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To Balance Budget, Board Can Assess Members

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Richard White

Tribune Correspondent

Published: October 5, 2008

Q: Can a board of directors approve a special assessment simply to balance a budget? The members have been assessed what amounts to an additional fiscal quarter because the new board members have determined that there is a shortfall. Shouldn't a full membership vote be required for any assessments not deemed an emergency by the governor?
BR, Naples

A: Budgets can be changed by the board at any time with proper notice to the members. The budget was created as an estimate of coming expenses for the next year. Sometimes the budget is underestimated and must be recalculated. Since the board has the responsibility to maintain the common areas and operate the association, it has the authority to assess the members.
There are two exceptions that allow members to vote to reduce assessments. The first is to vote to reduce the reserves, and the other is if the expense increase exceeds 115 percent (minus money for reserves and a couple other exceptions). In both situations, it is up to the members to call for a special members' meeting.
The board can vote on any budget increases to meet expenses at any meeting that is properly called and noticed.

Q: What legal repercussions can a homeowners' association incur for failure to provide the end-of-year financial statements to the homeowners?
LW, Miami

A: Condominium owners can report the problem to the state, but the only recourse for members is to file a lawsuit. Rather than spending money on a lawsuit, I suggest the members vote out the board and replace it with members who will recapture the financial information and print proper reports.

Q: I am president of our homeowners association, and our governing documents specifically state that NO DIRECTOR MAY SERVE MORE THAN TWO CONSECUTIVE 2-YEAR TERMS. There seems to be a feeling among some of our past directors, who have served two consecutive 2-year terms, that they can stay out of office for a year and then be eligible to run again.
I contend that such a director who has served that time cannot serve again. I cannot find anything in FS 718 or FS 720 addressing this point. Do you have any thoughts or opinions on this?
RR, St. Petersburg

A: I cannot render an interpretation of your documents. In the past, associations with similar wording in their bylaws allowed directors to return if they sat out a year. This is unlike some of our elected government offices. The U.S. president, for instance, cannot serve more than twice by constitutional dictate.
The section you quoted from your documents specifies that no director may serve more than two CONSECUTIVE terms. That differs from the constitutional mandate for presidents, who can serve only two terms, consecutive or not.
There is a change in the statutes, HB 995, that changed Saturday. You should review the change to the 2008 FS 718.112(2)(d)1.concerning this question.

Richard White is a licensed community association manager. He does not offer legal opinions; any other questions and comments concerning association operations can be sent to Richard White, 6039 Cypress Gardens Blvd., No. 201, Winter Haven FL 33884-4115; or e-mail camquestion@cfl.rr.com.

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TOPICS IN THIS ARTICLE

legal repercussions • condominium owners • membership vote • special assessment • homeowners association • fiscal quarter • spending money • shortfall • recourse • board members • financial statements • naples • exceptions • financial information • budgets • board of directors • failure • budget • br

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