Richard White: Send a certified letter to request financial records

Q. Our management company has ignored several homeowner requests to review the financials for our HOA. Phone calls are transferred to an answering machine. E-mails, certified mail and regular U.S. mail are ignored. We have reason to believe there has been financial wrongdoing by the board and understand reserves are being spent. How do we get access to such information, including the balance of each reserve fund? I know what the Florida statutes state, but like most provisions, the homeowner is helpless. — S.O., Clearwater

A. Management is an agent for the association engaged by the board. In other words, management has duties and contract requirements approved by the board of directors. Management does not have any responsibilities to the operations of the association, only duties. The board has all the responsibilities and may have instructed the manager not to respond to any correspondence. The HOA statute (as well as the Condominium Act) allows owners to inspect the records, FS 720.303. This section allows the board to establish certain rules for the inspections, but it cannot restrict or ignore a written certified letter. My suggestion is to find out if the board has any requirements as to the inspection of the records. But in any situation, send your request in a certified letter addressed to the board of directors. You may need to send it to the manager’s address, but address the letter to the board of directors.

Q. One of our unit owners was found dead in her apartment. She had no known heirs. The police retrieved the body but never contacted the association with any information. I will appreciate very much if you could advise which government agency we will have to get in contact in order to solve this matter. — A.S., Miami

A. This is an unfortunate event that does happen. In the end, you will need to engage an attorney, so I would advise that you contact the association attorney immediately for a search to find out if there are any heirs. Since the fees probably will not be paid, you may need to perform collection action and you will need an attorney to file the necessary documents for collections. Your attorney can begin to start to locate relatives to eliminate collections. Such sources as bank accounts may reveal the information. When you open an account, they ask for relatives on the application. While the association cannot ask for the bank for the information, the attorney may have powers to get the information. Think of the different accounts that require relatives such as the mortgage company or maybe the power company, to name a few agencies. Maybe this is a clue for the board for the association records to be updated to include a name of someone where an emergency contact can be listed.

Q. I am the treasurer of a HOA and am working on the 2008-2009 budget. I would appreciate if you can give me any information in regards to the reserves for a HOA. Our proposed budget will be $119,905. — C.H., Miami

A. There is no common percentage used to calculate reserves. Here are the steps you should follow: First, make an inventory of all property and assets (components) owned by the association. Then calculate the values to replace or repair them in the future. We are talking about future years, not the next year as that would be included in the planned expense budget. Calculate the useful life of the components and divide them into the replacement/repair to obtain and annual collection for the next year. Here is an example: You have a swimming pool and deck. The pool has parts that will need repairs or replacements. You expect the pool pump will last less than one year, so that figure must be in the expense budget for next year, not reserves along with chemicals and filters and service. Your pool will need resurfacing in three years and will cost $2,100, so your annual reserves must total $700. The pool deck is concrete and has a useful life of 15 years and will cost $3,000 to replace. That means you will need to have in your reserve budget $700 and $200 for next year’s reserves. The state has a book on reserves called “Budget & Reserve Schedules.” Call the department and ask for a copy: 850-488-1122.

Q. I am a director on our board. We are a small community of 37 units with a tight budget, so we run our business for ourselves. We received a report of the changes to FS 468 Part VIII, Community Association Managers. The first sentence stated “Changes the threshold for employing a licensed community association manager (CAM) from 50 units to 10 units. What does it mean? Are we required by this law to hire a community association manager? I will appreciate your advice about this issue. — M.B., Miami

A. In the past, small associations, 50 units and smaller, were exempt from certain sections of the statutes. The change lowers this exemption down to 10 units or smaller. No association is required to hire a licensed manager. However, if you pay someone, then that person must be licensed as a CAM. Since your board now performs management duties, as long as they do not receive compensation, they can continue to serve on a volunteer basis.

Q. One of our residents is five months behind in maintenance fees. One of their benefits is cable paid by the association. Cable is not a necessity. Why can’t the board cancel cable? — S.D., Port Richey

A. It is a good idea, but condominium statutes do not allow the board to terminate common area usage or services. The best way to put pressure on delinquent accounts is to lien and begin foreclosure action. The board will need to engage an attorney and instruct him/her to begin collection by placing a lien and following with foreclosure. Most times any legal expenses will be added to the amount due in the legal action. In other words, it usually will not cost the association any legal fees.

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 To be considered, questions and comments should include the author’s name and city. Questions should be about association operations, not legal matters.

© 2008 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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