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TheT (Florida)
Posts: 9
Posted:
I'm a new member of an HOA Condo board in Florida and I have mentioned to the board that they have had work done on specific projects within the community that require permits however the permits were not pulled and the past board members did nothing to get this issue solved. Some of the old board members are still active on the current board, What is my recourse on this as I feel it is a MAJOR liability to the Association... Is this a breach of the past board members' fiduciary duty?
MichaelT21 (Arkansas)
Posts: 200
Posted:
As a former Board member, I advise to tread lightly in the beginning. Yes, permits need to be pulled. However if you rock the boat too much then no one will listen for you.

I think the best option is to volunteer to help (lead) a project, and as part of your successful project, ensure that permits are pulled. After the project is done, present how you did it to other board members. Hopefully they will see that your way was wise.

Or you can, as a condo owner, file a complaint with the AHJ (authority having jursidiction) and the I guarantee you that the issue will get resolved and that no one will talk to you again.
CathyA3 (Ohio)
Posts: 6,299
Posted:
A lawsuit can result in expenses that far exceed any penalties for the lack of permits. These expenses can include insurance premiums going through the roof (with assessments following them) or loss of insurance altogether. In addition, the outcome of a lawsuit is not guaranteed - you can end up pretty much where you started, but with less money in your pocket.

Also, how did you determine that permits weren't pulled? Did you look at association records, or did you assume from the lack of records that the permit never existed? Does a local governmental agency make the info available to the public? Were you on the board when this happened, so you have personal knowledge? (I'm assuming not since it sounds like you want to hold people accountable.) Other?

What is the scope of the problem: is the un-permitted work a threat to life and limb, or is it minor? How do you correct it? I'd be a lot more worried about un-inspected electrical work performed by an un-licensed electrician in a residential building than I would about a rebuilt decorative something-or-other at the community's entrance.

I agree with Michael that this is a good project to tackle. I also agree on the likelihood of push back if you want to spent big bucks on an issue that is pretty much invisible to everyone. You may have to raise the specter of Surfside to get people's attention, and even that may not be enough.

If you do choose to go the legal route, you'll be limited in what you can do as a board member since you'd be acting against the association because of actions taken by past boards. You'd almost certainly have to resign. If you're not sure, you should consult with your own attorney (not the association's attorney since you're a potential adversary at this point and the attorney can't advise you).
TimB4 (Tennessee)
Posts: 21,062
Posted:
If you are that concerned, contact the permit office and let the chips fall.

As others have said, you will likely not be very popular with the board when the chips do start falling.
TheT (Florida)
Posts: 9
Posted:
Cathy,
the specific items installed are major electrical items on 2 different buildings. Both buildings are used by the entire community. I know if I keep pushing the chips will fall as I've already been threatened to turn and look away. Permits are public records. Would this be considered a breach of fiduciary duties to those past board members that are still serving as they had knowledge of this issue?
I'm totally aware of the legal liability on the Association if a fire were to occur caused by these items. I'm also aware of the issues this can cause with insurance in the event of an issue.....

What are my options I guess?
CathyA3 (Ohio)
Posts: 6,299
Posted:
You're asking legal questions. Most of us on this site aren't attorneys and aren't qualified to give legal advice. The best thing to do would be to talk to your own attorney since this sounds like it could get messy. As I said, the association attorney represents the association and would not be able to act for you as an individual client because of the potential for a conflict of interest. You need someone to protect your own interests.

I don't blame you for being concerned about this.
SheliaH (Indiana)
Posts: 6,964
Posted:
Cathy has often said, and I agree, that when it comes to association issues, you can either (1) live with it (2) move or (3) work to try and resolve the problem. I think everyone has given you the options, so the real question is what are you willing to do to get this fixed and are you ready to deal with the ensuing fallout, which may get really ugly? We can't predict what will happen, so think about it carefully and perhaps talk to a few of your neighbors.

Most issues like this stand a better chance of being resolved when several people get involved. It's one thing to blow you off, but if several homeowners also express concerns, the board will have to respond Or you can rally together enough people to recall the board - and then appoint others to take over (and one may need to be you) That'll put you in the hot seat for this and other issues - do you have the backbone to try?

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By TheT on 04/06/2023 11:29 AM
Cathy,
the specific items installed are major electrical items on 2 different buildings. Both buildings are used by the entire community. I know if I keep pushing the chips will fall as I've already been threatened to turn and look away. Permits are public records. Would this be considered a breach of fiduciary duties to those past board members that are still serving as they had knowledge of this issue?
I'm totally aware of the legal liability on the Association if a fire were to occur caused by these items. I'm also aware of the issues this can cause with insurance in the event of an issue.....

