Richard White: Rewriting documents can be very costly

Q. In your Sunday column regarding articles of incorporation, you stated “The statute requirements are different for HOA and condominium, and you cannot be both.” We are in the process of updating our articles and bylaws. We are a community of 88 condominiums and 66 residential homes. Our articles of incorporation were formed in 1972 and they state we were formed as a corporation not-for-profit in accordance with FS 671 and FS 711. I am assuming that FS 711 is now FS 718. Our articles further state the purposes and objects of the owners association are to provide an entity to acquire, own, administer, operate, repair, replace, maintain and manage all the common areas defined in attachments to be used in connection with the condominium and single-family residential lots. We have shared common property, buildings, clubhouse, waterways and marina. Do you have any insight on how to update the documents and/or separate the entities? We will eventually bring our ideas to our attorney but would like to do most of the preliminary work (a couple of attorneys on board) ourselves to save legal costs.

— C.S.

Stuart

A. Yes, you are a very old community as the first condominium statute was FS 711 first approved in 1962. FS 711 was changed to the current statute FS 718 a few years later. First, recognize that you are dealing with title to each home and unit. If you modify your documents, you may alter the title. For that reason alone, do not even begin to think of modifying the documents until you have talked with your attorney. You must understand also that the documents are primarily three individual and distinct sections. Each stands on their own and serves different purposes. You have the declaration that defines the property, the articles that form the corporation, and the bylaws that define how the corporation is operated. You may have additional sections in the documents as each association may have supportive properties. It may be possible to break out the condominium units and the homes to form their individual associations. However, this will cause additional expenses. As an example, each year the two associations must file the annual report with the state and pay the filing fees. You will need to acquire separate insurance, maybe separate operational licenses, and maybe pay separate tax reports. Once you think about the cost of rewriting the documents and the extra costs, it may not be worth the effort.

Q. I live in a condominium where all the rules in our bylaws have been totally ignored. I thought it would improve when we obtained a management company. Not so. They, too, break all the rules and ignore any form of communication. A known felon, who recently moved in, just announced that he will be on the board in 2011. I have received a threat to my communicating with any board member. One resident was even arrested and received a restraining order preventing this resident from attending any meetings. She had to obtain a lawyer. This has got to stop. I am living under a dictatorship.

— A.N.

Tampa

A. I would suggest that your approach with the board should be focused on changing the directors at the next annual meeting. Condominium boards are elected by secret ballots that must be voted by each unit. This means that a majority of owners voting elect the board. If the members do not have interest in who is serving and fail to vote for the good people, they can only blame themselves. My guess is that most of your owners sit back and let others do the work. This is the major problem with many associations. Their failure of becoming involved and volunteering will result in aggressive and nonresponsive boards. If the owners elect the felon, who is legally unable to serve, they will suffer the consequence. The owners must talk with each other to find out other points of concern. Rather than communicating with the board, maybe it would be better to talk to your neighbors and get them involved. Find out if they have the same concerns about rule violations. Then the members must volunteer to become a candidate to serve. You need to understand that management is instructed by the board. If the directors instruct management not to aggressively comply with the rules and regulations and conduct sound business policy, then that is the board’s responsibility. Talking to your neighbors, getting them involved is the best way to improve the board’s operations.

Q. Could you please answer this question for me concerning HOA governing documents? As we know, statutory laws have certain statute of limitations pertaining to same. Do certain HOA governing documents also have statute of limitations? Reason: Some members of the association have had things done to their parcels several years ago, that are contrary to the architectural rules. Now, some other members of the association are changing the present board to take action regarding these violations. Rule violations have been neglected by other boards for years. Can the present board force corrections to these violations?

— P.O.

Miami

A. There is an old saying: If you sleep on your rules, you lose the right to enforce the rules. The legal term is called laches. Laches is a doctrine providing a party an equitable defense where long neglected rights are sought to be enforced. Each violation would have the defense upheld or denied in court by a judge. There is no one answer to apply to all cases. What I suggest is that the board send a communication to each owner that the rules and regulations are to be reinstated and enforced. Each case of a violation will be grandfathered on a case-by-case situation. As you said, some have not been enforced violations for years. My guess is that you will not be able to enforce those rules. You should so note and move forward. Documents do not have statute of limitations, but the enforcement actions may.

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.

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