HOA Dues

If the HOA are charging homeowners for services which are not part of their function or obligation as described by the Declaration, what approach needs to be taken should the BOD refuse to listen? Can a homeowner refuse to pay part of their dues?

If the BOD have been advised to seek legal advice by the LCAM and they refuse does this place liability on the board members personally?

This response is based on what I believe is prevailing law in the United States and not on specific knowledge of Florida law.

Directors are protected from personal liability while exercising business judgment. They may lose their protections under state law or under a D&O policy if they intentionally or recklessly act contrary to law. Failing to seek legal advice at the suggestion of a manager, however, would not be enough to establish such liability. The manager isn't a lawyer, and in any event could be recommending legal advice as a way to get owners to stop complaining rather than based on a belief the action is legally unsound. Personal liability for the directors is a theoretical possibility but most likely a remote one.

Refusal to pay assessments in full has consequences that will apply without regard to your opinion of the board's actions and may very well apply even if you are ultimately found to be correct that the board was acting beyond its authority (as happened in at least one recent case). Homeowner associations wouldn't be able to operate if everyone who disagreed with expenditures could omit payment.

What can you do? Litigation is a possible solution but a costly and unpleasant one that you would likely end up regretting. The better choice is to convince your neighbors to elect board members who share your views. If you're unable to do that, the most reasonable choice, however distasteful it may be, is to accept the political reality of the situation.

Thanks for your comment.

Please advise on the recent case you refer to and any other consequences that may result from refusing to pay the assessment should the grounds be determined as correct.

Also what are the litigation options? Would this be in defending legal action to recover the alleged debt or would it be action that I would have to take?

The member may:

1) Gather support and recall the board and replace them with individuals who will listen.
2) Gather support and wait for the next election, then fill the board with those who will listen
3) Gather support and bring legal action against the Association for exceeding their authority
4) Seek legal action on your own against the Association


Perhaps, but I doubt it.

Statute and governing documents typically specify that the Association will indemnify the Board. This is normally done with D&O Insurance. However, if the insurance denies the claim, then the Association must pay all legal bills (which will be passed on to the membership).

In all cases it would be a very bad idea and self-destructive act to withhold any portion of your dues. Despite what you might think.

In is clear, you have little complete understanding of the issues, the details or the reasoning of the parties involved.
Just because a managing agent suggests something to the board does not require the board to follow that suggestion.

And if cleaning the walkways and moving garbage cans somehow causes you to withhold payment of common charges it would seem you have gone overboard. Even though at this point the best you offer is " you believe" these might be an issue.

Then keep that in mind as you explore your legal options.

Anytime anyone brings legal action against their Association they may have an initial support. That support will likely go away as the Association starts paying their legal bills and demonizing you for the reason for increased assessments or special assessments. You may actually lose friends within the development.

Typically, you don't need most owners. You simply need enough owners to not reelect someone.

You can start by bringing this issue to the memberships attention with a letter or (as I did) with a newsletter specifying both the good and the bad of the board. Changes won't happen overnight, but they should happen. It took me three years of publishing my newsletter to get the membership more involved. Granted, most of that was seen when the Board requested an increase in assessments high enough that it required a membership vote.

If you calculate what the assessments should be if said services were not paid for, you may have enough info to gather support (as everyone tends to get involved when it affects their wallet) once you let this information known.

Well the issue is whether they are common charges. Jon is assuming they are. These charges relate to the homeowners lot, not common areas.

I do have a fair amount of experience with contractual disputes here in the UK (leasehold law) and then there is also the opinion of the LCAM. The arguments from the people who want the charges to remain are not that the Declaration allows them but that they think the BOD can do what they want. Another factor is that some of these decisions from past Board members have been made on the basis of what happens in other Developments which again shows a lack of focus on the actual Documents. So all in all I'm pretty confident that I'm right.

