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JohnF25 (Florida)
Posts: 5
Posted:
Our Board held a membership vote last August to fund an assessment (required by Florida law). The membership did not approve the assessment. The board then arbitrarily decided to simply add the amount of the assessment to the dues for this year, without voting or posting a notice of the meeting in which this decision was reached. Membership is now very concerned with the end run around Florida Statutes and our own Covenants which require a majority approval. Is membership required to pay the amount demanded by the board as additional dues or has the board exceeded legal authority in this action?
SheliaH (Indiana)
Posts: 6,964
Posted:
Since this was a violation of your CCRs, you already have your answer - the question now is, what will you and the other homeowners do about it? You will need to call a special meeting with the Board and have them explain themselves and cease collecting the additional assessment. If they refuse to, your documents should say something about recalling them.

If it gets to that point, be sure you have homeowners ready to step up and take over. One of the many things they may need to do is revisit the issue that lead to the assessment (I'm assuming this was a special assessment?) You can get rid of the board (and if they're not following your documents, that's what they deserve), but if that issue remains, the new board will need to come up with a way to deal with it, since it probably won't go away. Good luck!

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
JohnC46 (South Carolina)
Posts: 14,265
Posted:
John

The real question is do your docs permit/allow the BOD to set an assessment? If they do, then what the owners want (or voted for) is not the question as the BOD is within its authority to do so. If within their authority to do so, then owners not paying are subject to appropriate legal action.

If the BOD can and the owners do not want such, then the owners recourse is to elect another BOD or recall the present BOD.

DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By JohnC46 on 02/07/2015 3:37 PM
John

The real question is do your docs permit/allow the BOD to set an assessment? If they do, then what the owners want (or voted for) is not the question as the BOD is within its authority to do so. If within their authority to do so, then owners not paying are subject to appropriate legal action.

If the BOD can and the owners do not want such, then the owners recourse is to elect another BOD or recall the present BOD.

You should also check to see if there are limits to how much dues can go up per year without requiring membership approval. Have you read your by-laws and CCRs to see what they say?

Escaped former treasurer and director of a self managed association.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Doug

Dues can go by many names (regime fees, yearly assessment, annual whatever, etc.). A one time assessment (even if it takes years to pay it off) can be another issue.

I have see docs that say the BOD cannot increase annual dues (whatever called) by more then a specific amount (say 10% a year) without owner approval. Yet the same docs say the BOD can do a one time assessment in any amount (like a one time $1,200.00 assessment payable over a period of time) for a "required" item like rebuild a retention pond.

Dues, $500 per year. Assessment #1, $200 per year during 2013 and 2014. Assessment #2, $300 per year during 2014 and 2015. My bottom line for 2014 would be $1,000 per year. $800 per year for 2015 then $500 per year for 2016 assuming no dues increase nor special assessments.

It can get tricky.

TimB4 (Tennessee)
Posts: 21,059
Posted:
John,

Is this issue related to the issue of your Board wanting to hire a management company?
Your other thread specified misinterpreting FL 720. Therefore, I expect that you are not in a condominium.

Typically, as was pointed out in the other thread, the Board may hire a management company without approval from the membership. If they need to increase assessments to pay for that decision, unless there is language in your governing documents that limit the amount the board may increase assessments each year and the increase exceeded that amount, then the membership is responsible to pay the assessment set by the Board.

I saw nothing in FL 720 that required membership approval for the budget. However, I may have missed it.

If you believe that your membership is required to approve the budget, please cite the applicable statute or cite the section of your governing documents that supports your belief.

On a side note, I believe that most Associations turn to hiring management companies for one of three reasons:
1) the size of the association is so large additional help is needed.
2) The number or type of amenities provided requires professional management
3) There is simply a lack of volunteers and those who are volunteering just don't have the time to do everything

Tim
JohnF25 (Florida)
Posts: 5
Posted:
Tim, et.al.
Our governing docs clearly state that "such special assessment may be levied only if it is approved by a majority of the Members." In that reserve funds were established by the developer for specific areas of funding 720.303(6)(d), F.S. (HB 7119), and that those reserves were misappropriated for other uses, and that the Board wishes to replenish those funds with the special assessment, we feel as though they are attempting to cover their tracks. We also feel that the Board is attempting an end run around our governing docs by switching from assessment to dues increase. The members are willing to pay up the assessment in five yearly installments, but feel that all at once is a bit harsh.
JohnF25 (Florida)
Posts: 5
Posted:
Tim, et.al.
Our governing docs clearly state that "such special assessment may be levied only if it is approved by a majority of the Members." The membership clearly and unequivocally did not vote for the assessment. In that reserve funds were established by the developer for specific areas of funding 720.303(6)(d), F.S. (HB 7119), and that those reserves were misappropriated for other uses, and that the Board wishes to replenish those funds with the special assessment, we feel as though they are attempting to cover their tracks. We also feel that the Board is attempting an end run around our governing docs by switching from assessment to dues increase. The members are willing to pay up the assessment in five yearly installments, but feel that all at once is a bit harsh.
JohnF25 (Florida)
Posts: 5
Posted:
Tim, et.al.
Our governing docs clearly state that "such special assessment may be levied only if it is approved by a majority of the Members." The membership clearly and unequivocally did not vote for the assessment. In that reserve funds were established by the developer for specific areas of funding 720.303(6)(d), F.S. (HB 7119), and that those reserves were misappropriated for other uses, and that the Board wishes to replenish those funds with the special assessment, we feel as though they are attempting to cover their tracks. We also feel that the Board is attempting an end run around our governing docs by switching from assessment to dues increase. The members are willing to pay up the assessment in five yearly installments, but feel that all at once is a bit harsh.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JohnF25 on 02/08/2015 4:55 AM
Tim, et.al.
Our governing docs clearly state that "such special assessment may be levied only if it is approved by a majority of the Members." In that reserve funds were established by the developer for specific areas of funding 720.303(6)(d), F.S. (HB 7119), and that those reserves were misappropriated for other uses, and that the Board wishes to replenish those funds with the special assessment, we feel as though they are attempting to cover their tracks. We also feel that the Board is attempting an end run around our governing docs by switching from assessment to dues increase. The members are willing to pay up the assessment in five yearly installments, but feel that all at once is a bit harsh.

Well, yes based on what you are posting, the Board does appear to be on the edge. However, being on the edge is not the same as being illegal.

The Board knows that there is a need for Reserves (why the need is there isn't important at this moment).
The Board requested a special assessment from the members.
The members said no.
The Board then chose to fill the need with higher assessments.

This appears to be compliant with applicable laws and what you have provided from your governing documents.

Another issue is why does the need exist. You state it's because the funds were misappropriated. Call it what you will, if the funds were used for the Association, then the Board can borrow from the reserves (this is their option unless your governing documents specify otherwise) providing there is a method to pay the reserves back. One could argue that the plan to pay back was the special assessment. When that failed, the only other option was to raise assessments.

As others have said, what do you desire to do about this?

Will you gather support, find other volunteers to serve and recall the current Board based on that decision OR will you simply complain about the issue and do nothing to keep it from happening again?

As I said, based on what you provided in the two threads, it appears that the Board simply made a bad decision. Bad decisions are addressed internally, typically by recalling those who made the decision and putting new people in place who will have to clean up the mess and find a way to replenish the Reserves, either by special assessment or an increase in regular assessments (basically what this current Board is now doing).

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