What are my options I guess?
Safety-wise, I can understand your concerns. One first step to consider is contacting the city and seeing what they have to say about the lack of permits.

Regarding a "breach of fiduciary duties": This phrase comes up a lot here, mostly by newbies. From experience, this it not the angle to take here. The only time a "breach of fiduciary duties" seems to get any traction is if bona fide crimes (as delineated in statutes) are committed. I know you may think there is maybe a crime or two here. But I suspect it is a stretch. I doubt a court would force an individual past director (or even an entire, past board) to pay money to correct the deficiencies here.

Another step to consider is finding the language in the covenants that requires permitting and send a letter requesting it get into compliance. Who knows? Maybe all that is needed is an inspection. If you want help with a letter you can send to the board, //politely// asking for the permitting to be remedied, just say so.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Are you sure the Board didn't have the contractor pull the permits? There are two options. You can pull the permits yourself or make it part of the contract terms with the contractor. So if you don't see a permit "pulled" it may be because the other party did it.

Former HOA President
KerryL1 (California)
Posts: 14,550
Posted:
If you have not, get the contract(s)that the Board approved and read them. As Melissa suggests, there may be info in them that clarifies this situation. Assuming the work was (certainly!?) done by a licensed professional, in our high rise, our contract always put the responsibility of pulling the permits with the contractor who knows the ppl. at the Planning, Etc. Dept. , with the HOA paying for them, of course.

One hopes that the previous board had your HOA attorney vet the proposal(s) to see that your HOA was protected. S/he shoulda provided a written opinion. I also would want to see the minutes from the board meetings when the board approved these contracts.

You're suggesting that the contractor(s) willingly put their licenses at risk, and the Board didn't protect your HOA by approving a contract with no mention of permits. I strongly urge you to do more research and gather and read the above records of your association.

IF you find that the Board did not include pulling permits in the contract language, and IF the HOA attorney wasn't even consulted to review the contract, I'd say that the board did not practice due diligence/its duty of care. It night be what a former poster here called "misfeasance." Anyway, get the history. I'm not in any legal field.

JackS20 (North Carolina)
Posts: 271
Posted:
the whole premise sounds ridiculous.
the hoa paid to get work done and paid contractors who didn't pull permits? Why would they do that? in order to save a few dollars?

it is quite common for "handymen" without licenses to charge much cheaper rates and do work on the sly.

And the city never inspected this work in a condo? If the city did inspect it, they would require a permit.

might want to get yoru accusations verified before going further ahead.
JackS20 (North Carolina)
Posts: 271
Posted:
Quote:
Posted By CathyA3 on 04/06/2023 10:11 AM
A lawsuit can result in expenses that far exceed any penalties for the lack of permits.

so can having to rip out and redo work that was not done to current NEC or Building codes.
TheT (Florida)
Posts: 9
Posted:
I've done my homework. No permits were pulled and a board member used someone they knew rather than going with the vendor the board President approved which was a reputable vendor. The board member that made the decision to use said vendor is now working on getting permits now that this had been brought to light, however, as of today no permits have been pulled and the vendor's insurance is expired. It's a MESS, to say the least. I have to say a couple of board members run the property manager in circles and won't allow them to do their job.

What I'm hearing here makes this sound like it's common practice and a drawn-out process to get them booted. In a nutshell, these people need to go as from what I see they are putting the Association at risk at a minimum. Now I just have to find out how I can get them to resign.
TheT (Florida)
Posts: 9
Posted:
Shelia,
I have a thick skin, and a strong backbone and I'm not looking for friends. I'm looking to protect my fellow owners. I've already stood up and got elected to the board, it's just the fact that I'm working against the majority at this point. The majority of the blows owners off a lot from what I'm seeing. I'm working to change that currently. I'm out meeting owners and getting and giving my email address to any owner that will listen.
TheT (Florida)
Posts: 9
Posted:
Kerry---sad to say but the HOA attorney didn't review any documents, the bids the current President won't allow me to see because it was before my time on the board. I have emails from the past President approving a vendor that was reputable and the Treasurer at that time decided to use someone he knew instead.