It's just the best way to deal with the issue that's important. If I'm wrong then I'm sure I'll have to pay any legal costs.

I'm thinking that Arbitration might be the way forward. Does anybody know anything about this? See http://www.myfloridalicense.com/dbpr/lsc/ARB/LSCMHArbitrationDisputeDefinition.html. That should at least keep costs down and will probably be something I can deal with myself.

Thanks. I will do that.

Just realized that the type of dispute I have is not eligible for State Arbitration.

Our HOA documents stated we were responsible for lawn care only. However, we had a pool, a clubhouse, and garbage/recycle pickup. So what your saying is if you don't swim you should not pay for the pool because it's not in our HOA documents to do so? That is the logic I see here. It's not going to work and your just costing you and your neighbors more money in the process.

Additionally, a HOA instead of issuing fines to violators, have a different option. A HOA can fix the issue and send the owner the bill for the fix. If the owner doesn't pay that bill, then the HOA can place a lien for that money. Fines have to be established by a fining schedule and distributed to each owner if the HOA is to enforce such means. A HOA has the right to fine but lacks definition without a fine schedule.

Sounds like your ASSUMING some things beyond what is needed to be. The HOA can decide what it wants to spend it's money on. If the owners ask the board they want garbage services added, then the board they elected can vote to pay for this service. Sounds like the owners want this as a option and are willing the board to use their funds to do so.

I will also say that if we had certain repairs/maintenance to common areas, we would vote to do it. That would include pressure washing certain areas like the mailbox area or the clubhouse. We had work done by a our cable company that tore up some yards when replacing the cable. We paid for the replacement grass. Things like that happen in the NORMAL operations of a HOA. It's the cost of operation and what people want. If it's something the majority of owner don't want or the board is acting on it's own, then I'd have an issue. Otherwise, garbage pickup services and other such conveniences isn't something I'd go force my HOA to pay a lawyer for.

Well if that's the case why does the Declaration list what can be included in an Assessment?

If the HOA can charge for any service then why is special legislation introduced to allow a HOA to charge for cable charges? See FS 720.309 (2).

I will quote my book on the Florida Homeowners Associations "The purpose for which a HOA may levy a charge or an assessment against a parcel must be identified in the articles of incorporation, bylaws or other documents governing the community"

Cyber

Be careful of what you wish. You keep saying short term rentals. That scares me. They are the least likely to cleanup, replace/remove trash barrels at proper times, etc.

It might well be "extra" services are needed to maintain the integrity/looks of your HOA as obviously not all owners, yourself included I believe, do not live there.

Now I understand.

I also understand, as others have pointed out, the possible need for such service within a short term rental development. However, if such service is not to be provided, then the Association should take the appropriate actions (amending documents) or take enforcement action on the owners who fail to ensure that their trash is placed out and cans returned in a timely manner. This, depending on the governing documents, may be done with monetary penalties or through the courts (at a cost to all).

I understand the principal of the issue.

I understand fighting an issue on principal alone.

What is the per lot cost for these services?
It would be interesting to know what the fight will gain.

Yeah this sounds like a convenience type item the HOA pays for because of frequent violations of the past. If there are short term renters, the renters may be putting their garbage out at the end of the renting. Which means they won't be around nor the owner to pull the garbage can back in. So I can see why the HOA has decided the best solution is to hire someone to do this.

Our situation is that we use 2 dumpsters on BOTH sides of the neighborhood. We do have county pickup available. However, our HOA's roads were not designed to be wide enough to accommodate the garbage trucks and cars. Plus we would have the issue of trash cans being left out, damaged, knocked over, and just eyesores. So we instead elected to have dumpsters and pay for that service. However, we still have the issue of people leaving the dumpster area a mess. So occasionally we pay someone to clean up the area.

None of this is in our documents to provide or maintain. We decided that is an item we want to provide for with our dues. Your HOA did the same thing. No big deal. What is even bigger is your making the HOA pay for a legal opinion on this matter. Where is that cost in the documents to cover?

