Capital Improvents of HOA w/o majority membership vote

Our HOA has approved to go forward on a $600,000 renovation to our clubhouse, cabana expansion, and a free-standing 'garage' for storage. We have been informed that these improvements DO NOT fall under the special assessment definition, and that they have the 'sole' decision for such. What remedy do we,
the majority of homeowner's, have with respect to their decision ?

These issues are usually deeper than a few sentences can explain.

Philosophically, there should never be special assessments for renovations/replacements that can be reasonably expected and planned. That means the dues payers aren't paying high enough dues or the board is blowing its cash rather than understanding the need for long-term savings.

On the other side, you have residents who fight all dues increases and complain when assessments hit because they can't afford them, but want the amenities.

Tough call and I don't understand the full situation.

Tim, I believe he is referring to: 720.303 Association powers and duties; meetings of board; official records; budgets; financial reporting; association funds; recalls.—

(6) BUDGETS.—
(a) The association shall prepare an annual budget that sets out the annual operating expenses. The budget must reflect the estimated revenues and expenses for that year and the estimated surplus or deficit as of the end of the current year. The budget must set out separately all fees or charges paid for by the association for recreational amenities, whether owned by the association, the developer, or another person. The association shall provide each member with a copy of the annual budget or a written notice that a copy of the budget is available upon request at no charge to the member. The copy must be provided to the member within the time limits set forth in subsection (5).
(b) In addition to annual operating expenses, the budget may include reserve accounts for capital expenditures and deferred maintenance for which the association is responsible. If reserve accounts are not established pursuant to paragraph (d), funding of such reserves is limited to the extent that the governing documents limit increases in assessments, including reserves. If the budget of the association includes reserve accounts established pursuant to paragraph (d), such reserves shall be determined, maintained, and waived in the manner provided in this subsection. Once an association provides for reserve accounts pursuant to paragraph (d), the association shall thereafter determine, maintain, and waive reserves in compliance with this subsection. This section does not preclude the termination of a reserve account established pursuant to this paragraph upon approval of a majority of the total voting interests of the association. Upon such approval, the terminating reserve account shall be removed from the budget.
(c)1. If the budget of the association does not provide for reserve accounts pursuant to paragraph (d) and the association is responsible for the repair and maintenance of capital improvements that may result in a special assessment if reserves are not provided, each financial report for the preceding fiscal year required by subsection (7) must contain the following statement in conspicuous type:

THE BUDGET OF THE ASSOCIATION DOES NOT PROVIDE FOR RESERVE ACCOUNTS FOR CAPITAL EXPENDITURES AND DEFERRED MAINTENANCE THAT MAY RESULT IN SPECIAL ASSESSMENTS. OWNERS MAY ELECT TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6), FLORIDA STATUTES, UPON OBTAINING THE APPROVAL OF A MAJORITY OF THE TOTAL VOTING INTERESTS OF THE ASSOCIATION BY VOTE OF THE MEMBERS AT A MEETING OR BY WRITTEN CONSENT.
2. If the budget of the association does provide for funding accounts for deferred expenditures, including, but not limited to, funds for capital expenditures and deferred maintenance, but such accounts are not created or established pursuant to paragraph (d), each financial report for the preceding fiscal year required under subsection (7) must also contain the following statement in conspicuous type:

