Richard White: Certain reports must be filed each year

Q. According to the state Web site, our condominium has an inactive status. Both the compliance for the state DBPR and the registered agent have expressed concern about this. What would be the legal ramifications for this? R.P. — Miami Beach

A. Each year the association must file with the state an annual report. In addition, several other annual filings must be reported, including an IRS tax form. Adult communities must file a report ever other year regarding qualification as an adult community. Boards without legal assistance or professional management sometimes overlook these reports. To do so may make the legal status of the association unenforceable. It can open up exposure to lawsuits. If an association neglects to file the necessary reports, they will lose the right to enforce their rules and the right to collect fees along with other necessary actions. You can rectify this oversight by contacting the specific state agencies and filing the back reports.

Q. Our board has a dispute about preparing for the hurricane season. Some members believe that if we have a program and involve the members, it will scare too many of the residents. In your experience, should the board create a plan of action for the coming hurricane season? Do you have any suggestions how to start? Y.R. — Ft. Pierce

A. Disasters happen. Once the emergency begins, it is too late to begin to prepare. The emergency could be a fire, flood, tornado, to name a few that your association can face. They could be local and only involve your association or large involving the region or state. Regardless of the disaster event, your board needs to have some plans in place. Let me take this one step further, each resident has to have a plan of action as well. That means that the board needs to establish an emergency response team. That team needs to establish a plan of action for your community. It may be as simple as having a list of shelters in the area or as complex as needed. A good beginning is to contact the state’s Community Emergency Response Team (CERT) for information. There is a Web site to make contact: www.floridacert.com or their mail address is Florida CERT Association Inc., P.O. Box 1458, Bartow, FL 33831. Yes, it is very important to have a plan of action ready. It is my belief that boards have a duty and responsibility to plan, and owners have the same responsibility for their safety as well.

Q. Our condominium association takes in enough fees to cover our annual expenses; however, our collections do not meet the monthly requirements of our cash needs because we receive a huge insurance premium bill at the end of April. We did not know it, but our past board was borrowing money to handle the cash flow requirements with short-term high interest rate loans. Since over the 12-month period we do collect money sufficient to cover our requirements what are alternatives to meet all expenses and the insurance without the loan? G.H. — Ocala

A. Recently, several questions have come to me concerning this problem. It is not a new problem but has recently been more burdensome because of the increased costs. I suggest that you talk to your insurance agent to see if you can change your insurance policy date. It may require that you take a longer term or a shorter term policy renewal date. Some times you can have a special assessment to cover the policy cost and then set up a special deposit account similar to reserves to cover the necessary funds for the next years policy.

Q. Do the original declaration of condominium and rules and regulations expire? If they do expire, and are required to be updated after a certain number of years, and they have not been updated, does that mean the current rules are non-existent? If rules have been adjusted over the years, and have been properly documented is that the date, which begins their renewal? P.L. — Winter Haven

A. The Marketable Record Title Act (MRTA) does not affect condominiums and in most cases, they will not expire; however, homeowner associations should have an attorney review their documents to see if they will expire under this act. Since condominium documents, more specifically the covenants or declaration, are title documents, they run current with the land. This may not be true in homeowner associations. MRTA is an act that involves title claims and title rights. After a certain number of years, the rights will expire. Since you are asking a title question, I suggest that you seek a legal opinion as to your specific association. As to enforcement of the rules, a large portion of how they have been enforced in past years may determine whether they are enforceable or not. This is a key question and each association should have their documents reviewed every few years by an attorney. Rules may be rendered unenforceable, not only by expiration, but by four legal methods: laches, selective enforcement, waiver of rights and estoppel. A rule in an older condominium will not expire but may be unenforceable for these reasons.

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Richard White is a licensed community association manager in Florida. Questions should be mailed to him at 6039 Cypress Gardens Blvd. # 201, Winter Haven, Fl. 33884-4415; e-mail CAMquestion@cfl.rr.com. To be considered, questions and comments should include the author’s name and city. Questions should be about association operations, not legal matters.