What is the actual issue here? You don't want to pay dues? Cause your stuck with them now or your stuck out of your home...

>I'm talking about the costs for the issues you identify.

Yes, well landscaping is one of the issues that the LCAM has raised with the HOA and advised they get legal opinion. That works out at $1000 per lot per year.

What do 'handymen' earn in Florida? $30,000 per year? So that might only be $150 per year per lot. Still, wouldn't you rather have $150 in your pocket and just roll your own bin down to the pavement?

I see both your points but the solution is there and it takes two parties to tango. If one party to a dispute won't do what they are supposed to then you can't blame the other for causing them the cost of seeking legal opinion.

The people responsible for this cost are the BOD who refuse to accept a professional opinion. I refer you to FS 617.0830 which describes the general standards for Directors. I would say that acting in this way is acting without the care an ordinarily prudent person would exercise. In discharging their duties they may rely on opinions provided by persons as to matters the director reasonably believes are within the persons’ professional or expert competence. In my opinion they can't just say "I don't know and I don't want to know" when in reality they do most likely know.

Why should I subsidize other owners who have these expenses? If 20% of owners don't require the services then that's a pretty healthy discount for those that do. These people are in business with some of them owning multiple properties.

The solution - simply provide the same services but don't charge as HOA dues and only charge those who want to use the service. No owner who rents on a short term basis would benefit from the resort being a mess.

There's another issue. The HOA is not enforcing that trash is located out of sight of the roads. This is devaluing the property in the Resort.

What it all boils down to is that the HOA have been breaking their backs to enable more profit for Short Term Rental Businesses. Owners who rent on a long term basis, live in the home or just use the home for themselves as a vacation home are suffering from this.

I know the people I am dealing with - I can assure you there is no other option. If the law wasn't so protective of Directors who won't work to a legal contract then the option would be to make these Directors incur the costs.

The threat of legal action and fear of the associated costs might work but it might actually require legal action.

What problems do you see me causing for myself?

I'm just curious if the OP just recently purchased this property or if he just now decided to take up this fight? If he just recently purchased, maybe some more due diligence would have exposed this prior to signing and you could have possibly looked elsewhere. If he's owned here for quite sometime, why is this now an issue?

Good question, Ellie. I'd like to see that too.

All,

I think you are missing the point of the OP's posting.

The issue isn't the trash cans or the power washing of lead walks. It's the board exceeding their authority.

The trash cans and power washing are examples.

What also seems to be forgotten is that this issue was brought before the State ombudsman (perhaps the complaint was made by the OP). Per the OP: "the LCAM has advised the BOD to have an attorney carry out a full top to bottom review of the Governing Docs. He seems to say there is not only a potential charging issue but a liability issue too - by carrying out services that aren't the obligation or defined function of the HOA the HOA may be liable for claims should any damages occur to an owners property or third party. "

I also agree with most of you that in the big picture there are other things to worry about. However, there may be more to this story then we know and, based on what has been provided, the LCAM seems to agree that the actions the Board is taking is something that they should seek a legal opinion on. Regardless of what we think, the OP seems to be set on seeking legal action to bring this issue to a resolution.

We have offered alternatives and they have been considered and rejected.

All we can really do now is wish the OP luck and ask that we are updated on the outcome.

Cyberbird,

Legal action is not the course of action I would take, but it is the one that you have decided on. Therefore, I wish you luck and ask that you keep us posted on the outcome so others in similar situations can learn through your actions.

Tim

Thank you Tim. I have just woken up to all the posts and am grateful that you have supported my reasoning as I now don't have to address them all. It's clear most people think the Association can provide services outside of their remit and I don't think I could change their mind on this.

I should clarify though that the issue has not been before the State Ombudsman, that was something I thought might be a possibility but having read further they don't have jurisdiction for assessment disputes.