The actual work was completed last year and it took me becoming elected to the board to raise the question at which time the current board President said the property manager tried to get the issue resolved but was not successful in doing so..at that time I instructed the property manager to forward all information to me so I could step in and get this issue resolved ASAP, the current President sent a less than friendly email to all board members calling me everything but a gentleman and said he would get everything handled, well that was over two weeks ago and here we sit.......no traction.
TheT (Florida)
Posts: 9
Posted:
Jack,
from what I see yes, they wanted to save a little $ and use someone that someone knew....basically, it's a lack of board members doing their duty to the owners is how I see it. I'm all about saving $ but not like this. I posted this thread because an owner told me about this site. I'm preparing my next step on this issue if the company doesn't produce permits within a week. Again, Thank you to everyone that posted as I'm just looking for MORE information before going forward.
TheT (Florida)
Posts: 9
Posted:
Ellen-
yes, I'm a newbie to boards. with that being said I'm also a businessman in a totally different field and I have over 30 years of experience in the construction field and residential and commercial property ownership. Those items are my hobbies if you will.
Thanks for the input
TheT (Florida)
Posts: 9
Posted:
Ellen-
yes, I'm a newbie to boards. with that being said I'm also a businessman in a totally different field and I have over 30 years of experience in the construction field and residential and commercial property ownership. Those items are my hobbies if you will.
Thanks for the input
TheT (Florida)
Posts: 9
Posted:
Michael,
thanks for the input. I hear what your saying loud and clear
KerryL1 (California)
Posts: 14,550
Posted:
TheT wrote: "...the bids the current President won't allow me to see because it was before my time on the board. I have emails from the past President approving a vendor that was reputable..."

I'm pretty sure that as a board member you now have access to all HOA records,* including old proposals. This may be in your bylaws or, if silent, in FL corporation codes. Aren't you concerned that the president "approved" a contract? Unless FL is different than most states, the board at a meeting must approve contracts. Often the president signs it, but other officers usually are OK too.

It's not clear to me that you were able to review the contract(s) involved with getting the work done?

If your PM won't give records to which you're now entitled, you can consider complaining to their supervisor if they belong to a management company. That, tho', won't further endear you to your new board colleagues.

*The same section that permits directors to review all HOA records**, at least in CA, allows all directors access to the entire common areas. This might matter if, given your background, you want to see the actual work that was done.

**Caveat: if you become involved in legal action against your Board, the Board/property manager can be instructed to keep certain records form you.
LoriM15 (Florida)
Posts: 1,009
Posted:
Florida HOA statute 720 requires bids from companies that were not chosen to do the work to be kept as official records for one year. You should be able to request those officially just like any other homeowner.
JackS20 (North Carolina)
Posts: 271
Posted:
just report it to building codes and they will force the board to get a permit.

however if this was just to install an outlet or some lights, pretty much a monkey can do that as long as the correct gauge wire is used with the correct breaker amps.
JackS20 (North Carolina)
Posts: 271
Posted:
some codes people would reqire the drywall be ripped out to make sure the wires are stapled to code. if you get a lienient guy he might just check the outlets/switches.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Here is a cautionary tale on the possible outcome when a homeowner sues the board and/or officers for mismanagement and breach of fiduciary duty:

Important Takeaways from Recent Appellate Ruling over Dispute at Hollywood Condo

My own takeaways:

* Be *very* sure of your facts
* Hire a skilled attorney who will tell you if they don't think you have a winnable case
* Have deep pockets
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By CathyA3 on 04/08/2023 11:37 AM
Here is a cautionary tale on the possible outcome when a homeowner sues the board and/or officers for mismanagement and breach of fiduciary duty:

Important Takeaways from Recent Appellate Ruling over Dispute at Hollywood Condo
Full decision is here:
https://4dca.flcourts.gov/content/download/861249/opinion/213528_DC05_03012023_100030_i.pdf

The court's decision and FS 617.07401 "Members' Derivative Actions" (in the Florida Nonprofit Corp statute) are a how-to for protecting against, and defeating, an owner's derivative lawsuit. Very cool, IMO.
NormanK2 (Florida)
Posts: 39
Posted:
Permits are funny in some ways when you travel across the World and America you see Buildings and other structures 100s of years Old before permits still standing strong then see something built after Permits and inspections up the back side and there fallen down.
NormanK2 (Florida)
Posts: 39
Posted:
Permits are funny in some ways when you travel across the World and America you see Buildings and other structures 100s of years Old before permits still standing strong then see something built after Permits and inspections up the back side and there fallen down.

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