Serving on the board of a homeowners or condominium association is rewarding work. Most directors take the role seriously, but there are pitfalls that can expose the association, and sometimes the directors themselves, to disputes and liability. These five mistakes are among the most common.
This article is general information and is not legal advice. The association's attorney should be consulted.
1. Holding Meetings Without Proper Notice
Under section 720.303(2) of the Florida Statutes, a board meeting of a homeowners association occurs whenever a quorum of the board gathers to conduct association business. In a condominium, section 718.112(2)(c) provides that board meetings at which a quorum is present are open to all unit owners. A lunch or social gathering where a majority of directors discusses association business can therefore become a meeting that required notice.
Notice of board meetings is generally posted at least 48 hours in advance, and 14 days' notice is required for meetings at which regular or special assessments will be considered, or rules about the use of parcels or units will be adopted. Board members may use email to communicate, but under both chapters they may not cast a vote on association matters by email.
The manager can help directors understand what may be discussed outside a properly noticed meeting.
2. Not Following the Governing Documents
New boards sometimes act before reading the declaration, articles of incorporation, bylaws, and rules. The mistake is usually unintentional, but decisions made outside the documents can be challenged and reversed.
Florida law now requires education for new directors. In homeowners associations, section 720.3033(1) requires a department-approved course within 90 days after a director is elected or appointed. In condominiums, section 718.112(2)(d) requires a written certification that the documents have been read and a course of at least 4 hours, within 1 year before or 90 days after election or appointment. A director who does not file the required certificate on time is suspended from the board until it is filed.
3. Mismanaging Association Funds
Money can be spent too quickly, leaving nothing for emergencies or major repairs. Short-term wants can crowd out long-term needs such as roofs, paving, and painting.
- Prior budgets and actual spending should be reviewed before a new budget is adopted.
- Reserves should be funded as required by law and the governing documents. Condominium reserve rules are found in section 718.112(2)(f) and (g).
- Several bids should be obtained for significant work.
- Reserve funds should not be used to cover operating shortfalls.
More on this subject can be found in
consequences of not having cash reserves.
4. Acting Too Quickly
New directors are often eager to make changes. Large decisions made in haste, such as replacing a vendor in the middle of a project or rewriting rules without owner input, can stall work and create disputes. Significant policy changes should be studied, discussed at a noticed meeting, and explained to owners. The manager can provide history on vendor contracts and advice on how changes can be made in an orderly way.
Under section 617.0830, directors must act in good faith, in a manner they reasonably believe is in the association's best interests, and with the care of an ordinarily prudent person. Directors are entitled to rely on reports and advice from officers, attorneys, accountants, and other professionals they reasonably believe to be competent. Taking time to gather that information is part of the duty.
5. Not Seeking Legal Advice
Community association managers are not attorneys and may not give legal advice. When a dispute with an owner could lead to a lawsuit, when a contract carries significant risk, or when the meaning of a document provision is unclear, the association's attorney should be consulted. The cost of advice at the start is usually far less than the cost of a dispute later.
A Partner for the Board
Being a director is a serious responsibility, and most mistakes can be avoided with preparation and good advice. More on the job itself can be found in
the role of the board of directors and
6 HOA board meeting best practices. Meeting notices, budgets, and records are handled for the boards of the communities managed by Condominium Associates. To learn more,
contact us.
