August 11, 2022

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Condo Q&A: Amending Documents, Bylaws and Boards

Is it suitable for a condo association to “self-insure” and terminate their latest insurance plan? Also: Can a board stay clear of naming a director to an vacant position?

STUART, Fla. – Question: My cooperative dock association board of administrators is checking out the capability to “self-insure” by cancelling the wind protection on the docks and increasing the reserves. The existing windstorm insurance plan is practically 50 percent of the annual spending plan and is proficiently ineffective thanks to the deductible. The board thinks they can do this by amending the governing documents to clear away the insurance plan necessity. Can this be done?

Solution: Most likely not. When the governing documents can be improved by an amendment, the documents cannot be improved to circumvent the necessity of the Cooperative Act. Precisely, F.S. 719.304(three) which requires a cooperative association to insure all association residence. In a cooperative, the association “owns” the docks and leases them to the members. So, the statutory necessity that the association insure “association property” includes the “docks” even even though Statute 719.104(three) does not virtually use the term docks.

The Cooperative Act also enables an association to “self-insure” as an option to common insurance plan. Nevertheless, “self-insurance” is not simply just protecting reserves. It is controlled by Florida Statute 624. To boil it down, it requires the association to effectively develop its own insurance plan company and fund it. It is incredibly intricate and price prohibitive in the perception of the real savings.

Question: We have a 5-member board, just one of the members resigned. The remaining four refuse to appoint a fifth member. When questioned at a current conference why they did not appoint a fifth member, the response was that the lawyer educated them that all that is needed is a quorum to perform board business, which was under no circumstances questioned. Our Bylaws have been and are as follows: “The affairs of XYZ POA shall be managed by a Board consisting of 5 (5) Directors”

In your viewpoint aren’t 5 administrators expected at all periods? This has very little to do with a quorum.

Solution: Sure, I feel your board is expected to appoint a fifth director. The part you cite from your bylaws presents that the board “shall” consist of 5 administrators. The use of the term “shall” indicates it is necessary. As you the right way position out, the quorum is not the issue. A board can perform lawful business as extended as a quorum of the board is existing at the conference, which in your situation indicates a few, nonetheless this does not suggest the board can dismiss the necessity that the board is supposed to have 5 administrators.

Question: A individual in my condominium submitted their name to be a prospect for the board. Nevertheless, the individual was delinquent in the payment assessments. Just before the prospect deadline handed, the manager contacted the individual and advised them they have been delinquent and needed pay back up before the prospect deadline. The individual paid and their name was shown as a prospect. Is it correct for the manager to have done this?

Solution: Chapters 718 (condominiums) and 720 (HOA/POA) both involve that a prospect for the board ought to be a hundred% latest on all financial quantities owed to the association at the time they submit their name to be prospect. If they are not, then their name cannot be shown on the ballot. The prospect is the individual generally responsible for generating certain he or she is qualified to be a prospect. Nevertheless, it is not unlawful or essentially incorrect for the manager to have notified the prospect about the challenge in time for the prospect to suitable it. Nevertheless, if the manager was likely to do this then it really should be done for all candidates as well.

Richard D. DeBoest II, Esq., is co-founder and shareholder of the Law business Goede, Adamczyk, DeBoest & Cross, PLLC. The data supplied herein is for informational reasons only and really should not be construed as legal information. The publication of this post does not develop an lawyer-client partnership among the reader and Goede, Adamczyk, DeBoest & Cross, PLLC or any of our lawyers. Viewers really should not act or chorus from performing dependent upon the data contained in this post without to start with speaking to an lawyer, if you have queries about any of the concerns lifted herein. The hiring of an lawyer is a conclusion that really should not be dependent solely on advertisements or this column.

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