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PetunkaM (Florida)
Posts: 1,009
Posted:
Our By-laws require the BOD to approve the budget in any open meetings. However, this has not been done in FY17 or FY18. Could there be consequences? I was told that if the budget is not approved and distributed to the membership for FY19 the Assn. cannot spend any funds in FY19. True? Thank you.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
Petunka,

We need a bit more info to be helpful in our replies ... for starter, pls quote the section of the Bylaws that address budget requirements.

A major issue in most HOAs is when folks listen to other folks about what their docs (Bylaws and CC&Rs) actually say ... "I was told that..." to us means that you need to find the docs, read and understand them, then speak with the Board about what has or has not been done ... this will start the process of clarification of requirements.

Now, it is not usual for the Board to develop the budget and present it to the community ... the community usually does not vote on the budget. If there is a major issue with the budget then communities usually have provisions in their docs and perhaps even in state statutes to demand a special meeting to address issues or remove the board members who are not being responsive to the needs of the community.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Since there isn't any state authority that polices HOAs, the primary way to challenge a board action would be to sue. Barring that, there isn't much to stop the board from doing what they want.

As far as spending money without following the correct budget procedure, do you have anything other than somebody told you they couldn't? Even if you go to court, a judge might slap their wrist and tell them to do things correctly in the future, but probably won't tell them to stop spending money to maintain the common elements, keep the street lights lit, and anything your association is responsible for.

Escaped former treasurer and director of a self managed association.
GenoS (Florida)
Posts: 4,276
Posted:
Quote:
Posted By PetunkaM on 12/15/2018 10:07 AM
Our By-laws require the BOD to approve the budget in any open meetings. However, this has not been done in FY17 or FY18. Could there be consequences? I was told that if the budget is not approved and distributed to the membership for FY19 the Assn. cannot spend any funds in FY19. True? Thank you.

Check Chapter 720 of the Florida Statutes. It requires the budget to be approved at an open meeting, too. Whatever your bylaws say on the matter is irrelevant.

FS 720: "The association shall provide each member with a copy of the annual budget or a written notice that a copy of the budget is vailable upon request at no charge to the member."

Consequences for not following that? The board could be found negligent or worse for failing to follow the various parts of the statute. But that's only after owners bring some sort of court action against the board. The state of Florida, itself, doesn't care to enforce anything in an HOA outside of election disputes. You can call your state representatives, county officials, the Governor, Consumer Affairs (whatever it's called in FL), the state Atty General, the state Atty General's "help line", .... you name it. It's extremely unlikely that you will find anyone willing to halp you.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
I think we’re agreeing that budget is approved by the board - and since 720 covered board meetings must be open to members ... viola.

Question is how and when would the budget be approved if not at a board meeting ...were there no board meetings?
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Pet

Not sure about FL, but typically a BOD has to present a budget once a year and it is usually done at the Annual Meeting. Typically owners do not get to vote on approving the budget but usually there are ways they can get together and disapprove it. That is how SC operates. Approval not needed but able to jump through hoops to disapprove it and not at that meeting but another subject.

Most of our owners do not have the vaguest idea how budgets are done, approved, disapproved, etc, nor do they care until dues are increased.

I should stay away from FL stuff......LOL
PetunkaM (Florida)
Posts: 1,009
Posted:
Thank you for all the replies. Our Bylaws state " The board shall adopt a budget for each year'.. which is in harmony with 720.
Yes, we do have a problem. There was not even one open BOD meeting in FY18 and all financial decisions are made behind the closed door or voted on by e-mail. Consequently, we do not even know where we stand financially. Several owners now want to initiate a recall -for first time in some 35 years -of the entire board. That, I am concerned, could get also ugly.
CathyA3 (Ohio)
Posts: 6,299
Posted:
As far as I'm aware, homeowners have the right to inspect association records, including financial ones. (Types of records can vary by state.) Has anyone asked to see these records? That should be your first order of business. What happens at your annual meeting? Budgeting and other financial concerns are usually at the top of the agenda in my community's annual meetings. If the board ignores you or refuses to allow you to see the records, or if your community isn't holding annual meetings, then your board isn't doing its job properly and you have a good reason to consider electing someone who will do a better job.

Having said that, before you decide to remove the current board, make sure you have enough homeowners who are willing to serve. In my experience, people complain a lot, and when they're asked to step up and "be the change they wish to see", they're nowhere to be found. Being an effective board member is a time-consuming, demanding, and often frustrating job, and it looks a whole lot easier from the outside than it does once you're in the hot seat. Educate yourself, and look before you leap (you'll be doing that a lot once you're on the board, so best t0 develop those skills now).
PetunkaM (Florida)
Posts: 1,009
Posted:

I understand the BOD's job is demanding. My late husband served as the Treasurer for four years and during that time we were hit with three hurricanes. It was not exactly a cake walk serving then. We do have a few qualified souls who are willing to step in but the problem is that we are a small community with over 40% of absentee owners and investors plus many members simply do not want to get involved. My concern is that we may not get 51% required which would make the life here even more tense.

Yes, if recall fails, asking for all financials is another option we should consider.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
Florida statute says board meetings must be open ... are board meetings held?

Florida statute also says the board members may NOT vote by email.
PetunkaM (Florida)
Posts: 1,009
Posted:
George,

yes, I know. There is no doubt the board is in violation. We think that a recall may be our best option, at this time. We just have to evaluate pros vs cons. No one here has any experience in doing so and there is no room, as far as I can tell, for any procedural errors.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
Probably a recall - however, you could shake the board up with a letter from an attorney - or, perhaps even a threat via registered letter to each of the board members ...

I'm assuming there is no management company?
PetunkaM (Florida)
Posts: 1,009
Posted:
Yes, we are self managed. I realize many HOAs have similar problems. As one attorney said. The board behavior is like speeding. You may speed and not be caught. So, the next time you speed even more. Well, nothing is going to happen before the Holidays. But thank you for your suggestions.

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