LEGAL Q&A 58 november 2024 www.goodnewsfl.org Good news • South Florida edition Few tasks are more thankless than being a conscientious homeowners’ or condominium association board member today. On top of the usual responsibilities, from budgeting to maintenance to policymaking and enforcement, you’re facing increased litigiousness, exploding insurance and vendor costs and recently, sometimes crushing state inspection, repair and reserve mandates. And now, well-intentioned new changes to statutes governing associations have the potential to add not just considerable costs and burdens for boards and homeowners alike, but confusion and uncertainty as well. Let’s take a look. Bill Davell: Why another new package of HOA rules? Matt Zifrony: Although most board members are conscientious, a few leaders treat communities as personal fiefdoms, keeping owners and even other board members in the dark as to operations and finances and arbitrarily enforcing rules. Other members are passive rubber stamps with little understanding of their by-laws, much less state laws and regulations. Some rules have no real bearing on the community’s safety, order or appearance. And unfortunately, the occasional board member or leader does engage in self-dealing or outright fraud. BD: So what are some rules and requirements Board members need to be aware of? MZ: The below are just highlights of a long list of new rules: • Reporting, records, notice and disclosure requirements: • HOAs with 1000 or more parcels must have audited financial statements, regardless of annual revenues. • HOA with 100 or more parcels must establish a website accessible to owners and post certain records and meeting notices on it. • HOAs must maintain official records for at least seven years unless governing documents require longer periods. • HOAs must provide a physical or digital copy of rules and covenants to every homeowner, and updated copies if they are amended. This information can be posted on the website homepage, but only if each owner receives a notice that the site will be so used. • Homeowners can request in writing a detailed accounting of amounts owed to HOAs, which must respond by 15 business days, with consequences for failure including waiver of some overdue fines. • Stricter guidelines on reviews, restrictions and enforcement: • HOAs must provide written notice of rules or covenants relied upon when denying homeowners’ construction or improvement requests. • HOAs can’t prevent homeowners from installing or displaying vegetable gardens and clotheslines in areas not visible from frontage or other parcels or areas. • New timelines and guidelines are established for enforcement and hearing notices, fines and attorneys’ fees. • HOAs are limited in restricting hurricane protections, unless they are similar to protections previously regulated, and in restricting parking of pickup trucks, non-commercial work vehicles and first-responder vehicles. • And one specific and seemingly trivial provision: homeowners get more leeway in retrieving garbage receptacles and taking down holiday decorations. • Fiduciary duty and punishment for malfeasance: • Board members receive more guidance on their duty to homeowners, including some leeway to rely on opinions of professionals such as lawyers. • Board members are automatically removed if they face charges of certain voting frauds, embezzlement, destruction of records, or tampering with evidence in furtherance of a crime, or obstruction of justice. • Board member education and training requirements: • HOA board members must, within 90 days of election or appointment, submit both a written certification that they have read and will work to uphold HOA governing documents and a certificate of completion of an approved condominium education course. • Board members must also complete at least four hours of continuing education annually – eight hours for HOAs of 2,500 parcels or more. BD: Do you see specific issues with these new requirements? MZ: Some key issues: • Increased costs to HOAs, and ultimately residents, and burdens on board members. • The need to dot every “I” and cross every “T” in compliance with more complex rules, especially with reporting and enforcement. • But most important, confusion and lack of clarity of some provisions. For example: who determines whether clotheslines or gardens are “visible” and how? What hurricane protections and architectural/structural improvements are similar to those previously restricted? BD: How should boards deal with these concerns? MZ: Many costs for HOAs and additional burdens on board members will be facts of life. As for the other issues, boards and their committees will have to be fully transparent – holding all meetings and making all but the most basic decisions in public – and meticulous in record-keeping, in particular minutes documenting rationales for decisions. Moreover, boards will indeed likely need to lean more on financial and legal professionals to ensure full compliance and protect themselves, as good faith reliance on qualified advisors is one way to demonstrate fulfillment of duties to residents. This effort should begin with having all policies, processes and procedures – from meetings to minutes to records to websites to financial record-keeping to enforcement to member certification – reviewed by external counsel to ensure they keep HOAs and boards on the straight and narrow. And keeping counsel closely informed of proposed policy changes and enforcement actions. The lawyers of Tripp Scott’s condominium and homeowners’ association practice provide comprehensive legal counsel on the full array of issues covered in the new laws and more. Reach out at www.trippscott.com/contact-us or 954-525-7500. If you have any topics you think my be of interest to our readers, we encourage you to email us at [email protected]. The Good News provides a monthly column with important content having to do with topics from the legal community. This month features a conversation with Matt Zifrony, director with Tripp Scott. ASK BILL: William “Bill” C. Davell, Esq. HOA Rights and Rules: Board Members Must Heed Newly Passed Rules William “Bill” C. Davell Esq.
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