THE BUDGET OF THE ASSOCIATION PROVIDES FOR LIMITED VOLUNTARY DEFERRED EXPENDITURE ACCOUNTS, INCLUDING CAPITAL EXPENDITURES AND DEFERRED MAINTENANCE, SUBJECT TO LIMITS ON FUNDING CONTAINED IN OUR GOVERNING DOCUMENTS. BECAUSE THE OWNERS HAVE NOT ELECTED TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6), FLORIDA STATUTES, THESE FUNDS ARE NOT SUBJECT TO THE RESTRICTIONS ON USE OF SUCH FUNDS SET FORTH IN THAT STATUTE, NOR ARE RESERVES CALCULATED IN ACCORDANCE WITH THAT STATUTE.
(d) An association is deemed to have provided for reserve accounts if reserve accounts have been initially established by the developer or if the membership of the association affirmatively elects to provide for reserves. If reserve accounts are not initially provided by the developer, the membership of the association may elect to do so upon the affirmative approval of a majority of the total voting interests of the association. Such approval may be obtained by vote of the members at a duly called meeting of the membership or by the written consent of a majority of the total voting interests of the association. The approval action of the membership must state that reserve accounts shall be provided for in the budget and must designate the components for which the reserve accounts are to be established. Upon approval by the membership, the board of directors shall include the required reserve accounts in the budget in the next fiscal year following the approval and each year thereafter. Once established as provided in this subsection, the reserve accounts must be funded or maintained or have their funding waived in the manner provided in paragraph (f).

Thanks to everyone ! Further research finds me reading all of our docs, and coming away feeling that we are in a 'box' ! At turnover, there was:
1) no verbage for the approval of the annual budget by its members; 2) there is no verbage w/ regard to the issue for 'reseves' for cap. improvements:
3) the definition for 'special assessments' is for 'certain, unidentifiable costs' and not for cap. improvements; and, 4) there is nowhere in any of the docs, an amount that limits the board's ability to indebt the community !!

ie; It appears that our remedies are in the amending of the doc's, or re-call of the bd. members. Timing always being of the essence, it appears that
we are in a costly, up hill battle ! In reviewing the Fl. statute 720, the legislature allows the majority of the members the ability to protect themselves in suits of $100,000 or higher, by a majority vote,.....yet pays little, or no attention to the ability of HOA's to indebt the same members at whatever amount they deem appropriate, denying the majority a voice !

As elected 'volunteers', wherein does the 'fiduciary responsiblity' begin to play ? It's certainly not within the scope of the annual maintenance and
keeping the status 'quo' !

Thanks again !

Ed.

Tim-
Under our CCR's, Gen'l Provision, Section 16. " Non-Condominium / Non-Cooperative .....Articles of Incorporation of the Association does not and is not intended to constitute a condominium or a cooperative association. The properties are not intended to be a condominium or cooperative property under applicable law. This Declaration is not part of the common elements of any condo or cooperative.

ie; Does this preclude us from using the FL718 Act ?

The term "Special Assessments" is defined as any 'unanticipated costs and expenses',......provided that any 'Special Assessment which exceed twenty percent (20%) of the Annual Club Dues plus the Base Assessments for the fiscal year shall require the affirmative vote or written consent of a majority vote of the Members required to pay the Special Assessment.'

Since the project planning, by Committee, has now exceeded 22 mos., we are being told that it is not 'unanticipated costs', ergo,....will not be handled as a 'special assessment', and thus, not fall under the majority's 2/3 vote for approval.

EdG:
Perhaps to avoid such things in the future you need to amend your governing documents to put a dollar cap on what the board can spend without a vote of the membership. In my Condominium Townhouses, it is 15% of the annual budget. Works pretty well.
Jeanne

John -
The BOD is saying,....We have $197,000 (in a non-reserve acct.), the costs are $600,000, and the HO's will be charged the difference, as a non-special
assessment item, spread over next year(s) budgets ! We do not have a spending limit in our docs. The issue is: ......the ad hoc committee that was formed to survey the community as to our future wants for the community,......have turned these 'wants' into what the committee sees as our 'needs' !
By survey, the community is against this renovation on an 11% (for) - 74% (against) per the survey ! It's the 'process' and the 'arrogance' of this BOD that is the problem ! Legally, by our present docs, they appear to have this power! In my opinion, now, rather than sooner, our docs were
inappropriately prepared, after turnover.

Thanks - Ed.

The clubhouse renovation could be expensed from your reserves assuming that the clubhouse's elements are listed, assigned an expected life and an estimated cost to replace. I'd think there'd be a few elements, e.g., roof, siding, kitchen appliances, cabinets/counters, flooring, bathroom fixtures, furniture, TV, etc.