need to get a secretary or property manager. Perhaps you need to do management housecleaning as well.

James,

Just curious, is the "swimming fee" charged to all homeowners, or just to those who use the pool? The reason I ask is because it makes a difference in how that income must be reported to the IRS.

The swimming fee is just on the members who use the pool. The board puts this out there with no procedural trail. They can't do the association's work in the back room. I am an investor who owns units so I pass this to my tennants. I know homeowners think they are one up on renters but so what. I have rentals in my neighborhood and don't cry about it. Alot of good people are choosing to rent in this economy. My attorney took my case saying I have the right to see all records. He also looked at our Covenants and said because most of them are no longer valid that the CCR may no longer be a binding contract. They were written in 1972 and are now only selectively enforced. He will call me back after reveiwing the records and advise me.

If your covenants were written in 1972 and none were preserved under the Marketable Record Title Act then the Association may have a more serious problem.

Homeowners Associations are covered under 26CFR1.528. The tax treatment is different.

Bruce,

I do thank you for your clarification.

Sorry I am referring to the $5000 in pool fees.

Thanks for the help. It looks like if those fees were paid by non members we would be back on the hook. Most of the fees are paid by renters and credited to member's accounts. That is also probably wrong also wrong. Any thoughts?

Fees or other income received from non-members is non-exempt income and is taxable. However, if the non-member pays the fee to the owner-member and the owner-member in turn pays the fee to the association, it may appear as exempt income.

Do the non-members pay the fees directly? You may be in a gray area here. I'd check with an accountant or knowledgable tax attorney.

Hi James:

Check your governing documents and insure what they state with regards to whether or not the pool is considered “community property” and if it is owned and maintained proportionally between all owners. If so, then the HOA should not be charging a swim fee. This is because access to community property which you in essence own a portion of by virtue of your governing documents and which you pay to maintain should not be denied. In essence expenses are shared to both use and maintain between owners as noted in the governing documents.

Now … on the other side of the coin if you potentially own a home within maybe a “country club” type setting where the “pool” is not owned and maintained by the HOA but instead by a different and separate entity, then yes you could be charged a fee above and beyond assessments for use of facility.

The following statute would pertain if you fall under 720 as you mentioned above:

 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.

720.303 Association powers and duties; meetings of board; official records; budgets; financial reporting; association funds; recalls.—

 (2) BOARD MEETINGS.—

 2. An assessment may not be levied at a board meeting unless the notice of the meeting includes a statement that assessments will be considered and the nature of the assessments. Written notice of any meeting at which special assessments will be considered or at which amendments to rules regarding parcel use will be considered must be mailed, delivered, or electronically transmitted to the members and parcel owners and posted conspicuously on the property or broadcast on closed-circuit cable television not less than 14 days before the meeting.

Thank you all for your measured replies. I am an investor and in my post Common Areas 2 I received equaly good advise. I retained a lawyer for an opinion on fees for common areas. He advised me that the Covenants seemed to give our HOA the right to charge for use. He said however that members must be advised in advance and a vote in the open by our BOD had to be taken. That was not done last year or this year so members have had no access to the process. I did not continue my action and advised the board of the law opinion and how to fix it. They did nothing. Our president said he decided to charge and that was that. There are no records to support anything they have done in the minutes. The minutes are the only records I have been allowed to see. No seal is put on them and they have freely changed them to suit their purpose. The minutes of a meeting my be 6-10 sentences long. I sent certified requests 3 times to see them before one was signed for. I wanted to see arch. committee records and financial records. That was during the last week of April. I was told that an answer to me was written at the last meeting 3 weeks ago and voted on but I still have not received it. The law is clear on this and it is now the only way forward.

Donna,

Unfortunately, when you have a president that thinks he or she is "the boss" ("Our president said he decided to charge and that was that.") and the board doesn't contest it, then there's not much anyone can do. The owner can take it to court, but it's not likely to do much good since he hasn't been "harmed" (the tenants are willing to pay the swimming fee).

Melissa,

As far as being a "superior owner," I suppose if he can afford it and was willing to buy enough units to be able to control the votes in the association, then it would be a "hostile takeover" and he could set up a board to his liking.

James,

Just out of curiosity, what do your documents say on this? 720:308 (a)

" 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.

Do you have different classes of members? 720.308 Assessments 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.

None the less, the Board failed to pass or vote on the issue at an open meeting. Shame on them. This needs to stop.

As I remember our HOA attorney explained, that assessments or special assessments are a a Board action only. (Donna)

The swimming fee is just on the members who use the pool. (James) .. He [my attorney ] advised me that the Covenants seemed to give our HOA the right to charge for use. He said however that members must be advised in advance and a vote in the open by our BOD had to be taken.(James)

First, let me clarify that ‘fee’ is not an assessment. Charging fees, to raise extra money, is allowed in Florida but the issue is determined by the Governing documents. For instance, HOA can charge a late fee of $25 plus interest on assessments, or a $100 transfer fee for leases or sales if your docs allow it. In other words no vote by the BOD has to be taken to levy those fees.

If your covenants provide for charging, let's say, a fee of $100/per year to use the pool, then the Board can certainly do it also without any further notice. But should that fee be increased from $100/year to $500/per year, the vote of the entire membership – not only the BOD - could be required.

If that fee of $500 is challenged, the courts are going to review whether that fee is board imposed or something the owners agreed to. If the docs are ambiguous, only heavens know.

I will say this, I agree that all board actions need to be in the open and transparent. But I don't agree that suing boards is the answer. It should be a last resort because in the end the money used to defend the board will be your money. It will deplete your reserves and may cause a special assessment.

Why not recall the board? If they are doing a bad job band together with your neighbors and recall and replace them. Litigation gets messy and expensive, the best way to deal with a bad board in my opinion is to get rid of them.

My advise is if you don't want to be a board member, attend meetings, and just want to complain you don't know what is going on because you should be treated separately than all other members...I say MOVE!

James,

I think that what everyone is really saying is that members should try all avenues available prior to filing legal action against the Association. Granted, sometimes the individuals who are serving on the Board refuse to comply with State laws or their own governing documents. When this happens, there are only three choices:

Live with it.
Move.
Bring legal action.

As you are aware, legal action causes unintended consequences. It also typically costs more in time and energy. Only the person bringing the action can decide if they are willing to deal with all of the costs, time, energy and unintended consequences.

It appears that you have tried everything else and you are left with one of the three choices. Based on your posting, you have chosen to seek legal options. I wish you luck and encourage you to keep the lines of communication open with your board in the possibilities that the issue can be settled outside of court (as this will be less expensive for you and everyone else).

Tim