It is the LCAM who has pointed the fact out that the Resort is not being run in accordance with the Governing Docs. and they have actually handed their 60 day notice in but are willing to be dissuaded. I don't know if compliance with the Docs. is a condition of being dissuaded or not or having a top to bottom review. Another of his concerns is the direct employment by the Association of Security and here he points out that the situation as it is (with no real day to day management) is a risk to the Association.

Having listened to the responses from the BOD I get the feeling they would prefer to find a new LCAM who will tell them what they want to hear.

As I have stated a few times, the threat of litigation may be enough. It is normal procedure to send a 'letter before action' detailing a complaint and giving the other party a reasonable time limit to remedy the situation. This may just result in the HOA attorney being consulted and his advice I imagine would hopefully put pressure on the BOD to change the way they do things or seek approval from the required number of owners to amend the Docs.

Thanks to everybody who commented. I will continue to pay my assessments and will investigate the route recommended by ArtT5 early in the thread.

I agree Pita... . Our HOA you owned the house and the lot it sat on. Everything else is COMMON AREA to be maintained by the HOA. If we were to go by our rules, we'd only be obligated to provide lawncare. However, REALITY is that we had to keep HOA insurance, pay for clubhouse costs, pool supplies, legal consultations, updating documents, sending out letters, and repairs/maintenance to common areas IF necessary. Heaven forbid if the HOA would have to hear about our Tree project where we the HOA paid to cut down trees! That's not in our documents to do...

If your HOA wants something, then it takes a vote, raises the money, and gets it. Sounds like this HOA was sick of left out garbage cans and decided it was best to pay someone to take them in. A GREAT idea in my book. Plus the dues had enough money to support it. It's not like they had to do a special assessment.

The HOA's purpose is to ATTRACT potential buyers and enforce the rules it takes to maintain that. Seems to me, this is something that is exactly what is needed and wanted. We paid $50 for our crooked ex-president to clean/pressure wash our dumpster area on occasion. Otherwise, it was an eyesore, smelled, and buyers thought badly about the set up.

Anyone ever heard of or use a " letter before action" ?

I have not.

The OP seems to think this letter will result in the board following their directives. I have my doubts.

CyberbirdL,

You posted: “the issue is whether they are common charges. Jon is assuming they are. These charges relate to the homeowners lot, not common areas.”

I am wondering if the various ways the word “common” can be used, with different meanings, might be what is causing confusion.

For example, when referring to funding of the Association Budget, the words “common interest assessment” are often used, when referring to the total budget that is to be funded. Here “common” refers to all the owners collectively, the owners in common that share a proportionate “fee” to fund the Budget.

Then there is the use of the word “common” as in Common Elements, Common Areas,as typically defined in the Declaration, and, or on the Plot Plan. The expenses directly associated with the upkeep and maintenance of those Common Areas, Elements, would, of course, be a line item, or line items, in the overall Total Budget.

Correct me if wrong, but you seem to be saying, that the only costs that can be included in the Budget, are costs directly associated with the upkeep and maintenance of the Common Elements or Areas. And you refer to words in your Declaration, that list and or specify, what costs can be included in an Assessment.

Maybe others do, but I have no idea what sections or sections of your Declaration you are referring to. Would you be willing to post those words, as an aid to understanding?

And, re the possible need to “amend the Documents”. How, it what way, and why, would your Documents have to be amended?

Thank you.

Hi Ellie,

I'm really not inclined to type out what the Declaration says. The part of the Declaration that describes what can be part of the Assessment lists a whole number of things.

I'll provide a hypothetical example which is probably easier to understand though. Imagine you paint your own home and the Association decide they are going to paint peoples homes for them. Would you be happy paying a share of the HOA expenses if they provide this service when this not something that the Declaration says you can be assessed for?


This is something the owners can decide to do if they want these services to be something the Association can provide and include in the assessment. In the case of our community it requires two thirds of owners to agree.